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Telco 2.0 News Review: AT&T buys T-Mobile USA (and a huge fight)

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[Ed: Diary reminder - it’s now just two weeks to the Americas Telco 2.0 Brainstorm, 5-7 April in Palo Alto, and seven weeks to the EMEA Brainstorm, 11-13 May in London.]

AT&T has agreed to buy T-Mobile USA off DTAG in a deal valued at $39bn in a mixture of cash and share swaps. As part of the transaction, the German operator will retain 8% of AT&T and get a seat on the board for Réne Obermann. AT&T gets an enormous pile of spectrum, a highly rated HSPA network, and a whole lot of regulatory trouble, as competitors line up to denounce an oligopoly with enormous spectrum resources. Major operator mergers in the past have often involved very large disbursements of assets to satisfy the regulators.

Sprint was the first to make it to the press wire with a statement attacking the deal and threatening to call in the FCC. Brough Turner mourns competition in mobile and remembers when the Boston area had six PCS operators. Rich Miller notes that T-Mobile USA owns a massive data centre infrastructure located in Western Washington’s hydro-power country, and provides a neat roundup of reactions, which are universally negative, expecting higher prices and monopoly in general.

It’s fair to say that the net neutrality lobby won’t be best pleased either. Senator Al Franken kicks off with a rant against telco lobbyists at this year’s SXSW Interactive. As far as the competition goes, Verizon has announced that it will not be imposing usage-based pricing on its fixed customers.

In the UK, BT has announced a round of price rises for line rental and also for some voice call charges. At the same time, the price of its BT Vision IPTV service has been cut back in an effort to get some interest going.

Meanwhile, 3UK CEO Kevin Russell attacked OFCOM’s plans for the 900MHz band refarming, claiming that letting the Original Two operators, O2 and Vodafone, keep it all is anti-competitive. (He also loosened their Web filter a bit.)

AT&T has been successfully sued by a small operator in Michigan to force them to provide information about their infrastructure and the bits of it that are covered by regulated special access. Until now, the RBOCs have been obliged to allow other operators to use some of their infrastructure, but not necessarily to say what is available at any given location, which is obviously useless.

It looks like Bharti Airtel is going to hoover up the Broadband Wireless Access spectrum Qualcomm bought in the Indian auction.

While T-Mobile USA still exists, it’s planning to be the first North American carrier to offer the Nokia C7 or indeed any Symbian ^3 device. Meanwhile, some of the Forum Nokia team have received their N8s, and they sound genuinely regretful at the thought of the coming replacement.

Asymco’s Horace quotes from Nokia and Microsoft’s recent filings and foresees doom, while he has some more data-driven thoughts here. For the foreseeable future, the opportunity in expanding the smartphone market overall will be hugely bigger than trying to win back share from the other players. And how well will a licence-fee paying product do at that particular game?

German Android bloggers were briefly able to see the planned Amazon app store. It looks like Amazon pricing is going to be somewhat lower than the mainline Android Market, which would fit with a general everyday low pricing/volume first strategy.

There’s some detail of the latest Android IP dispute here - it looks as if the problem is that some Linux headers covered by the General Public License (GPL) are included in the code Google released under the Apache Public Licence, which is marginally less open. Google tries to “sheep-dip” the code of GPL’d material using automated scripts before release, but the question is whether this is enough .

Google released new developer analytics tools this week, which as Rich Karpinski points out tend to show that the “fragmentation” problem is nowhere near as bad as some suggest. So far, though, they’re still not as cool as RIM’s embedded user-experience metrics.

Appitalism, the independent app store for iPhones, launched this week. We’ll see how that turns out. Meanwhile, there’s a curious problem with iOS - some of the high performance features of Safari, their web browser, aren’t available in the embedded browser API that iPhone developers use when they want to show a web page inside an app, even though they are both based on WebKit. This is weird, because iOS apps are revenue earners and have to pass through Apple’s approval process while web sites that you can load in the iPhone’s browser have nothing to do with Apple at all. So why should the websites get the goodies when the apps don’t?

Apple has certainly put a lot of effort into that browser - as independent tests of the iPad’s HTML5 rendering performance show.

It’s a cliché to mock Apple users as fans obsessed with gadgets, but this takes the biscuit. Apparently, dodgy dealers are buying iPads and then reselling them to people in the queue for a four-fold markup. Nice work if you can get it. The London version of this used to be selling someone a laptop, and carrying out a neat bait and switch so they ended up with a laptop bag containing four bottles of water as ballast.

Google is having trouble in China - it alleges that the authorities have been interfering with connections to GMail and trying to give the impression that the problem is downtime on Google’s part. Further, they’ve been blocking some Google App Engine projects, including the missing person finder hackers built for victims of the Japanese earthquake.

Yahoo! is apparently going to sell the much loved Del.icio.us, for about a tenth of what it paid for the social bookmarks site.

Microsoft has announced the end of Zune, at least for the hardware element. Also, last week, they culled all the remaining blogs in Windows Live Spaces.

Data Center Knowledge reckons that we’ll see a dip in the market for data centres in the next couple of years before a renewed surge in demand around 2015. In the US, that’s likely to be closer to a real drop, while the global market will see more of a slowdown. They also quote Telehouse as saying that all their Japanese data centres, including one in Sendai in the heart of the earthquake zone, are on line.

Alcatel-Lucent is pushing its 100 Gigabit optical Ethernet products for the New Zealand government’s public fibre build. In Australia, the final vote by Telstra shareholders on the Telstra-NBN deal has been postponed while details are thrashed out in the final stage of negotiations. Telstra currently estimates the value of the contract at A$11bn.

NSN’s acquisition of Motorola’s GSM assets is held up, again, apparently due to objections from Chinese regulators. And, for the first time ever, Cisco Systems is paying a dividend out to its hungry shareholders, in order to keep them happy while it carries out a major product update. As it has $40bn in cash on the balance sheet, this isn’t difficult.

RevK from Andrews & Arnold has discovered a serious problem in BT’s infrastructure.

Via Voyces’ Larry Lisser, the New York Times has an interesting piece on the history of social mores about telephony. How did the phone get to be the official bearer of bad news, and why did we tolerate its rudeness for so long? Exactly what we could do better as a result is, of course, left as an exercise to the reader.

Lisser also has some interesting thoughts from Enterprise Connect 2011 - it looks like “collaboration” is the buzzword of the year - he also has a good point here in asking why video (and IVR) can’t get good enough that your customers will try to get the switchboard to put them through to the robot.

There’s a white paper and a webcast on just this sort of thing in the UK here. Meanwhile, Voice 2.0 hackers set up a live translating and interpreting service for the Japanese earthquake using Tropo’s platform. Dan York has a pair of posts on how to be productive with Skype’s hidden command-line interface. If that’s not enough for you, Qik is now Skype’s first Web API, and you can find the reference for it here.

SIP not working? Here’s a list of known-broken router gateways and how to render them harmless. Remember, if it starts singing “Daisy, Daisy” you should consider re-installing from backup.

There’s a zero day exploit in Flash Player, which will let anyone who exposes it to a crafted Microsoft Excel file own your computer. (What is Excel even doing opening Flash content?) Beware unsolicited attachments, but then you should anyway. Embarrassingly for Adobe, Google has already patched Flash Player in Chrome before their fix was ready.

Cunning tricks for surviving a DDOS attack - deliberately keep open the TCP connections so the other guy eventually runs out of ports or RAM and crashes.

Hackers discover more security problems with feature phones. Notably, if your SMS of Death attack doesn’t work at first, don’t despair, as the operator’s SMSC may keep sending it until it gets through! Better yet, many Nokia devices will shut down if they receive three malformed SMS messages - apparently Nokia considers this a feature, but most people would recognise it as a denial of service attack. And some devices will actually crash and become impossible even to re-flash - a hardware kill.

The average data disclosure incident costs £1.9m to clean up. Stealing mobile transaction authorisation codes on Symbian. 25 years of malware. A problem we’ll probably need to fix - now everyone’s doing optical Ethernet to the cell site, we don’t have the feature that SS7 provided accurate timing any more. Trying to provide accurate timing over nondeterministic networks - you know you want it.

Do you want a watchphone? You probably should, shouldn’t you? Of course, those have been done, but Sony Ericsson has updated the concept with a watch that hooks up to your Android phone’s notification service and displays whatever comes in - twitter/facebook/whatever, e-mail and messaging notifications. About 20 apps for it already exist, but apparently it doesn’t work terribly well.

Neither does Time Warner Cable’s iPad app, which fell over messily during prime time not long after it hit number one in the App Store. Whoops. No wonder cord-cutting turns out to be less of an issue than previously suspected.

This week’s agenda at the FCC - note the issues of national data roaming and the universal service fund. Microsoft’s Explorer 9 has impressive privacy control features the EFF will talk you through them. Finally, the .xxx domain gets ICANN approval after years of bickering.

Creating a wholesale interconnection ecosystem for mobile money transfer.

I know we’ve got a problem with rural broadband availability, but this is ridiculous.

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