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Telco 2.0 News Review


Telco 2.0 Top Stories

[Ed. We’re now busy analysing the output from last week’s 11th Telco 2.0 Executive Brainstorm, as well as planning the next brainstorms in London, San Fransisco and Singapore (see here for more). Meanwhile, here’s a quick preview of one of the votes on Cloud Computing where we asked delegates to rank alternative ‘Use Cases’ options. It shows that delegates favoured the integration of telcos’ network and footprint assets with cloud computing as the way forward in this key field.

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This supports our view in a forthcoming analyst’s note that using telcos’ control of network assets and widespread geographical footprint could be a key differentiator for them in the cloud market.

You can also access the US event summary write up, an outline of the forthcoming Telco 2.0 Roadmap Report, and we’ll bring you more on the EMEA analysis over the next week or two.]

Vodafone results were out this week - the giant operator announced 3.9% revenue growth year-on-year for the first half of 2010. CEO Vittorio Colao said that he was planning to “adjust pricing to usage” in order to squeeze out more revenue from their data networks. As it’s Vodafone, there’s always someone trying to drum up a merger or demerger rumour, and this week Colao tossed them a bone by announcing the sale of Vodafone’s remaining stake in Softbank, bringing in a cool £3bn. Woof…gulp. More broadly, the firm is planning to concentrate on Europe, Africa, and India - how this differs from its strategy so far under Colao isn’t clear.

It was also results time at BT, but rather less comforting. Revenues fell by 2.8% year-on-year for the third quarter, primarily due to the continued erosion of the voice business. Line loss stood at 5.9% year-on-year. However, BT succeeded in getting an almost matching boost to EBITDA (2.6%) by squeezing its costs. At the end of September, the carrier had a massive 38,000 subscribers on its new FTTC service and 45% of the eyeball ISP market.

Telefonica also had results out, and they were good, with revenues up 6%. They’ll be needing some of that money, though: O2 UK is spending a million pounds a day in CAPEX to keep up with the smartphones, and CEO Ronan Dunne expects this to rise 25% next year.

After Everything Everywhere, France Telecom/Orange apparently wants to sign a whole lot more network-sharing contracts next year.

Getting away from the UK results beat, Safaricom saw revenues and profits up 15%. Interestingly, 23.8% of their revenues are now coming from data, so they’re almost half way to Softbank’s position of making more money from data than from voice, although it’s not clear how much of that is SMS. Safaricom M-PESA has 13.5 megasubscribers, meanwhile, or 81% of Safaricom’s customers.

You might wonder, then, with M-PESA licencees deploying all over the place, why Vodacom Tanzania needs a grant from the Gates Foundation. It’s only $4.8 million, but still. After all, MTN says they’ve invested $3bn in basic infrastructure for their African networks in the last 12 months. MTN has also signed up Western Union as a partner for its mobile money service.

The GSMA has launched a set of operations metrics and KPIs for mobile money operators.

Interestingly, MTN claims that 60% of the devices its South African retail outlets activate are smartphones. So that’s probably the right moment to link to a review of Orange’s latest own-brand Android device, the San Francisco, which comes in at £99 and delivers HSPA, WLAN, GPS, a 2GB micro-SD card, a 3.2 megapixel camera, and a 600MHz processor. And the battery apparently lasts for a whole two days.

Of course, one consequence of smartphone proliferation is security dread. In China, an estimated one million phones have been infected with a virus that sends itself to everyone in your contacts, via a premium SMS provider. It’s a threefer - not only does it propagate, but it makes actual money while it does so, because as well as the premium SMS, the attack page the messages point you to contains pay-per-click ads. It’s not clear whether the attack is against Symbian, Android, or China Mobile’s fork of Android, OMS, but perhaps this might explain it.

Windows Phone 7 numbers are still fluffy, but what it doesn’t look like is a hit. Especially as Microsoft seems to be trying to sell Kins again.

Nokia’s user-designed phone has made an appearance, and it looks a lot like an N8.

AT&T is trying to cheer up its non-iPhone users - Getjar’s white label app store is coming to their fleet of BlackBerries, Nokias, ‘droids, etc.

Relatedly, where are the missing gadgets? Two things are clear from this story - there’s a groundswell of small ODMs in Asia, because it’s never been easier to make a phone, and big number forecasts should be treated with caution. If that hasn’t soured you on analysts’ numbers completely, Gartner’s smartphone market share scoreboard is out, charting the attack of the ‘droids.

The big number at Clearwire is currently “zero” - that’s how much cash they’ll have left by Christmas on current trends. Sprint CEO Dan Hesse indicated that the operator might be willing to tide them over, but didn’t make any promises. This may have something to do with the fact that Clearwire and Sprint are suing each other. Last week, we mentioned that Clearwire currently doesn’t make any money at all from its wholesale (i.e. Sprint) smartphone subs. This week, we know a bit more about why after Sprint invoked mandatory arbitration.

Essentially, the problem is that Sprint agreed to buy wholesale WiMAX service from Clearwire with regard to its 810,000 HTC Evo and Epic smartphone subscribers. These devices are all capable of using the WiMAX network, and the subscribers pay a premium for it. However, not all of them are covered by it, and the question seems to be whether the agreement means that Sprint bought the service in advance, or whether it contracted to pay for the service that was actually used in arrears.

Back in the UK, 3UK is beginning to shut off its 2G national roaming deal with Orange. Apparently they have discovered that there are actually a few 3 subscribers with 2G-only phones - surprising, as 3 has never sold them - and they’re trying to track them down and offer them an upgrade. There’s a rundown of device availability for UMTS900 here. Also, STEricsson will be shipping chips with IPWireless’s TDTV mobile TV technology included, so perhaps that spare 20MHz of spectrum might get used.

The European Union reckons that there is no sign of net non-neutrality in the EU at the moment, and therefore there is consensus that there’s no need for net neutrality regulations for the time being. You can’t fault the logic.

In the UK, BT and TalkTalk succeeded in getting a judicial review of the Digital Economy Act. The “Federation against Software Theft” fulminates that this is “a fig-leaf for their own agendas”, but they may have a fight on their hands to portray the incumbent telco as a bunch of hairy torrent-freaks.

Here’s something interesting - BSNL’s latest monster contract, 5.5 million lines’ worth of GSM, has come down to a straight run-off between NSN and Huawei. Ericsson dropped out - because the Indian government insisted that the vendors submit their source code for security testing. Huawei and NSN were apparently cool with that. Meanwhile, India’s minister of telecoms resigns after being accused of not getting enough money for the 2G spectrum. The argument is that the 3G auction brought in so much money that the 2G one should have done better - you probably can fault the logic there.

LightSquared’s first satellite, a mere 5.4 tonne flyweight with a 22-metre wide antenna, has been launched from Baikonur on a Russian rocket. The next steps: deploy that antenna without anything going wrong, and then work out what to do with the thing.

Is Facebook going to launch a webmail service? Is Skype going to launch a webmail service?

One thing we do know is that Facebook is going to build an enormous data centre in North Carolina at the cost of a mere $450 million. Interestingly, an unnamed major US telco is getting into containerised data centres. And the world’s top supercomputer is now Chinese.

Telcos seek better application servers for their cloud activities. Economics of the cloud. When the cloud fails: Register.com’s massive DNS outage.

HOWTO hack on Qt-based mobile applications with their new QML user-interface language.

Yahoo!’s messenger app for Android now comes with video calls.

Amazon has dropped the percentage it takes on sales of newspapers and magazines onto the Amazon Kindle, aligning the pricing with the now-traditional 70-30 split.

More bad news for Google TV - Fox is the latest TV network to blacklist them, going so far as to detect anyone streaming TV via another service. Netflix, meanwhile, won’t do Android because it’s too open and they’re worried about their DRM, or rather, the contracts with Hollywood that demand it.

Apple is preparing to launch iAds in Europe. Meanwhile, did you know that Opera may soon have as much web traffic in its cache farm as Google?

There are notes of a fascinating talk on Google’s scalability architecture here (note: technical). Did you know it can take longer to read data from RAM than it can take to push it over a 1Gbps LAN? However, Google doesn’t yet do inter-datacentre virtualisation - perhaps because they find the round trip delay outweighs the benefits.

Here’s a video on Asterisk SCF. Voxeo has signed up voice hacker Mark Headd. Twilio closes another round of VC funding. Vidyo offers high quality video conferencing for $1200/seat/year.

Tim Berners-Lee’s original grant application. Where to find a hosting provider that’ll never rat on you. Google Refine cleans up crufty datasets. Where to find Britain’s start-ups (we filled in the form but we’re not on there…). Rudolf van der Berg blogs back after Telco 2.0.

Online poker site representatives visit user to find out if they’re human.

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