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January 31, 2011

Archive of Telco 2.0 newsletter

A reminder to our blog readers that you can sign up for the free Telco 2.0 email newsletter here. There’s also an archive of 4 years’ worth of newsletters available online here.
More detailed analysis is available via our subscription research service here.
Hopefully useful resources to those interested in new telecoms business models…

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Telco 2.0 News Review


Telco 2.0 Top Stories: Facebook, AT&T M2M

[Ed: Don’t forget Telco 2.0 Best Practice Live!, our global virtual event, is this week on Wednesday 2nd and Thursday 3rd of February. We’ll be tackling the key issues covered in this week’s News Review - check out the agenda here and sign up absolutely FREE here.]

What if social networks drove what you buy? What would that mean for our strategic focus on customer data? Wired carries a major feature on a wave of start-ups that promise to track the stuff you buy, and, er, social or something. Not to be too snarky, though - group-buying websites like Groupon are attracting enormous amounts of stock-market interest at the moment. Interestingly, it’s been pointed out that their terms of business sometimes essentially mean they’re supplying businesses that sell through them with trade finance. It’s one way to get banks to invest in small businesses…

The big player here, apart from Google, is of course Facebook. ZDNet has a fascinating piece on their latest advertising feature, which scrapes status updates, adds advertising that seems to fit, and then reinjects your status with the ad into the ad columns on your friends’ pages. It’s certainly one way to target ads, but does it constitute “turning users into spammers”, and are Coke, Levis, Budweiser, and Starbucks really brands that would benefit from it? Is there anyone on earth who drinks Coke on a word of mouth recommendation? Indeed, one of the major insights of our recent Facebook analysis was that it doesnt work so well as an advertising channel for the really big brands as it does for those with smaller, more ‘tribal’ fans.

We therefore think they’ll struggle to support the investors’ hugely inflated expectations on advertising alone. As a result, if this isn’t just another rumour, it wouldn’t be any surprise. A Read/Write Web user claims to have seen a “Call” button briefly appear in Facebook, as if a small percentage of users were being served a beta version of the page in best Google style. Interestingly there was no sign of Skype’s branding. As usual, Dan York has a sensible discussion, among other things of whether telephony really fits with Facebook’s user patterns. After all, Voxeo already integrated voice with Facebook as an entirely unofficial experiment.

Yet another Facebook phone rumour has been officially denied.

However, one star media/consumer electronics company did announce some interesting shiny gadgets this week. Computer Weekly has a hands-on with Sony’s brand new replacement for the PlayStation Portable, the Next Generation Portable. The device has a large touchscreen, but also a touch panel on the back, and two analogue controllers. Oh yes, it also has a quad-core ARM Cortex CPU which Sony claims is more powerful than the PlayStation 3. It may be worth remembering that PS3 units have been used to build a serious supercomputer, at least back when you were allowed to run Linux on them.

And it has a cellular radio. There’s also a gaming-focused smartphone, the Xperia Play. And there is no mention of the concept of “Sony Ericsson” anywhere on these devices. Something to watch - migration of SMS and other communication services to systems built into gaming environments, or delivered over-the-top. Especially as they’ve also got their own app store for Android games.

Who knew that Barack Obama spent his time drawing up innovative Telco 2.0 use cases? Connected Planet notes that the broadband section of his State of the Union address included several M2M or embedded mobile/comes with data applications. (See more on new approaches to M2M business models in our M2M and Embbeded research stream.)

Perhaps not surprisingly. AT&T reported that it added 2 million devices other than mobile phones in the fourth quarter - that includes about 500,000 tablets and laptops, but the rest are mostly true M2M devices like the SIM cards in “smart pill boxes”. As a result, 940 different device types account for 12% of AT&T’s wireless subscriber base.

In another Telco 2.0 strategic priority, is Microsoft about to launch something new in online video? While MS has been having a pretty lacklustre time of late, it’s had a quiet success with Mediaroom, its back-end solution for online video and IPTV service providers. Now, apparently, there are a couple of codenamed projects looking at integrating Silverlight (its browser-based applications environment) and Mediaroom, and perhaps also at adapting the Windows Media Centre product line to play nicely with both Silverlight and Mediaroom. Browser-based apps and a local media centre device basically adds up to what both Apple and Google are doing with their TV projects. Having their own back-end technology is probably a significant advantage.

Meanwhile, Samsung’s next lot of Blu-ray players will be Internet-connected and integrated with Lovefilm, the Amazon-owned movie distributor. Amazon is apparently planning to launch a movie streaming service, which is presumed to be Lovefilm, more widely across its global footprint.

Boxee users are going to start seeing British TV content from SeeSaw, the online streaming service owned by Arqiva. (That’s the company that owns a lot of the UK’s TV infrastructure and plays a major role in YouView.)

The Wall Street Journal believes that Hulu’s owners are thinking of turning it into a “virtual cable operator” - which seems to mean streaming cable programming. Wired points out that what is happening here is that it turned out to be a better deal to licence content to Netflix and to accept Google ad-revenue sharing from YouTube viewers than to compete with them.

For its part, Netflix this week showed data on which networks provided the best throughput for their customers. Not surprisingly, the DOCSIS 3 cable operators did best, although it’s worth noting that Verizon’s numbers are given as an average of its DSL and FiOS subscribers. Curiously, Canadians got better service than Americans whatever the technology they used, although this may be an artefact of Canada’s population being concentrated in the southern cities.

Data traffic growth figures are being bandied about again by people who make routers and other networking equipment. But this is interesting:

An unexpected driver in this overall growth of Internet traffic is the surge in ambient video. This is so-called “puppy cam” traffic — fixed video sources featuring pets, so-called “nanny cam” child care and health monitoring video streams, and especially security camera applications.

“This is a much bigger deal than anyone thought,” said Pepper. He added that the popular Shiba Inu Puppy Cam site was said to have more Internet viewing hours than all of ESPN online video. In fact, of the top online video sites in Europe last year, “three of the top 20 are ambient video, and these didn’t exist a year ago.”

Puppies: the future of online video. As a sidelight, a British court administered a spank to the practice of sending out speculative legal threats to filesharers and then trying to get the copyright holders to pay you.

In devices news, Connected Planet reports that Motorola is seeing a drop off in sales of its Droids after the announcement that Verizon Wireless would carry the iPhone. On the other hand, AT&T will be selling their Atrix 4G, and is apparently keen to round up more HSPA+ phones as a hedge against getting too dependent on Apple. Nokia saw an ugly drop in profits (23%), although smartphone shipments and overall market share were both rising. We told you they’re becoming the cheap option. Apparently, they’re going to have a top-management meeting in London on the 12th of February, presumably before heading off to Mobile World Congress, in order to define a new strategy.

Of all the things you might think Nokia needs, “more meetings” probably wouldn’t be one of them. On the other hand, NSN had a strong quarter and landed the LightSquared deal. Qualcomm is looking forward to a killer year with the new iPhone, and LG saw a horrible year after it was stuck without a decent smartphone.

Toshiba, meanwhile, revised its profit and sales forecasts upwards on strong demand for touchscreens and NAND memory chips.

Google announced a preview of Android 3.0, while it seems that there was a major row between Google and Apple over collecting customer data from Google Maps users with iPhones. There’s also a really fascinating group profile of top Googlers in Bloomberg Businessweek - note that the key Google execs are in charge of search, YouTube, Android, and a secret project competing with Facebook. Also, YouTube’s content licensing is now focusing on “high quality amateur material” rather than big deals with rightsholders.

Google has responded to complaints about the quality of its search results by altering its algorithm to screen out “content farms” more effectively.

Will Dell change the smartphone business?

Despite all the iHype and marching Androids, though, it looks like RIM won Christmas 2010 in the UK.

There’s been another critical Android security exploit. Facebook, meanwhile, asked users to do its internationalisation for it and got burned when they translated the messages into different ones to those intended. Naughty monkeys.

Speaking of naughty hacker monkeys, here’s a periodic table of Google’s API and developer products. Bada and Android devs will soon be able to get paid through carrier billing on O2 Germany. Prepare for Forum Nokia workshops. Amazon S3 went from 102 billion data objects at the end of 2009 to 262 million objects at the end of 2010.

FluidDB lets you trivially create read-write APIs for your data.

O2 UK is two-sided - they announced a free WLAN offering this week that’s going to be monetised by local advertising. The idea is that, having registered, when you use the service in one of the participating venues, you get a sponsored text message or two. Tangentially, O2 has also hired NSN to beef up its southern UK network with their Flexi Multiradio base stations.

Femtocell specialists Ubiquisys have an interesting prototype product - it’s a small femto designed to do exactly what most operators don’t want you to do with them, which is take them with you on holiday and avoid roaming charges. The usual barrier to this is that you don’t have a spectrum licence for your hols and therefore it’s illegal. This device, however, tries to cut down the power and get in below the licence floor - which could still be enough to cover your hotel room. Although you could just use Skype.

Skype launched version 5.0 for Mac this week, having made significant changes from the beta. Interestingly, there’s no sign of the Facebook integration, although there are wholesale changes to the user interface and group video chat, which is now a premium feature. It costs $9 a month, which is significantly cheaper than any of its competitors, as Phil Wolff points out. They’re also holding a contest for the best skin for the chat function on the Mac.

It looks like Skype is going to put off the planned IPO, which both Wolff and Andy Abramson (and Telco 2.0) consider is wise as the company deals with regulatory issues, internal “creative tension”, technical debt, and strategic questions around its efforts to push into the SMB and enterprise markets.

Meanwhile, Google has acquired SayNow, a Voice 2.0 startup focusing on voice-social network integration. But ZDNet’s Jason O’Grady argues that Google Voice on the iPhone is a poor user experience. HOWTO send SMS from the command line with Tropo. Protecting your Asterisk 1.8 server from spam with Fail2Ban. Did you know there’s a whole blog for Trixbox users migrating to other Voice 2.0 solutions?

Thomas Howe predicts a wave of trivial Voice 2.0 startups, and argues that BT management has ruined Ribbit but that Voxeo, Twilio, and IfByPhone will endure.

Consultant John Seddon says that as much as 60% of inbound traffic to some of his customers’ call centres consists of “failure demand”, analogous to “muda” (empty work) in the Toyota Production System. Those are the calls that are generated by failure elsewhere in your system. An exercise for the reader - how can your business help your customers reduce this, rather than just selling more but ever-cheaper minutes of use? (empty calories?)

RevK is completing his migration to IPv6, despite Nokia products that either force you to set the password “password”, or else force it to be anything else. He also suggests we stop talking about IPv6 and just say “Internet” instead, and make IPv4 the weird alternative case.

Not sure of your IPv6 clue? IPv6 carrier Hurricane Electric can help you with its online certification test.

What do you do after the dictator runs off into exile? Wired interviews the head of Tunisia’s Internet agency, who’s busy changing course from blocking websites and hacking everyone’s Facebook account to managing the TLD root servers and such. He’s already made it legal to run your own mail server.

It looks like 3GPP might do something horrible to USSD in the next lot of LTE specs. Verizon buys data-centre developer Terremark, owner of the NAP of the Americas.

Video fix: the GSMA Mobile Money blog has two sets of videos on Safaricom and Equity Bank’s M-KESHO product. The second is here.

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January 28, 2011

Threats to the Telco Business Model: Next Week - 2nd/3rd Feb Reminder


A quick reminder, Telco 2.0 is presenting our second FREE ‘Best Practice Live!’ virtual event on Wednesday 2nd February, 0900-1500 GMT, and Thursday 3rd February, 0900-1500 Pacific Standard Time, it features online presentations by, and live discussions with, key innovators in the industry. Sign up here - more details are here]

Here’s a quick preview of the first session at Best Practice Live! 2. The theme is External Threats to the Telco Business Model. We recently published an analyst’s note on Facebook. At our most recent events, delegates thought Facebook was clearly their highest competitive priority - which should come as no surprise. As Telco 2.0 MD Chris Barraclough points out in this new presentation (slides here, permanent link here for members), Facebook urgently needs to be a competitor to telcos’ voice, messaging, and video products if it is ever going to come close to realising the fabulous valuations placed on it.

facebook-quartet.png

Although its growth is spectacular, it’s beaten only by the growth in investors’ expectations of growth in actual revenues, profits, and cashflow. Revenue per user is about one quarter of Skype’s monthly average revenue per paying user, for example. Which would make us tend to wonder who’s going to be paying who under their “strategic partnership”.

We’ll also have presentations on:

  • Out-Appling Apple: is it even possible?
  • Telcos vs. Internet Players: Act before it’s too late
  • Evolution of the Mobile Ecosystem: What’s happening to handsets?
  • and more…

To find out the full story, sign up for ‘Best Practice Live!’ FREE here.

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January 26, 2011

‘New Digital Economics’: New brand for new opportunities


NDElogo_210w.jpgOur readers, members, and clients have asked us to facilitate deeper collaboration around new business models with other industries who increasingly rely on telecoms infrastructure.

So this year we’ve launched ‘New Digital Economics’, a new programme of research, supported by executive brainstorms and developer forums run for the AMERICAS, (5-7 April 2011, Palo Alto, California), EMEA (10-12 May, London) and APAC (22-23 June, Singapore).

Each event looks at new growth opportunities at the intersection of telecoms, media and technology and incorporates 4 other events: Telco 2.0, Digital Entertainment 2.0, Mobile Apps 2.0 and Personal Data 2.0. Each event also includes a 200+ person developer forum and showcase, run in partnership with AppCircus.

An agenda overview is here. Contact us for more information

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January 25, 2011

Why CSPs Can’t Afford to Miss the Cloud



[Ed. This is a guest post by Telco 2.0 partners Parallels who are running the 6th Parallels Cloud Summit, February 22-24 2011 at the Gaylord Palms Hotel and Convention Center in Orlando, Florida (more here).]

It could be argued that Communications Service Providers (CSPs) missed some opportunities in the last 10 years. They certainly didn’t lead the market in the mobile application revolution. The next big opportunity is with Cloud services. And, simply put, CSPs cannot afford to miss the Cloud.

The Good News

The good news is CSPs are in a fantastic position to capitalize on Cloud services for two main reasons: they own the underlying network infrastructure and they have existing commercial relationships with millions of customers. Further, some CSPs are already offering certain Cloud services like web hosting. However, very few have invested enough in the infrastructure or marketing to make them successful or bringing them meaningful revenues relative to their traditional network and voice services.

The Small Business Opportunity

While the Cloud opportunity in the enterprise and government sectors is exciting in terms of potential deal size, this article focuses on another market - Small Businesses. These are the businesses that typically have very little in terms of IT resources and that can benefit the most from the Cloud services and applications.

There are over 73.5 million small business and easily another 100 million home or small offices worldwide. Virtually all need a “web presence” and simple email. However, the majority of them would also greatly benefit from a range of applications, including some which were traditionally available only to bigger organizations, such as messaging and collaboration, backup and archiving, customer relationship management, and hosted PBX, especially as their business and marketing needs evolve.

Small Businesses are and will be adopting these Cloud services very quickly, partly because it improves productivity and efficiency, and partly out of necessity, since they do not have an internal IT department. This becomes the easiest and best way for them to consume technology. Cloud services also make sense financially for small businesses, as there are no large capital outlays required and they can pay for just the services and applications they need, easily adjusting for both good and bad markets.

Cloud Services Reduce Churn

Another reason CSPs cannot afford to miss the Cloud is that Cloud services fundamentally increase the average lifetime value of a customer. The following data shows the impact in churn rates among Small Business who use one service (web hosting) versus two services (web-hosting and email hosting):

In short, Small Businesses that subscribe to web hosting services and use the hosted email services as well remain a customer almost three times longer than if web hosting without email is consumed. Furthermore, this positive impact to churn scales, as additional Cloud services are added and bundled together.

parallels cloud 1 churn.png

How to Rapidly Offer Cloud Services to Small Businesses

What is the best way for a CSP to rapidly get to market with Cloud services for Small Business? Developing a Cloud solution from the ground up and integrating into existing OSS/BSS systems is a multi-year project. Building and managing a shared environment for applications (multi-tenancy) along with authentication, security, billing, and payment system integration are all very extensive and expensive projects.

Implementing commercial off the shelf automation software designed for Cloud services that integrate with existing OSS/BSS systems is the fastest way to go to market. Given how rapidly things are evolving, time-to-market is THE critical decision making factor. This approach is also the most flexible, as a CSP will be able to adjust pricing and margins with the market, along with adding new cloud services.

Therefore, CSPs can rapidly and profitably get to market offering cloud services by deploying an open solution built on open multi-tenant standards, security, authentication and license tracking. Such a solution must:

1. Offer a catalogue of Software-as-a-Service (SaaS) applications;
2. Provide a flexible framework for easily adding new services and applications;
3. Enable the syndication or sell-through of external third party cloud services (e.g., Microsoft BPOS).

The key to success for a CSP is managing a Cloud platform that is flexible, extensible, and rapidly enables the roll-out of new Cloud services. Just as automation is critical to profitability for traditional voice and data services, every possible aspect of purchasing, provisioning, billing, and self-service management for Cloud services should be automated. This is critical to keeping “book to bill” days low, support costs down, and being able to rapidly introduce new cloud services. Further automation ensures operational efficiency thereby creating the opportunity for higher margins.

Cloud Services must be easy to consume for Small Businesses

The way Small Businesses consume technology in general, and particularly Cloud services, is unique. Most of them do not care how it works so long as it works. To be successful, CSPs must make it incredibly simple for small businesses not just to subscribe to Cloud services but also modify and manage their services and applications at any time. Modifications could be to the existing Cloud services being subscribed to such as adding or deleting users or increasing storage capacity or this could mean adding new Cloud services to their subscription bundle.

The last thing a CSP wants to do is introduce existing support costs from small businesses that cause confusion or frustration with their Cloud services. This will destroy margins. The answer is providing an intuitive, self-service portal, or control panel, for small businesses to be able to easily manage the overwhelming majority of their needs.

The Future of Cloud Services for CSPs

Over the past few decades, communications have become ubiquitous. We no longer call a place, we call people. Cloud services take this trend to the next level. Documents, contacts, calendars, applications and other IT services are moving into the Cloud. CSPs that will be able to leverage their network assets, put the right Cloud automation systems in place, and aggressively target small businesses will be positioned for success in the years to come. After all, close to 40% of overall IT spend is coming from small businesses and this spend is moving the Cloud very quickly.

For more information, visit http://www.parallels.com/products/automation/solutions/csp/

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January 24, 2011

Telco 2.0 News Review


Telco 2.0 Top Stories

[Ed: Telco 2.0 presents our Best Practice Live! virtual event in two weeks’ time. On the 2nd of February, 0900-1500 GMT, and the 3rd of February, 0900-1500 Pacific Standard Time, we’re presenting a succession of talks from key innovators in the industry and on-line discussions. Sign up here - it’s FREE more details are here]

A clear top story this week: Eric Schmidt hands over after 10 years as Google’s CEO. Schmidt’s hopping upstairs to stay on as chairman of the board, in fact executive chairman, while Larry Page will take over as CEO. On the official blog, Page said that he now felt he no longer needed adult supervision. Not many other startups would have decided to give the top job to an outsider because they didn’t feel mature enough to run the business - it’s one of the reasons Google is such a special company. Meanwhile, Sergey Brin is moving to a new role heading Google’s product development.

Although Facebook is now the world’s most visited web site, Google was able to announce outstanding fourth-quarter results to go with the personnel changes. Net income in the quarter was $2.5bn, up 29% year-on-year on sales of $8.4bn, themselves up 26%. So not only did they gain volume, they also improved margins. An interesting detail from the results was that although Facebook accounted for 13.6% of US display ad revenue in 2010, just ahead of Google on 13.4%, this compares with 7.3% and 4.7% respectively in 2009 - so Google’s catching up fast, even outside its search-ad core business.

There’s a decent Schmidt retrospective here - note that Google has some $35bn in cash on hand. What would Richard Kramer say?

Google Voice briefly launched mobile number portability this week, offering its subscribers the chance to move their original number onto the new service. That sounds like a significant enhancement, but hardly had the link appeared on the GV web site than it vanished again - perhaps, as with Google Nexus One activation, they’ve discovered that being a telco is quite difficult. And Google Voice, technically, is just that - it’s a CLEC.

There’s an idea: Telcordia is up for sale and there’s very little the company that was Bellcore doesn’t know about OSS. A snip at $2bn!

Elsewhere in the Googleplex, Google says it mostly bought the iconic-for-engineers 111 8th Avenue carrier hotel for the office space, and it wants to move its East Coast engineering centre in there. Data Center Knowledge points out that the buy single-handedly represents a spike in Google’s CAPEX for Q410. And having failed to buy local-ads company Groupon, the Google is going to make its own version.

Android intellectual property is going to get tiresome this year; here’s an interesting summary of the various patent disputes. The latest one involves what Oracle claims is patented code (from Sun, originally) that was distributed with some Android devices, probably as part of vendor customisations. Details are here - some people argue that the code in question is a unit-test module that should never have been included in production builds anyway, and would most likely have been distributed by accident. Further analysis is here and suggests that it may be more serious and might involve Dalvik, Google’s homemade Java virtual machine.

But do those patents apply….in space? The UK’s fantastic satellite-building start-up, Surrey Satellite Technologies Ltd., is planning to evaluate an Android-based smartphone’s baseband as the controller for a tiny satellite. A team of their engineers are working on a nanosat as a spare-time project that would test how well the operating system and the hardware stand up to space - if it works, it would be a major step forward in terms of the cost of building a satellite and also in terms of developing and testing the software that goes into it. Smartphones have already been used in high-altitude balloon projects, but this goes a step further.

On the other hand, all you can say about this is “ouch!” Security researcher Ralf-Philipp Weinmann will demonstrate at the Black Hat 2011 hacker conference an exploit against Apple iPhones and some Android devices that allows an attacker to turn the phone into a bug, activating the microphone and relaying whatever it can hear to a phone number of their choice. Worse, the exploit is against a bug in the radio firmware rather than the operating system, and this one is present in both the Infineon chip used in most iPhones and in some Qualcomm Mobile Station Modem devices. The good news, if there was any good news, is that the attack vector does require you to set up an evil base station with OpenBTS and make sure the target comes close enough for their phone to connect with it.

The bad news is that any airport will be full of roaming devices looking for the strongest signal nearby….the EFF, meanwhile, reckons that mobile OS vendors are poor on pushing out bugfixes.

On related issues, here’s the first part of a tutorial on how to use the popular Arduino microcontroller with a GSM modem. But why bother when people leave their voicemail PIN set to 1234?

Nokia, meanwhile, seems to have pulled its X7 smartphone. A Telco 2.0 trip around Oxford Street this weekend suggested that most of the UK retailers seem to be marketing Nokia devices as being the cheap option, which is probably not what they want to hear even if it reflects post-Christmas discounting. Carphone Warehouse, at least, said that it had an excellent Christmas, that 20% of its prepaid sales were smartphones, and that Android devices were the big hit.

Nokia has also announced the closure of Comes With Music, the unlimited music streaming service that comes with some but not all Nokia devices. This should come as no surprise if you’ve been reading Telco 2.0.

On the other hand, what looks like a new Nokia tablet has been leaked.

Verizon sued the FCC last week over its Open Internet order, claiming that the order constituted a change to the conditions of each one of its licences separately.

Interestingly (especially when you think of Google’s troubles activating Nexus Ones…), VZ is also investing in enterprise identity-management technology from Novell and other vendors. If you want to know why, well, it’s been a Telco 2.0 priority for some time. Also, the US Federal government is keen on federated online ID - check out this excellent piece from Ars Technica.

Another Telco 2.0 priority is the smart grid. A partnership between the US Department of Energy and Chattanooga’s local power company is going to build a joint smart grid/broadband fibre network that will collect 80 billion measurements a year from the electricity system and deliver 1Gbps symmetric fibre connections to business subscribers.

Comcast is pushing out broadband connections for $9.95 a month for families who fall within 165% of the US poverty line as part of the FCC Broadband Plan.

Troubled WiMAX operator Clearwire is being sued by Sony Ericsson over the alleged similarity of its logo to theirs (one is a swirly green thing, the other is a green swirly thing). But that is probably the last of their worries, what with the cash crisis and the boardroom row and the discovery they’ll probably need LTE radios as well. After industry pioneer Craig McCaw quit the board, his old sidekick from McCaw Cellular, John Stanton, who later founded Western Wireless and sold Voicestream to T-Mobile, is in as the new chairman.

T-Mobile USA is happy with its HSPA+ network until 2015, and estimates the cost of upgrading to LTE as $2bn, although it would need more spectrum. In the meantime, it is planning to drench its subscribers in Androids as a way of dealing with the 10% or so of its churners who are off looking for iPhones.

Connected Planet asks T-Mobile USA if it’s true about the femtocells, and learns that it’s not - the operator is sticking to WLAN for its fixed-mobile convergence, shipping the software built into the routers it supplies to subscribers. They may have a point, if you read Brough Turner’s netBlazr manifesto - they’re relying entirely on the latest WLAN silicon operating at 5GHz for point-to-point high-capacity links in their mesh network and looking forward to the first beam-steering chips.

3UK has lost a major wholesale customer, Gamma Telecom, to Vodafone. Under the Gamma-Vodafone deal, Gamma becomes something like a MVNO to Vodafone, incorporating Vodafone mobile services into their products.

In news from the intersection of open source, developer communities, and Worse Voice & Messaging 2.0, Skype drops the ball. For years, Skype has had an extension for Mozilla Firefox that permits some integration between your Skype node and the Web - for example, phone numbers or links using the callto:// prefix get highlighted with a Skype button and despatched to the Skype node’s API when you click them. Some kinds of contact details can be added to the Skype contacts roster, and your own Skype me! status button gets updated.

More recently, Skype hooked up with a Web advertising firm, Marchex, to monetise this. Now, advertisers could pay for SkypeOut calls placed from the Skype button, which would display “Free Call!” instead. Unfortunately, something went wrong and the current version of the extension has been kicked off the Firefox Add-Ons site - the original app store, really - as one of the biggest causes of browser crashes (the scoreboard is here), being capable of slowing down Document-Object Model manipulations by 300%. If you insist, you can still install it by clicking through a warning page. Bug 615799 refers.

Tropo.com continues to be one of the most technically interesting Voice 2.0 players - you can now pass asychronous events into a running Tropo script from another program or from the Web API, as if it was a fully-fledged Asterisk server with the Asterisk Manager Interface operating. There’s also a new platform for hosting Node.js applications that will let you integrate with the Tropo Web API. It keeps getting easier to build remarkably complex voice applications, and the degree to which you need to control the hardware as opposed to using services in the cloud is steadily falling.

Facebook has, for once, done the sensible thing and decided not to release mobile numbers and home addresses to random apps. O2 subscribers, though, may be invited for a sandwich and a smoothie if they stray too close to a Marks & Spencers under their O2 More advertising programme.

On the other hand, significant numbers of AOL users are apparently still paying for their dialup service although they have cable or DSL. Business Insider has instructions on how to cancel the service.

According to HADOPI, half the population of France is a dangerous Internet pirate. As if to confirm this, someone hacked Nicolas Sarkozy’s Facebook page.

Amazon has bought out its UK partner, Lovefilm and is thinking of rolling out the brand to other markets.

Datacentre specialists Rackspace are expanding their cloud offering, which is now available in Europe for the first time. The EFF has a guide to what information social networks give out to the police. Sony to security researchers: shut up. Why does the New York Times iPad app cost more than reading it in the iPad browser? YouView, delayed. The BBC shuts down websites. Cuba peers with Venezuela, thanks to the cable ships of French imperialism.

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January 17, 2011

Telco 2.0 News Review


Telco 2.0 Top Stories

[Ed: A date for your diary - the next Telco 2.0 Best Practice Live! virtual event is on the 2nd and 3rd of February. Sign up now!]

Dan York thinks that the arrival of the iPhone at Verizon will be worse news for Google than for carrier rivals like AT&T - Verizon Wireless will no longer be the marketing champion for Android devices. The big question is how the expense of doing an iPhone that lives on CDMA2000 is justified when VZW is well on the way to deploying LTE. Informa has a stab at the numbers, and reckons that VZW will be forking over at least $3bn in handset subsidies. However, in return for that, they can expect to boost their population of high-spending subscribers, while Apple gets to ship more units. However, if you’re a rural Verizon affiliate, not so much.

Amid a heavily speculative piece at Engadget, the probable explanation - Apple is going to be using one of Qualcomm’s new radio chips which can handle HSPA, EV-DO, and some other air interfaces too in software. Connected Planet notes that Verizon is keeping the restriction that FaceTime video only works over WLAN in place, and is probably right in thinking that the real issue is latency rather than data rate.

T-Mobile USA responds with a knocking campaign against Verizon’s network.

As relief from all the iStuff, Phone Scoop has a thoughtful piece on the most overhyped phone features and wonders why nobody boasts about voice call quality. That done, back to the hype.

Millenial Media reports that Android devices are now pulling more adverts from its servers than the iOS fleet (46%). Is this the first non-touchscreen ‘droid?

LG expressed disappointment with Windows Phone 7, but plans to crack on with it in order to have some non-Android devices in the lineup. Meanwhile, Intel CEO Paul Otellini reckons that the new version of Windows for ARM chips might actually end up displacing Windows Phone. Yet another mobile ad company reckons that it serves more adverts to Windows 98 users than WP7 ones. This is after it was caught mysteriously sending and receiving cellular data on its own.

In fairness, the Chinese government is starting a crackdown on fraud involving dialler trojans on Android devices. RIM launched a new SDK offering more features and cross-platform development for BlackBerries and PlayBooks. And Rebtel’s VoIP app is now available for BlackBerry.

The Register has another instalment of its series of interviews with Symbian veterans - this time it’s the CTO, Charles Davies. Saddest detail: Cisco wanted to use Symbian in a line of enterprise gadgets, until they discovered there were multiple flavours to worry about.

Is app store carrier billing a fundamentally flawed idea?

BT Openreach has announced its prices for regulated access to ducts, poles (no sniggering at the back, there), and trenches. One metre of duct space costs 95 pence per annum and each pole attachment £21. The launch is planned for this summer. The details are still a draft proposal so far, awaiting the opinion of OFCOM - always a jolly opinion to have.

The EFF has its official response to the FCC’s call for apps and research papers into the extent of net non-neutrality. More seriously, the Open Internet Order issued on the 21st of December goes into force on the 18th of next month, and the big question is whether Level(3) will serve a complaint against Comcast as part of their epic traffic dispute.

Google says that it’s now serving 200 million videos a day to mobile devices, as it prepares to release a lot more music as part of a deal with VEVO. Hardly surprising that Tata Comms just bought Bitgravity, a CDN operator.

Or that SK Telecom needs a 4G network. It may be more surprising that they’re going to do LTE, plus a hell of a lot of WLAN access points - these are the people who brought you WiMAX, remember. Relatedly, there may be problems with LTE interfering with cable TV, which looks like a serious issue for femtocells especially or media centre devices that have a cellular radio.

LightSquared, Phil Falcone’s wholesale-only LTE operator, has coughed that it expects to send about 0.005% of its data traffic via the satellite element of the system. The NTIA is not pleased and the project is looking a lot like a transparent attempt to get round the spectrum rules. Also, there’s a possibility of interference with GPS, and you know who owns the GPS satellites…

Renesys’s annual IP transit scoreboard is out, and the big winners in 2010 were Level(3), Global Crossing, and NTT, with IPv6 specialists Hurricane Electric doing well further down the scale. On the other hand, Sprint is sinking steadily down the rankings. Also, France Telecom, DTAG, and Telecom Italia all became transit-free during the year.

An important moment in Google’s history: the Department of Justice opens an antitrust inquiry. Into what? Their acquisition of ITA, an airline data company. Is collecting too much data anticompetitive? At the same time, a Spanish court wants to make Google hide any links that could be libellous. Good luck with that.

Elsewhere, Google is going to drop support for H.264 video encoding and rely instead on the open-source codecs WebM or Ogg. Lots of analysis at the link.

High Scalability has a fascinating post on how the data store in Google App Engine works on a deep technical level. And one blog sent Mark Pilgrim’s Dive into Mark more traffic in 2010 than Bing.

Having turned down a $5bn offer from Google, Groupon is now looking at an IPO with a valuation as high as $15 billion. This has to be a bubbly valuation, but it does show the opportunities there are in the SMB world.

A survey of SMBs shows that sales and marketing applications are the key ones that drive them to make use of the cloud. Connected Planet’s Susana Schwarz says:

While companies like Amazon and Google (as well as IBM, VMware, and Microsoft) are the first to come to mind, telcos might be up and coming in the race to attract SMBs if they can offer greater ease-of-deployment and better management by business people possessing less than optimal technology skills.

We’ll drink to that. Verizon, meanwhile, is building a truly gigantic data centre or six.

Benoit Felten tries out a suite of SMB cloud services and reports he’s satisfied. Why’s he doing that? Because he’s having a start-up, that’s why.

If you used Facebook Connect to log in to Gawker websites, you don’t have to worry about the massive disclosure a couple of weeks back. You only have to worry about Facebook.

Financial blogger Felix Salmon is trying to work out the business model of partner site Seeking Alpha. And Apple is trying to prevent newspapers from offering free iPad apps to their print subscribers, apparently in an effort to help out News Corp’s coming iMag project.

Back in core telco news, as Queensland floods, Telstra categorises 262 local exchanges as no-go areas, but so far all data centres except AAPT’s were still online. Bharti Airtel outsources all its African IT to IBM. Vimpelcom/Wind is a done deal.

T-Mobile tries to explain why you can’t see the YouTube video in the Facebook page after their new data cap comes in - hilarity ensues. Read the whole interview and the original statement. But you wait until they have to explain it to the advertisers.

RIM vs. India - it’s a mess. KPN shuts down the payphones. CS fallback is tested. RevK has strong feelings about DHCPv6. Cyberwar is overhyped.

Johannesburg’s traffic lights are an M2M application - some of them contain a GSM/GPRS module so the transport department can remotely control the phasing. Unfortunately, thieves discovered this, lifted the SIM cards, and started running up some seriously large phone bills. Hint: disallow voice calls and set a private APN.

Innovative two-sided business model: Chatroulette has come up with an elegant solution to its funding problems, and a few other problems besides. The Web site, which provides users with instant video chat with other randomly selected users, is notorious for the large percentage of users who are naked men and who usually do something obscene as soon as they are connected. It is estimated that about 10% of the site’s daily 500,000 average unique users are nude and that something pornographic occurs in one in eight chats. An analysis of their statistics is here, with the worrying conclusion that British users are more than twice as likely to be described as perverts than the general user population.

Now, once a user has been the subject of five complaints, they get redirected to one of several porn or adult-dating websites. These upstream customers pay Chatroulette for the traffic.The revenue from this is significant - $100,000 a month for a three-man startup is a lot of money. This also gets rid of a problem - the perverts tend to be looking for other perverts, so they rapidly reject anyone who isn’t and therefore cause heavy load on the database server. Presumably, the non-perverts also tend to hit the “next!” button pretty quickly as well. So sending them on their way is a saving, too.

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January 13, 2011

Telco 2.0 at the Mobile Premier Awards


Next month, at Mobile World Congress, the Mobile Premier Awards for the most innovative and interesting mobile apps. And Telco 2.0 will be on the jury (last year’s is here), so we expect to shake this up.

If you’re reading this and you’ve apped (is that a word?) recently, the deadline for submissions is Saturday - the 15th of January - and you can sign up through the links here. You will need an AppCircus account.

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January 10, 2011

Telco 2.0 News Review


Telco 2.0 Top Stories

[Ed: new Mobile Internet business models and Apple’s strategy are two of the major topics at our Spring 2011 Brainstorms and our free Best Practice Live! online event on 2-3 Feb 2011 - more on all of the agendas here.]

It was CES week, but we’re trying not to go overboard on the gadget blogging. Instead, AT&T gave some detail on its plans to roll out LTE, with the rollout beginning this summer with a target completion date of 2013. They also announced the completion of the HSPA+ upgrade. T-Mobile USA took the opportunity to upstage them by announcing the availability of “42Mbps” service (that’ll be a very theoretical theoretical maximum) with dual-carrier HSPA.

AT&T also showed off some apps intended to link its U-Verse TV (IPTV on its FTTC network) service with Apple devices, the App Store, and its mobile network. The basic idea seems to be that you’d be able to control your TV from your mobile or tablet - there’s an interview with Michael Adams of Ericsson on this trend from the last Telco 2.0 Americas brainstorm.

In other “duelling theoretical maxima” news, NEC claimed that the LTE net NTT DoCoMo switched on over Christmas will do 75Mbps.

Verizon Wireless showed 10 LTE devices at CES and paraded two key partners - Skype and Electronic Arts. Not bad going. The flagship device will be Motorola’s Xoom, a superduper tablet based on Android whose name does remind us a little of Sprint’s original WiMAX branding. Skype chucked in video calling for the thin client its partnership with VZW uses, while EA demonstrated a “networked jam session” inside its Rock Band game.

Cisco, for its part, announced that the Cius enterprise tablet would get LTE from this summer. On the other hand, Dan York doubts that either the Cius or HP’s WebOS-based devices will get any traction in the light of a possible second generation iPad.

It’s being heavily rumoured that Verizon might announce that the iPhone is coming to its network - the usual confusion brought about when mainstream “tech journalists” cover anything telecoms is heavy here, but the obvious explanation would be that the next lot of iPhones will have an LTE radio. Would anyone really bother doing a “CDMA iPhone” when the only possible launch customer is getting away from CDMA as fast as Alcatel-Lucent can deliver the new base stations?

A major Apple shareholder is pressing the company to reveal details of its plan for the succession to Steve Jobs. Apple doesn’t like it and has asked shareholders to vote against the measure.

Google, meanwhile, released some details of Android 3.0, which will make its first official appearance on the Motorola tab mentioned above. In the meantime, hackers succeeded in getting Android 2.3 running on an iPhone.

Computer Weekly has the “ooh! shiny” video of the Moto device.

Apple also turned on the first releases through the new Mac App Store during CES, with hilarious results. Whitelabel app store GetJar has some interesting predictions for 2011. Meanwhile, Microsoft Windows Phone 7 is going to get a revolutionary new feature: cut and paste. The Guardian Online blog has a good CES roundup - note the lack of interest in WP7 and also the lack of products or really any activity at all for MeeGo.

Wired covers Towerstream, the company that deploys high-capacity point-to-point WLAN links between office blocks. They also note that even with the special deal with Goldman Sachs, Facebook is going to have to file audited numbers with the SEC some time next year.

The mystery: what happened to all the spam? Brian Krebs has a detailed review - it seems that a number of major Russian botnets have stopped spamming, partly because an affiliate network that they used to collect cash for pushing pharma ads was shut down and possibly also because they are finding click-fraud more interesting.

TeleGeography reports that international voice traffic grew 4% in 2011, and that Skype added more traffic than all the world’s telcos added together, 45 billion minutes of it. They also debunk the story that Chinese telcos want to ban VoIP.

Fascinatingly, Skype just acquired Qik. Qik is one of several startups that let you send streaming video from a mobile device to a pre-defined URI on the Web. Of course, Skype already has video-telephony and is building up video-teleconferencing with its beta group video chat product. But this adds a number of interesting possibilities (and also Qik’s own adaptive streaming technology). You could record the teleconference for future reference, publish it to the Web both as a live broadcast and as a recorded talk, and perhaps link content from the Web into the teleconference.

There’s another “unlimited…sort of…Internet access…sort of” row blowing up: Skype Journal complains that MetroPCS is blocking Skype calls on its open slather data tariff.

Python hackers can get the Tropo.com API library through the Python Package Index with “python easy_install tropo-webapi-python”.

Worse voice & messaging, US airlines edition:

Cali Archon of Portsmouth, N.H., tried calling JetBlue Airways for four hours yesterday morning to rebook her 15-year-old daughter’s flight to Fort Lauderdale, Fla. But each time, after about five minutes of recorded messages, the system told her: “Please try back at a later time. We are doing the best we can to manage our call volumes at this time. This call will end now.”

And then it did.

Here’s your chance to contribute to open source telephony: the Asterisk community is looking for proof readers to check out the text of the latest O’Reilly handbook for the swiss army knife of VoIP software.

The FCC has a competition on for the best app for monitoring telcos’ and ISPs’ treatment of your Internet service. OFCOM has altered the UK mobile licences to permit UMTS running in refarmed GSM900 spectrum. And the Aussies lose enthusiasm for their planned national porn filter.

The EFF has published a series of blog posts checking up on its trends for 2010. This one covers online video. A survey for JP Morgan suggests that 47% of Netflix users would consider cutting the cord - but Dan Rayburn thinks the survey is worthless.

Meanwhile, Atari fails to prosecute RapidShare for publishing pirated games, which is a little like failing to prosecute Julian Assange for leaking secret documents. But they did that, didn’t they?

Cloudmeister-general Werner Vogels speaks on the origins of Amazon Web Services and says that, actually, spare capacity never came into it and AWS was always intended to become a major line of business.

Rackspace, meanwhile, is seeing a surge in its revenues per floor space driven by its cloud services rather than traditional hosting and colocation. No surprise, then, that they’re behind OpenStack.

The GSMA has a new paper out on how operators and banks can cooperate for mobile money transfer. Unfortunately, after last week’s 27C3 disclosures, suddenly our infrastructure doesn’t look so secure any more. After all, the SMS of Death attack doesn’t just let you crash phones remotely - although that’s plenty of fun - it also gives you the full power of SIMToolkit. Whoops.

Martin Geddes is sceptical about grandiose claims for the future of mobile. North Korea’s Twitter feed, hacked.

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January 6, 2011

Video review of Telco 2.0 Americas

Below is a short video review of the 10th Telco 2.0 Exec Brainstorm (incorporating Digital Entertainment 2.0) held in Los Angeles at the end of last year:

2011 event agendas, including some new event brands, described here

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January 4, 2011

Telco 2.0 News Review


Telco 2.0 Top Stories

Kicking off the New Year, it looks like Clearwire may not be with us much longer. Although they flipped the switch on their network in San Francisco on the 28th, and with that completed the year’s planned deployments, they’re running out of cash. The company is trying to borrow $1.1bn urgently, and is passing the hat round the various launch partners (Intel, Sprint, Google, and several cablecos). However, it looks like Sprint has decided to pass on the opportunity to pour more cash into Clearwire, as a key deadline was the 2nd of January and they’ve not taken steps.

In an ominous development, founder and industry pioneer Craig McCaw quit Clearwire ahead of the announcement, with the result that former CEO Ben Snow is going to be CEO again.

Qualcomm, meanwhile, sealed the end of its MediaFLO mobile-TV play by flogging the spectrum, 12MHz of prime 700MHz to AT&T for some $2bn, which will surely cheer them up as they only paid the government $683m in the first place. AT&T plans to use it for additional LTE data capacity.

Facebook is claiming to be worth $50bn, although not in the sense of being publicly traded. A syndicate led by Goldman Sachs has put in some $500m of (essentially) venture capital in exchange for stock. Dealbook makes the excellent point that Facebook’s decision to stay semi-permanently as a VC-funded, privately-held company has benefits in that it doesn’t have to undergo the scrutiny that is applied to companies with a public listing. As long as the ‘book has fewer than 500 shareholders, it doesn’t even have to publish audited financial results. (See also our analysis on Facebook’s business model and potential move into telco space.)

On the other hand, there’s MySpace, rapidly turning into Friends Reunited 2.0 under News Corporation’s stewardship. Employees were given an extra week off to save money, which sounds desperate, and now apparently half of them can expect to be laid off during 2011.

Viviane Reding had a meeting over the break with US Attorney General Eric Holder, and the Washington Post has a brief Q&A with her. It’s fair to say, going on that, that Facebook would do well to steer clear of coming under Reding’s purview. Meanwhile, Data Center Knowledge’s Rich Millar notes that Facebook is building a ton of infrastructure and suggests that the Sachs money is going to be spent on big sheds, fibre, and racks.

It’s a basic truth that “the cloud” isn’t very cloudy in reality. In fact it’s all about massive electrical wiring projects and really big sheds. And, it seems, Ubuntu Linux. ZDNet’s Steven Vaughan-Nichols crunches the numbers and concludes that the desktop-friendly Linux distro is the most popular choice for Amazon EC2 users, that it accounts for as many EC2 instances as the whole RedHat/RPM family, and that it’s doing 4 times as many instances as Windows and MS Azure put together.

Jack of All Clouds has data on growth rates at EC2. And Data Center Knowledge has a visit to the Wall Street high-frequency traders’ data centres.

There’s nothing more cloudy than Google. Jeff Atwood believes there’s a serious problem with Google’s core product, search - specifically, Google Search’s quality control is slipping. The Web is a plagiarist’s paradise, but Google has always been good at filtering out sites that just copy other sites’ content. You could find them, but PageRank systematically preferred the originals. Until now. Atwood notes that someone devised a browser extension that redirects you back to his StackOverflow.com programming questions forum if you’ve by chance wandered off to one of the leeches. Has Google lost its edge?

(NB Please see our new research stream for more on Cloud Services business models.)

Piling on, Connected Planet criticises Google’s voice and mobile strategy and pours scorn on suggestions it might buy Clearwire. And British MP and former minister Tom Watson recalls the day officials told him that “the problem with Google is that it doesn’t find the pages we want people to read” and suggested starting the government’s own search engine….

None of this has held up Android’s progress, though. The Android Market app count has charged through 200,000, with 2.5bn downloads in two years and downloads running at a clip of 103 per second. And AT&T and T-Mobile USA are offering carrier billing for the market.

On the other hand, an unusually vicious trojan is attacking ‘droids in China, and a humiliatingly awful bug has been discovered in Android 2.2. Specifically, your SMS and MMS messages may be sent to the wrong people. Whoops. Double whoops: the problem has been known since June and is currently marked “priority: medium” in the bug tracker.

Did RIM believe that the iPhone couldn’t exist? Apparently so. They once believed that “smartphones would be outgrowths of its pagers and that there would never be enough battery life or wireless technology for more functions. It started growing beyond this view before the iPhone shipped, but the OS foundation until recently was based on this early assumption”.

Cars - there’s an app for that. In fact, there’s a whole developer platform and an app store for that. Ford is showing off a navigation app for iPhones that links the smartphone with your car’s satnav and other electronics - a different take on “connected car” to the network-centric view you tend to get from operators. Interestingly, part of the point is to have the car control the smartphone. On the other hand, Honda has had to own up to leaking 2.7 million owners’ data.

Connected Planet reports that 2% of all the world’s mobile lines are now M2M applications. That would be 81 million ‘bots. More to the point, this number is growing at a 46% annual clip, and Berg Insight estimates that it’s going to keep up a 32% CAGR to 2015, for a total of 294 million devices in that year.

Rudolf van der Berg has a long and detailed post about 2 and 3 digit Mobile Network Codes and the E.212 numbering standard. It’s critical to delivering all those M2M devices, so go and read. Seriously.

You might need them: smartphone growth is slowing down in the UK, although the problem is surely that in the future all the phones will be smart anyway.

BT, you may recall, asked communities to compete to get fibre. The five participants with the most signups would get their local exchange blessed with FTTC. Unfortunately, six participants appear to have induced every last subscriber - or even more votes than subs - to sign up and a seventh got 78%. Apparently, if you cleared your cookies and knew other subscribers’ names (from the phone book, of course…) you could vote as many times as you wanted. Vote early, vote often….

Meanwhile, there’s some hyperventilation going on about BT Content Connect - this FT article is an example. It’s depressing to watch the Open Rights Group degenerate into rentaquote.

And RevK’s homebrew modems are confirmed as working with BT FTTC.

In other broadband news, the Wall Street Journal covers a wave of investment going into metro-area fibre deployments. CANARIE’s Bill St. Arnaud has an interesting post on extending the universities’ EduRoam WLAN partnership. And there’s trouble between Free.fr and French landlords.

A fascinating series of blog posts (warning: technical) begins here. Is it actually the temptation to include oversized buffers in home routers that broke TCP congestion control? Would less buffering fix the Internet? Whilst we’re on that, Technology Review covers efforts to deploy Tor anonymisers built into home routers.

It was also the Christmas of no Skype. Dan York discusses the network crash and the role of the famous supernodes. Phil Wolff has data at Skype Journal. Did you know a Skype supernode can be asked to handle 350 concurrent TCP connections? York is interviewed (over Skype) here. Wolff points out that Skype’s crisis management could be better.

In better news, the iPhone Skype app is here and it does video calls, including the new group-video calls. The Guardian reckons that one minute of mobile Skype video equals about “600kbps”, which is obviously wrong - it could be one minute at a rate of 600kbps, perhaps.

If you’re in China, though, no Skype for you. Some applications get blocked because they’re subversive, but Skype (despite being end-to-end encrypted) gets blocked because…it provides free phone calls.

Phil Wolff, meanwhile, presents over a hundred predictions for 2011. Fortunately he also reviews 67 predictions for 2010 and concludes that he did slightly worse than tossing a coin (30 misses, 24 hits, the rest don’t knows). At least you know.

Want to link a Tropo voice application to Skype users? Here’s how, plus details of their new API, and how to recognise speech.

Voyces reviews a gaggle of Voice 2.0 startups. We note that IfByPhone has snagged another round of funding. Local ads/e-commerce player Groupon has managed to raise some $500 million.

Details of the Open Source Telephony track at FOSDEM are here and it looks like a cracker.

How will your network be in 2011? The short answer would appear to be “hacked”. This year’s Chaos Comms Congress has been more than interesting from a telecoms point of view. Crypto-meister Karsten Nohl’s project is the standout, demonstrating how to eavesdrop on GSM calls using cheap gadgets in a follow-up to last year’s demonstration of an attack on the A5/1 encryption. But there’s more. Here’s a catalogue of serious bugs in common featurephones and how you can crash them with crafted SMS messages. Here’s analysis of how web sites profile users and how telcos and ISPs do the same. Here’s HOWTO interfere with RTP voice streams. And here’s HOWTO print your own NFC money. PlayStation 3 gets jailbroken. And even hackers do it sometimes: Mozilla leaked 44,000 users’ passwords.

Don’t have nightmares!

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January 2, 2011

BlueVia: Telefonica’s new global developer platform


Back in February 2009, we blogged about O2 UK’s Litmus project, a developer platform that offered more than any other. As well as a range of useful network APIs and the typical revenue-sharing element, it provided access to crowdsourced testing from Mob4Hire, hosting with Rackspace, and to an internal Telefonica venture-capital group.

Six months later, we reviewed Litmus again, finding a worryingly empty web forum, and were able to interview Jose Valles Nunez and James Parton from Telefonica and O2 respectively about it. They argued that one of the main goals Telefonica had with Litmus was to spot potential star applications that could be integrated with their mainline products in a process of “co-creation”. (An example: Sun Microsystems was eventually so pleased with the open-source community’s version of its Solaris operating system that they decided to use OpenSolaris in their commercial products and have the engineers who worked on Solaris contribute code to the community version instead.)

Developer communities are a major concern for Telco 2.0 (see our Apple vs. Nokia note) and therefore we’re following the story further, in the build up to a new research and event programme for 2011 called ‘Mobile Apps 2.0’.

A few weeks ago, just before Christmas, Telefonica launched BlueVia, a further development of Litmus that will be deployed across the whole Telefonica footprint rather than just O2 UK or Telefonica O2 Europe. Here’s the latest public presentation on Bluevia:

What you will have noticed here are some important points that we believe the rest of the telco industry should take on board when planning on becoming truly relevant to developers.

While some telcos have overpromised/underdelivered to developers (think of Vodafone 360 perhaps), others have tried to charge them for API’s (think T-Mobile), while others, who have made good start, have still not made it simple enough (read the small print for Orange Partner Connect).

BlueVia has learnt from the web world by making API’s free for developers to use (up to a certain volume), by providing more tangible ways for developers to make money and by enabling them to receive cash quickly via simple currency management tools.

As well as the canonical 70-30 revenue share on the sale of app itself Telefonica is pushing the possibilities of not just in-app advertising but also of sharing messaging revenues stimulated by applications activity. A share of the global SMS market (worth €160bn today, and forecast to rise to €240bn in 2014) is a very impressive pool of money for developers. As far as ads go, the plan is to push ad inventory aggregated by Telefonica to the developers’ apps, sharing the ad revenue 50-50.

As well as the 200 million end users who are due to to have access to Telefonica app stores across its footprint by the end of 2011 (80m have access today), apps using BlueVia capabilities can also be sold in 3rd party stores too.

Most interesting perhaps is a vast untapped market that Telefonica will be targeting with BlueVia: featurephones in Latin America.

LATAM is one of the remaining subscriber growth zones, where data and apps are likely to become much more important as 3G becomes more available, cheap Android-based devices appear, and earlier featurephones that boast at least a Web browser are flushed from stocks in other markets.

In the meantime, however, they see a significant opportunity in working with a raft of specialist technology companies like twitea that allow people to use advanced services without the need for either a data plan or a smartphone.

For mature markets one of the most important elements for developers is likely to be BlueVia’s User Context API, which is free and which provides a read-out of the capabilities of a given device - what data rate is available, what features, OS, and software versions are present, and if it’s subject to parental restrictions (and if so, what). When Telco 2.0 was at the Financial Times’s world telecoms conference in November, Alcatel-Lucent (ALU) - in their capacity as new owners of ProgrammableWeb - presented some research about what app developers wanted from operators. Here’s the slide.

alu-programmablewebdata1-small.png

It’s quite data-heavy for the constraints of this blog, but it’s clear from the charts that developers were much more interested in customer data and context than they were in anything else ALU thought telcos could offer - including bandwidth.

In terms of BlueVia as a corporate project for Telefonica, it’s currently in Beta, and will no doubt be launching more API’s in 2011. We understand that the effort to get internal agreement to its business model was significant - you can imagine the arguments with internal financial controllers at each OpCo about making volumes of APIs free and sharing core SMS revenues, all highly anathema to normal telco commercial thinking.

What is important to the success of this programme is that BlueVia is sponsorsed and supported by the COO of Telefonica SA, the CEO of its LATAM operation as well as the CEO of Group R&D.

This level of ‘air cover’ is vital to any ‘Telco 2.0’ initiative, since in most telcos you are likely to find that 90% of top management are finance people focused on exploiting and protecting the existing business model and perhaps only 5% really understand what Telco 2.0 even means and its importance to future growth.

How does BlueVia fit with industry initiatives like WAC? Telefonica is clearly supportive of the need for industry-wide widgets to support web apps, but is perhaps less convinced of the practicalities (today at least) of exposing a rich array of network API’s beyond in-app payments.

More worrying for us is that too much traditional telco thinking and behaviour is still lingering within the Community: individual operators staying too closed, too attached to withering business models, seeing each other as competitors rather than partners in creating (quickly) a globally interoperable telecoms-centric business model that could add significant value to developers, help to embed more telco capabilities into the everyday business processes of other industries, provide a viable alternative to Apple and Google, and float all telco boats in so doing.

We believe that the thinking behind BlueVia is a major step in the right direction for the telecoms industry. One that other operators should emulate, and fast.

We’ll be monitoring progress closely and inviting Telefonica to share their learnings at our events throughout 2011. In the meantime, here’s some more on their thinking in this recent presentation:

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