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October 29, 2010

Telco 2.0 at FT World Telecoms


We just got this through Telco 2.0’s Inbox 2.0. The speaker lineup looks fascinating - Telco 2.0 Executive Brainstorm delegates will recognise quite a few of the names. We’ll be there and we’re going to blog it. (The Financial Times has been around a bit longer than Telco 2.0, so they are on their 29th Telecoms conference, whereas we have only reached our 11th).

FINANCIAL TIMES HOSTS THE 29TH WORLD TELECOMS CONFERENCE: SMART MOVES FOR CHANGING TIMES

LONDON: 27 October 2010: The Financial Times today announced the full speaker line-up for the 29th World Telecoms Conference, taking place in London on 16 and 17 November 2010. Sponsored by Oracle, Hewlett Packard, Alcatel-Lucent, Tata Communications and Kit digital, the two day conference will take place at the Marriott Grosvenor Square in London. Global industry leaders will discuss how telecoms players can adapt their businesses to thrive in today’s broadening communications eco-system.

Global communications are developing to the point where almost everything - and everyone - is connected. Emerging technologies and services are changing the shape of the telecoms sector, with new players entering all parts of the value chain. Competition to own the customer has never been stronger, reaching nearly every segment of the market and fuelling debate about the role of regulation. The conference will host discussions about how telecoms players can become more competitive, innovative and efficient in these changing times.

The FT World Telecoms Conference features 38 speakers, panelists and chairs from around the globe:

  • Andrew Parker, Telecoms Editor, Financial Times (Chair)
  • Richard Waters, West Coast Managing Editor, Financial Times (Chair)
  • Ian Livingston, CEO, BT Group
  • The Hon Ed Vaizey MP, Minister for Culture, Communications and Creative Industries, Department for Culture, Media and Sport, UK Government
  • Matthew Key, CEO, Telefónica Europe
  • Erik Huggers, Director, Future Media and Technology, BBC
  • Ed Richards, CEO, Ofcom
  • Rodrigo Barbosa, General Administrative Superintendent, Anatel
  • Nick Read, CEO, Asia Pacific and Middle East Region, Vodafone
  • Gabriele Galateri di Genola, Chairman, Telecom Italia
  • Jon French, Executive Director UK, Ireland and South Africa, HTC
  • Bhaskar Gorti, SVP and General Manager, Communications Global Business Unit, Oracle
  • Rick Halton, VP of Worldwide Marketing for Communications and Media, Solutions, HP
  • Adolfo Hernandez, EVP and President EMEA, Alcatel-Lucent
  • Laurie Bowen, President - Sales and Strategy, Global Data and
  • Mobility, Tata Communications
  • Malin Frenning, Deputy Head of Business Area Broadband Services, TeliaSonera
  • Andrew Barron, COO, Virgin Media
  • Naohide Nagatsu, General Manager, R&D European Representative Office, R&D Planning Department, NTT
  • Ahmad Julfar, Group COO, Etisalat
  • Stephen Bates, Managing Director, RIM UK
  • Michael Antieri, President, Advanced Enterprise Mobility Solutions, AT&T
  • Rajiv Mehrotra, Founder, CEO and Chairman, VNL
  • Olaf Swantee, EVP, Europe and Sourcing, Orange France Telecom
  • Phil Jordan, CIO, Telefónica O2 UK
  • Russell Buckley, AdMob Evangelist, Google
  • William So, Former President, China Unicom (Europe)
  • David McCourt, CEO, Skyware Global
  • Stephen Howard, Head of Global Telecoms, Media and Technology, Research, HSBC
  • Simon Weeden, Head of European Telecoms Research, Citigroup
  • Leong Keng Thai, Deputy Chief Executive and Director-General, (Telecoms and Post), Infocomm Development Authority of Singapore
  • Gerd Leonhard, Media Futurist, Author and CEO, The Futures Agency
  • Mike Fairman, CEO, giffgaff
  • Stewart Easterbrook, CEO, Starcom MediaVest UK
  • Shaun Collins, Managing Director, CCS Insight
  • Emma Lloyd, Director of Mobile, BSkyB
  • Wolfgang Kniese, CFO, T-Mobile Austria
  • Hannes Wittig, Telecoms Analyst, JPMorgan
  • Faisal Galeria, Global Head of Business Development, Spotify
These speakers will be addressing some of the following key themes:

Regulation: How will regulatory approaches shape the future of the global telecoms marketplace, and what effect will they have on commercial strategies and revenues?

Reinventing next generation networks: How can the industry ensure fixed and mobile networks offer optimum speed, performance and accessibility via the various available devices?

Emerging markets: Which markets will be the key to growth over the next three to five years and which strategies will allow businesses to capitalise on the opportunities available?

CEO insights: What lessons have industry leaders learned over the past 12 months and what opportunities and threats do they foresee on the road ahead?

Efficiencies: What are the cost-optimisation initiatives that will still allow telecoms businesses to focus on their strategic goals?

Value-added services: How can the telecoms sector contribute to the major emerging growth areas within digital entertainment?

The new digital consumer: How is consumer behaviour changing as new platforms and digital channels open up, and what does this mean for companies attempting to build relationships with consumers?

Further information about the conference can be found online at: www.ftconferences.com/telecoms

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October 25, 2010

Telco 2.0 News Review


Telco 2.0 Top Stories

Last chance to book Telco 2.0 autumn events!

Sign up for Telco 2.0 Americas or EMEA

Panic on the streets of Symbian: Psion vet Lee Williams collects his cards as director of the Symbian Foundation, amid rumours that the organisation is going to shut down. Rumours that turned out to be largely true - both the London office and the Cambridge-based R&D centre seem to be essentially dead, after the entire staff were locked out. As well as this drama, Nokia has announced that the notions of Symbian^3 or what have you are going, and future releases will just be versions of Symbian, and that developers should in future concentrate on Qt and stop writing native Symbian code. Not many will miss it - the only platform where you had to spend a day learning how to use strings, as one expert put it.

It looks like Nokia’s own Avkon user-interface library is for the chop. HTML5 is going to be increasingly important. Nokia CTO Rich Green explains further on the Nokia Conversations blog, which results in quite a conversation in the comments. It turns out elsewhere that Java devs are advised to port to Qt forthwith as Nokia’s JavaME support will only be in maintenance mode from now on.

Droidcon, a conference for Android developers, is offering a special discount to anyone who can prove they’ve been fired from Symbian.

Meanwhile, the WAC has signed up more members, including Qualcomm, Oracle, Opera, and a gang of network operators. Interestingly, Samsung’s on board even though it has its own independent app store.

Ridiculous one-upmanship breaks out between major platforms: Steve Jobs tries to replace “open” vs. “closed” with “fragmented” vs. “integrated” and says Microsoft Windows is “the epitome of open”. Andy Rubin retaliates with a quick command line example, and a rather good explanation of just what is open source in Android and what isn’t arises. And Jim Basillie of RIM accuses Apple of fiddling its sales figures.

He also says that RIM users know that you “can’t have a real Web experience without Flash”. Adobe launched the latest version of AIR, the all-in-one developer kit for their products, which boasts a variety of mobile-specific features and a special JavaScript API for use on devices that don’t have Flash installed.

However, it looks like the new MacBook Air will be the first Apple computer to ship without Flash preinstalled for a lohttp://www.tuaw.com/2010/10/21/apple-quietly-discontinuing-os-xs-factory-fitted-java/”>Java. However, it does come with an app store, complete with approval criteria. It works for them - this was, after all, Apple’s first $20bn quarter.

Verizon Wireless seems to be doing rather well, thanks without the iPhone. All in all, VZ had a reasonable quarter, with continuing FiOS fibre rollout pushing back against the decline of voice/DSL. They’ve also struck a deal with African operator Gateway to provide MPLS services in 26 more countries. Gateway is a Vodacom division these days, so they’re keeping it in the family.

Vodafone Essar has attached a date to the launch of 3G in India - it’s coming in the first quarter next year as around $500m in rollout contracts start to flow towards NSN and Ericsson.

Vodafone Australia, meanwhile, has terminated its network sharing deal with Telstra. Telstra’s CTO, in town for Broadband World Forum, argues that sharing isn’t such a good idea - in fact it’s “a race to the bottom”. The problem, he says, is that neither party to the deal wants to invest in the network while both parties’ marketers are desperate to promise the earth.

Despite this, German mobile operators including Vodafone’s German opco are holding talks to discuss the possibility of a shared LTE network. Dave Burstein has pricing details for the first LTE rollouts. Telecom Italia thinks that the joint fibre network the Italian government and three major alternative operators want is “against the constitution”, and they vow to press on with their unilateral rollout.

Did you know there are now more femtocells than cells in the US?

TalkTalk has signed up Alcatel-Lucent to build them a big internal CDN in support of YouView (ex-Project Canvas). What we really want to know is why they feel the need to go it alone rather than use BT’s Content Connect infrastructure, which is specifically intended to be YouView’s TV-pushing back end.

OFCOM, meanwhile, has declined to investigate YouView despite the last-minute intervention from Sky last week, so the project might even go ahead. You never know. Sky’s HD TV over your broadband link offering has just gone live - interestingly, they’re now refusing to rule out joining in with YouView themselves.

On the other hand, the major US broadcasters, and Hulu have blocked Google TV devices from watching their stuff. In fact, they may be going to refuse access to other TV-and-more devices too, like D-Link’s Boxee. InformiTV is sensibly sceptical as to whether this will actually do anyone any good. The networks never tried to control which TV sets people used to watch it on, after all, so why should they now? Wired reckons it’s all about the terms of their deals with the advertisers.

Starbucks Digital Network, the deal under which various content players provide free video and other stuff to people using the free WLAN at Starbucks, and monetise through some combination of ads and a wholesale deal with the caffeine pushers, has launched. Connected Planet would like to know how much they’re spending on bandwidth.

CDN operator Brightcove is being interestingly coy about whether or not they’re going to do an IPO any time soon and whether the rumours of a “major Internet company” buying them are true.

A major Internet company, meanwhile, confessed that not only did its street-mapping cars sniff for the presence of Wi-Fi networks, they also sniffed Wi-Fi traffic where they could and collected whatever was flowing over the air. There is now a nice legal row going on - should they delete it all as quickly as possible, or should they keep it because it’s evidence?

In Pakistan, police raid illegal VoIP operators and seize among other things GSM switching equipment. Some people really want to be telcos. And here’s the one-click session hijacking tool.

We presume Apple has a use for the enormous data centre approaching completion. Speculate away… Meanwhile, Microsoft is teeing up a version of MS Office delivered from the cloud, rather like Google Apps. There may be some relevance with this story - MS is suddenly keen on supporting the OpenStack cloud platform, even though it has its own cloud (Windows Azure). The difference is apparently that OpenStack is for “infrastructure clouds” and Azure for “platform clouds”. Me neither. It wouldn’t be Microsoft if there wasn’t some awful security issue - RevK gets bitten by Windows’ tendency to emit invalid and unwanted IPv6 router advertisements. Treatment is available here.

AT&T is planning something big in terms of Voice 2.0 - specifically, they’re setting up a network of major SIP peering points around the US. Either they’re going to do something dramatic, or they’re expecting a wave of demand for interconnection from people who will.

Skype has fallen out with Nimbuzz, who they accuse of creaming off Skype users’ SkypeOut minutes. It’s fascinating to see the voice price war dynamic replicating itself in the Voice 2.0 space - the value really isn’t in the call any more, is it? Skype Journal has telling thoughts on the differences between Skype and Facebook and wonders if getting together is such a good idea. Summary: Skype is for your real friends.

Meanwhile, the UK government loves Mydex, the agonisingly hip VRM/ID management startup from Bethnal Green. Way back when, in the optimistic late 90s, remarkable numbers of New Labour staffers and wild-skinned geeks got paid by the Government to think about identity management in the future. Then came the War on Terrorism, and their work was sent to the darkest recesses of the civil service files. Instead, we got the Really Big Database of Absolutely Everything About Everyone approach, much beloved by spooks and Big Tech suits. Now the National Identity Register is dead, and guess what? It turns out the dotcom hipsters were right all along.

Some people really don’t like the new version of Google Image Search. They’ll probably like this even less - software that profiles you as you hold in the call centre queue and matches you with the perfect customer-service representative. Arthur C. Clarke’s sentient local exchange wanted its subscribers to fall in love. The implementation wants them to upsell. Sometimes the future is depressing.

However, the Connected Planet story on it does refer to “analytic engines”, and we really hope they mean it runs on one of these.

T-Mobile complains that a badly implemented IM app ate their Radio Network Controllers, and argues that this warrants an exemption from net neutrality. But then, who actually thinks you need an exemption to do some filtering and rate limiting of the Internet wildlife?

A new version of Mobile WiMAX has been standardised. The FCC wants to hurry up the big spectrum dump. The EFF has advice on privacy in the smart grid. FAILCon 2010, the tech conference that embraces failure. Apple FaceTime leaks. Mobile money transfer gets a fatwa.

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October 21, 2010

Customer Data 2.0: Telcos Must Vie for a slice of the $Multi-Billion ‘PIE’


Facebook, Google and others are pioneering the creation of the Personal Information Economy (PIE) based on consumer/user data. Our new analysis outlines emerging participants’ roles, and why, where and how telcos could and should play.

Introduction

In this first of a series of briefing notes, Telco2.0 sets out to describe the potential roles for Telcos within the trust networks that we believe will underpin the future personal information economy. We’ll also be discussing this at two important sessions on this topic at our Los Angeles (Oct 27-28, 2010) and London (9-10 Nov, 2010) events.

Personal Information - digital data relating to an identified or identifiable person - is being generated, transmitted and stored on a vast and increasing scale, primarily for internal use by organisations looking to better serve individuals, but increasingly for external use to support third-party organisations to better interact with those same individuals.

Still only a nascent industry, the business of using personal information to create value for individuals and income from third parties, holds considerable promise. For example, Facebook, only 6 years old and generating an estimated $1bn in revenues, somehow commands a $33bn valuation, by doing just this.

Personal Information Economics (PIE) isn’t just a new area for Telcos. It’s new for everybody, including individuals themselves and the regulators / legislators tasked with safeguarding personal freedom and privacy. Many disciplines cover aspects of PIE and the associated areas of Privacy and Identity (Law, Information Systems, Information Science, Economics, Public Policy, Psychology, Social Psychology, Philosophy) but few are geared to supporting those wishing to pursue it as a commercial practice. Subsequently, there are few frameworks to help Telco strategists and innovation practitioners to understand, communicate and quantify the opportunity.

To read more of this new analysis, please see the article on our research site here.

For other, related Telco 2.0 analyses, please see ‘World Economic Forum: Strategic Opportunities in Customer Data’, the ‘User Data & Privacy’ and ‘Adjacent & Disruptive’ categories on our research site. Other articles include ‘Can telcos Unlock the Value of their Customer Data’, and ‘Google - where to compete, where to co-operate’ and ‘Facebook: moving into Telco Space?’.

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October 20, 2010

World Economic Forum: Strategic Opportunities in ‘Customer Data’

The World Economic Forum will be launching a major initiative around leveraging telco customer data at Davos in February 2011. Telco 2.0, along with MIT Media Lab, Harvard Law School and Bain & Co has been part of a core advisory team to prepare for this. In the run up to major sessions on this topic at our Executive Brainstorm events in AMERICAS, EMEA and APAC, and Best Practice Live! virtual events we describe the aims and status of the initiative, and share some of the outputs from a recent workshop in New York:

Readers of this blog are no doubt aware that the World Economic Forum (WEF) is a powerful not-for-profit body that has significant influence in helping industry and government think about global commercial and social development opportunities in new ways.

Each year, within the major industry sectors it covers, it identifies a small set of big issues that it feels are important and which it can uniquely address: strategic topics that require collaboration from a wider variety of stakeholders, cross-border, cross-industry, cross-governmental stakeholders that can’t be assembled or managed by existing industry bodies.

It researches these topics, defines a set of hypotheses, and then each February at its Annual Meeting in Davos, Switzerland it launches major ‘projects’ to push forward the opportunities it has defined. The Annual Meeting is attended by the CEOs of the world’s biggest corporations, politicians, heads of state and other luminaries. It’s very much the place to be for the great and the good, and ideas and opportunities raised there get very high global visibility.

So, the Telecoms and Technology group at WEF, having started projects for Mobile Finance and Mobile Health a few years ago, decided this year to focus on ‘Personal Information and Digital Identities’ - what we at Telco 2.0 call ‘Customer Data’. After our Privacy 2.0 summit in Boston in February, which WEF attended, we were asked to join a small group of expert advisors to the project alongside MIT Media Lab, Harvard Law School and Bain & Co.

The ‘Re-Thinking Personal Information’ project is now in full flow and a white paper will be launched in Davos in Febuary 2011. It looks holistically at the issue of how individuals, government and commercial enterprises can leverage the enormous quantity of rich personal information that flows through telecoms networks, to benefit the user and society in general.

Given the speed at which technology and online user behaviour is developing and the slowness of regulators in keeping up, the project looks as much at legal/governance issues as commercial, technical and user acceptibilty issues.

A project workshop was run recently in New York with a group of senior participants from the telecoms, technology, internet, banking, media, consumer advocacy, government and healthcare sectors - the type of gathering that WEF can uniquely create. This document was used as a briefing, and provides a very good summary of what the project is about.

Telco 2.0 was delighted not only to participate, but also, on the day before, to facilitate a separate session for the WEF’s leading telco industry members to brainstorm the key macro issues/opportunities for the industry over the next 3-5 years (that the WEF could help support).

The outcome, which involved voting by the group, was very interesting. The top 7 issues were:

1.) To create a global ‘trust framework’ for customer data and digital identities.
2.) To re-define the fundamental telco business model and the methods for industry commercial innovation.
3.) To define how to partner better with adjacent industries
4.) To develop more appropriate regulation for cross-border, cross-industry collaboration.
5.) To create a more compelling business case for (fixed/mobile broadband) infrastructure investment.
6.) To clarify the opportunity for Telco Cloud infrastructure.

This is the sort of list that existing telco trade bodies can’t really conceive of, and which WEF is uniquely placed to support. But, the striking thing for the Telco 2.0 representative was how important customer data and business model innovation ranked in order of strategic priorities for the telecoms industry (as opportunities and challenges).

Telco 2.0’s latest analysis of the role of telcos in the Personal Information Economy is here.

Here’s also a video interview Telco 2.0 did recently with Telecom TV, about the WEF initiatives:

Here are some photos from the New York workshop (deliberately grainy to protect the privacy of the participants and their output!):

wef.jpeg

wef1.jpeg

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Entertainment 2.0: Can Telcos help save the Video Distribution Industry?


The physical distribution of digital video is in turmoil, and the entertainment industry is in a state of fear and denial about online distribution. The signs are that Video could emulate the music market’s disappearing act. Can telcos help?

In the run up to our Executive Brainstorm events in AMERICAS, EMEA and APAC, and Best Practice Live! virtual events, we provide some background analysis:

If you want to know what the entertainment supply chain thinks of the digital online opportunity, then the ESCA Edge conference, the premier entertainment retailing and supply chain event, is not a bad place to start. At the event held in London last month, a major theme coming through from speakers and delegates alike was fear - fear of declining physical sales and fear of online eating into margins legally or pirates destroying them completely.

As a result, most discussions targeted the short-term and were based around protecting physical margins by reducing costs in the supply chain, such as minimising returns and on site disposal. Additionally, the conference questioned the ability of online to deliver video effectively, clinging to a hope that the Internet’s weaknesses would provide the best defence against it.

Negative approach to online
This was highlighted by a strange presentation from Tom Moran, senior director, business development at Savvis, who laid out the limitations of the Internet infrastructure to support professional video. Pitched as ‘realism’, the messages were a little misleading. While it is certainly true that the Internet would not be capable of supporting the switch of all broadcast and physical video today, this is not what’s happening, it is a gradual transition and broadcast will remain a mainstay in the market for the foreseeable future.

Furthermore, customer behaviour online is different to traditional TV as users choose when they watch, rather than always watching live. Finally, the amount of dedicated infrastructure available to video or the development of specific structures such as CDNs that reduce pressure weren’t mentioned.

At Telco 2.0 we would argue a better and far more positive approach to online is to develop an effective supply chain for it and leverage the unique characteristics of both physical and online mediums to maximise profits from both in the medium and long term.

According to Jim Bottoms, director and co-founder of Futuresource who kicked off the event with an overview of the market, even by 2014, 2/3 of video revenues will still come from physical formats. However, overall, video revenues are declining. Across Europe, Futurescore cited a decline in average household spending on video from a peak of UK£72.40 per year in 2005, to UK£53.70 in 2010 and it is a trend that is set to continue, following that of music. In contrast Gaming, the third area of entertainment, is so far bucking the trend, as shown in the Futurescore chart below.

Futurescore household expenditure web.png

source: Futurescore

His presentation went on to demonstrate that while revenues are declining, costs are also on the increase. At the same time online video views are increasing exponentially. Although Futurescore predicts that only 1/3 of total revenues will be accounted for by online by 2014, share of viewing will be far greater than its revenue share. The problem, as Bottom recognised, is getting consumers to pay for online video content.

He cited that in the UK, there were 65 billion online video views of which 54% were through YouTube and a mere 0.01% were paid for. To put it simply, consumers are watching video online but they’re not paying.

How can consumers be encouraged to pay?

Firstly, we have to understand the obstacles to consumers paying for online video, beginning with the association between the Internet and free content.

Many consumers now believe that the Internet is a way to access free content. This perception has been enhanced by the failures of the music industry in its online transition and by the P2P and pirate sites that enable instant access to pirate versions of all kinds of entertainment from single music tracks to full form video.

Richard Atkinson, the former head of piracy prevention at Disney and now chief piracy specialist at Anti-Piracy Worldwide, gave a great insight into how video piracy works. He asserted that piracy always happens and should therefore be seen as a continuum on which different incidents can be placed according to the severity of problem.

Piracy challenge

The challenge for the industry is twofold. Firstly, to make sure that the pirates are identified and illegal copies blocked, something that should be more possible in the virtual world than the physical, and secondly, to ensure that legal video sales give consumers what they are looking for when and how they want it.

The first challenge is about prevention and tracking; the second about challenging the film release ‘windows’ system for sold video content (e.g. the time between a film’s release in cinemas and its availability online) and creating a new model that recognises the unwillingness of consumers to pay for the same content in multiple formats.

Atkinson revealed that most pirates are also consumers of legal material and not just any old customers but the best customers. They are driven to turn to pirate options by price of course but also by availability - the timing of releases and availability of formats. In essence, the very window system on which the video industry has been based also provides the opportunities for pirates. Indeed, he cited examples of how the marketing of movies prior to their availability legally, drives pirate take-up. This phenomenon only increases as regional border and licensing restrictions are undermined by global availability of online distribution.

There is little doubt that the current models are under fire and that new thinking is needed to address the challenges brought by digital online services.

Replacing the DVD ownership model

Yves Caillaud, senior vice president, EMEA, Warner Home Video and Digital Distribution, explained that DVD has worked on a successful ownership model for a decade, but the industry needs to reinvent that ownership model for the digital age. To do this he points to the need for interoperability.

We agree. The concept that consumers will buy new copies of their existing library or to continue to build a library of titles in multiple physical and digital formats that need different players is flawed. It will only fragment and contract the market overall. However, equally, the speed of technical development is increasing and agreeing on a single format is not realistic. Therefore a mechanism has to be developed that enables consumers to continue to build their video libraries.

As we proposed in our recent Executive Briefing ‘Entertainment 2.0: New Sources of Revenue?’, digital lockers offer a solution to this issue and, at the conference, Tim Wright, director for technology of Sony Pictures Entertainment, provided an update on the UltraViolet initiative.

UltraViolet Light?

Formerly known as DECE, UltraViolet is the service brand for a cross company, cross industry attempt to create a digital locker system that enables consumers to buy video content once and access it from any and multiple devices.

Wright expounded the consumer and business benefits of the concept, promised service launches in the next 12 months and gave an update on the various roles they’ve set up legal frameworks for. These are:


  • Content Providers - owners of the video content

  • Retailers - physical and online

  • Locker Access Service Providers - Providers or streaming services, such as NetFlix, LoveFilm etc

  • Digital Service Providers - Providers of DRM, hosting and other heavy lifting services for retailers e.g. Sonic and Ioca

  • Client Implementers - device vendors and app developers

  • Right Locker Coordinator - running the rights locker itself, a function that Neustar has been hired to do
There is no specific role laid out for telcos and that is disappointing as telcos are ideally placed with a set of assets that can enable and enhance the UltraViolet structure. However, this reflects the failure of the telco community to engage with DECE in a timely fashion.

Yet all is not lost and there are multiple places they can play, as illustrated in the diagram below extracted from our ‘Entertainment 2.0: New Sources of Revenue? report.

Digital Locker telco options diagram web.png

source: Telco 2.0

The most obvious role for telcos is UntraViolet is as a retailer but Wright confirmed that the access and digital service provider roles were both feasible options for more advanced telcos.

The legal frameworks laid down are interesting, particularly that for service provider as SPs are not allowed to deviate from the total proposition. The same service will be offered by all retailers and Wright confirmed that he expected the pricing structures to be the same for all, although the pricing itself is down to the individual retailer as it’s a competitive issue. The lack of service differentiation will concern some telcos but in providing access to a well-stocked locker would provide differentiation from other telcos in the short term and could well become a prerequisite in the future.

There will be more on UltraViolet and the possible roles for telcos at the Entertainment 2.0 Executive Brainstorms being held in Santa Monica and London on October 28 and November 11, respectively.

A second important and connected thread is the retail challenge and opportunity.

Consumers Can’t Help Acting on Impulse

The heads of entertainment of major UK retail chains, Sainsburys and Tescos, provided a serious reality check on the day-to-day pressures on physical retail. Some startling figures included the fact that when two other retail chains - Woolworth, a general store and Zavvi, formerly Virgin Megastore for music and video - closed their doors for good, 50% of their video sales just disappeared. They weren’t transferred to another retailer, a feature that Sainsbury’s Richard Crampton put down to the fact that a significant proportion of video sales are impulse buys. Indeed Richard said that 70% of Sainsbury’s own video sales were bought on impulse.

The importance of impulse buying is a major feature and one that shouldn’t be ignored. At Telco 2.0 we don’t agree with the assumption aired at ESCA Edge that the only way to protect this market is to defend the physical retail space. Instead, we believe that it is essential to provide the impulse opportunity online.

There are two pillars to this strategy. The first is to provide the purchasing opportunity where consumers are online, such as social networking sites and YouTube; the second is to provide proactive recommendations based on unique user data.

Following consumers online

It’s a long-held view that retail success is found where people gather and this just as true online as in the physical world. The ability for content owners and online video retailers to advertise their products in these areas is a start but only if backed by instant purchase and access will it meet the impulse compulsion.

To support this, it’s necessary to enable friends to make recommendations to each other and to have the sort of automated recommendation engine used by Amazon, but it is only a start.

Telco assets supporting impulse buying

Telcos have access to a whole host of customer data. They can supply information on what people have previously downloaded and when (day and time), combined with location information and possibly presence information as well. This could provide a powerful tool to proactively push information about video options to consumers even before they’re aware they might want them but at times when they receptive to them.

Such functionality also needs to be backed by an immediate and simple payment and access system so the impulse to buy can be taken instantly to its natural end.

Music’s warning is still relevant

One thing that the experts on the video supply chain were agreed about was that the experiences of the music industry are highly relevant to their business. Primary amongst those lessons is that price cuts do little to support physical sales in the face of online competition.

Maureen Hughes, partner from Deloitte Consulting, claimed that simple cost cutting is not enough to increase profitability for video, while Martin Talbot, managing director of the Official Chart Company, gave a more positive view saying that digital had not killed the music market but transformed it.

Snack mentality

He supported this assertion stating that in the UK, more singles are now being sold than ever before. Sales are now reaching over 160 million and 2009 was the third successive year in which over 100 million singles were sold, whereas the highest pre-digital sales high was 90 million. 98.4% of singles are now digital downloads as consumers respond to the low cost snacking opportunity.

Furthermore, this snacking phenomenon is something that is even more evident when the impulse is prompted by an external force. For example, the resurgence of tracks such as Journey’s Don’t Stop Believin’ after it was featured on Glee, or the thousands of downloads of Ewan McGregor’s single that followed a performance of the song on the UK’s X Factor, demonstrate the power of promoting the impulse and backing it with a download capability.

This brings us back to our earlier concept of the active promotion of impulse purchases. Digital video products will be triggered purchases, by a mention on TV, advert, or some other media, or through recommendation engine or personal recommendation from someone within a social network. Building these and other impulse supporting structures, is as essential as ensuring the transport infrastructure over which video traffic flows is robust enough to support the quality service necessary. This is, in a sense, very much business as usual for the entertainment industry - it’s just that the distribution channel is changing from physical to online.

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October 18, 2010

Telco 2.0 News Review


Telco 2.0 News Review

Google results are out for Q3, and they show revenues of $7.29bn, up 23% year on year, and profits of $2.17bn, up from $1.64bn year on year. Traffic-acquisition costs (the money Google pays out to upstream customers) were $1.81bn, up from $1.56bn year-on-year, but are stable as a percentage of ad revenues at 26%.

Connected Planet notes that Google confirmed YouTube has gone into profit, and points out that Google also put a number on its mobile activities. They are forecasting $1bn of mobile revenue this year, mostly from search-based advertising (no surprise there) on Android devices, which may be a slightly bigger surprise.

Another financial highlight was Google’s CAPEX bill, which showed the company pouring cash into its fixed investments. Google historically tends to build early and often, and this quarter it got through $757m in servers, sheds, and the like. That’s more than it has spent in any quarter since the beginning of the world economic crisis - Google CAPEX last reached these levels in early 2008, when the company was building three enormous data centres it announced in the summer of 2007.

This probably has something to do with a gigantic project in Finland using sea water for cooling. Data Center Knowledge has a telling chart and much detail - Google’s investment spending was practically shut down during the recession, and it’s now plunging again. Specifically, construction of a monster-sized facility in Alabama was halted entirely. That project may now be revived. Also, Google data centres are designed in order to be expanded quickly, so they may be about to launch a round of upgrades across the existing 37 sites.

If that wasn’t enough data centre for you, check out CapGemini’s new outsourcing base, with pictures of a remarkably interesting shed.

Microsoft launched its new Windows Phone 7, to relatively favourable notices. Nothing like the enthusiasm that anything in the Apple, Android, or RIM lines would evoke, or even that for the Nokia N8, but at least it wasn’t a merciless panning. HTC is, of course, the main vendor, but as the Informer points out, they shipped 5.9 million devices in Q2 - and only 3 million Windows Mobile handsets shipped in Q2 in total. Android has transformed HTC’s business, and will keep doing so - here comes their first low-cost ‘droid.

Microsoft has made a rather odd decision, however - vendors have been warned off doing Phone 7 tablets. Apparently there’s yet another Windows coming for them. So there’s Windows Phone 7 for phones only, except if you intend to do anything useful with them in which case you need Windows Mobile 6.5 still, and if the touchscreen is big enough, you need a yet-to-be-determined different version of Windows, and if it has a big screen and a keyboard, probably just Windows Windows. All clear so far?

The Register asks if the point of WinPhone might be to be a carrier’s OS, and concludes that there is no point in having a carrier’s OS. They also refer to “the Linux” rather as some people say “the Google”.

They may have a point about carriers and OS - Vodafone does it again! To recap - they decided to push 360 to iTunes and the ‘Droid Market as an app, but then also decided to force-upgrade all their recent Androids with it. Now, they’ve issued new Ts & Cs that ban their subscribers from removing it. With hilarious consequences…

Apple’s main problem appears to be managing expectations at the moment. Results are coming up, and everyone thinks their profits are going to double at least. The Apple bulls’ next target is to see the shares go high enough that Apple becomes the biggest US company by market cap.

Nokia power users rejoice - you can now dual-boot your N900 phone with both Maemo Linux and MeeGo. If you really want to. Actually, you would have a good reason to - MeeGo announced this week that it now supports telephony.

But you might make better use of that time reading this exhaustive investigation into Nokia’s problems, which pins them on Jorma Ollila’s decision to chop the phones business into Enterprise, Multimedia, and just Phones. This, they argue, led to constant in-fighting between the divisions, product proliferation, and a lack of strategic focus on Symbian, which ended up being nobody’s child.

On a parallel note on OS Ecosystems, the NYT argues that the greater diversity of Android devices will help it outstrip the iPhone.

In the last couple of weeks, as well as the CEO change and Vanjöki’s resignation, personnel moves at Nokia included the departure of a top user-interface designer and the recruitment of another design guru from Palm. All is now clear - the Nokia designer, Ari Jaaksi, is off to take the Palm guy’s job at Palm while the Palm guy takes the Nokia guy’s job at Nokia. And the EFF hates them.

The good news, such as there is, is that NSN has landed a whopper of a contract to build out 60% of Vodafone Essar’s 3G network in India. The remaining 40% goes to Ericsson. NSN also has the contract to build LightSquared’s US wholesale LTE network. It looks like the devices side of Nokia is on board, as well - they’re planning to make device radios that will support the half-and-half mobile/satellite L-band oddity.

Mobile-satellite operator TerreStar is running out of cash fast - it’s also $100 million in hock to a hedge fund that lent it the money to build a second spaceship. That’s only the beginning - in all there’s about $1bn of debt, the company lost $200 million this year, and there’s a total of $15m in cash on hand. But that hedge fund is also a shareholder. It happens to be none other than Harbinger Capital, Philip Falcone’s company and the major investor in LightSquared.

Broadcom has acquired a company that designs dual-mode LTE/WiMAX chips.

Wired interviews the CTO of Ruckus Wireless on the possibilities for the TV whitespace spectrum and advanced 802.11 radios. He’s cautiously positive and points out that there’s a troublesome negative correlation between data demand (concentrated in town) and whitespace availability (concentrated in the countryside). Brough Turner explains why the spectrum is useful and why you should care.

Philip Sheppard @ 3UK is showing off the size of 3’s radio network, with a Layar augmented reality app that picks out the base stations from the cityscape and highlights the ones added since 2007. Unfortunately, if you want the app (and we do) you need to get a job as a CSR in a 3 retail store. Curses.

Clearwire is selling chunks of spectrum - Connected Planet wonders with good reason if it’s not essentially selling its future. Verizon Wireless denies any interest.

The government of Taiwan wants to spend $215m on its WiMAX development plan, almost entirely in order to support its chip exporters.

Merger rumour of the week - AOL to buy Yahoo! the week after Time Warner confessed the merger was the “worst deal in corporate history”. TelecomTV points out an obvious flaw - AOL would need to lever up and bring in several other investors, as it’s actually a much smaller firm than Y! and arguably one with even worse problems. Yahoo! has a decent search engine, a significant advertising business, a variety of social applications and utilities, and quite a reasonable developer platform. AOL has Advertising.com and that’s really about it.

Yahoo!, after all, is a huge Web 2.0 operation that makes money. When Jack Welch ran GE, they had a policy of only getting into any given business if they were certain of being the biggest or the second biggest player. Yahoo! is the No.2 in search, so if they can keep ahead of Microsoft’s Bing they can at least follow Mr Welch’s minor rules for now, although becoming the No.1 may be trickier…

Meanwhile, the aforementioned Bing wants to show you links that your Facebook contacts have shared in your search results. Nothing could possibly go wrong with the multiple levels of personal data disclosure there, could it?

Skype 5.0 is here (unless you’re a Linux or Apple Mac user - some of us haven’t had an update since 2.1) - it brings with it a shower of new features including a tabbed user interface and close integration with Facebook. As well as pulling in your updates and cross-referencing your contacts list, it lets you push events out from Skype to Facebook. All done with the magic of OAuth. In a way very unlike Facebook, though, you’ve got to explicitly choose to import Facebook contacts into Skype or to export Skype contacts and events into Facebook. Here are instructions on how to eliminate all traces of Skype-Facebook interaction.

They’ve also signed up KDDI as a network partner, using the thin client/SIP.skype.com model. That’s quite a network partner…

Phil Wolff, meanwhile, has some thoughts about what Skype could do as a trusted data broker and VRM provider. It parallels a lot of Telco 2.0 thinking on this - with the important difference that Skype isn’t a telco.

Voxeo launched a plugin for the popular jQuery JavaScript framework that provides an extension voice API for applications in the browser. You can use their Tropo.com platform, or in fact anything you like for the SIP connectivity.

YouView/Project Canvas CTO Anthony Rose gives more details of the project; Sky waits until the last possible moment to cry to OFCOM. Canvas better be good - the UK is still 18th in the world for broadband. And the FCC makes minor changes to the US cable TV regulatory framework.

O2 UK presses the button on location-based advertising by SMS.

The printers that know what you print and censor it. Detecting propaganda memes on Twitter. Anonymous hacks the MPAA. Total mobile surveillance: there’s an app for that. GetJar struggles to distribute enough pig-squashing games. JavaScript’s flaws - “Plus, I had to be done in ten days or something worse than JS would have happened. Something like PHP only worse…”

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October 15, 2010

Cloud Services 2.0: Two Great Partner Events



New business models related to Cloud Services are a key focus for Telco 2.0. You’ll have seen that we’re exploring them in depth at our upcoming events in LA and London. In the meantime, we’re pleased to recommend two other events on this topic from our partners.

Telecom TV: Cloud Services - Free Virtual Event

TelecomTV are hosting global live webcasts on Tuesday, October 19th, on the opportunities and challenges of Cloud for telcos (more here).

Parallels Summit 2011: Cloud Services for Enterprise
The 2013 forecast of $19Bn in Cloud Services offers telcos the potential to generate new revenues, leverage existing services, and decrease churn. Join Telco 2.0 partners Parallels to find out how in Orlando, Florida, February 22-24, 2011 (more here),

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October 14, 2010

Guest Post: Future Broadband - Free, Funded by Apps?


Could ‘free’ broadband connections for the unconnected be funded by a bundle of apps paid for by ‘upstream customers’ - such as banks, supermarkets, etc.? This is a guest post by Thomas Sachson, Founder and CEO of Box Top Solutions, Inc.

[Ed. The ‘Freeband’ model Thomas proposes raises a number of interesting questions, such as how to regulate, commercialise, and manage such a system. Thomas will be presenting this concept at the Americas Brainstorm, 27-28 October in L.A..]

Background - Can the ‘Digital Divide’ be Bridged?

In January 1996, the New York Times published its first article on the “digital divide” and highlighted the pitfalls of a society of two halves - those with online connectivity and those without. Fifteen years later, the divide is still pronounced, which is surprising given the prevalence of communications technologies. But the broadband adoption gap nonetheless exists and should be resolved. As stated by the FCC in their recent National Broadband Plan, the unconnected simply cannot afford connectivity as it is currently offered. And, short of an enormous government subsidy (not likely in the current economic environment), this reality is not going to change. However, there is another model that has just become viable in the digital world - the toll-free online access model - and it could finally connect millions of unconnected homes globally without the need for taxpayer subsidy or expensive new access infrastructure.

The ‘Toll-Free’ Online Access Model

By way of background, the toll-free model, from when it was introduced in 1967 to the present, became one of the most visible and successful telecommunications strategies for marketing (“1-800”, “freephone”, “provider pays”). It was based on the powerful observation that there was a market-driven, three-way trade possible in the field of telecommunications commerce. A voice carrier would ensure that a caller would not be billed for making a call to a merchant if, in advance of that call, the merchant agreed to pay the carrier for the cost of carriage. As a result, carriers generated many tens of billions in additional revenue, with merchants transacting many hundreds of billions. And nearly every customer on the planet now knows the how, why and consequence of using a “1-800” number and, more importantly, is comfortable using this technology in their daily lives.

Nonetheless, this “1-800” provider pays voice model has failed to translate into the field of data communications due to considerable technical and business model limitations. While most users would quickly appreciate how such a toll-free economic model might work once they are introduced to it, the vision and technology to deploy and maintain such a provider pays model has not been possible on a scalable basis. However, these problems now can be overcome by leveraging upon the recent widespread appreciation for and use of discrete applications (“apps”), and in particular Android apps. The result is a new technology platform that has appeal for consumers, online vendors, and carriers.

NB The concept outlined here is described as ‘Toll-Free Online Access’ and not ‘Toll Free Internet Access’ because the ‘free’ component is not unfettered access to the Internet as Telco 2.0 would describe it (see Net Neutrality 2.0).

Consumer ‘Freeband’ Proposition

The core consumer proposition is a ‘free’ broadband connection to alow-cost toll-free broadband gateway enabled for either 3G or xDSL, which may be connected to a suitably configured set-top box, game console, or other device.

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The connection would be funded by the ‘upstream’ App providers - merchants who benefit by the consumer getting easier access to their services. Each app would effectively mimic the experience of a bookmark in a browser, and the consumer could also buy packages of pre-paid / pay-as-you-go pure Internet use if they want to access services outside the app bundle.

From the perspective of targeting an unconnected end-user, a toll-free app system has important technical advantages over a traditional browser-based surfing model.

1. Apps possess features that make them extremely well-suited to fostering a “provider pays” dynamic that enables an end-user to access content without paying for the connection costs (analogous to the 1-800 voice call). This is possible because apps are excellent at monitoring data flows and therefore can act as “micro broadband metering” engines.

2. Apps are also very secure when compared to a browser (each app is walled-off from other apps), and often much easier to use due to their bespoke design (one need only look at the Android app universe to accept the ease of use thesis).

These advantages translate into a “no pain” adoption proposition to an unconnected end-user seeking to get online for the first time, at the lowest price point, with the greatest ease, and with a real functional utility.

sachson-1.png

In practice, an unconnected end-user would assemble or choose a pre-set package of 50 or so apps from various online content providers. The host device would be controlled by a wireless keyboard (or cell phone with keyboard) and output to an HDMI TV.

Each app would keep a tally of the bandwidth it consumes over a monthly period and instruct the app creator (let’s say Yahoo!) to pay the carrier for the bandwidth consumed. So long as the cost of the bandwidth is less than the benefit to Yahoo! for acquiring this newly connected user, then the trade makes economic sense and Yahoo! will continue to pick up the access charges for the end-user.

And presuming the end-user confines online viewing to content available within this toll-free app ecosystem, then the bandwidth costs associated with these app-enabled online activities would be borne by the parties providing the apps and the affiliated content, resulting in no broadband bill to the end-user. When one considers the amount of time spent by viewers on AOL, Yahoo!, Google, Facebook, Netflix, Amazon, WebMD, Monster.com, etc., one could easily envision the assembly of a fairly comprehensive viewing universe capable of meeting the daily needs of many online users, where the content providers would be willing to pay for the “cost of the call” in order to get access to millions of new end-users: the presently offline, unconnected demographic.

Of course, at times the end-user would seek to access web content from a source that does not wish to provide a toll-free app (a typical HTML page). In these cases, the end-user will be allowed to go outside the app ecosystem by purchasing à la carte bandwidth directly from the carrier (pay as you go, pre-pay per hour of bandwidth). So in effect, end-users can customize their online experience to reflect their willingness to pay access fees for certain content and not for others.

Content Provider Proposition

Online content providers also have much to gain from a toll-free Online Access system - namely those millions of newly connected users who represent true organic growth for their industries. Clearly, not all online content providers will be willing to pay the specific broadband access costs in order to gain a presently unconnected user, but many thousands of merchants and online providers will be interested in paying the access costs. And remember, in this model, the content provider is not paying the whole monthly broadband fee, just the bandwidth costs associated with the new user’s specific use of the app, which is likely to be only pennies per session per app. So, for many content providers, the traditional customer acquisition and maintenance costs associated with securing an online customer are likely to be greater than the cost of paying for the broadband access to that customer (akin to the vendor paying the cost of the 1-800 voice call).

Carrier Proposition

Lastly, the toll-free Online Access platform introduces two new, organic-growth, recurring, access revenue streams for the carrier, who now collects: (1) a monthly tariff from credit-worthy application providers (for the bandwidth consumed by each toll-free app); and (2) from the end-user whenever they venture outside the ecosystem and purchase additional unrestricted à la carte bandwidth (e.g. pre-pay). As mentioned earlier, both of these revenue streams are easily quantified and managed due to the apps’ ability to monitor data flows.

The use of toll-free applications has another considerable benefit for the carriers. Just as each application is capable of monitoring and controlling the flow of broadband access (bytes), it is also capable of monitoring commercial activities associated with the application so used. In this sense, subject to appropriate data permissions and customer relationships etc., each application could be uniquely positioned to act as an “affiliate marketing” engine that can be used by the carriers to generate new, high value, and recurring revenue streams related to commercial activities enabled by the apps.

As has so often been pointed out in the past, carriers have been unable to fully leverage their position as the physical broadband conduit to the home, instead having to accept billing models where they seek payment only from the end-users and not the broadband-enabled online merchants. However, where an app also is used as a dedicated affiliate marketing tool, the carrier can finally participate in the actual commerce resulting from the connection between the service end-user and the online vendor, and do so in a manner that increases the utility to the end-user (no broadband fees) and the online vendor (access to a new online customer and organic growth). Under this paradigm, a traditional carrier in a very short period of time could possibly establish itself as a major and permanent affiliate marketer of goods and services.

In terms of the carrier investment in such a platform (central office and customer premises), the up-front costs will depend on the type of toll-free connection deployed (e.g., 3G, xDSL) and whether that connectivity is built into a stand-alone device (a stand-alone modem gateway) or integrated into another platform (DVD, DVR, game console), either directly or through a device peripheral. However, much of this cost could be offset by having the app providers shoulder some of the device costs in exchange for being pre-loaded onto the device (akin to the trialware model for new computers). Clearly, from the perspective of the app provider, having one’s logo and app appearing immediately and prominently on a living room TV screen is of great value and worth bearing a fractional part of the hardware deployment costs.

Carriers also benefit because there is a low risk of cannibalization to their existing customer base, as current customers (unlimited access plan customers) would not likely cancel their existing service in order to access a “toll-free + pre-pay plan” that would be considerably more expensive on a per byte basis for their high level and diversity of Internet use. But there is the very real possibility of the carrier up-selling the toll-free access household to a more comprehensive connectivity package once they have experienced the benefits of broadband in the home for the first time.

Obviously, a key requirement will be that the carrier receives enough revenue from “inside the ecosystem” app provider fees coupled with the app users’ “outside the ecosystem” fees (pre-pay) so as to cover the cost of the new line. However, as part of the terms and conditions of this service, the carrier could reasonably specify that the end-user engage with the toll-free apps or purchase à la carte bandwidth often enough to justify the maintenance of the line over a pre-determined period of time.

$28Bn of Growth in the US?

Lastly, it is worth flagging the potential value of the unconnected market to carriers that need to identify and secure long-term growth in their markets. By way of example in the U.S., presuming that there are 35 million households that could adopt broadband under a toll-free model, and the revenue per household per month was only one-third that of a typical broadband household, this nevertheless implies that the carriers could avail themselves to $28 billion in enterprise valuation growth by bringing these lower revenue households on-line (again, so long as it is done in a manner that did not disrupt their relationships with their existing broadband customers).

Furthermore, this value would be achieved not through the deployment of expensive, new infrastructure rollouts, but through the efficient monetization of existing last-mile assets. In other words, the toll-free broadband market represents a disproportionate return on investment opportunity for a carrier seeking to grow rapidly in the near-term and, from a corporate citizenship perspective, to do so by closing the digital divide.

Just The Beginning

There is, of course, much more to the toll-free model (especially in terms of setting the bandwidth price as between the carrier and the app provider), and that is what my company Box Top and its partners have been working on this past year. We call the platform “FreeBand” and are confident that it is a workable model by which we can “connect the unconnected”. The result will be a new toll-free application ecosystem where service end-users can access much, if not all, of their daily content on a provider pays basis. As with the “1-800” voice market, should the provider of content feel it is worth paying the broadband carriage costs in order to ensure that their content is consumed, then they will do so as a rational economic choice. Moreover, a major improvement with FreeBand will be the diversity and perhaps unlimited nature of the applications offered to the end-users. Taken as a whole, this collection of free access applications can approximate the “browser + bookmarks” experience of today’s web for many end-users as they engage in their daily online experience. To this end, Box Top is already considering the parameters for several localized trials (xDSL and 3G) that are likely to tell us much about the actual use of this platform.

The FreeBand model is an easy to understand, high quality means for free broadband where the carriers, merchants, and end-users all benefit in a virtuous cycle, in which each offers something the other values. And, unlike most models for free or subsidized broadband, it is not dependent on overly intrusive ads being foisted upon the end-user or the government (and ultimately taxpayers) paying out more, as the public incentive to fund the broadband bills is provided by the prospect of a net reduction in public services costs.

In the end, the carriers, online vendors and the end-users will gravitate towards arms-length commercial arrangements that suit the parties in each given circumstance (sometimes FreeBand, sometimes pre-pay, sometimes an end-user customized mixture of both). As such, the toll-free Online Access model relies wholly on the “invisible hand” of commerce to allow market participants to determine what type of content the online provider should pay for and what type of content the end-user should pay for. FreeBand, and the toll-free Online Access Model, is therefore as powerful as it is novel. It is a technology platform that can make a real difference in connecting the unconnected and eliminating the digital divide once and for all.

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October 11, 2010

Telco 2.0 News Review


Telco 2.0 Top Stories

[Ed - join us with Lightsquared, Google, and lots on broadband economics and disruptive strategies at the EMEA Telco 2.0 Brainstorms, London, 9-10 November 2010, and the AMERICAS Brainstorm on 27-28 October, L.A.]

Some doubted it, but the UK is getting regulated access to BT ducts at last, as well as dark fibre unbundling on BT’s FTTx network. The settlement suggests that BT will keep the right to price access to its fibre and layer zero infrastructure as a wholesale product, on condition that the same prices are charged by BT Openreach to BT Retail, and that they keep competing with Virgin Media’s cable net. Well, they’re unlikely to stop

As a result, this story is somewhat less embarrassing than it might otherwise have been. Slovenia is aiming for 70% fibre coverage by 2015 as opposed to the UK’s 66% target. But at least there’s now a chance of better times ahead. We’ve still got the infamous fibre tax to worry about though.

In Australia, of course, they took a different course and just decided to overbuild the whole damn lot with publicly owned fibre. Telstra is planning to fill up those pipes with high-quality TV, using an adaptive streaming solution from Widevine. As well as multicast, this system constantly measures the quality of each link and adjusts the video stream to maintain quality of service - a radically different approach from most telcos’ ideas of “QoS”.

More details on Google TV are emerging, with Logitech pricing one of the first devices at $299. New buzzword watch: to “fling”, as in “I flung that video on my mobile at the TV”. An improvement on flinging your mobile phone at the TV, we presume. The opposite function is fairly well served by things like Slingbox - here’s another version, in which you can take your Verizon FiOS TV away on a mobile device.

It’s being suggested again that YouView, ex-Project Canvas, is going to be subject to yet more scrutiny by OFCOM.

LightSquared’s plans are taking shape - as well as the mammoth deal with NSN for the build-out, they’ve got a deal with Nokia for devices and Qualcomm for chips to support their slightly eccentric 1600MHz LTE mixed cellular/satellite network. There are also interesting clues about the business model in there - apparently they’re looking at white-label devices as well as wholesale connectivity, via a partnership with AnyData.

Nokia is also in the middle of efforts to tackle the smartphone device aggression problem, which are concentrated at the moment on femtocell kit. The keyword to remember is “fast dormancy”. Meanwhile, RevK is trying to ping his iPad and learning all sorts of things about the UMTS radio-paging channels.

You’ll surely remember from last week that Nokia is providing a new API that lets you let your devices sleep in the powersaving idle state, and then wake up when you want to notify them of something. Here comes competition - HTC is launching a new service platform that provides a variety of device management functions for developers. Remind us why it’s so hard to get this stuff from operators again?

Meanwhile, the VP of MeeGo devices at Nokia quits, for “personal reasons”. Thud. Scream. Thud. The purge continues.

Elsewhere, WAC is seeking comments on the draft specification, which has been published as a wiki. Here’s your chance to influence it into the paths of righteousness.

HTC is annoying its community of Android power users, having discovered a way to roll back the jailbreak procedure used to get root access to the phones. It’s still possible, but the break only lasts until the next reboot - which will always be near, given typical Android power consumption.

Google CEO Eric Schmidt has claimed that Android is profitable, on the rather sketchy basis that it encourages people to go online and therefore increases Google’s advertising revenues. It doesn’t seem that obvious, to put it mildly, that large percentages of current Android users weren’t online before they got an Android phone.

Android developers may soon have the choice of selling through Android Market or a new Amazon app store, so Schmidt’s remark may be even more unlikely soon.

In other Google news, GOOG-411, the voice search service, is being discontinued. Interestingly, Googlers asked about seem to be quite open about the fact that they never had a business plan for the service and that it only existed as a testbed for their speech-to-text technology. Apparently this now works to their satisfaction and they no longer need to record bulk speech for samples.

So, what is a Microsoft Windows Phone 7 developer day like? Here’s a report from the field. The first interesting point is that Microsoft’s strategy still seems weird. Who is likely to develop Microsoft mobile applications? Obviously, the (huge) existing base of Microsoft shops. Who will pay for them? Obviously, those MS developers’ existing customers, the (huge) installed base of businesses that run Microsoft for everything. So, obviously, MS is doing all it can to get them the latest and greatest version of their technology?

No. Participants who expressed an interest in business projects were told to stick with Windows Mobile 6.5. There’s certainly something ironic about MSFT encouraging people not to update, but we really wonder if this makes any sense at all. After all, the new and improved version of the Visual Studio mobile plugins, and a new developer tool, Blend, are only available for Phone 7. Also, you’ve absolutely got to develop in MS Silverlight using either Visual Studio or Blend, but then if this worried you, you’d already have moved to Linux (or whatever).

Also, there’s very little multitasking support and no native database. Customers have noticed: Verizon’s COO Lowell McAdam says that there are three major mobile OSs and they are BlackBerry OS, Android, and Apple iOS. Microsoft is “not at the forefront of our mind”. Ouch. Nokia can’t be very pleased either. Microsoft’s in-game advertising company, Massive, has closed down, and the less said about the idea of an Microsoft-Adobe merger, the better.

McAdam also gave some details of the LTE roll-out plan.

Meanwhile, Motorola announced three more ‘droids including a combined touchscreen-and-QWERTY, business-focused device. Fortunately, Microsoft has a solution: they’re going to sue. There’s a helpful visualisation of mobile industry lawsuits here, which seem to be driven by two highly litigious no-name companies.

More news about Skype for Android - the new full-fat version won’t let you do VoIP over 3G, but only if you’re in the United States. The opposite is of course true of the “old” Verizon Wireless/Skype app, which would do psuedo-Skype over the cellular network. Inevitably, an use the Activity Streams protocol to squirt Skype events into other social networks.

Medical students get issued iPhones for fieldwork. Meanwhile, Kenya is collecting epidemiological data in real time using much less expensive kit.

Vimpelcom and Orascom merge. In other merger news, EverythingEverywhere brings that famous Orange/France Telecom knack for industrial harmony to the UK, as employees are notified that their jobs are at risk by a traffic light turning green, yellow, or red in front of a mass meeting. Meanwhile, some Foxconn shifts consist of up to 50% unpaid student interns.

Vodafone is planning a major drive for PAYG market share in the UK, with a mixture of heavy advertising and giveaways.

KPN, meanwhile, has discovered a new source of voice revenue - providing pseudo-voicemail on lines where there’s no voicemail, which means they can cash a termination fee on any call that goes unanswered. Neat, and possibly illegal.

Turkcell has become a major wholesale customer of DTAG, in preparation for the launch of an MVNO targeted on millions of Turks living in Germany.

Twitter is getting excited about advertising, so much so that the founder Evan Williams has been replaced by the ad chief.

It was the week they made a movie about Mark Zuckerberg. As if to celebrate, Facebook has a new privacy disaster. It seems that the iPhone app will slurp all the phone numbers on your device and try to match them with Facebook users, rather guessily, and that this information will then escape through the Open Graph API. Hacker Tom Scott demonstrates the possibilities.

You can now dump all the information Facebook has on you, or at least everything it admits to having on you, although F-Secure reckons that this should require more confirmation than just your Facebook password. Good luck getting that implemented.

How Google organises its search index. Can telcos improve by being cloud computing customers? And are they in a position to deliver the mobile wallet? In Germany, they’re going to try, bringing back MPass from the deep past to support NFC payments and interworking with the new German ID cards.

Brough Turner presents on the technical advances in Wi-Fi and his new mesh-network ISP NetBlazr. Bruce Schneier brings a sceptical look at the Stuxnet worm. The first RFC sponsored by a nightclub - Zawinski of course.

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October 4, 2010

Telco 2.0 News Review

Telco 2.0 Top Stories

[Ed - a reminder that the ‘Early Bird’ discount ends for the EMEA Telco 2.0 Brainstorms, London, 9-10 November 2010, and that the AMERICAS Brainstorm is on 27-28 October, L.A.]

About 35% of mobile data is accounted for by streaming video, and 40% of that is YouTube, says Allot’s Mobile Trends report. Meanwhile, VoIP is 3%, but it’s growing at 83% year on year. So it’s no surprise that Skype is eating the world, again. Facebook wants a deal under which Skype would handle user-to-user voice for their half a billion or so users.

Computer Weekly, meanwhile, loves Avaya’s new enterprise video conferencing/collaboration tablet. The key ingredient, it turns out, is Skype Connect, as Phil Wolff’s Skype Journal informs us. The enterprise-voice workhorse is planning to integrate the SIP version of Skype into all its products starting in the second half of 2011.

Phil also points out that the various thin client/SIP Skype products, which unlike “real” Skype nodes rely on a client-server architecture, are based in a flock of data centres operated by Verizon Business. So that would explain why VZ has been so happy to let its users Skype as much as they like - they’re making money on the rackspace. And handling the irksome CALEA lawful intercept requirements, too.

Wolff has more Skype-Facebook love here, and reports that the new contacts import tool is decidedly suboptimal. He’s also got posts on Skype for Schools and for the High Holidays, a discussion of whether the Torah permits you to Skype into prayers.

Inevitably, this all leads to a round of caffeinated merger speculation. Om Malik thinks Facebook should buy Skype, pointing to their sort-of valuation at $33bn. Well. What about the other way round? As 37Signals points out, if Facebook is so rich, why hasn’t it got more money? And who on earth believes it’s 7.5 times as good a business as Google?

Now Skype has actual, kickable cash flow and profits, rather than shares that aren’t actually traded on an exchange, and doesn’t do things like this. Bad API documentation, but that’s relatively trivial. This is much worse.

“Instant Personalisation” lets third-party websites get access to Facebook Connect information on users who are currently logged in, without any user action. The really bad thing here, as 33Bits points out, is that this could mean any web site could get this information and do whatever it likes with it through the well-known XSS (cross-site scripting) attack. And don’t even think about what might happen if someone found a way to embed such an attack into a “share this” widget or an advert, deployed on many, many other websites. Peter Kirwan has more scepticism at Wired. Meanwhile, why on earth would you do a 5-for-1 split on shares that aren’t traded?

The Ministry of Defence is concerned about Facebook Places, and especially its nasty habit of showing your location without your active intervention. Soldiers have been advised to disable it for fear of being stalked by terrorists.

It’s Startup Camp: Comms soon enough, and just look at this list of innovators in voice, video, and messaging. The secret is that they got Thomas Howe to pick.

Hulu commences monetisation - and the new business model is very much like the old one. Essentially, it’s a subscription of $9.99 a month, which gets you more content out of the owners’ (ABC, NBC, and Fox) vast archives of TV. More interestingly, they’re also looking at partnering with some of the better-TV device makers like TiVo and Roku, and planning to recruit higher-rate advertisers for the new service.

The company’s revenues were $100m last year - readers may recall that we expected it would be significantly harder for Hulu to get to breakeven than YouTube. Moving back to a subscription model is one way to tackle this, but we wonder whether it will beat the “apparently free” model that the premium channels on YouTube provide.

While the content rightsholders are busy pushing video at us, what’s happening with the wires? BT Openreach announced the latest 159 local exchanges to appear on the fibre-to-the-cabinet timetable - some of them are even marked as getting fibre to the premises. And they’re asking the public where they should send the big white vans next.

Sort of. The “Race to Infinity” is being organised by BT Retail, rather than Openreach, so it’s not taking account of demand from wholesale customers like unbundlers. As there’s a minimum threshold of 1,000 votes to be considered at all, it excludes the smallest exchanges - which are usually the ones that don’t get broadband even now. And there’s a maximum of five additional roll-outs.

In better news, the EU’s Regional Development Fund is paying half the cost of deploying fibre in Cornwall, with about 50% of the deployment making it to the customer premises. Meanwhile, Algeria Telecom is planning to move from a trial to 250,000 100Mbps lines. (Are we bitter about this? Yes, we are.)

No amount of good ideas or good technology can overcome dire execution. Rudolf van der Berg reports on KPN’s services over fibre and their horrible customer service record. Pro tip: it’s a bad sign when your field service engineers are offering to do the install cheaper for cash, pocketing the money, and leaving the transaction unrecorded.

He also costs out Belgium’s heaviest Internet user and discovers that even multi-terabyte monthly usage might be profitable. No wonder Dave Burstein reports that video-throttling firm Zeugma has failed.

Google Voice is coming, to the Apple App Store. It’s probably fair to say that a whole stack of mobile VoIP apps are holding behind it. Meanwhile, apps developers are satisfied with Apple and profitable, a survey finds.

Getting back to the evil news for a while, a trojan is spreading on Symbian and BlackBerry devices that threatens the security of mobile payments and other SMS-based two-factor authentication applications. Basically, it monitors your messaging inbox and informs its evil masters. Technical details are here - the really worrying bit is that the virus was correctly Symbian Signed, and it posed as a “Nokia update”. The certificate used for the signing has been revoked, but you have to wonder whether all the Symbian Signing palaver is worth it if you can get your malware signed…

Or you don’t, if you work for Samsung, which has pulled out of Symbian development.

Meanwhile, Graham Cluley at Sophos blogs on a new spin on the old dialler trojans everyone grew to hate in the early 2000s - this time it’s mobile, and it makes calls to rented “virtual numbers”. Neatly combining the themes of Voice 2.0 and evil, Vox Sciences gets caught spamming former Spinvox customers.

And beware creepy Android apps - a significant percentage of them are secretly sending home phone numbers and GPS locations. A paper is expected on the topic at USENIX.

AT&T launches better voicemail, which integrates U-Verse (FTTC) voicemail with AT&T Wireless voicemail and provides a visual interface for the whole thing, with a Web version for the PC. Now that’s more like it. Meanwhile, Verizon Wireless has to refund $60m in data charges to its customers.

T-Mobile USA has kiboshed the Clearwire merger story, as chief network officer Neville Ray described WiMAX as “niche” and expressed a strong preference for LTE. (Ray is surely an ideal surname for a mobile network engineer.) T-Mobile has also got an impressive new HTC Android device, with their own videochat app, HSPA+, and DLNA media server capabilities.

Microsoft, meanwhile, sued Motorola over alleged patent violations. Given that they include “scheduling meetings”, “synchronising e-mail”, and “notifying applications of changes in device battery level”, it’s going to be somewhat difficult to demonstrate prior art. Is it just us, or are patent disputes getting a bit dated?

Nokia announces a genuinely useful innovation - the Ovi Notifications API, which extends the well-known XMPP protocol to provide a generic push-notification capability for apps on Nokia devices. The key thing here is that this makes it possible to have a single connection for all the apps, and to make use of the low-level radio wake-up channel - thus doing your battery a power of good. Operators could have done this years ago. Also, the N8s are finally on their way.

Pieter Knook is out at Vodafone, in the wake of Vodafone 360’s troubles. As are 1,200 Orange UK and T-Mobile employees, as EverythingEverywhere sets about de-duplicating.

Interesting thoughts on APIs and open source strategy from the head of Canonical.

IDC reckons Apple iAds are 21% of the mobile ad market.

The EFF rejoices after getting the Leahy internet-censorship bill kicked down the road, after an awe inspiring list of Internet engineering heroes protested.

Microsoft gives up on blogs, hands over Live Spaces users to Wordpress.com.

TomTom = the world’s 137th biggest mobile market. iPhones for sense your moods. (Some N97 users found theirs could tell when they were frustrated - they flew across rooms and shattered.) Kenya’s broadband price war. Marketing IPv6. The sticky end of ACS:Law.

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