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February 28, 2011

Telco 2.0 News Review: Broadband CAPEX up globally, Amazon vs. Netflix


Telco 2.0 Top Stories


[Ed: We’re covering a lot on the digital ecosystem agenda - broadband, Amazon, Apple, adjacent player strategies etc. at our upcoming Brainstorms in the Americas, 5-7 April, EMEA, 11-13 May, and APAC 22-23 June 2011.]

Connected Planet reports that spending on broadband equipment was up sharply in the last 12 months as major deployment projects pressed ahead. DSL, optical Ethernet, and cable technologies were all affected.

Basic connectivity is something of a theme this week. Huawei dared the US government to investigate it, and then went on selling enormous amounts of network equipment. Vodafone-Hutchison Australia announced that it was planning to replace its entire radio access network, after the CEO issued an apology to their customers for what sounds like truly dreadful service.

“The issues some customers have experienced included dropped calls, delayed SMS and voicemails, slow data speeds, inconsistent coverage and long waits when you called us”

Those Aussies - always direct.

Anyway, they’re planning to replace no fewer than 8,000 base stations, of which 5,000 will get Huawei’s SingleRAN product, a software-defined radio that provides 2G, 3G, and beyond in one box. VHA is also looking at becoming a fixed operator, using open access services over the new National Broadband Network.

In the UK, Huawei is supposedly going to give away or deeply discount the equipment needed to get mobile service into the London Underground as “a gift from one Olympic city to another”. We weren’t aware Shenzhen, where Huawei’s HQ, R&D centre, and most manufacturing sites are located, has ever hosted the Olympics…but anyway. Sanely, the proposed network is going to be shared by all UK operators, with O2 and Vodafone paying for the deployment and Thales UK being contracted to maintain it.

Meanwhile, Vodafone was down over large areas of the UK this morning after burglars invaded their Basingstoke data centre and either stole or vandalised equipment. Services affected were described as follows:

3G, 2G, SMS, Voice, Vodafone One Net - Voice, Paknet, Telephony, Vodafone.co.uk, BlackBerry Connect, Email, Network Mgt, Voicemail, Fixed Link (Voice), Remote Access Service, MMS

They didn’t include “Vodafone Kitchen Sink” in there, but it sounds close enough. An all-hands e-mail stated that the criminals had only “tried” to get into the building and had damaged something outside it - oddly enough, though, some customers reported that GPRS data service still worked but nothing SS-7. The rumours will no doubt collect here.

Benoit Felten has detailed deployment projections based on France Telecom’s recent additional investment in fibre deployment - it looks like they’re going faster, all right, but the deployment is still very much targeted on the urban core.

RevK is displeased by the Government’s views on the ISP business - nobody wants to check if your electricity supply is copyright-infringing, after all. With that in mind, here’s a detailed update from Ars Technica on the current status of the Level(3)/Comcast peering war. It looks like L(3) is trying to use the FCC’s Open Internet Order to press Comcast to negotiate, while Comcast is trying to get the telco lobby on its side. Meanwhile, Netflix has taken note of the issue in its accounts, which suggests that the content providers may yet get involved.

Speaking of content, Samsung has announced that users of its Galaxy S smartphone can now pay via their phone bills for content that is delivered to Samsung’s Media Hub appstore, and then shared with up to 5 other devices. There’s that iTunes rival on Android for you…

If all that Netflix streaming is torturing your peering ratios, watch out. Amazon Prime customers will soon be able to stream some of Lovefilm’s enormous catalogue free, in a move obviously designed to hit Netflix hard that will also inevitably generate an enormous amount of video traffic. And YouTube subscriptions will only crank it up further.

Whatever is happening out on the Internet, one line of business for the content providers is holding up very well. Just as live music is substituting for much of the lost revenue from recording, cinema box-office receipts are up strongly.

Is DirecTV’s strong performance evidence of cord-cutting or the opposite?

At the daddy of integrated device/software/media ecosystems, Apple, a major shareholder has tried to force the company to publish details of how it will eventually replace Steve Jobs, but other shareholders voted it down. It’s not Apple’s only succession issue, either - there was a rumour this week that master industrial designer Jonathan Ive, behind the look of the whole line of iProducts, was about to quit the company.

They’ve also made some changes to the iAds advertising platform. Very unlike Google’s AdSense/AdWords, the service has been targeted on a relatively small slate of big-name advertisers. To begin with, you had to commit to at least a $1m ad buy to get any adverts at all. Now, Apple has decided to halve that.

Google has issued a major revision to its search algorithms, which aims to reduce the salience of content farms, websites that host large quantities of low-grade articles usually scraped from other websites.

Elsewhere in the cloud, Verizon is apparently working hard on improving its datacentre and cloud computing products. They’ve been certified by Cisco Systems as a “Data Center Unified Computing Authorized Technology Provider”, which helps, apparently.

Amazon Web Services, meanwhile, has opened up an internal application called CloudFormation, which is used to automate the start-up, management, and shutdown of large numbers of virtual machines running in its cloud. It covers all AWS’s cloud products, and allows you to define a “template” for each of your applications which is then used whenever you need more machines.

There’s a really excellent piece on WAN optimisation for cloud systems at Data Center Knowledge - it’s an excellent example of how dependent the entire sector is on premium grade connectivity. Here’s an example of the sort of products the cloud/datacentre operators are now offering - a “virtual private data center”, no less.

Run your servers hotter and save money. Apparently, one data centre in a desert found it was worth just letting them overheat and wear out rather than spending the extra money on more air conditioning. Could be right, but you wouldn’t want to work there…

Yet more containerised data centres. What’s holding up Apple’s giant data centre - are they planning a major digital locker product, or is it just that the vice president of datacentre operations died? Egypt: did the spooks just hit the fireman’s switch at the 23 Ramses Street Internet exchange?

Google Cloud Connect integrates your Microsoft Office apps into Google Docs, and Computerworld thinks Microsoft should be “afraid…very afraid”, as they say.

It’s results week. Deutsche Telekom saw a somewhat larger net loss in Q4, although the results are so riddled with “special factors”, the de-consolidation of T-Mobile UK into Everything Everywhere, adjustments to valuations, a special tax imposed on their Hungarian operation, and God knows what else it’s hard to say what’s going on. In Germany, fixed-line revenues were off by about 1.1% year on year, while mobile was up 4.4%. But the rest of Europe seems to have been much worse, with sales down 14%.

EE itself had disappointing results, with a worryingly high count of numbers with funny definitions in the statement. Turnover is down significantly, and they’re losing contract customers, although ARPU is up. And the percentage of voice in the total is actually rising.

Connected Planet has a good discussion of T-Mobile USA’s KPIs. Although their HSPA+ deployment and associated ad blitz are successfully adding more customers and increasing smartphone penetration, they seem to be struggling to retain customers, specifically the non-smartphone ones who are on contracts. The low-cost US operator Leap, meanwhile, is rapidly adding more smartphones.

Telefonica announced profits up 30% year on year, although the ex-incumbent division is suffering in Spain’s dreadful economy. Elsewhere, it saw subscriber growth running around 7-8% in Latin America and 6% in Europe. Telefonica is one of the most Telco 2.0 of operators, but these results suggest they’re not losing sight of the basics of running a GSM network either. To zoom in a little, here’s the Brazilian operation Vivo’s Q4, which shows contract customers up 29% and margins of 34%, up 3 percentage points year on year.

Telecom Italia also had decent numbers, with erosion of the ex-incumbent business being compensated by gains in Brazil and in wholesale.

Over in the stripy-sweatered world of mobile apps and developers, here’s a rant against RIM’s developer toolkit, on the grounds that it involves more than one download (there’s more, but come on, it’s nowhere near as bad as Symbian…). RIM’s official blog responds and gets a positive reaction from the comments thread peanut-gallery. Elsewhere, a leaked list of new features in BlackBerry Internet Service is doing the rounds.

It’s not been a good start for WiNokia - Microsoft released a software update for WP7 that bricked a variety of Samsung devices all over the world. Sometimes you really need bureaucracy. Extensive detail, and a sense of astonished horror, is here. We note that the fatal update is an update for Windows Update.

There are some concept designs for Nokia Windows phones here.

Some Android apps can’t be trusted to SSL-encrypt your data even if they claim to be doing it. Notable offender: the official Facebook app.

You know mobile ID is taking off when the enemy takes an interest - someone’s created a mobile trojan to attack a Polish bank’s two-factor authentication.

Google’s Nexus S gadget, running Android Honeycomb, gets reviewed by Charles Arthur, who thinks it’s better than the iPhone 4. Android hits 24% of the smartphone market, while Motorola wonders if it’s a blessing or a curse.

Cisco exits hosting e-mail, and pushes video conferencing as collaboration, which Skype Journal disagrees with. Will Skype do something new with e-mail? Skype’s new offices - no wonder they’re spending a lot of money.

Inbox Love looks like a potentially interesting event for Voice & Messaging 2.0 people. Freespee has an open calendar for digital media events in Europe. HOWTO export your FreePBX configuration. Avaya and BT on call centres.

The EFF continues its commentary on the Open Internet Order. The UK government is trying to define an open-source software stack. An Australian medical app tries to get Australian men to see a doctor. Brough Turner’s column has moved.

And the iPhone’s personal problems are out of control

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February 24, 2011

Mobile World Congress: Microsoft CEO fails to land all punches, but…

Microsoft’s pugilistic CEO Steve Ballmer came out fighting at the 2011 GSMA Mobile World Congress, but failed to register a convincing win. Is this the start of the old software champ’s great comeback in mobile, or is the only way down?

Detailed analysis of Steve Ballmer’s presentation, our perspective on the ‘MicroNokia’ deal and Microsoft’s longer-term prospects in mobile, and how telcos should and will react at this link.

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Mobile Apps 2.0 Agenda: Growing More Profitable and Sustainable Ecosystems


mobapps.jpg

The Mobile Apps 2.0 Agenda, designed for those at the cutting edge of developing, distributing and marketing apps, covers: Best-App Store Strategies and Business Models; Marketing, Merchandising and Monetising apps; and Future Mobile Industry Requirements; Connected TV’s; and Out Appling Apple.

Mobile Apps 2.0 is a dedicated stream at our New Digital Economics Executive Brainstorms in Palo Alto - April 5-6, London - May 11-12, Singapore - 22-23 June 2011), and a key focus for Telco 2.0’s Research Programme.

Here is the Mobile Apps 2.0 agenda in detail, covering our key hypotheses and questions for industry strategists, marketing, commercial and technical leaders developing or assessing strategies in the Mobile App ecosystem, and including details of the Mobile App 2.0 Executive Brainstorm sessions and planned research outputs in the Telco 2.0 Apps and Appstores research stream.

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Introduction - The Explosive Growth of Apps

The Apple App Store has been a key component in the growth of the ‘mobile internet’ over the last two years. It has provided a single location for iPhone users to download, and developers and brands to distribute, applications and content. Since Apple set the benchmark, other players - device manufacturers (e.g. Nokia on mobile, Acer on the laptop), operators (e.g. Vodafone), industry bodies (e.g. WAC) and independent players (e.g. GetJar) - have all entered the mobile content and the app store market in earnest. Consumption and use of mobile content and mobile apps has continued to grow but, fortunes for individual app stores and different players in the ecosystem, have been mixed. Despite the odd blockbuster (think Angry Birds), few developers make much money from applications that are not developed for a fee (for example for a brand). Similarly, analysts are agreed that none of the independent app stores are making money.

At the same time, there is increasing emphasis on tablets and connected TVs as new sources of growth for applications with strong belief from many that there is a need for an integrated experience between the mobile, the tablet and the TV.

Recent Telco 2.0 Analysis in this area includes:

Mobile Apps 2.0 Objectives

In the Mobile Apps 2.0 sessions at the H1 2011 Brainstorms, we will be exploring where areas of opportunity for CSPs exist, and how to create value with and from the mobile App ecosystem.

We will also be looking at the interaction between Apps and other elements of the Telco 2.0 agenda, notably developer communities, subscriber data, and Augmented Reality.

In addition, in our Apps and Appstore research programme, we will be analysing and benchmarking the most successful and innovative strategies, particularly among CSPs.

There are three Sessions in the morning of the Mobile Apps 2.0 stream:

  • Session 1: Best App Store Strategies & Biz Models;
  • Session 2: Marketing, Merchandising & Monetising Apps;
  • Session 3: Industry Requirements for future success.
The Mobile Apps 2.0 stream then joins the related afternoon plenary sessions on ‘The Connected Home’, and ‘Out-Appling Apple’, (we will post more on these soon) and In the evening there is a special AppCircus developer showcase/forum and a major networking event.

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You can register now online by following the links in this article, or alternatively, please contact us on +44 (0) 207 247 5003 or email us at contact@telco2.net.

The rest of this article details the sessions and outlines our planned research outputs.

Session 1: Best App Store Strategies & Biz Models

Three major players have developed new app stores in the last eighteen months. Google, with Android Marketplace, Microsoft, with Windows 7 Phone (designed to supercede Windows Marketplace for Mobile), and Blackberry, with App World, have launched and joined the early players - Apple and Nokia (Ovi).

The Telco community too has attempted to overcome its fragmentation by launching the Wholesale Application Community (WAC) which allows developers to write applications for multiple operators.

Session 1: Objectives

In this session, we will explore the best strategies and business models for app stores and seek to uncover the strategy for each of the ‘big six’ app store players mentioned above.

Tablet, set-top box and TV manufacturers, as well as broadcasters are all seeking to develop a ‘control point’ into the home. How important are applications and app stores in this battle and how will they go about delivering a seamless user experience?

Session 1: Telco 2.0 Hypotheses:

  1. Scale economies mean that there will be pressure to consolidate in the app store market with a one or two players coming out on top.
  2. App store players do not need to make money from the app store but are using it to drive value in their core business - devices, advertising or telecoms services. It is differences in these core businesses which will drive different strategies from the major app providers. For example, those such as Google that have an advertising-driven core business will be more open than players such as Apple and Nokia that are motivated by device revenues.
  3. Business models, including revenue distribution models, differ between the key app store providers and these differences will be critical in determining the winner and losers.
  4. App stores serving the burgeoning tablet market will become much more important during 2011 and players than can integrate their propositions across the PC/Tablet, TV and mobile environments will have a considerable advantage.

Session 1: Key Questions to Debate

  • Can the market sustain six big providers (and a host of independents) or will we see consolidation in app stores?
  • What are the best strategies for success in this marketplace?
  • What are the most appropriate business models for distributing value across all ecosystem players?
Session 2: Marketing, Merchandising & Monetising Apps

The volume of apps and content in the major apps stores continues to grow: 10,000+ in Blackberry App World, 80,000+ in Android, 300,000+ in the Apple App Store. Similarly, usage is rising with Nokia OVI announcing in November 2010 that consumers were downloading 3 million apps a day. But how can applications and content best be marketed so that the appropriate offer is made to a consumer and what are the best revenue models?

Session 2: Hypotheses:

  1. As with Amazon and other merchants, the number of items ranged will be a key driver of consumer traffic to app stores.
  2. App stores that offer developers, content owners and advertisers the best overall ROI will be able to range the largest volume of apps and content.
  3. The best overall ROI for ecosystem players will not only be a function of consumer traffic on an app store, but also of the marketing support and revenue model adopted for the app and the ‘pay-out’ offered by the app store. For example, developers have experienced several shortcomings with Android (such as limited distribution of Android devices in some geographies) but, overall, the generous revenue share model (with 70% going to the developer and 25% going to the carrier) has fuelled rapid growth in both developed apps and distribution of Android devices.
  4. The overall success of an individual application will be a function of the quality of the associated marketing strategy (and its execution) and the revenue model selected (sponsored or ad-funded apps will generate higher downloads but may have low app usage whereas paid-for apps will be downloaded in lower volumes but are likely to have greater longevity). Getting the marketing approach and revenue model right will be a key concern of developers, content owners and advertisers.

Session 2: Key Questions to Debate

  • What are the respective roles of the developer, content owner, advertiser and app store owner in delivering apps to consumers?
  • When should different revenue models (freemium/paid-for, sponsored, ad-funded) be deployed?
  • How can momentum be created for an application - what marketing strategy is most effective and how important are new marketing methods, such as social media, and new platforms, such as tablets and TVs ?
  • What are the benefits of understanding user behaviour beyond the app store and using this to provide more relevant apps within it? Google is seeking to do this with Google Accounts and Amazon will integrate the Amazon recommendation algorithm from its website into with its forthcoming Android App store. How important are such strategies and what will drive their success?
  • What are the benefits and risks of a multi-platform/app store approach for developers, content owners and advertisers and how might aggregators such as WAC reduce risks?
  • How important is a social media marketing strategy for driving the success of applications?
Session 3: Industry Requirements for future success

As the ‘application and content industry’ continues to grow (and grow up), what needs to be done by individual companies and collectively by all players to ensure continued and sustained success? Everyone has a role to play but how should those roles evolve for app store owners, developers, device and OS companies, advertisers and operators? How should healthy competition be encouraged and necessary collaboration also fostered? How should existing ecosystem players work with new ones - set-top box, tablet and TV manufacturers, broadcasters and web players such as Amazon?

Session 3: Hypotheses

  1. As the industry matures and growth levels come down, so competition and consolidation will intensify
  2. Some players will be forced out of the market (or be subsumed by more successful players)
  3. Action should be taken now to best position both individual companies and the overall industry for the future. This will help ensure that healthy growth is maintained and the industry develops a firm footing with which to tackle future challenges.
  4. New players from the TV and PC industries and online retail will create new sources of opportunity and threat and need to be successfully integrated into the ecosystem
Session 3: Key questions to debate:
  • What actions are required by players - developers, app store owners, device and OS companies, advertisers and operators - to build on the industries early successes?
  • How can operators add value to existing app stores and to WAC?
  • How should existing players manage relationships with new players: set-top box and TV manufacturers, broadcasters, tablet manufacturers, online retailers? Where are the threats and opportunities?
  • Where should players work together commercially and technically to accelerate value creation for the overall ecosystem (including consumers)?
  • What can we learn from recent best (and worst) practice? How should these lessons be applied in the future?
Presenters, Panellists, and Developer Forum

There will be short stimulus presentations x 3 (from representatives from the Communications, Media and Technology industries), followed by debate with participants using our ‘Mindshare’ interactive technology, followed by a panel discussion.

There is also a Developers Forum at each Brainstorm.

Telco 2.0 Recent and Planned Research

Next Steps

Follow these links to learn more and join the H1 Telco 2.0 Executive Brainstorms and Research programme:


  • Americas Executive Brainstorm, 5-6 April 2011 (here);

  • EMEA Executive Brainstorm, 11-12 May 2011 (here);

  • APAC Executive Brainstorm, 22-23 June 2011 (here);

  • Telco 2.0 Research Programme (here).

Alternatively, please contact us on +44 (0) 207 247 5003 or email us at contact@telco2.net.

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February 23, 2011

Mobile Internet & Broadband Economics: Telco 2.0 Agenda Focus


Our Agenda on Mobile Internet and Broadband Economics for the Telco 2.0 Executive Brainstorms in the first half of 2011 covers: understanding usage trends, embedding connectivity into end-user products, and smarter, cheaper networks.

In our Future Broadband research stream, we’ll also be covering the impact of tablets on the network, and the opportunities and threats of ‘Under the Floor’ Players. This article provides more detail on our objectives, hypotheses, and planned outputs.

[NB The upcoming Executive Brainstorms are in Palo Alto - April 5-6, London - May 11-12, and Singapore - 22-23 June 2011.]

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The rest of this article covers Telco 2.0 Brainstorm Objectives, Hypotheses and Key Questions, and planned research output.

Telco 2.0 Executive Brainstorm Objectives - Mobile Internet

The objective of the ‘Mobile Internet’ sessions at the April-June 2011 Telco 2.0 Brainstorms will be how to create new growth opportunities and sustainable business models which grow the whole mobile internet ecosystem, learning from best practice from around the world.

With the explosive growth of Smartphone penetration and usage, the ‘Mobile Internet’ is at last providing a significant new way to access and use the internet. The subsequent ‘4G’ arms-race to support the new volumes and patterns of data consumption is stimulating a new wave of investment in networks and mobile internet platforms (e.g. VZW’s, AT&T and T-Mobile’s announcements at CES).

Telco 2.0 conducts ongoing research and has published a major research report on how telcos can create New Mobile, Fixed and Wholesale Broadband Business Models. In our recent Americas and EMEA brainstorms (analysis here and here respectively), we analysed the new economics of broadband at the intersection of communications, media and entertainment / technology sectors, looking in particular at issues around the ‘Net Neutrality’ debate and innovative strategies to deliver higher capacity of mobile internet data more economically.

Key Hypotheses:

  1. Mobile Internet business models and their environments need to support evolving rapidly consumer needs and applications.
  2. They also need to stimulate and reward CSPs’/telcos’ investment and innovation.
  3. New Mobile Internet ecosystems need to be fostered that support enterprises big and small, particularly in Media and Entertainment.
  4. CSPs/telcos should employ strategies beyond just grabbing local access market share to create optimum value and returns, driving the creation of new business models.

Key questions to debate

  • What are the Trends in End-User Demand?
  • Globally, what new behaviours, applications and devices are evolving in which segments?
  • What are the consequences of these trends for those seeking to develop applications and other products and services for the mobile internet?
  • What is and will be the impact on mobile internet bearer technologies (e.g. LTE adoption), signalling etc.?
  • What are the Mobile Internet needs of Enterprises?
  • What sort of enterprises need enhanced mobile internet services?
  • What are the needs of the Media and Enterprise Sectors in particular?
  • What models of pricing, charging, or value exchange can / do work for Media and Enterprise?
  • How can telcos create sustainable and profitable Business Models based on these trends?
  • What are the latest business models that are being employed by telcos?
  • What does the telco / communications industry need to address collectively?
  • How do these developments impact the business cases for ‘4G’ and Fibre investments?
Presenters and Panellists

Short stimulus presentations x 3 (from representatives from the Communications, Media and Technology industries), followed by debate with participants using our ‘Mindshare’ interactive technology, followed by a panel discussion.

Planned Telco 2.0 Research - Mobile Internet & Broadband Economics

  • Android: Google’s Anti-Apple Virus?
  • Executive Briefing: Strategies for Managing Apple’s Impact
  • The Impact of Tablets on the Mobile Broadband Ecosystem
  • Executive Briefing: Are ‘Under-The-Floor’ Players a Threat or an Opportunity?
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February 21, 2011

Telco 2.0 News Review: MicroNokia; MWC, WAC, LTE update


Telco 2.0 Top Stories

[Ed: We’re covering a lot on the digital ecosystem agenda - Apple, disruptor strategies, etc. at our upcoming Brainstorms in Americas 5-7 April, EMEA 11-13 May, and APAC 22-23 June 2011.]

No prizes for guessing the lead story, again. You’re all probably well aware of Nokia’s “strategic partnership” with Microsoft, but just to recap, Nokia will be using Windows Phone 7 as its primary software platform. Symbian is going to reach end-of-life after another 150 million units. The new environment apparently won’t use either Microsoft Silverlight or Qt. MeeGo Linux is left up to Intel to look after. Most of Ovi will shut down, although the Ovi Publish interface (the back-end into the app store) continues to exist. The Mobile Phones division keeps ticking on shipping S40 devices to India and China, but how it stands for future development is anyone’s guess as part of the deal is a radical cut-back in Nokia’s R&D budget.

The reaction has been explosive - we’ll be giving our initial take later this week.

Telco 2.0 was present at their developer event at MWC and saw CTO Rich Green explain that “it’s an and story”, whatever that means, to a hall full of Symbian developers whose skills had just been rendered worthless. In an effort to cheer them up, there’s been a distribution of free E7s, but there are some problems even shiny gadgets won’t fix. After all, the first Winokia phones won’t ship until October and the concept designs are already getting some unfavourable reviews. Asymco reckons that the 150 million units number puts the end of Symbian in 18 months and predicts that Nokia’s market share of smartphones will plummet. (He was working on the assumption that Winokias wouldn’t ship until 2012, but a faster drop-off of the orphaned Symbian devices would counterbalance that.)

Blogging up a storm, Horace went on to predict either further erosion of Nokia’s ASP, or of its profit margins and to estimate the installed base of Symbian S60 and above as 200 million units and that of WP7 as about 1 million. This is a good point: Nokia’s official letter to developers makes much of “distribution”, but why would you want to distribute your app to a smaller user base? In an ironic touch, this poll on the official Nokia Conversations blog shows that the most appreciated WP7 feature is “other”.

On the other hand, Andrew Orlowski thinks it’s a good idea. It seems that Nokia reserves the right to customise WP7 heavily, but in the light of the R&D cuts, will there be any investment left between sprucing up WP7 and answering Microsoft support requests for S40? At least the users can check in on FourSquare now.

At MWC, Google chairman Eric Schmidt said that there had been extensive talks between Nokia and Google regarding a potential move to Android, and said that their offer still stood if Nokia had second thoughts. Tomi Ahonen disclosed that Nokia had finally secured a major carrier deal for E7s in North America and cancelled it because they planned to EOL Symbian. Briefly, a supposed dissident group within Nokia called Plan B appeared before being denounced as a hoax. No HTML5 yet for WP7, and you have to be an American company to get paid through the app store.

What a week.

HTML5 is a notable omission, as it played right into a major theme at MWC: developers. Not only did everyone have a developer program of some sort, but most of them involved HTML5 at some point. HP’s TouchPad tablets work like that - so does their new WebOS smartphone. RIM’s key developer environments are Java and HTML5 (WebWorks as they call it). The operators’ WAC is HTML5-based. Obviously, Androids have web browsers and can play as well. Samsung’s Bada works like that. Nokia’s Web Runtime, though, is joining the MeeGo and Symbian refugees. More on that later.

WAC, for its part, launched commercially with 12,000 apps and 8 operators at the event. Over the next year, it’s planning to roll out a wide range of network APIs from the OneAPI project, including carrier billing/subscription, location, customer data and context. Smart Telecom in the Philippines has already bought one, from Huawei. Telefonica showed off their BlueVia developer program, which grew out of O2 Litmus and includes cool stuff like revenue-sharing from incremental SMS traffic - that’ll be the one we wrote about here. RIM threatened to introduce an API for BlackBerry Messenger including “voice, video, sharing, and commerce”. In the meantime, developers there can enjoy their Analytics Service, which embeds a full-featured set of user experience metrics into your app.

Here’s a quick rundown of rundowns: Alan Quayle’s, Informa’s, no fewer than three from the Guardian, why the Wi-Fi didn’t work even though it was sponsored by Cisco, interview with a CBoss girl.

MNO revenues were considered large. Apple didn’t have much to say, but there’s a rumour out anyway, about a cheaper iPhone. Everyone was talking payments, and NFC - if you’ve been reading us for any length of time, you’ll have noticed that we consider NFC so far to have been a counter-indicator of success with payments - although the tide may now be about to turn (of which more anon). Orange and O2 have NFC pre-paid debit cards out.

Huawei can sell you an app store, or a whole network. Nextel has a real monster of an upgrade on, building out 3G and more across its Mexican and Brazilian networks, and naturally they tapped Huawei for the job. The system will have to support their PTT features. Huawei also agreed to accept a US government request that they sell certain intellectual property for reasons of, you guessed it, national security.

Their great local rival, ZTE, landed a contract to build out dual carrier HSPA and LTE across Australia for Hutchison, another to deploy its software defined radio base stations for KPN and to cooperate with them on R&D, and yet a further one to develop the new, TDD flavour of LTE with China Mobile and KPN’s E-Plus division in Germany.

Interestingly, Clearwire has been reported to have joined the TD-LTE trials, which leaves WiMAX looking a bit peaky. Not that Clearwire itself is any healthier: the losses are growing. At least Mobily’s buying some WiMAX kit.

Telstra announced it was deploying LTE this year. In what looks like a trend, the new network will be fully integrated into the old - the 1800MHz LTE nodes will be focused on the dense urban cores and the HSPA-Dual Carrier service cascaded outwards as spectrum becomes available with heavy traffic being moved over to LTE. They also said they had no need of femtocells, because WLAN works just as well. (That SIM-authentication for WLAN spec looks like it’s about to get a few more downloads.)

LightSquared has announced its first customers.

Also at MWC, we saw Verizon Wireless’s executive director of 4G, Lindsay Notwell, presenting on their LTE network (and if you’re reading this, you promised us the slides). It’s another of these ones integrated with a different radio interface - the EV-DO network is used as the step-down for the LTE devices, with some cunning use of IPv6 addressing. We even heard someone refer to this strategy as “het-net”, a candidate for the worst neologism of the year.

Crossing the streams, VZW has announced a developer centre for its LTE network, with the aim being to provide intimate engineering support for applications developers and solution providers working on LTE.

Apps can now be approved medical devices. A serious, Chinese Android trojan.

We said we would come to some MeeGo news. Intel displayed a pre-alpha tablet version of the OS at MWC, and CEO Paul Ottelini came along to the developer day to commit the company to supporting the OS and perhaps more importantly, the Qt GUI framework and developer toolchain, which Nokia acquired from Trolltech in 2005 and which underlies many, many other software projects on desktops and embedded systems. Quote: “We’re going to spend whatever it takes to make this float”. Telco 2.0 came away with an evaluation version of the OS on a shiny. It’s very…pre-alpha indeed, especially compared to our Nokia N900’s Maemo OS, but then that’s the point of a pre-alpha build. PC Pro didn’t like it much, although surely there were worse products about - like those big plastic Android logos Google gave away that we saw some Mediatek people trying to get through security at Barcelona Airport on Friday. A truly odd sight, especially on the X-ray screen, and completely useless.

Skype took the opportunity to announce some more deals and details from its carrier-partnership programme. Qtel is the latest lucky girl, and there are rumours about AT&T. Also, Dan York has discovered an easter egg in Skype 5.0 - it supports a command-line interface through the chat window, so you can just type /golive to initiate a group videoconference with everyone in the current chat.

There’s a cheatsheet of the commands here, which of course doesn’t include the egg. In other Skype news, US Republicans are confused about Skype.

Chinese social network Renren.com, with 160 million members, is planning to IPO in the US. Meanwhile, Alibaba.com’s CEO quits over fraud. Not fraud he committed - frauds his company didn’t detect.

The NTIA has published the US National Broadband Map, an often controversial element of the US National Broadband Plan. AT&T has unexpectedly intervened in the Level(3)-Comcast peering war, writing to the FCC to ask them to end the suspense and rule.

Benoit Felten’s blog post from the FTTH Council in Milan is here. FTTH Council’s dates, of course, clash with MWC, but they also clash with #NotatMWC as well, our new favourite industry conference. If they really do move MWC to Paris, you’ll be able to attend both by hopping on the Eurostar…

Way back in 2007 we asked why there weren’t any mobile CDNs. The answer back then was probably something along the lines of “because hardly anyone’s using any mobile data”. Now Akamai and Ericsson have a deal to cooperate on building CDN and video optimisation capabilities into mobile networks. Now there’s sense.

The founder of Last.fm doesn’t like Apple much after they decided to impose the 30% revenue share on content subscriptions. And check out Bain & Co.’s chart of music revenues by format.

Rich “Data Center Knowledge” Miller has a deep dive post on colocation pricing trends. He also has news that I/O Data Centres has opened a factory to mass produce modular data centres.

Google wants to pull more social information into search. Why your customers aren’t a good source of advice. Zain’s decline. Picking a fight with Anonymous. The random start-up generator. Telco 2.0’s whiteboard notes from the AR standards meeting at MWC.

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February 10, 2011

Cloud Services: The ‘$40Bn/year’ Telco 2.0 Agenda

Cloud Services offer a c.$40Bn p.a. opportunity for CSPs by 2014 and are a key focus for Telco 2.0’s Research Programme and Executive Brainstorms (Palo Alto - April 5-6, London - May 11-12, Singapore - 22-23 June 2011). Here is our agenda, covering our key hypotheses and questions for industry strategists, marketing, commercial and technical leaders developing or assessing Cloud Services.

Introduction - The Cloud and the Communications Service Provider

Cloud computing is one of the buzzwords of the year - everyone from NASA to Wikileaks is keen to move into the cloud as fast as possible. Providing infrastructure services at very high scale with strong reliability guarantees while charging by volume sounds very like a classic CSP business. In many ways, the PSTN is the original cloud. This also plays into STL Partners’ enduring focus on SMB and enterprise markets - essentially 100% of cloud computing is sold to ‘upstream’ customers of one kind or another, as an input into their business processes.

Telco 2.0’s Cloud research stream has recently explored these issues in an analyst’s note, “The Cloud: Identifying Telco Opportunities.”

We’ve also reviewed the many different ‘X-as-a-Service’ Cloud varieties, from Infrastructure-a-a-S (reselling data centre space to enterprises) to Software-a-a-S (selling software based services to SMEs and applications customers) as nicely articulated in this video presentation from the recent EMEA Brainstorm Making Sense of ‘Cloud / xAAS’: Seven Clear Examples.

Telco 2.0 Initiative Objectives

In the Cloud sessions at the H1 2011 Brainstorms, we will be further exploring the issues and where areas of opportunity for CSPs exist.

We will also be looking at the interaction between cloud computing and other elements of the Telco 2.0 agenda, notably developer communities, subscriber data, and bandwidth on demand. Major drivers of cloud usage in enterprises are rapid applications development, and scaling (up and down) applications usage volumes, according to work at past Telco 2.0 events.

In addition, in our Cloud Services research programme, we will be analysing and benchmarking the most successful and innovative cloud applications, particularly among CSPs.

Telco 2.0 Hypotheses:


  • There is a nontrivial market opportunity for CSPs in Cloud Services. Delegates at the last Telco 2.0 Executive Brainstorm converged on a rough figure of $40bn a year.

  • As cloud providers, CSPs have certain key assets that differentiate them from the IT-world competition.

  • The core CSP product is still connectivity, and the key assets cluster around it. CSPs have control of network assets and also of a geographical footprint that permits them to provide an ADN or Application Delivery Network analogous to a CDN.

  • However, a major driver of cloud adoption is the developer community “voting with its feet”. An unexpectedly strong result from the last Executive Brainstorm was the value that several presenters had derived from using cloud computing as a rapid-prototyping tool.

Key questions to debate:

  • What are the lessons from the best telco Cloud Services examples / case studies?

  • What are the key Cloud Services opportunities in SME and Enterprise Markets?

  • Should an innovative interoperable “Application Delivery Network” (ADN) be developed for Cloud Services?

  • If so, what needs to be done to deliver the ‘ADN’?

  • What are the key pricing structure options for Cloud Services and when are they most appropriate?
Presenters and Panellists

Short stimulus presentations x 3 (from representatives from the Communications, Media and Technology industries), followed by debate with participants using our ‘Mindshare’ interactive technology, followed by a panel discussion.

Next Steps

Follow these links to learn more and join the H1 Telco 2.0 Executive Brainstorms and Research programme:


  • Americas Executive Brainstorm, 5-6 April 2011 (here);

  • EMEA Executive Brainstorm, 11-12 May 2011 (here);

  • APAC Executive Brainstorm, 22-23 June 2011 (here);

  • Telco 2.0 Research Programme (here).

Alternatively, please contact us on +44 (0) 207 247 5003 or email us at contact@telco2.net.

Further reading

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February 8, 2011

Telcos unlocking 3-Screen Revenue Opportunities



This guest post by Telco 2.0 partner Wipro Technologies describes the 3-screen opportunity, and a broad-based solution construct for ‘Content Monetization Solutions’ which are critical for realizing the opportunity. There’s more on the 3-screen opportunity in our Digital Entertainment Research Stream and at our Digital Entertainment 2.0 Americas (5-7 April, Palo Alto) and EMEA (11-13 May, London) events.

Background

As the Media industry continues its shift towards the digital world, Studios, Music labels and TV/Cable networks continue to be faced with wider and better opportunities of monetizing content aided by direct and engaging connections with the end consumers. Laptops/ PC’s, TV’s, mobile phones, pads/ ebooks and in some instances directory or information screens make up this 3-4 screen world.

In turn, consumers are satisfying their appetite for media (Audio / Video / Images) infotainment by consuming using multiple screens targeting specific content and services appropriate to the device, the time of day and personal situation or need of the individual. This world involves more devices… but very often without replacing what has preceded it.

Wipro roles diag.png

* Source: Nielsen Report Sep 2010

In this digital, device-driven transition, media companies need to ensure that their value is not undermined in the process. Additionally, the rich customer experience that video and multimedia brings cannot be diminished. Today’s consumers are technology savvy in their interactions and transactions around digital media.

The landscape of traditional television is facing a ‘sea change’. Linear broadcast is no longer sufficient to hold consumer attention. Pay TV is facing increased competition from Digital Terrestrial TV and streaming, on-demand and Over-The-Top (OTT) video based services with selective competition from Mobile TV in specific genres.

Most video inventory is today supported by a traditional advertising model. This includes news clips; special events include world cup / Olympics, user-generated content, TV shows and more. Advertising remains a key revenue source for broadcasters with higher CPM rates ranging between $10 and $100, although revenues can be volatile. Publishers are looking for avenues that could provide greater stability to 50% or more of their company revenues. Where might this come from?

The Need for Content Monetization


  • Nielsen recently reported that 42% of consumers are willing to pay for content online. The opportunity exists today to monetize, and potentially surpass, revenue generated through video advertising networks.

  • Forrester Research predicts the online video advertising market will reach $7.2 billion by 2012. Highly targeted advertising needs to be delivered in a variety of innovative, user-friendly formats which yield a high CPM.


Monetizing Content inventory beyond broadcast is an economic necessity for the media companies but the business models are changing and evolving as new devices and services cause disruption.

Some key objectives for Media Companies include:

Wipro bullets diag.png

Content Monetization Solutions

Content monetization solutions are a generic set of technologies integrated to address these needs. The core components are a Content Management System, Inventory and Campaign Management, Subscription Management, Portal Infrastructure, Storefront, eCommerce, Billing and CRM.

Wipro Syst diag.png

The following is an ‘idealised’ set of system roles and functions needed by Media companies looking to exploit these opportunities on which Wipro bases its systems’ designs:


  • Content Management - where the content strategy should be defined with product definitions, product / content classifications, metadata, storage and unit pricing.

  • Inventory and Campaign Management - robust inventory management to enable dynamic product creations ‘on the fly’; be it single product or bundles with complex pricing engine configuration.

  • Campaign Management - enable marketers to create, optimize, contextualize and deliver the right campaigns at the right time. This should include real time campaign serving, performance-to-conversion ratio tracking and flexible/ configurable reports.

  • CRM - enable business to understand customer preferences, identify prospects, sales force automation, customer support and service, flexible customization and deliver powerful Customer Relationship Management solutions.

  • Store Front - includes product catalogue creation, multiple product layouts, customized look and feel, and search engine optimized, carrying price engine rules and definitions.

  • E-Commerce - Enables users to add their preferred products to the cart and fulfill the purchase through secure payment gateway. This helps retain recurring customers and simplify the search process.

  • Paywall - allows premium content access only to paid users. Should include comprehensive business rule definitions, customer profiling information, analytics, alerts & notifications. This is the core engine that unlocks new revenue opportunities including advertising and launch of new business channels.

  • Portal - provides the base infrastructure key services and integration points, and user management, help, faq, collaboration, roles and permissions, search etc.

  • Subscription Management - enables subscription management and commerce based transactions.

  • Promotions - incorporates loyalty points, bonus, and discounts definable to provide value-adds or benefits to the users thereby attracting more subscriptions.

  • Billing - enables micro payments - be it ‘instant buy’, pre paid, post paid, or royalty points.

  • Delivery platform - supports Offer Fulfillment phase where new media and device strategies are deployed.


Example Functions, Workflows and Media for to Unlock 3-Screen Revenues through Content, Experience, Engagement and Monetization.

Wipro flow diag.png

The author of this post is Steve Snyder, Vice President and Head - Media and Entertainment Business, Wipro Technologies.

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February 7, 2011

Telco 2.0 News Review


Telco 2.0 News Review

[Ed: Watch the full Best Practice Live! virtual event online, including presentations on Google, Facebook, and more. Sign up here absolutely free.]

Tellabs threatens the “end of profit” for the mobile networks within the next few years - by 2013 in North America. However, readers at Informa’s telecoms.com point out that their assumptions about cost structures are highly conservative, and also that the study assumed that the network operators won’t do any repricing/usage based pricing. Further, increasing their use of data offload pushed out the evil day beyond 2015.

On the other hand, for the first time, Vodafone made more revenue from data traffic than it did from SMS, with data revenue of £1.33bn in Q42010, growing at a 27.2% clip, compared to £1.31bn worth of txts. That doesn’t sound like disaster. On the other hand, the business is flat in Europe and voice revenues are declining - but rapid growth at Vodafone-Essar and Turkcell makes up for this.

Elsewhere, both Verizon Wireless and AT&T Wireless passed the mark of one-third of their revenues coming from data traffic excluding SMS in the third quarter. (They also reserved the right to cap the top 5% of data users, and the Canadian government told its telecoms regulator to think again about letting Bell Canada impose usage pricing on its wholesale customers.)

NTT DoCoMo, meanwhile, brought back flat-rate data, although they can afford it as it’s priced at $66 a month.

Did you know Felixstowe has worse Internet connectivity than many ports in Africa?

It was a week of big numerical milestones - after all, it was the week that the Internet ran out of IPv4 addresses. Once the Asia-Pacific Network Information Centre got an additional /8 block early this week, IANA activated the final divvying up of the remaining free pool of addresses, with the last five /8s being shared out equally among the five regional registries. RevK reports on trying to get IPv6 connectivity on a Virgin Media fibre link, and VM responds in the comments, but not before claiming there was plenty of IPv4 left.

Meanwhile, VM dropped its 20Mbps cable service to upsell the users onto its faster, and pricier, tiers of service.

It’s rough being an operator - Google and Twitter get all the glamour when they get blocked by some vicious tyrant, but if you’re a telco, not only do they cut the wires, but they also expect you to push out sinister state propaganda via broadcast SMS. Because of how Cell Broadcast works and how Vodafone configures its handsets, when the Egyptian secret police texted everyone to alternately threaten them and demand they come on a loyalist demo, the messages appeared to come from “Vodafone”. Whoops, especially as Britain’s students already suspect that Vittorio Colao might be history’s greatest monster, going by their attitude to the 360 Oxford Street Vodafone shop.

Vodafone has pointed out that the Egyptian spooks had the legal right to do this, and of course also the power to do it, legal or not. And that they’ve complained to the regulator, as if anyone is doing any regulating in the middle of a revolution. It probably won’t do any good. Renesys, of course, has charts illustrating the cut-off and restoration of the Internet in Egypt. Meanwhile, a major effort is on to secure the release of a Google exec who has been missing since going on a demonstration last week.

The EFF has an interesting legal discussion of the FCC’s Net Neutrality-ish order. Interestingly, they’re relying on the concept of ancillary regulatory authority under the Telecoms Act Section 706 - although this has been thrown out by a court in the past.

In the UK, OFCOM has given the go-ahead for the trading of spectrum between operators. Rather like football transfers, all transactions must go via the regulator, but it’s unlikely that 2600MHz will appoint an agent with a really odd haircut to represent its interests.

Brough Turner has a fascinating presentation on why he thinks “over the top” is the future of communications. He’s currently at the 4G Wireless Evolution shindig in Miami. Of course, if he’s right, his mesh-WLAN startup will need plenty more spectrum, and he reckons that there’s an obscure FCC provision that may deliver just that by extending the whitespace rule to other underutilised bands.

Contracts are out for New Zealand’s rural broadband network.

What’s on the network? As Brough’s presentation makes clear, it’s mostly video. Humax just added the BBC iPlayer to its Portal DVR as an over-the-air update, with the Sky Player coming soon. A TV tuner for your iPhone. At least that’s keeping TV where it should be, in broadcast. Google’s Google TV UI gets open-sourced. There’s only one problem….

….and that’s that it doesn’t seem that anyone really wants any of this stuff. An experiment with families in Boston demonstrates that “cutting the cord” is surprisingly difficult. Further, Informa estimates the population of cord cutters is utterly insignificant, and will stay that way for the foreseeable future.

Surely, though, there’s plenty of traffic from the cloud and social networking tools to go around. Data Center Knowledge reports on Facebook’s massive expansion plans. So far, they’re focusing on filling up the gigantic sheds they recently built in Prineville, Oregon, and Forest City, North Carolina, rather than adding more buildings. But that in itself adds up to a huge project.

Google and Facebook’s massive spending on data centres and big-data analytics is causing a bidding war for engineers in these fields, and startups like Cloudera are complaining that it’s raining money and they can’t compete.

Facebook’s faintly creepy Places Deals feature (you tell them where you are, and they soak you with advertising for stuff that is supposedly cheap and relevant) is going live in the UK and the first up is Starbucks. Because people in a cafe want to be reminded it serves coffee? Meanwhile, Connected Planet reports on the success of featurephone social network AirG.

If you’re crunching big data, you’ve probably used the R programming language at some point, and you may have a mass of stuff in the proprietary SAS file format. Help is at hand, at a price.

We’ve predicted before that BSS/OSS is a field where operators could do well to shift their data into the cloud. Connected Planet reports on products that exist to do just that. However, there’s a word of warning from High Scalability:

PaaS 1.0 is like the public telephone booths of yesteryear. Its starts out terribly expensive but all new, shiny & clean. Very quickly it becomes soiled by its multi-tenancy, lack of policing & maintenance, its limited (crapped) space & capacity, its lack of adaptability (upgrading is a bitch because its controlled by a single authority) to innovations elsewhere, and then there is all those business (card) adverts for questionable services plastered all over it. What’s amazing you continue to pay the same expensive call rate while it goes through this lifecycle process.

At the other end of the pipe, the devices half of Motorola announced it had made a small but real profit. It’s incredible what a bit of Android will do for a battered handset vendor.

No surprises, really - Canalys reckons that Android has now overtaken Symbian in shipments. Crucially, the quartet of Samsung, HTC, Acer, and LG have seen truly spectacular growth in units shifted.

The Android Developers blog announced a number of improvements to the Android Market, with access to the Market from the Web, easier handling of payments in multiple currencies, and an in-app billing process. Google also showed off prototypes of Honeycomb, the tablet version of Android.

There are videos of Honeycomb and also of a new Nokia user interface concept here.

Not surprisingly, given the news from Canalys, speculation is running wild ahead of Nokia CEO Stephen Elop’s pre-MWC strategy announcement on the 11th (Friday). Some think they should use Windows Phone 7, while others suggest Android, and Nokia’s credit rating is under review. All Things Digital points out that Nokia spends a fortune on R&D.

There’s an interesting Forum Nokia piece by Randy Arnold on promoting the MeeGo ecosystem - Telco 2.0 will be attending the Nokia/Intel developer day at MWC, so we’re very keen to find out what’s going on and if we get one of those sweet Lenovo IdeaPad netbooks he mentions them giving away at their conference last year.

Meanwhile, IBM and Oracle have settled their differences over the future direction of the open-source bits of Java. Perhaps Google should have stuck with OpenJDK in Android and they wouldn’t be having quite as many lawsuits.

Moving on from the shiny gadgets, Bharti-Airtel saw a sharp drop in profits although revenues were up, as it spent heavily on integrating its African acquisitions and encountered unfavourable currency movements. China Unicom warned on profits as a consequence of the shakeup of the Chinese industry and accelerated depreciation of its old network. Alcatel-Lucent UK recruited former BT chairman Sir Christopher Bland as its chairman.

Light Reading has a video interview with BT’s CTO in which he says that the operator is working on a new voice product for its FTTH deployments based on Ribbit. He also provides some updates on 21CN, BT’s Metro-Ethernet products, and fibre deployment.

Elsewhere in Voice 2.0, a row breaks out between a blogger and the FreePBX developers, and continues here. Salesforce.com launches its Chatter enterprise social network with a video during the Superbowl.

Skype Journal interviews Skype CEO Tony Bates, a Cisco veteran and multiple RFC author, and remembers former Skype president Rajiv Dutta, who has died unexpectedly.

Is Google making more money than expected from YouTube? According to a fascinating Wired piece, there is some content that is making as much money for its owners and for Google from ads on YouTube as it makes in revenues on paid-for sites.

News Corporation launched its iPad optimised newspaper in a blaze of hype this week. On the other hand, they’ve just taken a $275 million write-off on the value of MySpace. Better luck this time, eh.

Get the tweets you want out of the whole 110 million items a day firehose feed, with Gnip’s keyword search filtering product.

It looks like Apple is trying to stop apps getting into the App Store that provide access to other app stores, in order to stop the 30% revenue shares leaking away.

Hacking Toshiba laptops in 1995. Watercooled PC disasters. Open-source multitouch displays. Mashup of the year, and it’s only February: the geographical distribution of Page 3 girls.

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February 3, 2011

Google - we need mobile OAuth and we want better voice


Google security expert Eric Sachs’s presentation at the Telco 2.0 Best Practice Live! virtual event throws a lot of light on some key Telco 2.0 issues, notably the ones we encountered in the World Economic Forum project our consultants have recently supported. We’ll be discussing this further at our Personal Data 2.0 event in Palo Alto on the 6th-7th April. This graphic, taken from the WEF project, shows something of the complexity of the issue - it illustrates Facebook’s privacy controls. This is when they’re trying to be less complicated…

Facebook's attempts to do better here may not be helping

Sachs demonstrates that Google had a very good reason to start using mobile phones as an identification tool - quite simply, the numbers of people who used their GMail (or wider Google Account) password on other, poorly secured or malicious, Web sites meant that Google operations staff were constantly dealing with the consequences of account hijacking. This could involve fraud, the disclosure of embarrassing private information, and worse - after all, if you have a Google account you can use Google App Engine, which gives you the power to cause all sorts of trouble.

Although successful recovery of an account usually resulted in customer delight, it wasn’t always possible to fix the damage, and occasionally the wrong account would be recovered. Alternatively, hijackers might request recovery of an account, posing as its owner. People affected were angry, to the extent of involving U.S. Senators. Also, the whole exercise is costly, and easily wipes out several years’ ARPU for each case.

So they were absolutely delighted to be able to use mobile numbers and SMS as a form of two-factor authentication - increasingly, Google records mobile numbers when a new account is created. To recover an account, they could now send a message to the number with a one-time secret code and ask the user to log in entering this message. Simple - as simple as age verification could be for Betfair!

In the past, we’ve highlighted companies like Valimo and Turkcell, who are innovating in this field. Given that Valimo’s software is available off the shelf, you’d be a fool not to deploy the service while you can - surely?

Identity is an important platform service; once you get it in place, other things can be built on it. Sachs described Google’s contributions to the OAuth 2.0 standardisation and how their Google Health products are essentially built on OAuth. (Kaliya Hamlin’s presentation on OAuth and other identity technologies is here.) But, of course, online authentication of some user name or other is only as good as the original verification of that identity - this is why we need things like the certification chain in SSL or key-signing in OpenPGP. Operators can provide this, so why aren’t more of them doing it?

In fact, Sachs’s presentation was highly Telco 2.0 all the way through - he also touched on the possibilities of new forms of voice and messaging. “Social Caller ID”, he suggested would allow you to see which company was behind the phone number on an incoming call. It might also allow you to see what they were referring to - for example, a past service ticket or a conversation on a social network.

Google is very interested in this field - as well as the Google Voice app, they recently acquired a text-to-speech and web-voice integration company, SayNow. This might have passed unnoticed outside the tiny cult of voice hackers had it not been for the Egyptian revolution coincidentially breaking out last week. SayNow delivered a quick turn-around app that allowed people to leave voice messages that were then injected into Twitter, thus taking advantage of the fact that the Egyptian secret police had left the international voice gateways operating when they forced the ISPs off the net.

(Vodafone managers, whose network was shut down by force majeure and then used by the secret police to send threatening messages that appeared, due to the Cell Broadcast spec, to come from “Vodafone”, must be spitting tacks.)

Telco 2.0 CEO Simon Torrance, meanwhile, gave a presentation in which he showed results from our survey of Telco 2.0 delegates. Fascinatingly, the delegates saw identity, subscriber data, and better voice and messaging as promising fields for the future - but when asked where they were investing, they were putting remarkably little actual money into them. Unfortunately for them, Google is.

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Mobile data: finding ‘Quick fixes’ for revenue growth



This is a guest post by Telco 2.0 partners Aito Technologies.

At the Consumer 2.0 track of the last Telco 2.0 EMEA Brainstorm, the discussions focused on how operators could (and should) benefit from the wealth of information about their existing customers.

The key question on everybody’s lips during the Q&A session was, ‘what are the concrete monetary benefits that analytics can provide for operators?’

We’ve therefore put together some examples from our experience to illustrate just how readily operators can reap the benefits of closely monitoring network performance in order to identify and fix issues affecting service usage.

And the bottlenecks are…

We extracted data from a Pan-European study covering millions of mobile subscribers, their usage of mobile services and other behavioural factors. We focused on the ‘hot topic’ of mobile data usage. Analysis of the data revealed several bottlenecks which were causing problems for customers trying to access mobile data services. We broke these issues down into three categories:

• ‘Quick Fixes’, including provisioning, device settings and network configurations, which covered 18 percent of the bottlenecks across the study;

• ‘Fairly Easy to Fix’ issues, including congestion and Hardware/Software failures, accounted for 26 percent;

• While ‘Difficult to Fix’ issues, such as faulty devices and missing credit, covered the remaining 56 percent.

What’s it worth?

We looked at a specific example of an operator with 10 million customers, of which approximately 5 million are using mobile data. This operator’s share of the different bottlenecks differ slightly from the market averages with:

• 15 percent of the bottlenecks caused by handset settings and configurations;

• 48 percent from network related issues such as congestion, configuration, software faults and faulty handsets;

• 30 percent from customer related issues, such as failed authentication, no credit or no subscription to the requested service;

• the remaining 7% were combinations of all the above requiring deeper troubleshooting.

We estimate that 50 percent of the bottlenecks listed above could be solved with no major investments required to the network itself. With a set of built-in analytics carrying out the neccesary calculations - based on tariff plans and network data, the fixable faults represent an annual incremental mobile data revenue of 3.5M Euros.

This example is for one service only and there are further revenue benefits that can be found in other services. For example, in voice services, we have seen typical revenue losses that are 4 to 6 times greater due to the higher volumes of service transactions generated by the customers.

So in summary, we argue that good analytics can quickly and easily provide operators with tangible benefits and deliver monetary results, and are a must for each operator as a strategic tool for gaining competitve advantage.

You can meet Aito Technologies at stand 1F62 at the forthcoming Mobile World Congress in Barcelona. To arrange a meeting please contact Teija Rasanen at teija.rasanen@aitotechnologies.com.

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February 2, 2011

Don’t Miss It: Best Practice Live! Is Today


Our Best Practice Live! virtual event is due to go…live within an hour. We’re going to have some 30 video presentations from industry experts on the full range of issues Telco 2.0’s covered.
Sign up now - it’s absolutely free

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February 1, 2011

WEF, AT&T, Google, Harvard: Personal Data ‘hotting up’


If you read Monday’s Telco 2.0 News Review, you’ll know that the use and abuse of customer data is rapidly getting to be a more and more important and controversial issue. Ideas like “social commerce” and the technology of analysing enormous data sets combine to create both enormous opportunities and potential disasters. Facebook, for example, is trialling an advertising product which mixes advertising into content taken from user status updates and reinjects it on their friends’ pages as ads. Is this a great idea or an unusually egregious form of spam?

Telco 2.0 has been one of the analyst firms working on the World Economic Forum’s Rethinking Personal Data project for this year’s WEF meeting. We also recently issued a Analyst’s Note on the Personal Data Economy. We’re going to be discussing the issue and sharing some of the conclusions at our Best Practice Live! virtual event on Wednesday and Thursday this week - it’s free to register and join, and you can also find more in our Personal Data research stream.

Here’s a video interview with our CEO, Simon Torrance, about the WEF project:

Personal Data Agenda for Best Practice Live!

  • Key findings of the ‘Re-Thinking Personal Information’ white paper
  • Trust Networks and the Telco market opportunity
  • The key web technologies that are enabling user-centric identity management, and how to adopt them
  • What is the ‘Personal Information Economy’ exactly and what role should telcos plan to take?
  • What Google needs from telcos in the ‘trust’ space?
  • New evidence that demonstrate the tangible value of Personal Data
  • How AT&T is gearing up to play a significant role in Personal Data management

Presenters:


  • Bill Hoffman, Associate Director, World Economic Forum

  • John Clippinger, Co-Director, The Law Lab, The Berkman Center for Internet & Society, Harvard

  • Kaliya Hamlin, Executive Director, Personal Data Ecosystem

  • Phil Laidler, Director, Telco 2.0 Initiative

  • Eric Sachs, Product Manager, Security, Google

  • Von Wright, VP Cloud & Wholesale, Mobility & Consumer Markets, AT&T

Sign up here absolutely FREE.

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A Cloud Service Provider Blueprint



[Ed. This is the second 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).]

Full report available for Parallels Summit attendees

There can be no doubt that cloud computing has arrived and will define the IT landscape for at least the next decade, perhaps forever, but how can current and future providers of cloud services profit from this industry-wide shift? What are the capabilities that service providers need from their cloud service delivery platform? What does the cloud mean for traditional vertical service delivery platforms? And how can providers enhance the profitability of their cloud services offerings?

These topics are explored in a new framework and whitepaper Parallels just released called the Cloud Service Provider Blueprint and they will be featured in depth at the upcoming Parallels Global Summit, February 22-24 in Orlando (registration is free). While this Blueprint focuses on the key capabilities service providers need to successfully deliver cloud services, it is worth noting that there are some foundational requirements, such as reliability and scalability, which are common to all large-scale automation systems. For the purposes of this discussion, these capabilities are considered a given and are therefore not specifically addressed.

From a business model perspective, the cloud service providers with the highest margins, highest ARPU, lowest operating costs, and lowest churn will have a significant competitive advantage in the long run. To achieve this advantage, they will need a comprehensive cloud service delivery platform—and the cost of developing such a platform is a factor they will need to take into account.

A cloud service delivery platform must be able to design relationships between the tens of thousands of components involved in delivering cloud services, in order to create multiple options within service plans, as well as critical dependencies, commercial terms, and billing options—including over-usage policies. The complexity of the relationships between components is significantly greater than what is presently found among traditional telecommunication services.

It must also be able to work with a multitude of operating systems, databases, and application servers that power provisioned services and their individual components; be able to mix and match them efficiently to provide best-of-breed service offerings; and be able to easily replace one component with another if the need arises. (For example, service providers must be able to easily switch between third-party ISVs who supply one of their enabled services.) This complexity requires cloud service delivery platforms to be able to handle the widest range of diverse components.

Traditional vertical service delivery solutions are typically designed to solely provision services located on a provider’s premises. However, many services today are hosted on third-party vendors’ sites or in the cloud. Consequently, a complete cloud service delivery platform must be able to provision, configure, and manage such remote or syndicated services in conjunction with their on-premise services. For example, a service provider may want to combine an onsite Hosted Exchange deployment with offsite e-mail archiving from a third party.

To more easily explain the characteristics of a complete service delivery platform, Parallels, based on its experience working with thousands of the world’s leading cloud service providers, has developed a Blueprint of an ideal cloud service delivery platform. This Blueprint can serve as a guide to the capabilities required to deliver cloud services efficiently, profitably, and with a seamless user experience.

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The Cloud Service Provider Blueprint expands on the composition of each of these blocks individually. First, however, to grasp the big picture, it’s helpful to see how they all fit together, in order. What the figure illustrates is that the infrastructure, both physical and virtual, needs to be managed. On top of that, services need to be defined, managed, provisioned, and billed. On top of these services, it’s essential to include a layer that gives customers visibility into their subscription services and lets them self-administer basic functions, so they’ll have less need to call into the support center. The figure also illustrates that these core elements do not live in a vacuum. They need points of integration with all critical front- and back-office systems. Additional points of integration are needed to provide customers with a storefront and shopping cart—or, as it is more recently called, a services marketplace. When all of these elements are put in place with a high degree of automation, they enable providers to offer public cloud services profitably.

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For a detailed whitepaper on the Cloud Service Provider Blueprint, register for Parallels Global Summit 2011 today, February 22-24 in Orlando. Content designed specifically for CSPs will feature insights and information you need to:

• Choose the right Cloud services to offer
• Leverage your existing services and customer base
• Decrease churn by offering sticky Cloud services
• Rapidly get to market with your own Cloud solutions

Additionally, you will get to network with Hosters, Telcos, and VARs already heavily investing in Cloud, which will provide great business development opportunities.

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