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June 28, 2011

Telco 2.0 Best Practive Live: is Live at 3pm (BST)

Our free global online event is on, this afternoon at 3pm UK time/4pm CET/10am EST. Do join us for great presentations and interactive chat with a stellar line-up of speakers from around the industry including the following…

  • Anne Bouverot - EVP Mobile Services, France Telecom Orange
  • Carlos Domingo - CEO, Telefonica I&D
  • Jose Valles - Director, BlueVia
  • Anthony Rose - Co-Founder & CTO, tBone TV
  • Chris Barraclough - Chief Strategist, Telco 2.0 Initiative
  • Peter Kerchoff - VP Content & Media Partnering, Deutsche Telekom
  • Valérie Layan - VP Wireless Solutions & Marketing EMEA, Alcatel-Lucent
  • Simon Orme - Strategy Director Content Services, BT Wholesale

We’ll be covering Mobile Broadband, Cloud, Mobile Apps and Digital Entertainment - all 2.0 of course.

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June 27, 2011

Telco 2.0 News Review: BlueVia/Twitter, and Skype Shares Scandal

Telco 2.0 Top Stories

[Ed. Reminder - Telco 2.0 Best Practice Live!, our free global online event, is on live tomorrow Tuesday 28th and Wednesday 29th June, and on demand thereafter. Do join us for great presentations and interactive chat with Anne Bouverot, EVP Mobile Services, Orange Group, and Carlos Domingo, CEO at Telefonica I+D amongst others. We’ll be covering Mobile Broadband, Cloud, Mobile Apps and Digital Entertainment - all 2.0 of course.]

GigaOM asks if telcos could be the key to Twitter’s revenue model. It turns out that they’re planning to provide their own photosharing service, and might do it with Telefonica’s BlueVia API. The revenue element is, of course, that BlueVia offers you a share of the messaging revenue generated by your app. So presumably Twitter users pay for the messaging in some fashion and Telefonica kicks some of that back to Twitter. Telco 2.0 event attendees will not be very surprised to encounter Telefonica’s Jose Nunez Valles in there - he’s presenting at Best Practice Live! this week too.

Elsewhere in social, BusinessWeek has a detailed story on the decline and fall of MySpace under News Corp management. It’s a deep dive, and well worth reading as it touches on the tension between focus and range in product development, the limitations of the ColdFusion and Microsoft.NET platforms MySpace used, spam and malware issues, and the News Corp management’s insistence on driving advertising, any advertising, in order to hit quarterly revenue targets. Also, did they underestimate external innovation and the developer community?

At one point, News actually planned to build a massive “MySpace pavilion” as the centrepiece of a new corporate headquarters building in Manhattan. But within two years - 2007 to 2009 - they went from planning the ruins of the future to selling the office Slushy machine on EBay. It’s a must-read.

Google is about to face a confrontation with the Feds. Specifically, the Federal Trade Commission is going to investigate its business practices based on complaints from websites who think they should get more PageRank than they do.

Over at Nokia, their new flagship phone has launched, finally bringing MeeGo to market in a smartphone form factor. The pretty pictures are here at the official blog. Initial reviews are excellent; Ars Technica asks whether perhaps Stephen Elop seriously misjudged the readiness of the MeeGo platform back in January, given that, well, here’s a phone and it’s only June.

The answer seems to be that Nokia is using the codebase codenamed “Harmattan”, the ultimate development of the pre-Intel deal Maemo Linux, but it’s been reworked to implement the MeeGo 1.2 API specification. Also, the N9 design has apparently had and lost a keyboard on the way, although “selected developers” are going to get a device the N950 that does have one. (MyNokiaBlog called this one in March.)

Ars’s Ryan Paul makes the point that it’s surprising that Nokia isn’t planning to port its open-source Qt framework to Windows Phone 7, as that would let all the Qt developers working with Symbian or MeeGo/Maemo come along. We would point out it’s even more surprising as Qt already works on Windows desktop machines.

Here’s something interesting, though; over at NDN, the SVP of developers is strongly hinting that Qt will get ported to Nokia S40 phones, or something like that. MeeGo Experts seems to have been assured that there will be no more phones, although they’ve also been told that a hit with the N9 might reverse the whole thing.

It’s possibly telling that MeeGoExperts.com is serving up a big Vodafone ad for Android devices right next to its masthead. Anyway, Stephen Elop has told Helsingin Sanomat that there’s no going back. But he is still talking about Qt “platform independence”, and the Windows handset here looks quite like an N9.

Meanwhile, Nokia and Siemens have backed off from the idea of getting an outside investor into NSN and are instead thinking of dropping in some more cash.

So if you’re a real Nokia/Symbian fan, there’s a prototype Psion Revo going for only £85,000. Now that’s hardcore.

It was the week the Microsoft-Skype deal turned ugly. Last week, Skype suddenly disposed of a herd of executives, they were accused of doing so to avoid paying out on the change-of-control clauses in their stock options, and they denied it. This week, it turns out private equity-era Skype employees didn’t actually own their options even after they vested, so the company (or more specifically, its owners) could zap them remotely, as it were.

Reuters’ Felix Salmon, who led the original story, follows up and points out that Silver Lake is a private-equity fund but tries to give the impression of being a venture-capital fund, which turns out to be critically important. Not that this was considered so important when they bought into the company - back then, white-iPad VC firm Andreesen Horowitz was very much the lead partner.

Oh, and those Skype options may have been over shares in a specially created Cayman Islands partnership in order to make it harder to sue. Skype Journal rounds up the rage and betrayal. More here and here, and possibly the best Quora ever.

In marginally less dramatic Skype news, Disruptive Telephony reports that the iPad version is coming soon. Skype Journal wonders how long it will be before the SkypeKit developer program delivers anything much.

Phil Wolff further speculates that Skype VP for “Emerging Opportunities” Jonathan Christensen might announce a major developer community/API product at eComm tomorrow.

If you’re going, best to have a read of Alec Saunders on “Voice 3.0”. Impressively radical or Telco 2.0 2007 vintage? Dan York offers a critical response. Meanwhile, here’s HOWTO port both your landline and mobile numbers into Google Voice.

Google, for its part, announced that all its VoIP is now using the open-source version of Jingle, the XMPP-based protocol they invented, which has now been incorporated in the XMPP standardisation process. Read the list thread here for the horse’s mouth. There’s also an interesting talk by two Googlers doing the rounds about the history and prehistory of VoIP. Up your clue.

HD voice is coming to Telstra.

Apple is reported to have bought up so many lithium polymer batteries there is a world shortage of them. It’ll be all those MacBook Airs. There’s more chatter about a potential cheaper iPhone. And Apple knows devs: see which bits of the screen are getting hardware acceleration in WebKit!

Meanwhile, the iPhone is the top seller at 51% of Verizon retail outlets and many more AT&T ones. And one million people have actually chopped up their own SIM card so they can have a cheap (and fast) T-Mobile USA HSPA+ link and also an iPhone, which T-Mobile USA doesn’t carry.

AT&T is leaping back into the CDN market, Dan Rayburn reports. Specifically, he says, they’re investing heavily in EdgeCast and Cotendo’s technology, which makes this a more serious proposition than their past attempts. It looks like they’ll be offering both classic content delivery and also edge-based app hosting.

Rayburn also reminds us of those “download player” buttons the Web used to have. Much as people hate Flash, at least it freed us from guessing whether this or that embedded video would actually work.

Elsewhere in the cloud, Facebook is teeing up another huge data centre to take advantage of that delicious North Carolinan coal-fired electricity. Mmm…coal.

Amazon Web Services is currently storing 339 billion data objects in its cloud, says CTO Werner Vogels. That’s more than double last year’s count.

Hulu is available on Android, but only if you have one of six phones that can handle its DRM requirements. More broadly, the TV networks’ Internet video play is up for sale. AllThingsD’s Peter Kafka reports that the company has appointed investment bankers to look into a sale or perhaps an IPO, but that the big problem is whether the owners would let it take its mates’ rates content licenses with it. There’s already been quite a bit of tension between the content owners and their startup - did they want to make money from their stakes in Hulu or from charging it licensing fees? - and it’s obvious that they wouldn’t want a competitor to get their hands on the content.

Of course, though, no content means no company, so if the Hollywood and TV interests behind it go too hardball they won’t be able to get their investment back. And neither will the Hulu team get their share options out. One of the potential buyers is apparently Yahoo!

Here’s the first tablet with the Netflix streaming app, and it’s also the first WiMAX tablet. Netflix is regularly accused of being a bandwidth hog - remember the great peering war? - so it’s interesting to see that you can now adjust the video quality they send you to fit your data tariff.

Verizon, meanwhile, is evening out data pricing between smartphones and laptops, but also trying to maintain a special “tethering” price plan.

There are now more femtocells than macrocells - but as Connected Planet points out, given the difference in capacity between a femto and a macro, this actually isn’t very impressive. They also make the excellent point that public small cells turn out to be more useful than private femtos.

LightSquared has shuffled its frequency band up a bit in a bid to get away from the GPS signals.

Somebody has noticed that UK spectrum refarming and the T-Orange merger may result in T-Mobile UK and Orange’s owners being able to sell a £450m slug of GSM spectrum they were given for free in 1991.

Twitter app Seesmic has decided not to support BlackBerry any more. Bloomberg points out that RIM’s current share price makes it a steal for a solidly profitable business:

“RIM has lost so much value that an acquirer could pay a 50 percent premium and still buy the BlackBerry maker for a lower multiple than any company in the industry,” stated the report.

Although those PlayBook sales could be better.

Apple patents a way for third parties to turn off the camera in your iPhone. Australia starts censoring the Web. The business model of fake anti-virus.

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June 23, 2011

Apple iCloud/iOS: Killing SMS Softly?


The new report on our research portal Apple iCloud/iOS: Killing SMS Softly? is our analysis of how Apple’s iCloud, iOS5, and MacOS developments build value and control for Apple’s digital platform, and their consequences on other parts of the digital ecosystem, including the impact of iMessage on text messaging.

You can also join us next week for our free global virtual event Telco 2.0 Best Practice Live! on 28-29 June, where we’ll be presenting more on Apple’s strategy and hosting an interactive chat forum. Please pre-register here.

Apple icloud logo June 2011.jpg

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June 22, 2011

Mobile Broadband 2.0: How to Profit from putting the Customer in Control


Sophisticated segmentation, enabled by new OSS/BSS solutions, can put the consumer in control of their spend and create a more sustainable mobile broadband ecosystem for all stakeholders.

At next week’s Telco 2.0 Best Practice Live! virtual event (28-29 June), Stefan Hedelius, Head of Strategy and Marketing at Ericsson’s Multimedia Business Unit, presents a set of real-world case studies around online gaming and street vending machines that demonstrate this. Here’s a short preview video of Stefan inviting you to chat with him and the Telco 2.0 team online next Wednesday (29th June) at the event.

Stefan Hedelius Video Ericsson June 2011.jpg.png

We also explored some of these developments in our recent note Mobile Broadband Economics: LTE ‘Not Enough’.

mbb EMEA fuel guage may 2011.png

“The transformative power of mobile broadband is impacting not just on users’ demand for data, but on established industry business models” says Stefan.

He argues that the ‘one size fits all’ mobile broadband business model is simply no longer an option, and that mobile broadband segmentation driven by subscriber-choice will result in a win-win-win situation - for mobile broadband operators, for mobile broadband subscribers, and for enterprise partners. Handset manufacturers also stand to gain.

With case studies ranging from online gaming to consumers using street vending machines, he explains how the transfer of spending-control power to the user doesn’t mean that operators will lose out. He says that the key is segmentation through operations and business support systems (OSS/BSS) solutions. “Everyone can benefit from the data revolution in a world where everything that can benefit from a connection, will have one.”

Join us next week on 28-29 June to see the presentation in full at Best Practice Live! and chat interactively with Stefan and others, including Anne Bouverot, EVP Mobile Services, France Telecom, who’s describing Orange Group’s NFC launches in France and the UK, and Carlos Domingo, CEO at Telefonica I+D, who’s presenting a special case study on the acquisition of VOIP innovator, Jajah. It’s online, global and free - please register here now.

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June 21, 2011

Mobile Broadband: smart, small new 3G/4G cell preview


Here’s a preview of one of the innovations featured at next week’s Telco 2.0 Best Practice Live! free global online event, 28-29 June 2011. It’s a new small, intelligent cellular radio unit from Alcatel-Lucent called lightRadio™. This is a guest post introducing the innovation and describing how it came about.

light radio image telco 2.0 june 2011.png

Big ideas often arrive out of the blue, sometimes as a result of questioning the impossible. Alcatel-Lucent’s latest wireless innovation — lightRadio™ — is one such idea.

When the company’s Bell Labs researchers started asking how they could make mobile network base stations smaller, easier to deploy and less power-hungry, they came up with a modular radio and antenna that could be arranged freely, like Lego™ blocks.

Stack eight of them together to point a beam in a particular direction to provide coverage indoors. Or stack two of them by ten high, and get a macro cell for an outdoor antenna.

To do this meant compressing all the radio hardware and the antenna into a 6x6cm cube, which could be used as a small cell, so small that it becomes almost invisible. At first, this seemed impossible. After three months of development, the Bell Labs teams in Germany and Ireland came back with the lightRadio “cube.” They rendered the “impossible” possible.

lightRadio is not just a single innovation — it is not just the cube. It is a suite of innovations that integrate wireless and wireline networks in a way that will solve mobile operators’ future connectivity and capacity challenges. Most importantly, the technology has been co-developed with customers all around the world.

The potential benefits of lightRadio are many — from extending the benefits of mobile broadband to populations currently undeserved, to making unsightly antennas and towers a thing of the past, to relieving network congestion cost-effectively, to reducing some of the 18 million metric tons of CO2 that our industry releases each year.

Watch Best Practice Live! on June 29 and hear from Valérie Layan, VP Wireless Solutions & Marketing EMEA at Alcatel-Lucent, more about this surprising answer to an impossible question.

There’s more on lightRadio at www.alcatel-lucent.com/lightradio

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Guest Post: How can CSPs become Cloud Services Brokers?

Following on from our EMEA brainstorm findings that telcos can increase cloud revenues nine-fold by 2014, Verecloud describe the benefits of the ‘cloud services brokerage model’ aggregating and integrating ICT solutions and bundling them with traditional telecoms services for enterprise customers. This is a guest post by Bill Perkins, CTO, Verecloud.

Communication Service Providers (CSPs) have a significant investment in their network infrastructure and Operations Support Systems (OSS)/Business Support Systems (BSS). This investment of billions of dollars is seen as the key asset of the CSP and their strategies are primarily focused monetizing this asset. Examples of these strategies include special pricing in market areas where the network is under-utilized, and wholesale arrangements to increase network utilization by “white-labeling” the assets in a mobile virtual network operator model (MVNO).

While monetizing the network assets is an important part of a CSP revenue strategy, it is not a strong growth strategy because network connectivity is being commoditized. The CSP’s greatest asset is their customer base. Growth strategies must start with monetizing the customer. This includes strategies focused on increasing the average revenue per user (ARPU), reducing churn and providing complete solutions that address all of the information and communication technology (ICT) needs of their customers.

According to Gartner, the single biggest revenue opportunity for CSPs is as a Cloud Service Brokerage.

This concept is beyond product bundles, it is creating an aggregation and integration of ICT solutions from a single source. The cloud application marketplace is loaded with solutions, creating confusion and challenges for the cloud service providers and consumers alike. The CSP is in a unique position to act as the trusted technology intermediary to broker cloud services to their channel segments with solutions that are simple to understand and use, integrated and centrally managed. It is only a matter of time before the majority of cloud services move to the brokerage model. It is a matter of strategy for the CSPs to monetize the opportunity.

The Problem with Trying to Monetize the Network

CSPs are in the middle of a perfect storm. The business performance pressures are increasing and the attacks on their business model are coming from multiple fronts. The industry expects a 25% reduction in ARPU by 2014 in traditional telecom services. This reduction in revenue coincides with a huge increase in data demand. The forecast calls for more than 1 trillion connected devices, each with high data throughput requirements. This explosion of bandwidth consumption combined with a reduction of ARPU creates a large reduction in the price that is chargeable to the customer per unit of data traffic. This represents a strong erosion of the traditional business model of CSPs: charging for moving bits around.

It’s easy to realize that an industry with 25% reduced ARPU, and reduced price per unit has to have cost reductions to keep pace with the cost of delivering its goods, or re-invent itself and change its ARPU and price per unit equation. The re-invention of the CSP business model must include a fundamental shift in thinking towards monetizing the customer.

This fundamental shift in thinking towards monetizing the customer is not new to telecommunications companies. Increased competition and churn of the customer base has forced CSPs to re-focus on the customer experience. However this is only a portion of the approach that is needed to monetize the customer. It fails to focus on all the possible solutions that a CSP could offer that are not inside their current operations environment, but are within their distribution environment - the internet. The best examples of these new revenue opportunities are cloud services.

What is a Revenue Strategy of Monetizing the Customer?

Monetizing the customer is not upselling. It is simply using the trusted intermediary status of the CSP to provide the ability to integrate services the customer already wants.

Monetizing the customer is a strategy that recognizes three key assertions:


  • 1. The customer is the key asset of a CSP, and managing the customer experience is a key business process.

  • 2. SMB customers are spending an exponentially-increasing amount of money on services that utilize the networks provided by the CSP, and less money on the services provided by the CSP.


    • a. XaaS revenue is growing

    • b. CSP ARPU is decreasing


  • 3. CSPs should sell their customers what they need and become better long-term partners.

verecloud.png

Businesses currently follow the model in Figure 1, where they consume many different types of services in different ways from many different types of vendors, VARS, and, providers. This fragmentation in cloud services delivery for small businesses is an opportunity for CSPs to act as a trusted provider by brokering all of the voice, data, and cloud services.

What is the CSP response to the Gartner Research?

CSPs are looking to increase ARPU and reduce churn now. Looking back on the last decade, we see many companies selling other services to increase the stickiness of their customers through strategic partnerships and reseller agreements. Voice and data services are bundled with video or network security services provided by another vendor, but the support and billing relationship is managed by the CSP.

Given this example, and many similar examples of packaging and bundling services, why are CSPs slow to bring on the bevy of cloud services that are being purchased by their customers? The industry average for adding a new telecom service is 12 months and greater than $10M US. The number of cloud services available to the broad market and to niche markets is exploding. Considering the historical cost to on-board and operationalize a new service, it is no wonder CSPs are slow to jump on board. This is due to both the cost and internal difficulties in determining the demand and ROI of any particular cloud service.

How can a CSP become a cloud service broker?

Becoming a cloud service brokerage, and bundling those services with their existing traditional telecom services has many advantages. One of the main benefits is service velocity, as XaaS services (Software-as-a-Service, Infrastructure-as-a-Service, etc.) can be on-boarded for pricing, fulfillment and billing in weeks, as opposed to the typical months-to-years timeframe. In addition, the costs to implement the services are dramatically reduced as well.

verecloud1.png

The Cloud Brokerage Model is good for the CSP’s customers as well. In addition to the convenience of receiving one bill for a variety of ICT solutions, businesses now have the ability to integrate these services. For example, their CRM solution can be integrated into their accounting software, where before middleware or other third party services and relationships were required.

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June 20, 2011

Telco 2.0 News Review: RIM, Groupon and more Skype

Telco 2.0 Top Stories

[Ed. In case you missed it, we published our latest new research report Strategy 2.0: What Skype + Microsoft means for telcos last week, and Alcatel-Lucent are presenting more on their new radio device at Telco 2.0’s free online virtual event Best Practice Live! next week, 28-29 June 2011.]

RIM shares plummeted by 21% after they announced a profits warning six weeks after their last update. Not enough BlackBerries are selling and ASP is down - perhaps not surprising as there hasn’t been a new device since April, 2010. RIM has re-announced the next one several times, hardly helping sales of the existing range. 500,000 PlayBooks have been pushed out of the factory, but it’s anybody’s guess how many of those are somewhere in the supply chain rather than selling to end users.

Meanwhile, the much-announced BlackBerry Bold Touch 99xx devices have been delayed due to unspecified problems in production (Japanese parts, perhaps?) and now they’re coming at the end of August. Perhaps.

O2 UK has announced that it won’t sell PlayBooks but it will “consider” selling BlackBerry devices. Nice of them! And it’s hardly encouraging that RIM is both buying back stock and refusing to say what the ASP actually is.

Mind you, has anyone else noticed that technically, you’re not allowed to use a PlayBook on a plane? It requires your BlackBerry to be switched on and paired via Bluetooth, so you can’t turn off all the radios as the airlines want you to. This is not the best idea for a device marketed to North American business executives, to say the least. On that score, though, it’s only as bad an idea as a $500 laptop that won’t work on a plane.

Meanwhile, in contrast, Computer Weekly reviews the Motorola Atrix smartphone and thinks it’s great. They also try out the companion device it plugs into to make it into a sort-of-a-laptop and conclude that, although it’s quite cool, it’s not worth £250 as after all you could get a netbook for that.

Is there a pattern developing here? “Not quite a computer but still pretty pricey” is a device category that seems to return every few years, without noticeable success.

While we’re ruthlessly knocking everything in sight, what about this piece on Groupon? We covered the fact that out of nearly a billion dollars in venture capital funding the company has received in the last 12 months, about $120 million was actually used in the business and the rest was basically pocketed by the company’s directors, their wives, and a few favoured early investors.

TechCrunch has a detailed dissection of the business model. It’s not the first time the point has been made that a large part of Groupon’s business is essentially providing trade finance for small businesses, although it’s worth repeating. They also make the point that it’s not a great deal for the merchants from a marketing point of view and it’s mostly the cashflow/credit aspect that makes it worthwhile, and therefore that credit risk will become a huge issue for the company as soon as the merchants work this out.

On the other hand, Groupon’s own financing is heavily dependent on the difference between the VisaNet rules and the terms of business it sets for the merchants. Visa payments are cleared within a few days of the transaction, but Groupon pays the first instalment to the merchant within two weeks and the rest out as far as 60 days, so it can use the float as a source of financing for new deals.

There’s a distinctly shaky sound to that, but it’s actually worse than TC thinks. Whatever Groupon might put in its Ts & Cs for consumers, if it wants to accept credit cards, it’s got to comply with the credit card networks’ rules. The daddy is of course Visa and its IORs or International Operating Regulations. Time was, this bible was secret. These days, you can get it on the Visa website as a monster PDF. Whatever the legal protections for credit card users in the US are (in the UK they are very strict thanks to the Consumer Credit Act 1975), cardholders have the right to contest a transaction and request a chargeback from their card issuer up to several months later (it varies depending on the type of transaction).

Visa merchants don’t have an account with the issuing bank, they have a revolving line of credit. So when that happens, the VisaNet clearing system claws back the transaction value from the merchant - in this case that’s Groupon - immediately, pending settlement of the row through the dispute resolution mechanism. So if a major Groupon customer looked like failing, Groupon itself could be hit by a cash-sapping wave of chargebacks that it would have to pay out immediately from its incoming cash flow.

Elsewhere, LightSquared has been condemned by the FCC for interfering with the GPS band. An expert panel on space-based navigation and timing went so far as to argue that the decision to let LightSquared go ahead with the buildout should be reversed.

However, Philip Falcone was able to tell the intrepid band of LightSquared investors that they have a customer - Sprint. Or was it that Sprint has LightSquared as a customer? Business Week has more detail but it’s still far from clear what’s up. A little while ago, LightSquared announced it was a customer of AT&T, and nobody could really see how they could make money as a reseller/MVNO. So is this more of the same, or is Sprint a wholesale buyer? It’s not clear either way.

You’d probably do better to bet on incremental progress. T-Mobile USA has announced another wave of HSPA+ speed upgrades towards 42Mbps.

We’d cover this Telecom TV story if it wasn’t for the “take a survey” pop-up that won’t go away. But you might be able to guess what it’s about if you take in this Alcatel-Lucent presentation on their new very low-power, self-organising LTE base stations. As mentioned above, we’ll also be seeing more on this at our Best Practice Live! free online virtual event next week.

In other network news, an Australian opposition politician gets his numbers badly wrong over the NBN and South Korea’s super-broadband networks.

RevK has a practical and potentially commercially valuable suggestion for BT Openreach - provide a BT-managed edge device with each FTTC, FTTH, ADSL2+, or even LTE/WiMAX hookup, that exposes Ethernet-level diagnostic tests through a common API so both BT and upstream-customer ISPs can check the performance of their lines and identify faults easily. Chances of it happening, anyone?

Cable & Wireless Worldwide is apparently considering “retreating to the UK”. Perhaps they could call it something like “Cable & Wireless UK”.

Benoit Felten gives an interview to a Dutch newspaper saying that net neutrality will save KPN. Unfortunately nobody’s translated it.

The BBC releases a smart-TV app to Samsung’s app store to provide access to their Internet news product on the telly.

Red Bee Media, which operates several UK broadcasters’ VOD infrastructure, is planning to sell a Cisco-based video platform more widely.

Comcast demonstrated its Xfinity TV platform and also a gigabit connection over cable. Scary.

As the Skype-Microsoft merger approaches closing, the former owners Silver Lake have carried out a massive executive purge, with the VPs of Mobile, Strategy, Skype for Business, Advertising & North America, Marketing, and HR all getting the boot. The explanation is deeply cynical - as Felix Salmon explains, most of the Skypers have a lot of accumulated share options and these are typically covered by change-of-control clauses. Therefore, the Microsoft acquisition would vest the shares immediately and require either Silver Lake or Microsoft to buy them out. Sacking everybody instead avoids this tedious detail, although it’s absolutely certain that there’s going to be a lot of litigation.

Coincidentally, Skype for Business VP David Gurlé spoke on the Bay Area’s French-American TV channel just before this. (The Valley has a French TV station? Who knew?)

Meanwhile, the 2 billionth download of a Skype client was recorded.

Voice on the Web has a detailed review of Skype’s latest carrier partnership, with TELUS Mobility in Canada, riding on their new HSPA+ network. Interestingly, you can’t currently have a SkypeIn number in Canada but you can have one elsewhere, so while you’re online you’d be an odd bird, a theoretically foreign number that would actually be in Canada but not subject to termination charges. TELUS will let you (as I think we’ve said) put Skype credit on your phone bill.

Here, as Phil Wolff points out, is a candidate for a bid from Microsoft - Skylook, the company that integrates Skype into Outlook.

In other Voice 2.0 news, Freespee opens offices in Berlin. An interesting Voice 2.0 call centre solution.

IBM is celebrating its hundredth birthday. Having been almost the original cloud company with all those mainframes, they invented the PC and nearly creatively-destroyed their own business. These days, the cloud is well and truly back and IBM is a key player.

An IDG survey suggests that European CIOs are more interested in the cloud for scaling than for low low prices.

Apple iCloud is running…Microsoft! Specifically, part of it seems to be in the Microsoft Azure cloud, with content sometimes appearing from Amazon Web Services’ CDN. So what’s with that huge data centre? This may be an example of the “develop in the cloud, deploy to hosted servers” model, or perhaps evidence that the iDatacenter is behind schedule.

High Scalability has a nice piece on automating management of a big AWS application, as if you needed a reminder that the big stumbling block in the cloud is often the management and development tools. And the Fed’s pope of cloud, Vivek Kundra, is off, to a job at Harvard University.

WebGL is a standard for 3-D graphics with hardware acceleration, on the Web. But if you want to use it in Apple iOS5, you can only do so for advertising through iAds. However, Apple has fixed the notorious bug/feature that meant JavaScript ran slower in a home-screen widget than it did in the browser.

Microsoft has released a free SDK for the Kinect, the 3D games controller beloved of hackers. Watch out for much more fun and games - someone’s already used it to control a Quadracopter, while someone else used them to draw passers-by on the Ramblas in Barcelona and then print a statue of them on a RepRap. It was art, like. And Visual Studio has gained support for HTML5.

Meanwhile, Microsoft is trying to stop people selling cheap memory cards for the XBox by using the Digital Millenium Copyright Act. Mixed message, anyone?

Yahoo! has a new mobile app out - it’s an app for, eh, finding other apps.

EverythingEverywhere, Vodafone, and O2 have set up a joint venture to get an NFC-based mobile payments system going in the UK. They hope the rest of the industry will sign up as well.

Connected Planet has a look at Ericsson’s acquisition of Telcordia and concludes it’s a pretty good deal - did you know Telcordia makes revenue of $284,000 per employee?

ICANN has decided to allow the creation of commercial global top-level domains (i.e. like .com) - the Internet engineering world is up in arms, beginning at the top of this NANOG thread, as this raises the risk that if someone was to create - say - http://microsoft, most computers would resolve that to microsoft.[current hostname].com if the network they’re on has such a name anywhere.

Facebook is planning some sort of HTML5-based app store; they’re also declaring war on the press for mentioning it.

A study of Ugandan mobile money users shows that only 30% aren’t sharing a phone, which doesn’t seem to stop them from making use of the mobile banking and payments system.

A job board for hackers. When Neelie Kroes met Richard Stallman.

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June 16, 2011

Strategy 2.0: What Skype + Microsoft means for telcos


In theory, Microsoft and Skype have the resources, the brands, the customer base and the know-how to shape the future of telecoms and become a strategic counterweight to Apple and Google. Can they do it - and what should telcos’ strategy be? Our in-depth analysis Strategy 2.0: What Skype + Microsoft means for telcos is now available on our research portal here.

microsoft skype logo image june 2011.png

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June 15, 2011

Guest Post: Dynamic Price Plan Innovation

This is a guest post by John Giere, SVP Products & Marketing, Openwave Systems, covering some of the latest creative mobile data pricing approaches, and solutions to bring them to market faster. It includes options from basic tiered plans to broader ‘shared-wallet’ and micro-segmented data plans, and builds on some of the pricing innovation themes we reported in our recent research note Mobile Broadband Economics: LTE ‘Not Enough’, and which we will be discussing in the upcoming Best Practice Live! free online virtual event, 28-29 June 2011.

Openwave pricing plan options June 2011.png

Source: Openwave Presentation, Telco 2.0 EMEA Brainstorm, May 2011

In the world of the Web, innovation happens quickly. Start-ups spring up like wildflowers. A few succeed; most die, but almost all add to the collective momentum that drives progress faster than any other industry. Witness the disruptive power that digital commerce, digital publishing and digital music have unleashed in such a short period of time. The Web is fertile ground where creativity and risk are encouraged, iteration is more important than perfection, and where the value of ideas lie in how fast they can be put into action.

As the Web has gone increasingly mobile, its convergence with a far more mature telecommunications industry not only highlights a clash of cultures, but it draws sharp contrast between the pace at which the two industries advance. The telcoms space is comprised of larger, more cumbersome entities that tend to move slower and are more resistant to change. While these characteristics may lend a certain stability to the essential services provided, the last few years have seen agile competitors from the online world successfully capture value and revenue from the incumbent carriers. From Skype to YouTube to Facebook, over-the-top providers of popular services have a distinct advantage over the network operators: they innovate quickly. Four years ago there was no such thing as an app store; today the top app store has served over three billion apps.  

If mobile operators want to provide value above and beyond data access and transport they must take a page out of the Web playbook while still focusing on their core strengths. A perfect starting point is pricing.

With the right solutions, and more importantly the right mindset, mobile operators can emulate their Web partners/competitors to quickly build, test, launch and monitor creative pricing plans that empower the end-user and deliver value to all their different user segments.

Operators have a proven billing relationship with their customers and they are uniquely positioned in the network to handle the complexities of low-cost, high-volume micro transactions (pay-per-text, overage charges, etc.). Up to now though, mobile operators have barely scratched the surface. The bland, volume-based pricing tiers that exist now are blunt tools that present very little value to the end-user.

Tiered pricing takes into account time of day or specific content type when processing data. Operators can enable pre-pay subscribers to monitor their own use of mobile data, while pay-as-you-go data plans include a variety of time-based options, such as hour-, day- and week-long plans. Another option is to provide customers with custom speed access to their favorite websites. Ultimately, this type of micro-segmentation is rich with customer service and traffic reduction possibilities.

As the mobile ecosystem matures, we will get better at figuring out what content and services consumers are willing to pay for. Data plans that target certain user segments with premium content (e.g. HD video) present a huge opportunity for suppliers as they offer more choice for consumers, and more revenue for operators. However, it wouldn’t be fair for Operator X to charge HD Video Provider Y more to ensure that its premium content loaded faster, but it is fine for Operator X to offer a higher-priced plan to consumers for better delivery of all HD video services. We believe consumers will pay if they see the value.

Unlimited data plans will become the most expensive option while a variety of tiered micro-segment service plans will become the norm. Multiple operators now offer unlimited access to Facebook and other social networking sites within volume-delimited services and waive data volume metering in off-peak periods, e.g. at night. Some operators offer “shared wallet” services, in which allocations are shared across different devices or family members, for example, one operator lets customers choose five Internet sites or URLs and get unlimited access to them.

Today, more than twenty operators around the world are testing and implementing new pricing strategies in an effort to support the market need for even more segmented data traffic plans against the declining voice based ARPUs. We will therefore see a lot of development in this space over the next year.

Transparency is also as important as flexibility when it comes to operators’ creating and marketing their data plans. People look to the carriers when they need a data plan because there aren’t any other options. However, instead of competing with each other on price, they should compete with each other on value and customer service. For example, Carrier Z could partner with an iTunes competitor to offer a premium long-form video for a set monthly plan. The operator differentiates itself from iTunes through easy billing, clear service level agreement and proactive user engagement when network conditions change.

As the transition to more creative pricing plans continues, operators shouldn’t miss the opportunity to grab market share by positioning these service tiers as a way of opening up choice to customers, instead of a complex minefield of hidden charges. This will demonstrate how valued their custom is and that they are striving to make their network experience as complete as possible.

You can see more on Openwave’s pricing solutions on their site here.

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June 13, 2011

Telco 2.0 News Review: iCloud, Amazon Web Services & More…

Telco 2.0 Top Stories

[Ed: We’ll be publishing more on iCloud in the next few days, plus we’re looking at the range of entertainment services at Best Practice Live! on 28-29 June and in our forward research agenda.]

Apple made its digital locker/online backup/content streaming play this week with the iCloud - Ars Technica has a detailed sceptical discussion, arguing that Apple doesn’t have a great track record with virtual/online products as against hardware or even software. As a friend of ours said, it’s hard to give a cloud bevelled corners. They contrast Google, which excels at creating massively scalable online services but struggles with hardware and user interface design, and argue that Apple has a culture dominated by the figure of the designer - always an individual - compared to Google’s, dominated by programmers who work in groups.

Technical analysis is at High Scalability, which argues that it’s a hybrid of a content-streaming system like Spotify and an online-backup system. Apple will, unlike Amazon, be de-duplicating media content. However, not all the data will be in the cloud, and there’s a rather restrictive limit of 5GB of data and 1,000 photos. Like all such services that aren’t purely online-sync backup, of course, at least some of it will stop working when the bus goes under a bridge and it’s all heavily reliant on those painfully slow home ADSL uplinks.

Steve Jobs’ presentation at the WWDC also touched on the infrastructure behind all this - that enormous data centre they’ve been building. The equipment seems to come from HP and Teradata and both the hot and cold aisles are fully contained. Data Center Knowledge has details.

DCN also has a side trip to the competition, reporting on a talk given by Amazon Distinguished Engineer James Hamilton on Amazon Web Services’ infrastructure. For the first time, Amazon acknowledges it’s using modular data centres, and boasts that they are adding the equivalent capacity of the first five years of Amazon.com every day. Hamilton estimates that an 8 megawatt DC costs them $88 million.

Meanwhile, there’s more on the lessons of Cloudfail here.

Some people are moving back from the cloud. eHarmony, the huge dating website, has brought its infrastructure back in-house and is using servers based on large (512 per rack!) numbers of Intel’s Atom low-power chips, more commonly found in netbooks.

A senior Googler has left the company, saying that their software infrastructure is getting out of date and that famous Google achievements like MapReduce have been overtaken by their open-source clones. And here’s a a new extension to TCP for data centre networks.

So what’s going to be in the data centre? Horace Dediu has an interesting take on the growth rates of various platforms. Hint: it looks good for Apple iOS and Android, not so good for RIM. Further, Android developers do more apps but don’t look after them.

It was World IPv6 Day last week, so it’s probably the right moment to share the IPv6 Matrix Project’s results, at the link. The big day passed off without anything too weird happening and with a successful test of the new protocol on a range of huge Web sites.

KPN Mobile’s plans to charge per-application have ended up with the Dutch parliament passing a net neutrality measure.

In Australia, NBN Co. has issued a video to demonstrate some use cases for the project.

Renesys discusses how the Syrian regime cut the Internet off, or rather, turned off all the access networks and left the backbone and a few key organisations running. It appears that Tata Communications is the Syrian government’s preferred provider. And then they…turned it back on. There’s also an interesting timeline of the Egyptian dictator’s attempts to disrupt the revolutionaries’ communications, here, as prepared by the revolutionaries.

In related news, politicians in Wisconsin are trying to force the University of Wisconsin to shut down the state’s Research & Education Network, return its federal broadband stimulus money, and to never participate in any other NREN again. And some people just steal cable.

There was a Skype outage last week, as Phil Wolff’s Skype Journal reports. There’s a tongue in cheek list of possible reasons for the breakdown here, but one at least is deadly serious. Skype really does have a problem with IPv4-IPv6 transition - and Avaya really did announce an IPO this week. The enterprise voice specialist is preparing to sell $1bn worth of shares.

Telus has become the latest carrier to sign up for a strategic partnership with Skype. Notably, this one includes integration between Telus’ billing and Skype’s accounts - so you can pay for Skype credit from your phone bill, and presumably use Skype Access to pay for access to WLAN hotspots in the same way.

Vivox, meanwhile, snags a deal to provide voice calls inside Facebook. Like Jajah, Skype, and probably some more besides.

At Nokia, meanwhile, CTO Rich Green has resigned, supposedly because he was one of the biggest supporters of MeeGo within the top management. Distinguished research fellow Henry Tirri moves over from Nokia Research to replace him. Tomi Ahonen thinks the company is basically doomed unless the whole turn to Microsoft is abandoned and Elop fired. And their credit rating has been cut, probably because orders through the supply chain are drying up.

Meanwhile, it looks like the top developer platform beyond Apple and Android is the web.

Rob Conway leaves the GSMA, while the GSMA MMU blog reviews a new mobile money service in Vietnam.

Computer Weekly reviews the latest INQ device and likes it. They also take a look at some 3D cameras. You’ve seen augmented reality apps- now check out an app for creating AR on a mobile. Has the NYT paywall failed?

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June 10, 2011

YouView: the future of British TV or another Domesday Project?

In which Telco 2.0 reviews the YouView specifications

Delegates at the recent T2 events would have seen a fascinating couple of sessions on future TV. Will we (as LG suggested) have multi-screen TVs, with screens dedicated to high definition video, meta-data, and to social content? Or will the role of “social TV” be fulfilled by an independent “companion device”, as former YouView CTO Anthony Rose suggested?

[Ed: We’ll be discussing this and other issues at our forthcoming Digital Entertainment 2.0 events. For more Telco 2.0 thinking on this, try our recent YouTube: Recent Improvements Change the Game note and our new Analyst’s Note on UltraViolet,the content industry’s answer to iCloud and Amazon Cloud Drive]

On the other hand, as we’ve been saying for years, the move of mass-audience TV onto the Internet is constantly testing the technologies and business models involved. Even if the growth rates are not as ferocious as first predicted, they are still higher than overall traffic and the content itself is getting higher quality. How will we push all those packets?

In the UK, whenever there has been a technology transition in broadcasting, there has always been one institution that has acted as a leader - the BBC. Its great rival in this has to be BSkyB - think of Sky+, Sky HD, and Sky 3D. On the BBC’s side, there’s decades of work in the core trades of TV, developing the basic infrastructure, pioneering TV on the Web with the iPlayer, and some interesting side projects like the BBC Micro. The two of them have contrasting and perhaps complementary specialities - as the pay-TV challenger, Sky is fascinated by adding more features to TV, while the BBC as a public service is all about infrastructure and universal reach. When a little-known Racal division called Vodafone needed a radio planner to build their GSM network, they poached John Causebrook straight out of BBC Research.

After much tortuous negotiating with the regulators and the other TV stations, they have finally got a specification out for a common platform for the next generation of STBs, YouView. If it gets deployed, it will shape the future - so is it any good?

Telco 2.0 recently had to make a long train journey, so we grabbed the 229-page technical specification and got stuck into it.

The Good Points

This spec is basically sensible and that’s always preferable to the alternatives. It describes a low-power, media-optimised Linux device based on well understood, widely used open-source software.

Best of all, the spec is sound on networking. YouView intends to tackle the problem of dumping enormous quantities of video on the UK’s creaky copper-line infrastructure in the following ways:

  1. CDN the hell out of it
  2. Adapt to the limitations
  3. Shave the peaks
  4. Integrate broadcast and broadband
  5. Multicast everything

We already knew, of course, that a big part of YouView would be BT’s spanking new content delivery network, Content Connect. CDNing is a well-tried and reliable way to deliver video without blowing things up. So the point at which the firehose of telly pouring out of the BBC gets turned on the ISPs is pushed well towards the end user.

Perhaps that’s not enough, though. This is one of the reasons why an intelligent STB is useful in itself. YouView intends to obviate the idea of throttling or deep-packet inspecting streams of video by managing them itself from the network edge. The specification requires that the video bitrate adapt to the available bandwidth - the BBC iPlayer client already does this and manages to fit live streaming Rugby League onto the 400 or so Kbps Telco 2.0 enjoys in the wilds of remotest north London.

Self-managing the flow of video is a theme in the whole project. The specification requires that YouView devices provide several edge-defined traffic classes - the highest being for live streaming, the lowest being a scavenger-class for downloads that uses all bandwidth left over after other flows are satisfied and gets out of the way otherwise.

The mention of downloads should remind us that a big part of dealing with online video distribution is what we described as peak-shaving, borrowing a term from the electricity grid. Much more load can be handled if some of it is shifted from the peak hour to the rest of the day when spare capacity exists. This is especially important as wholesale bandwidth is typically charged for by peak utilisation (the famous 95th percentile). YouView intends to queue much of the heavy content ahead of time and stash it on the device’s local hard disk.

The spec also foresees the integration of broadcast and broadband - a substantial chunk of the disk is reserved for content pushed out by broadcasters and stored locally. Clearly, this is one way of keeping Coronation Street off the Internet and on the airwaves, where it belongs.

Finally, the specification requires IP multicast to be on by default. BT has recently announced that at long last their backbone network is going to be multicast enabled, and in fact they’re incorporating it into Content Connect. Multicasting essentially makes every router into a CDN node, drastically reducing the volume of data that has to be moved over the whole end-to-end path. Somebody has to originate the multicast streams and count the viewers, and BT is going to be offering this as a wholesale service.

Moving on from the packet pushing side - and we find everything seems a little dull after you leave the networking stuff behind - YouView also foresees that there will be apps for the system. Being a full-featured Linux device based on consensus technology, there will be no shortage of potential developers for it, especially as its web browser is WebKit. But we aren’t completely sure about the distribution model.

The Worse Points

It’s not surprising that a specification drawn up by TV channels would tend to give TV channels a special role. YouView foresees three kinds of apps.

  1. Core YouView
  2. Platform Provider
  3. Content Provider

The core YouView system is what it says on the tin, plus any applications the device manufacturer wants to include. The Platform Provider is the party responsible for YouView itself, for the electronic programming guide, for a variety of crucial approval and cryptographic signing processes, probably for the broadcast infrastructure, and is very likely to be the BBC. Among other things, the PP signs Content Providers’ keys that allow them to publish software that gets installed on the YouView STB. It’s possible that a pioneer device maker might take on the role of PP for their own devices, but the specification gives the strong impression that there will be only one.

youviewsystem.png

So, to a first approximation, you’ve got to be a TV station to get your app in the app store. Further, this quote from the spec should stand in its own right:

Chapter VI Consumer Device Software Management. This chapter is not relevant to application developers

Really? How could the process of getting your application out to the public and onto their machines not be relevant to application developers?

Obviously, there’s a possibility that one of the TV stations would decide to set up an app store that would facilitate the process. Our money would be on Channel 4 - they already invest in a variety of digital projects including ScraperWiki.

But there’s another problem here. YouView hopes to be the centre of all your TV and video content, whether it’s sideloaded from DVDs, downloaded or streamed from the Internet, or broadcast over the air and stored locally. But the fraction of this content that comes from a traditional TV station, however it gets to you, is falling all the time. Can YouTube be a YouView channel? Would it get code-signing rights?

There are ways round this. One, described above, is that a content provider would act as a proxy for independent developers. Another would be to do it all in the browser - the specification states that an AppPlayer object (the base type for a running application) can be a web browser. As we mentioned above, the browser is WebKit, which should provide plenty of scope, especially as a lot of web developers are intimately familiar with it from the iPhone.

More fundamentally, the user interface paradigm is very, very TV-centric. You wouldn’t expect anything else from TV channels, of course. But the specification insists that the user interacts with the system through a classic TV remote control handset. It’s very explicit about this.

Obviously, support for the remote is a must - there are public service obligations to think about and a lot of deep expectations and legacy kit to deal with. But what if you wanted to control the system - which gives you a lot more options and far richer forms of interaction than a TV remote - from your laptop or mobile device?

Even more importantly, what if you wanted to use your Kinect or Nintendo Wii or the accelerometer in your iPhone to do something genuinely exciting with it? All sorts of things are happening in this line right now. Even Microsoft has managed to make its peace with the Kinect hackers. And even Nokia’s doing interesting stuff with TV, video, and gesture interfaces…

But if you want to do it with YouView, you’re missing an API that lets you drive the user interface with something other than the classic IR remote you lose down the back of the sofa. Why isn’t there a Web service API for this? In fact, why isn’t there a user script API, the equivalent of Firefox add-ons for television?

Finally, we have some concerns about the networking side. When we’ve thought about broadcast-broadband integration, we’ve always worked on the principle that as much stuff as possible should travel over the broadcast system. Broadcast, whether satellite or terrestrial, does one thing well - moving hit content in high quality, cheaply.

But we’re struggling to see the use of the Push-VOD over IP functionality in YouView. The TV infrastructure broadcasts a list of available programmes, and the user device requests something from the list over the Internet. Isn’t this upside down? The metadata, a text file, is travelling on the broadcast link, while hundreds of megabytes of video are travelling over the Internet. It’s worth remembering that Virgin Media never bothered with Push VOD and Sky has tried it and changed their mind in more recent iterations of Sky+ - also, YouView foresees that the device might automatically pick out content predictively, based on observed usage or on user-specified criteria, which doesn’t make any sense at all with Push VOD.

However, in the light of the BT multicast announcement, we may have been too dogmatic about this. Apparently, BT originally didn’t do multicast because they were primarily thinking in terms of supporting their BT Vision IPTV product, and they hoped to move much of the video involved over the UK DTT broadcast infrastructure. Now, BT has got a lot more live streaming video to shift - they’ve succeeded in getting wholesale access to Sky’s football coverage. They’ve also got to think in terms of YouView and in terms of preparation for the 2012 Olympics and associated Global Packet Pushers’ Pentathlon. (London 2012 is likely to be a key driver of YouView.)

And it seems that they’ve decided that the additional DTT multiplex capacity would cost more than the IP multicast. This is an odd blow-back from the mobile video traffic boom - people started really using mobile data, the carriers lobbied frantically for more spectrum, and they won the lobbying war and got the additional spectrum ahead of TV. You pays your money, and you takes your choice, but it’s worth pointing that the original multicast concept foresaw global content distribution and it provides for some interesting future possibilities.

Further, as the spec stands, it doesn’t let you cache anything that was delivered over an SSL-encrypted link due to DRM issues. It is likely that most things on the Web will be SSL before long. This is a bug.

Telco 2.0 Final Thoughts…

Our conclusion is, essentially, “Good - as far as it goes”. YouView has obviously benefited from the work of network engineers with Internet clue, and is a fine and regrettably rare example of the content industry not finding ways to make everything more complicated. It represents an intelligent response to the online video challenge, and incorporates many of the approaches that we recommended in 2007-2008 as the BBC iPlayer revved up to disrupt the UK Internet.

It’s another reminder that, if you’re looking for the “British Google”, it’s BBC Internet Services. However, there’s another, darker story here - that of a whole lineage of interesting, elegant British tech projects that didn’t really happen. The classic case is the BBC’s Domesday Project, a massive crowdsourcing exercise from the 1980s that eventually just ended up in a filing cabinet at Broadcasting House. More recently, another BBC idea, Project Kangaroo, hoped to create a public archive of the UK’s TV history but failed miserably amid rancorous disputes between the partners.

As the surprisingly close choice between more broadcast and IP multicast shows, it really is a question of crafting the right digital logistics package for the job. YouView provides a lot of useful options

However, whether any of this actually helps depends on end user adoption and the quality of the products supporting YouView as a standard. And we’re seriously concerned that the TV-centric thinking behind YouView is going to cripple it as a platform for innovation. For example, we doubt that the notion of a TV “channel” will mean much, and especially that anyone will get software from one.

It’s also going to be critical to get the content providers of the future in there. YouTube is obvious (again, are they going to become a UK TV station?) but there’s Ultraviolet and Lovefilm to think about.

Also, will people really interact with a future “social”, “connected”, or “smart” TV through the classic, nine button remote control? For the first time, the percentage of households with a TV at all is shrinking. This is a critical issue - we don’t actually know if future TV will be delivered by something that even looks like a TV. Clearly there’s going to be a big display of some sort, but beyond that it’s anyone’s guess. Baking the remote into the system tends to enforce a TV-like design and a TV-like interaction pattern.

The danger is that YouView is too much like TheyView - a project inextricably linked to a media model with not much of a future, doomed to join Concorde, the Domesday Project, and much else in the halls of the Science Museum.

It’s not foredoomed - it’s not certain. But there is a serious risk that it will go that way.

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June 6, 2011

Telco 2.0 News Review

Telco 2.0 Top Stories

[Ed: New ‘Roadmap to Telco 2.0’ strategy report available now here.]

Now that’s what we call a profit warning: Nokia lowered its outlook for Q2 profitability in the Devices & Services division, basically to zero, and announced that it wasn’t going to even try to forecast what might happen for the rest of the year. Both average selling prices and volumes are down. As a result, apparently, they’re “investing to bring new capabilities to our Symbian smartphones”, and they also have “increased confidence” that the Windows Phone 7 devices will be along in time for Christmas.

The contradiction is unescapable. Whatever they do with Symbian now, it’s already been rendered irrelevant by the coming move to WP7, but oddly enough, this seems to be independent of how convinced anyone is by WP7-Nokia’s prospects. Q2 results are scheduled for the 21st of July and it’s a racing certainty they’ll be horrible.

Exactly what might be left is discussed here - amazingly, the first WP7 device might not even be made by Nokia but by a third party OEM, which if true suggests something approaching panic.

Bloomberg BusinessWeek has a long piece on Stephen Elop here. Oddly, he’s quoted as saying that Nokia’s distribution and supply chain is a major strength - if the story about the WP7 phone being outsourced is true, this looks like something is seriously wrong operationally. Interestingly, Qualcomm CEO Paul Jacobs (of all people) sounds supportive. As usual, Nokia recovery stories focus on the low-cost phone line of business, which is fair enough until you remember that smartphones account for 50% of their sales by value.

Analysts are circling, peering into the smoke like drones over the Fukushima Daiichi reactor, trying to work out if the fuel rods are exposed yet. Ex-Nokian Horace Dediu wonders if Nokia’s mobile phones business might sell for less than Skype and points out that vendors that dip into the red rarely recover. Sony Ericsson, Moto, and LG are just clinging on and Nokia is about to join them.

On the other hand, Andrew Orlowski thinks things are going just great, because Microsoft has managed to get a lot of internationalisation done on WP7. OK…

One of the salient points in the BusinessWeek piece is that Elop was given a presentation on the 6th of January on the development status of MeeGo and decided to kill it there and then. At their recent developer conference, the director of the Linux Foundation described it as an “unstoppable force”, or rather he actually didn’t - he described Linux in general as being such.

You do wonder exactly what happened in the integration process between Nokia’s Maemo Linux and Intel’s Moblin to set the project back so badly. After all, before the name MeeGo ever appeared, Nokia had already shipped a couple of tablets and a top-of-the-range smartphone, the N900, running on Maemo. There are quite a few hardcore geeks who still cherish them. The Maemo developer web site was always humming with activity and a lot of contrib code got written. But one of the bits of MeeGo that doesn’t work is apparently the dialler - what happened to the entirely functional one from the N900? And the alpha tablet version of MeeGo that Telco 2.0 has stashed away is, well, a hell of a lot more alpha than the N900 it’s also got stashed away.

Anyway, well, you can’t really discuss Nokia without discussing Microsoft these days. Is Microsoft about to kill its second major platform of the year? The recent demo of a Windows 8 tablet interface reveals that Microsoft is now looking more at locally-stored HTML5-based widgets than apps written in either its .NET or Silverlight frameworks, to the horror of the .NET developers. The point is well made that MS has historically been good at developer tools (like C# and Visual Studio) and at (yawn) developers, developers, developers in general.

Scepticism about the shiny new thing is here. Further, it is reported that when the markets closed on Friday, Apple was worth more than the combined valuations of Microsoft and Intel. Check out an impressive list of embarrassing predictions of Apple’s doom. (Sold to Philips?)

On the other hand, Microsoft’s official blog boasts with good reason of the success of the Xbox and Kinect, and makes the excellent point that its role is growing from being a games console to being a media-centre system that people actually buy. This makes sense - games developers and console designers have to be utterly obsessive about user experience and user interfaces, because their fundamental product is fun.

Elsewhere, HTC has announced its new developer program. There’s going to be a SDK for their various fancy additions on top of Android, and something called “HTCpro” to “help you build a mobile business”. HTC’s latest US smartphone, meanwhile, has been approved for use in part of the 800MHz band reserved for iDEN paging - it looks like, therefore, Sprint is planning to flip its 800s over to LTE.

Texas Instruments launched the latest of its OMAP mobile system-on-a-chip products. This one is a 1.8GHz monster (half the maximum clock speed of the laptop I’m writing this on). Inevitably it’s using the ARM Cortex A9 architecture.

A court has forced Samsung to show Apple prototypes of its new devices.

Hewlett-Packard CEO Leo Apotheker has said that he’s open to the idea of licensing their WebOS smartphone platform to other vendors. He was talking about niche players and business products, but when asked, he didn’t rule out inviting a mass market manufacturer like HTC.

RIM is still gradually gaining user numbers but losing percentage share: Asymco Horace isn’t optimistic, and makes the point that Microsoft Windows Phone is still actually shrinking in absolute terms.

Verizon Wireless has announced more feature phones and cut the price of its own-brand navigation service.

Apple, on the other side of the field, is apparently integrating location/geographic functionality into its iCal calendaring/groupware app and has hired a hacker who improved the iOS notifications interface.

And, of course, later today Steve Jobs will announce whatever iCloud turns out to be.

This, meanwhile, may be the single most irritating Apple-fan story you will ever read.

Everyone is expecting “iCloud” to be some sort of streaming music/cloud backup service. It’s therefore high time to have a look at the network. GigaOm has a write-up of how things are getting on with the city of Chattanooga’s public gigabit fibre network.

Telstra has flipped on its first LTE base stations, but it will have to argue with an indie ISP, Vividwireless, for the bragging rights as Australia’s first LTE operator. They’ve installed the Chinese TD-LTE flavour, while Telstra went with the original FDD version. Anyway, the late bolter (to use an Australianism) is less likely to cover all the major city centres by the end of 2011 and you try getting TD-LTE roaming.

Technical details: Telstra is using the Ericsson RBS6000 base station and is looking at another upgrade to the backhaul network. No surprise there.

In the UK, BT and EverythingEverywhere are doing a six-month joint trial of 800MHz LTE in Cornwall. You do wonder if this might mean more cooperation down the line.

Computer Weekly is very pessimistic, however, about the prospects for more broadband in the UK and wonders if the whole policy framework since LLU has been wrong. It’s a controversial point of view, but well worth thinking about. The comments are also punchy - “former BT Retail Videophone marketer”? Ouch…and if you think that was harsh, check out the link.

Why is LightSquared buying wholesale service from AT&T - if indeed it is? AT&T, meanwhile, has acquired Convergys’ rented towers.

The deadline for objections to AT&T - T-Mobile is here, and of course the EFF is agin it.

Syria’s beleaguered regime reached into the dictator’s toolbox and pulled out the fibre cutter on Friday, turning off the Internet to the entire country. Later on Friday they apparently had second thoughts and turned it back on. You wonder if they were inspired by Misery, the Drupal plugin that lets you torment troublemakers on your website by injecting spurious error messages into the pages they read. Jeff Atwood discusses its uses here.

Far from Syria, Groupon is preparing its IPO, which is set (if all goes well) to value a loss-making company at $15bn. Of course, all might not go well - who now remembers the fabulous World Online and its equally fabulous CEO Nina Brink? - and surely a flop would officially call the top of the tech market.

After all, Groupon last tapped the markets in January, when it passed round the hat and raised a billion dollars from a gang of…not white-shoe, that’s hardly the style…white-iPad VC firms including Andreesen Horowitz and Kleiner Perkins. To be precise, that snagged some $946 million. According to the books, the company has some $209 million net cash. What happened to the rest? Well, it looks like the urgent business need for additional capital was letting the first lot of VC funds get out with their profits. Peter Kafka at AllThingsD has the full details, including exactly how much of that money has been paid out to the founders’ wives.

He also points out that something similar happened in April, 2010 when Groupon slurped down $130 million of fresh funds and instantly paid out $120 million to its own directors, their womenfolk, and a select group of early investors. That would be a total of $930 million in venture capital funding that has passed straight through Groupon without touching the sides.

If that didn’t affect your animal spirits, the $10m cheese sandwich might.

At the other end of the tube, MySpace is still up on the auction block. It looks like there are no bidders at the $100 million mark set by News Corp. The point is made that it is bigger in terms of users and even in terms of revenue than Renren, which just IPOd for $5bn…

That may have been somewhat depressing. Cisco has its latest, skyscraping video traffic forecasts out. As you’d expect, they’re forecasting masses more heavy video pouring onto the Internet.

At the same time, the Hollywood Reporter reports on warnings that young consumers are very likely to at least consider not having a pay-TV subscription, and also that Americans in general aren’t getting paid any more and the price of TV is going up. Impressively brutal quote:

While Netflix, Hulu, YouTube and the like don’t offer video services comparable with pay TV, “when faced with a choice of pay TV or a third meal, will some customers choose to make do with a back catalog or off-the-run TV shows and movies?,” asked Moffett. “Of course they will.”

On the other hand, TV-related products are likely to be some of the first to carry a certification for “Wi-Fi Direct”, or ad hoc Wi-Fi as readers are more likely to know it.

Vijay Gill, chief of all Google’s networks and data centres, has left the building - he’s off to Microsoft, there to replace their chief packet pusher, who has himself moved on to run Facebook’s infrastructure.

COLT has sold a chunk of its London 3 containerised data centre to Phoenix IT.

In other cloud, scaling, and infrastructure news, here are two fine essays on common anti-patterns in scalability. Here’s a huge collection of papers on distributed systems design. And here’s a good primer on CDN caching architecture from Dan Rayburn.

Truphone, something of an old friend, has extended its local-anywhere voice service to provide local-anywhere data service for £20 a month, so long as you’re using an iPad for some reason.

HP has sold its videoconferencing unit to Polycom. Phil Wolff thinks it’s a good idea.

Has a Russian hacker reverse-engineered the Skype protocol?

Call-trackers Freespee have released a major new version.

Safaricom’s revenues from M-PESA are up 56%. Mobile phones probably still don’t give you cancer. Vodafone probably doesn’t give you revolutions. Sony probably does need to improve its security as another 1 million passwords go missing.

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June 3, 2011

Android: not as open as you might think. But that might be about to change

We mentioned this instant classic post in the News Review. But it deserves more attention. Basically, Nilay Patel delved into the legal papers filed in the lawsuit between Skyhook Wireless and Google over the Android terms of use, and used them to work out how Google actually exercises control over Android. In so far as it does.

The key take-home message is that it’s not the software - it’s the add-ons, the approval process, and some data assets. Android the operating system is open source. As Andy Rubin memorably tweeted, you can just grab the source code, make whatever changes you like, compile it, and off you go.

But this isn’t the case for several key adjacent products. Notably, the Google Mail and Google Maps apps and the Android Market are all highly proprietary, as is the Android compatibility test process. Google uses these as a way of enforcing its terms on Android vendors. In the case in point, Google was trying to prevent other vendors from using Skyhook’s database of WLAN hotspots to provide the network-based location service. In order to do this, they threatened to refuse compatibility to them unless they knuckled under.

One of the reasons to do this was, of course, that Android devices help Google add to its database of WLAN hotspots. Not very nice behaviour from the “Don’t be Evil” company.

This also demonstrates the thinness of Google’s control over Android, though. As far as the Market goes, there are already indie app stores out there. It’s not beyond the wit of man to include an alternative e-mail application - Telco 2.0 uses K-9 Mail, an open source fork of the GMail app, for its mobile e-mail - or an alternative mapping and location application. Presumably Microsoft (and Nokia) would be delighted to ship some version of Navteq’s mapping technology. Or you could build something that uses the Open Street Map. And of course, once you decide to fork Android you don’t need to worry about the Google compatibility tests any more.

Now that Google is competing directly with the operators on payments, how long before we see the first “ForkDroid” phones? Here’s a data point: HTC has unlocked the bootloader on its devices, allowing users to (if they want) run their own alternative operating system.

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Cloud 2.0: Telcos to grow Revenues 900% by 2014


Telcos should grow Cloud Services revenues nine-fold and triple their overall market share in the next three years according to delegates at the May 2011 EMEA Executive Brainstorm. But which are the best opportunities and strategies? The new report ‘Cloud 2.0: Telcos to grow Revenues 900% by 2014’ is now on our reseach portal.

cloud 1 market forecast large.png

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June 1, 2011

New Talent 2.0: Freelance Analysts, Editors and Writers Wanted

Telco 2.0 and New Digital Economics are growing and we’d like to add some new talent to our team. We’re looking for new ‘Associates’ who are either:

  • Excellent independent analysts or consultants, experienced in researching and report writing, or delivering written consulting projects;
  • Or freelance editors and writers experienced in interviewing and reporting, blogging, researching, report writing and editing.

You will have experience in and enjoy working on one or more of the following topics - Cloud (VPC, IaaS, SaaS, PaaS), Digital Entertainment (Music, Film, TV, Video, games), Mobile OS (iOS, Android, Microsoft, etc.), Apps, M2M, and Mobile Payments.

If you are genuinely interested, please read on and get in touch…

What kind of people will succeed and enjoy working with us?

You’ll need to be smart, characterful, and robust enough to add even more colour to our eclectic and diverse team, professional and confident enough to work with CxO clients, and disciplined enough to produce great work to agreed timescales.

We expect you to have a track record in the industry as an analyst, editor, journalist or blogger. We’ll consider ex-industry insiders too, but only if writing and delivering high quality and well reputed analysis are part of your stock-in-trade.

We’d like you to be highly proficient in Word, PowerPoint and Excel, extremely competent in online publishing, and we demand output delivered in our style templates to a highly professional standard.

What’s the deal?

There’s no single deal - if you can add value to what we do, we’ll try to find a way to do business with you, whether that’s by giving your ideas a platform, paying for piecemeal work, and ultimately perhaps developing a retainer deal. We do also employ people if the relationship works for all concerned, but we can’t offer that at this point.

What’s the process?

First, please take some time to look at what we do at www.telco2research.com, www.telco2.net/blog, and www.telco2.net/events if you aren’t already familiar with our work.

Then, If you’re interested to talk more, please email us your CV, including contact details, and some links to show us what you do, to contact@telco2.net.

Finally, if you really want to impress us, add 50 words or less on what you think we should improve, and 50 words or less on what you would bring to that task.

We’ll look at the responses we get by 17th June and try to get back to you quickly.

Many thanks! The Team at Telco 2.0 / New Digital Economics.

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Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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