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November 28, 2011

Android ‘profits’, NSN ‘crisis’, and AT&T/T-Mobile deal in trouble - Telco 2.0 News Review

[Ed. This week it’s the APAC Executive Brainstorm in Singapore - hope to see you there.]

ZDNet blogs Google’s numbers and reports that there are some 190 million Androids out there and Google’s mobile line of business brought in $2.5bn in revenue. But, as usual, this is arrived at by taking the fraction of AdSense revenue that came from ads served to a mobile browser, and the debate as to how much of this would have happened anyway rumbles on. However, with the sheer numbers of ‘droids out there, it looks increasingly convincing that Android is a major driver of traffic past the ad properties.

ReadWriteWeb makes a similar point, arguing that Amazon and Facebook are becoming “unwitting platform evangelists” for Android and helping to generate traffic and therefore ad revenue for Google. (Yes, there’s another go-round of Facebook phone rumours on.) If Google has “lost control” of Android, perhaps that’s precisely what they wanted in the first place. You might almost say Google released Android into the wild like a virus.

RWW also has some details on how Amazon forked Android for the Kindle Fire - apparently they’ve removed quite a lot of features and made it very difficult to use the Android Market. Neither the stock Facebook or Twitter apps will work as they use device APIs that aren’t present in the Fire.

Speaking of Android and viruses, Bruce Schneier has an excellent discussion of the growing presence of malware for Android, without going off the edge. Notably, although there are a lot of dodgy apps about, true viral spread from device to device is still unlikely. Interestingly, it’s still an open question whether Apple or Android have the better security model - iOS apps have to pass approval to get into the app store, whereas Android Market ones don’t, but Android users do get to accept or refuse detailed permissions when they install an app. It’s the age old perimeter security vs. defence in depth argument.

Mind you, the only really successful mobile virus is still Commwarrior and that targeted Symbian S60 with its intricate capabilities-based computing architecture…

Apple could buy the mobile industry…except for Samsung. Which is possibly something to do with why they’re at war over patents - after all, Samsung this week threatened to beat their already-hiked smartphone sales target.

China has become the world’s biggest smartphone market, and Nokia is still No.1 there, at least until the Symbian-Windows Phone 7 cutover kicks in. However, “No.1” in this context means 6.8% of the hugely diverse market, and of course it’s the iPhone people want. On that theme, The Register puts aside its usual tabloid style for a deep dive into Hildon, the next-generation version of Symbian that Psion built and Nokia never really used. Meanwhile, Indonesians riot for BlackBerrys.

Things are bad at Nokia Siemens Networks, and it looks like the eponymous owners are thinking seriously about spinning off the joint venture. Before they try that, they’re going to zap 17,000 employees and reorganise drastically. BSS, narrow-band, and “Communications and Entertainment Solutions” are going to be shut down or sold off - as are, more surprisingly, carrier Ethernet and “perfect voice”, which is Nokian for their fixed-line voice business. But there’s not much surprise in the fact that they’re going to get out of WiMAX.

On the other hand, the top priorities are going to be mobile broadband and “Customer Experience Management”, with the outsourcing and network planning side of the company integrating into them and the managed service and consulting businesses being reorganised.

Before moving on from NSN, it’s worth checking out this blog post on network-controlled fast dormancy, their solution for dealing with smartphone roaming aggression. See also this story about an accelerator proxy that’s optimised for power consumption.

Meanwhile, Ericsson renewed its managed services contract with Bharti Airtel. Ericsson runs 70% of Bharti’s network, and the contract has been renewed for the next five years, while they will also take over their prepaid IN and OSS.

Elsewhere in vendor news, Cisco and HP are at war over employee non-compete agreements. Usually it’s not a problem…until one of them moved from Texas to California, giving HP lawyers a brief window of opportunity when the case was justiciable…

“The only problem is that it’s technically illegal”. Meet the company that analyses mobile network data to help shopping centres understand where the customers go inside the building. They want to tie in information from the point-of-sale system and the CCTV. Fascinatingly, Path Intelligence - a British startup, from Portsmouth - isn’t getting the data from the carrier, but rather they deploy a gaggle of femtocell devices around the store and hoover up radio transmissions in order to triangulate people’s mobile phones. Rather like military electronic warfare types would. Their CEO has a presentation here.

That this is worth doing is a testament to the difficulty of doing anything with customer data through a telco. Meanwhile, companies with a social-media ban have more security incidents, and the European Court of Human Rights declares filtering Internet traffic for copyrighted material to be illegal.

In other Telco 2.0 themes, 65 million Vivo subscribers in Brazil get m-banking via a partnership between Telefonica and MasterCard, the GSMA MMU Blog reports. Relatedly, old Telco 2.0 favourites Oi Paggo are rolling out a full-service m-wallet in partnership with Banco do Brasil. (Subject matter expertise on possibly the leading m-payments market is just one of the features of Telco 2.0 consulting, thanks to Keith McMahon.)

The 3G & 4G Wireless Blog, meanwhile, brings us an interesting Logica presentation on “smart metering for dummies”.

Over with the carriers, the FCC officially said it thinks the AT&T-T-Mobile deal is against the public interest this week, and AT&T responded by taking back its application for regulatory clearance, although it’s still trying to sue its way back. However, they’re also taking a $4bn provision against having to pay T-Mobile’s mammoth break clause. Any renewed application may unload as much as 40% of T-Mobile USA.

The Wall Street Journal points out that mergers plus divestment often add up to poor service. That’s precisely what GiffGaff subscribers were getting this week. O2 UK and the user-managed MVNO have fallen out over who is to blame, even though O2 is a shareholder in GiffGaff…

Clearwire continued to walk the high wire over its huge debt repayment this week, saying they might invoke a clause giving them 30 days’ grace in order to think it over. Sprint presentations have recently been putting Clearwire last on a list of partners, but they own 54% of the company and otherwise, they get to see the investment go down the tube.

KDDI is buying out TEPCO’s investment in the telco. TEPCO needs the money because it owns the Fukushima Daiichi nuclear wreck.

And who wants to own African cell towers? Now you can!

Over in content and delivery news, TiVo is back in a big way, driven by Virgin Media’s major rollout of the devices in the UK (170,000 net adds in a quarter). They seem to have backed the right horse in concentrating on cable operators - Comcast VOD integration is coming soon.

The CDN race is on: AT&T, Juniper Networks, and Akamai Technologies are all in the running to acquire highly-rated CDN company Cotendo. Cotendo is a specialist in the emerging growth area of Web application acceleration, or as we think of it, ADN (Application-Delivery Networking), through its DSA (Dynamic Site Acceleration) product.

Dan Rayburn reviews the prospects and corrects countless factual errors in media reporting of the deal. AT&T is a big customer, Juniper is a new entrant, and Cotendo is Akamai’s biggest competitor in acceleration…

Back in 2006, Internet pioneer Bill St. Arnaud of the Canadian national research network CANARIE published this list of predictions for the Internet in 2010 on the NANOG list. It’s telling how on-the-ball the content players were.

Here’s a comparison of four cloud music players.

Be glad you don’t work for Zynga.

Over in voice news, Siri hacks proliferate - last week someone managed to reverse-engineer the protocol and get a non-Apple device to work with the Siri servers, this week someone persuaded an Apple device to work with a non-Siri server. Media centres and cars.

Google Wave shuts down in weeks.

Why doesn’t Skype have push-to-talk? Oops..it does. Meet Plivo - it’s like Twilio but open-source.

OpenBTS GSM over OLSR mesh-WLAN! Now that’s what we call geeky…although this High Scalability post on geo-distributed databases is pretty close, and rather important for the CDN folk.

MobileSquared has a piece on providing 3G for the Olympics visitors and anticipated video blitz. A quick rule of thumb for LTE dimensioning. Microsoft will pay you $20,000 for a great Kinect hack. Apple’s security communication with developers could be better. Hacking UK micro-SIMs - with a razor. Why are airline IT systems so painful?

Meet the EXODesk, a desk entirely covered in an HTML5 touch interface. (Although, we’ve got an EXOPC from the Intel Meego dev program and the less said the better.) The glamorous world of Telco 2.0 - apparently. Are you the most innovative mobile firm in Britain? Perhaps Path Intelligence should try. And, of course, nothing says “Shoreditch” like the combination of mobile apps and DJs. A recommendation.

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November 25, 2011

Your Text is on Fire: OTT’s to burn 40% SMS revenue by 2015

New analysis on our research portal ‘Your Text is on Fire: OTT’s to burn 40% SMS revenue by 2015’ says that in four years’ time, Telco SMS revenue will decline on average by around 40% across Europe and the Middle East according to the senior execs at this month’s Telco 2.0 brainstorm in London. The main cause is competitive pressure from ‘OTT’ alternatives (Facebook, Skype, Google, BBM, etc). Mobile voice isn’t that far behind, with a 20% decline foreseen. What can be done and what is the role of RCS-e? More here.

EMEA Nov 2011 Event Report Slides v3 Messaging decline.png

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November 21, 2011

STL Partners / Telco 2.0 is recruiting an Experienced Research Associate / Junior Consultant

Jobtitle: Experienced Research Associate / Junior Consultant
Location: Primarily office based in London EC2, some travel and off-site work.
Package: £36-40k basic + bonus

STL Partners has been at the forefront of the field of business model innovation and analysis in telecoms, media and technology (TMT) since 2006. In particular, the Telco 2.0 Initiative has focused on the opportunities for growth through new telecoms business models.

STL Partners offers TMT companies research, consulting and brainstorming strategy events to help them identify and realise growth opportunities.

We are growing fast and undertaking a growing volume of research and consulting assignments where we need to expand our skills base and capabilities. These include:

  1. Bespoke research projects. e.g. (www.tellabs.com/info/smart/stl_value-of-smart-pipes.pdf)
  2. Strategy projects. e.g. identifying the threats and opportunities posed by over-the-top services to telecoms operators
  3. Marketing and proposition projects. e.g. identifying and developing major breakthrough propositions for operators seeking to achieve future sustainable growth.
As a result, we are seeking an experienced consultant / research analyst to work with us. As a minimum we are seeking:
  • a very strong academic background from a leading university
  • 1-3 years in strategy consulting or research firm working for a blue-chip player (not necessarily in telecoms but this would preferable)
  • highly analytical - comfortable thinking through problems and good at structuring answers
To apply by email to this position, please send your CV and covering letter to the following link: jobs@stlpartners.com, quoting reference number: STLB1 To share this article easily, please click:

Skype-Facebook integration, Mobile data surge challenged, and UK fibre furore - Telco 2.0 News Review

[Ed. Two bits of news from us - we’re off to the fully booked APAC Executive Brainstorm in Singapore next week, and our strategy report on the Disruptors went down well at the EMEA Brainstorm, about which there will be more published in coming weeks.]

Any investors in UK fibre would be “certifiable”, says the head of NM Rothschild’s telecoms investment desk, and calls for OFCOM to insist on wholesale access to Virgin Media’s cable network. Meanwhile, Computer Weekly compares Andorra Telecom’s FTTH to BT’s DSL service, which has to be the most apples-to-oranges comparison in a while. Benoit Felten is still pressing for muni-fibre. Marco Forzati, via the 3G & 4G Wireless Blog, has attempted to quantify the economic benefits of FTTH in Sweden. As usual, the key variable is take-up in the MDUs the fibre passes. That also gives us an undisputed winner for this week’s Chart of the Week:


She’s a beauty!

Dean Bubley argues that O2 UK’s results mean that the surge in mobile data usage has passed. In comments, alternative explanations such as changes in O2’s data allowances and metrics are suggested and his maths is challenged. The 3G & 4G Wireless Blog puts the official line with presentations from Qualcomm and UMTS Forum showing the traditional traffic/revenue “scissors chart”. And even if the UK might see mobile data overcapacity, it doesn’t mean everywhere will.

O2, meanwhile, is firing up a 1,000 user LTE trial in London, the first LTE with live users in the UK. OFCOM, for its part, is angry about “unlimited” data plans that are actually limited and come with painful overage charges.

It looks like Steve Jobs had a dose of the metro-WiFi enthusiasm so common in the early 2000s, and discussed the idea of building a huge Apple WLAN and perhaps not even giving the iPhone a cellular radio with John Stanton, veteran mobile industry exec and pal of Craig McCaw. Fortunately for Apple, he seems to have cooled Jobs off on the deal.

However, here’s a cunning play with WLAN - we’ve occasionally mentioned that some of the technology changes in VoLTE make it easier to rig up a hybrid MVNO/WLAN operator, using WLAN where available and the wholesale provider’s cellular network where it can’t be avoided. Republic Wireless claims it can give you unlimited mobile service for $19/month, thanks to Devicespace’s fancy WLAN manager app that seeks out hotspots and automatically navigates the splash pages. They estimate 60% of the traffic will get offloaded.

And Renesys reports on Lebanese ISPs’ escape from satellite connectivity after a new Telecom Italia Seabone fibre landed in town.

It’s here - you can now make Skype video calls between Facebook profiles from within Facebook. If that doesn’t quite make sense, put it like this - Skype is providing a whitelabel version of itself to Facebook, so they can have video calls between Facebook users. You do have to import your Facebook contacts into Skype in order to make calls, though. But you don’t as far as we know need to install Skype to receive them, so some version of Skype is running in the browser, although whether it’s a Skype node or a thin client using SIP or something else talking to an otherwise unannounced Skype API isn’t clear. All clear so far?

Dan York is delighted to see that the new features have arrived simultaneously on Windows and Mac OS X. Another new Voice 2.0 startup. Tropo forks OpenVBX for additional openosity. Bidding for calls, like clicks on Google AdWords, with Freespee. Push notifications for HTML5, in the cloud.

Up in the cloud, Microsoft announced this week that it was going to halt development of LINQ to Dryad, their big-data cloud product, in favour of the open-source Hadoop platform, itself a community clone of Google’s MapReduce that eventually outgrew the original. MS plans to port Hadoop to the Windows Azure cloud and also integrate it with their SQL Server database.

Here’s an interview with the founder of VMWare’s CloudFoundry. Via High Scalability, is cloud portability really a good thing? How Google+ works and why there isn’t a public API yet (hint: complicated). Using gossip protocols to monitor the cloud.

Elsewhere in the enterprise, Warren Buffett starts tech investing, by buying a boatload of IBM shares.

China Mobile passed 638 million subscribers, with 3G penetration rising fast (45 million, up by 2.1 million, compared to total net-adds of 5 million). Rival China Telecom, however, reached 120 million subscribers but has a much bigger share of 3G users - 30 million.

There was a dramatic sell-off in Bharti Airtel shares today after Indian police raided the company, investigating alleged corruption around the award of GSM licences back in 2002. The police also visited Vodafone India and the former top civil servant at the Department of Telecoms.

Clearwire is threatening to miss a $237 million debt repayment on the 1st of December. The troubled WiMAX operator has total cash on hand of $698 million, so they could strictly speaking pay the bill, but this would force them to stall further deployments. Part-owner Sprint recently raised $4bn from the money market, but they’re blowing hot and cold about investing any of it in Clearwire. Presumably, Clearwire management is threatening to go bust in the hope of forcing Sprint to fork out or lose their equity in the operation.

Telkom South Africa’s net profits are down 36%, but Telecom Italia expects to outperform the market.

Occupy Flash is trying to get people to uninstall Adobe Flash from their PCs. Apparently there’s also an Occupy HTML trying to resist this, but when did you last have to kill the “HTML plugin” because it went ape and tied up 120% CPU?

Ars Technica has a typically chewy report on the landscape of Web video post-Flash. Interesting fact: Netflix is very keen indeed to move to HTML5 and is contributing to the standards group for adaptive streaming in HTTP video.

Google, meanwhile, wants you to share music into Google +.

Hackers succeeded in reverse-engineering Siri’s network protocol and connecting to the server with a homebrew client, although it’s dependent on spoofing an iPhone’s unique identifier and you bet Apple will notice multiple simultaneous connections from the same device ID. Full details are here, at the horse’s mouth. Ars Technica reviews the iPhone 4S as a camera, compared to other cameras. Smartphones are dancing on portable gaming devices’ graves.

Is it good news for Microsoft and Nokia that app developers’ interest in Windows Phone 7 is unrepresentatively high, compared to Android which after all has 52% of app sales? See the Nokia Lumia 800 being built. Samsung and Android move the smartphone market, and Apple is scoring off RIM in the enterprise.

NFC SIMs, perhaps. Barnes & Noble gets their tablet out one day ahead of Kindle Fire. KDDI sues Mobage. HOWTO get a DVD out of an Apple DVD drive if it won’t eject. An idea that’s too long for Twitter, too short for Google +, and too smart for Facebook. Chinese censors do something weird to SSL. 30 years of CB radio!

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November 14, 2011

Apple’s SIM Patent; Vodafone, Ericsson Samsung results - Telco 2.0 News Review

[Ed. Hot on the heels of last week’s envigorating EMEA Brainstorm in London our attention is now turning to the APAC Brainstorm in Singapore, 30th Nov - 1st Dec. You can see more on the program here, including Telco 2.0 Strategy, Mobile Broadband Economics, Digital Entertainment, Mobile Payments, and more on our major new research report dealing with the disruptors - Google, Apple, Facebook, Microsoft/Skype, and Amazon which went down a storm at the EMEA event. As a taster of the analysis from the event, the chart below shows EMEA delegates’ views of the contribution of so-called ‘OTT’ players on the significant decline in voice and messaging revenues they foresee.

messaging decline EMEA event vote nov 2011.png

Join us if you can in APAC or see more on our Disruptors analysis here.]

Vodafone announced solid results this week, with operating profits up 4.4% on revenues up 2%. At last week’s Telco 2.0 event, Vodafone executives briefed on the progress of their project to consolidate the giant carrier’s numerous IT systems and on OneNet, their SMB-focused hosted unified comms product. And, of course, the arrival of the first dividends from Verizon Wireless is doing them a lot of good. In general, Telco 2.0’s Keith McMahon comments, the results reflect a renewed focus on operational excellence without the distractions of constant mergers and acquisitions.

Ericsson claimed this week to have double Huawei’s market share in infrastructure. They expect global population coverage with HSPA to go from 35% today to 80% in 2016 and LTE to go from 2% today to 35% in the same period of time. Interestingly, they reckon that 60% of global mobile traffic will be concentrated in urban areas, so you might wonder if their real competitor is actually WLAN.

After all, there are currently about 1.3 million WLAN hotspots in the world and they’re forecast to grow to 5.8 million by 2015. Informa reckons the biggest chunk of that massive roll-out will be owned by mobile operators.

Samsung also had news this week, specifically about the world’s biggest smartphone manufacturer’s investment plans. This year, their single biggest hardware investment line item will be the System LSI division, which produces the chips that go into both the Galaxy S II and frenemies Apple’s iPhone 4S. That’s getting £4.5bn, while the rest of the semiconductor operation gets as much again. OLED screens and cameras get £3.9bn, and a whole £5.6bn is going for R&D and software development. Unsurprisingly, LCD technology is being cut right back.

On the other hand, there are some far less bullish metrics out there. A few weeks ago, there were reports that Apple and other vendors had revised down their pre-orders for chips in Asia, presumably as weak demand rippled up the supply chain. This can be overstated - recall last week’s Businessweek story about how Apple doesn’t just pre-order parts, it pre-orders the machine tools needed to make them well in advance and rents them to the contract manufacturers. That doesn’t sound like they buy much in the spot market. But the economic news is grim and this data-point is telling: Cathay Pacific is struggling to fill its cargo planes outbound from Hong Kong to the US West Coast.

Horace Dediu, fresh from his data-rich presentation at the EMEA event on the evolution of OS’s and what might be next, is the sort of analyst who probably tracks air freight rates and volumes at obscure German machine-tool companies - and we mean that as a compliment. We like this chart from Horace at the Asymco blog summarising just how far off Apple’s own forecasts have been.

Forecasts are wrong

In fact, what this chart shows is part of the phenomenon described in a classic HBR piece - corporate earnings forecasts are almost always wrong. Not just that, but they are usually wrong in the same way. They tend to be far too optimistic, and they also tend to hugely underestimate volatility. Apple seem to have given a new slant to this phenomenon, being far too pessimistic in guidance and seemingly even more volatile than actual earnings. In fact, counting the bars in the chart above, Apple was more than 30% short on its guidance seventeen times in twenty quarters. As error margins go, this might be considered extraordinary for a company with such famed attention to detail in its corporate DNA.

Earlier this year, there was much excitement when Apple persuaded the GSMA to permit SIM cards that could be remotely updated rather than swapped physically. Well, now they’ve patented the idea, which ought to worry operators a lot. Especially as it means sharing the authentication secrets with the manufacturers. (NB We covered the critical and increasing importance of patents in our presentation on ‘Patent Pool Wars’ last week and will be publishing more on this in coming weeks.)

Elsewhere, and following on from one of Horace’s themes (of which more soon), Amazon has acquired a voice-command startup, Yap. Since Siri, the Apple halo-effect looks to be causing a rush into this micro-segment. Nokia Research, for example, demoed a phone that tries to guess the caller’s mood.

Wired has a detailed and critical review of the Amazon Kindle Fire, in which they report that the Silk browser with its Opera-like cloud proxy seems to be much slower than the iPad 2 which doesn’t use an accelerator proxy.

On the other hand, the same issue also has an interview with CEO Jeff Bezos which is worth reading. Notably, he says he’d happily give up the infamous 1-Click patent if it meant software patents weren’t such a pain, and describes the Kindle Fire as a media service rather than as a product. He also rather oddly contrasts how long it takes to load a Web page “over WiFi” with how long it takes on Amazon EC2 - but you need the WiFi to get to EC2 in the first place.

Meanwhile, AllThingsD reports that Amazon has quietly added more features to the Amazon Prime service.

Netflix has been spending a lot of money lately. The latest deal is an exclusive for Lionsgate content in the UK and Ireland, in preparation for their coming launch here. Elsewhere in content, Telefonica-owned social network Tuenti has got out ahead of Netflix in launching a video rental service.

Where Netflix has been frantically buying up content rights and dipping its toes into the risky business of film financing, Google has been targeting key bloggers and videographers on YouTube and signing them up on exclusive deals, which has to be cheaper. Being Google, quite a few of them are science-focused.

Dan Rayburn’s quarterly CDN report is out, putting prices falling about 20% and volumes up 60%. Interestingly, however, the pricing is driven by bulk discounts for the very biggest video pushers and most CDN customers won’t see anything like that.

China is getting ready to deploy IPTV, and the STB orders are likely to be monumental. Faultline reports that 80% of the orders from each province are being reserved to a group of five Chinese vendors led by (of course) Huawei.

Felix Salmon has some thoughts about online advertising and makes the point that it’s a much better idea to offer links that someone might deliberately click than ads that are only ever clicked by accident.

Back over with the smartphones, here’s a positive view of the Nokia Lumia 800 and some app recommendations. However, Telefonica thinks it’s too expensive and therefore won’t be carrying it in the UK.

Also, you no longer need a Nokia to use the Nokia Maps and Nokia Music apps after somebody hacked’em. This is described as a loss for Nokia, but it could as well be a win if they have any plan to monetise the services independently of hardware. After all, you can use Nokia Maps the website on any device with a half-decent browser (and it’s blindingly fast, too).

Motorola’s new RAZR Droid, reviewed. PCMag interviews Alec Saunders at RIM, who promises that full BlackBerry Enterprise Server integration will be in the first lot of QNX smartphones and that they will be fully compatible with the PlayBook. And there are even more dev kits coming, including Qt.

High Scalability points us to the ever-reliable Packet Pushers’ Podcast, which argues that the Internet is facing a menace, and the menace is tunnelling. Far too many protocols, they argue, involve some form of packet encapsulation, which adds complexity and breaks core Internet engineering principles while also causing problems with robustness, debugging, and path-MTU discovery. There’s more discussion here.

And they blame telcos - but doesn’t everyone?

On the other hand, at least one cableco is boldly standing out against the tunnel menace. Comcast this week turned on its first production IPv6 network with full dual-stack addressing and therefore, no NAT or tunnelling.

A major motivation for IPv6 deployment is to make P2P applications, auto-configuration, and auto-discovery work properly. The world’s favourite P2P application is Skype, and they suffered this week when a bug in Juniper JunOS routers caused a major outage at Level(3). It wasn’t “just” the huge backbone network operator - if you can say “just” about L(3). The bug, triggered by an unusual combination of BGP attributes, caused a major disruption of Internet routing generally with a much higher rate of updates than is normal.

GigaOm reports on a preview of Comcast’s integration of Skype into their Xfinity smart-TV solution. Skype video calls will be transferred as 720p, aka HD, video, and you can make video calls in parallel with the TV. It also comes with no fewer than four microphones in order to hoover up every scrap of conversation. Providing you want that, of course.

Interestingly, it seems that Skype for Mac OSX uses 28% more bandwidth than it does on other OSes. In other voice news, AT&T has an app for cheap international VoIP, which will work while you’re in the WiFi. Android’s Native Development Kit gets low-level access to the audio path.

Elsewhere, the last NBN construction contracts are out. Reliance wants to share its towers.

Open-source cloud with VMWare at HP. Adobe ends development of mobile Flash. Integrating Node.js and Microsoft servers. Running the cloud in RAM. Building Flickr’s push API. Public data in the cloud with Amazon. Bad security advice from Google. British tech legend Tudor Brown steps down at ARM.

Beware of the tax implications of mobile payments. Klout profiles whole Twitter/Facebook user base without asking, hilarity ensues. Online gaming platform Steam hacked, loses credit card database. US Senate defends net neutrality regs, EFF battles SOPA.

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November 7, 2011

97% of 3UK traffic is data, the rise of HTML5, and Amazon’s new Cloud services - Telco 2.0 News Review

[Ed. At last! It’s the EMEA Brainstorm in London this week (Tuesday 8th PM only, and Weds 9th and Thursday 10th all day), and the key themes are: strategies for defending and extending voice, Customer Experience 2.0, M-Commerce 2.0, Cloud 2.0, M2M 2.0, CDNs, Digital Entertainment 2.0, Payments 2.0 and the launch of our major new research report dealing with the disruptors - Google, Apple, Facebook, Microsoft/Skype, and Amazon. We hope you can make it - be spontaneous and register here or call +44 (0) 207 247 5003 to make a last minute booking.]

3UK reports that 97% of the traffic on its network is now accounted for by data. This in itself isn’t that surprising, as the operator has a longstanding policy of both building capacity for mobile Internet service and also being the UK’s price leader. However, it makes us wonder about all those schemes for prioritising this or that traffic class - if 97% of the traffic is Internet service and a large majority of that is the Web, exactly what is left to enjoy a higher service class?

Verizon Wireless claims to have an answer - they’re planning an API for a “turbo boost”, delivering more bandwidth if an app requests it. That may require the use of a new micro-payments API to let VZW get a share of the money from the requesting app (rather than necessarily the customer’s bill), which sounds interestingly two-sided. And, fascinatingly, the use-case VZW executives mentioned was a Skype video call that’s beginning to go all chunky. So, it’s customer-controlled QoS for over-the-top video telephony. Future-y!

However, the most likely cause of poor service on a mobile network is the radio air interface, and it’s hard to see how on-demand QoS will fix that. You can’t prioritise nothing.

You can, however, make use of the cheaper equipment developed for femtocells in order to beef up the public mobile network - we’re not sure about the phrase “metro-femto” though, almost as bad as “het-net”. Alternatively, you could do as the Chinese do and deploy WLAN hotspots instead. Beijing is planning the world’s biggest municipal WLAN, with some 480,000 access points installed by the three mobile operators jointly. Naturally, anyone who wants to use them has to provide their mobile phone number to log in (will they have SIM-based login?) so they can be tracked down if necessary. (However, even the Chinese government has been unable so far to force all the hundreds of millions of phones in China to be tied to a valid address.)

We’ve been occasionally reporting on what seems to be a shift in Chinese policy towards their major Internet companies - Sina Weibo, Tencent, Alibaba.com, and friends. Earlier this year, they were subject to visits from top officials including, chez QQ, the chief of the secret police for the whole of China, after which their executives were invited to sing revolutionary songs at the Shanghai Party HQ. The decision is in - the top 39 companies have promised to do more to “curb rumours and prevent the spreading of harmful information”.

Elsewhere, Nokia is sponsoring a public WLAN deployment in London. This is only a start (26 locations), but it’s interesting when you think that the new phones run Windows Phone and Microsoft owns Skype, and Skype lets you pay for WLAN via Skype Access. It’s as if someone was trying to put together a parallel telecoms value chain.

Will HTML5 replace native apps? The Guardian’s developer blog has a good run-through of the arguments. Of course, the biggest advocate of this by far is Facebook, and TelecomAsia reports back on the details of their Facebook Platform, a sort of HTML5 app store for things that use Facebook APIs, released last month at their developer conference. It looks like Facebook is trying to replace some features - like authentication and payments - that telcos hold dear, while also breaking down the boundary between native applications and either local widgets or classical Web sites.

ReadWriteWeb reports on a rather impressive visualisation of the non-Facebook world - there is a very clear divide, and it’s basically between Russia, China, Japan, the Middle East - all of which don’t - and everyone else, all of whom definitely do. Among other things, it’s a clear example of the way in which the Great Firewall is an exercise in digital protectionism.

While we’re on the Web, this week saw a historic landmark. Microsoft Internet Explorer no longer has the majority of web users, which makes this image from Ars Technica the Telco 2.0 Chart of the Week.


Kids want to be on Facebook so much they get their parents to help them lie about their age, Bruce Schneier’s blog reports. The umbrella group for alternative search engines, which is suing Google, criticises Eric Schmidt.

And because this week’s event will launch our Google, Apple, Facebook, Microsoft, Skype, and Amazon strategy report, here’s a useful fact from Benedict Evans’ twitter feed - the cheapest iPhone 3GS, without handset subsidy, is still much more expensive than a typical Android vendor’s ASP.

Last week, we learned that Samsung took the Q3 smartphone cake. This week, Canalys refines this a little - confirming that Samsung probably did shift the most units in Q3, but pointing out that HTC led the US market, while RIM saw its volumes plummeting in the US and booming everywhere else. Also, the original wave of Motorola Droid users are about to finish their 2-year contracts, in time for the iPhone 4S.

HTC also explained itself a little, saying that it was going to make emerging markets a much higher priority, although this doesn’t mean it intends to go down market. It also promised a new tablet with Android 4.0 soon but didn’t give details.

Horace Dediu rounds up the smartphone scores for Q3, and points out that over the last 15 years, an average of one company has exited the mobile phone market every year.

RIM shares are currently worth less than the company’s assets, while an internal “SWAT team” has begun investigating BlackBerryFail and trying to decide what to do about it. The good news, though, is that Android devices are about four times as likely to break as BlackBerries.

We seem to have an answer to the question of how much Apple’s Siri voice-command interface depends on the network. (Or rather: “Siri, are you a local application or a network service?”) This week, Siri was down. More scientifically, Ars Technica reckons it uses about 63KB per query on average.

The latest twist on the Apple/Samsung patent war - the European Commission is getting involved. Specifically, it is starting a preliminary inquiry into whether the parties are acting as monopolists in their treatment of FRAND (Free, Reasonable, and Non-Discriminatory) patents. This is going to be long. Meanwhile, Samsung has demanded to question Jonathan Ive in court.

Nokia signs up ST-Ericsson as a potential silicon supplier for its Windows phones, although the OS doesn’t support dual-core chips yet. ZTE is keen on Windows Phone.

And Qualcomm reports a strong rise in profitability and sales, driven by all that smartphone activity.

The cloud is a major Telco 2.0 theme. Amazon Web Services had a pair of new products out this week - the first extends the existing Simple Notification Service to include SMS, and the second implements multi-factor authentication as a service. Another two Telco 2.0 opportunities get attacked.

(Mind you, Apple claims to be far from worried about the Amazon Kindle Fire and you can see why. Oh yes, and the major security breach.)

Notifications are a bit of a theme at the moment. Urban Airship just got a round of investment from Salesforce.com and, ah, Verizon, who as a telco might not be the first company you’d think would need an over-the-top notifications service.

Sometimes, the cloud isn’t the right choice. Mixpanel’s CTO explains why they decided to move their application out of the cloud and into their own dedicated servers. Fascinatingly, the problem with the cloud was exactly the same as many companies’ reason to move to the cloud - variability. People often move to the cloud because it’s easier to deal with scaling up and scaling down, and you don’t have to pay for capacity you don’t use. But Mixpanel found that the very variability of other people’s usage led to an intolerable degree of variability in their app’s performance. Much the same theme is noted in this High Scalability post on better apps with Google App Engine.

M-payments are a Telco 2.0 theme. This week saw another NFC trial, this time with iPhones and an external device, and the launch of a new, slightly odd service in the UK. Apparently you’ll be able to pay for a new phone at Carphone Warehouse with your phone…

The magic, though, of things like M-PESA was that they extended the capabilities of the existing billing and OSS infrastructure to do new things with the phones that were on hand, rather than requiring the deployment of masses of new stuff. This project is in the same tradition. Meanwhile, the MMU Blog looks at why some markets see the mobile money agents getting paid less than airtime resellers. The problem seems to be that the incentives of the agents and the carrier aren’t aligned - carriers are delighted by mobile money, as it’s also a less expensive way to buy airtime, but it’s a lower margin product for the agent.

T-Mobile USA tells the Open Mobile Summit that it’s “experimenting with services, trying out our new muscles”, at least as long as it’s not part of AT&T. However, just because you’re a telco doesn’t mean you’re secure. There’s been another compromise of an SSL certification authority, and this time it’s KPN.

Also at Open Mobile, VZW’s CTO said that they expect to run on their EV-DO network for many years after LTE deployment, filling it up with M2M devices and the like. Sanjiv Ahuja of LightSquared says they want to be the dumbest of dumb pipes. Demand for broadband was flat in North America in Q3, with 85% of net adds coming from cable. Interestingly, 85% of the rest - the telco sector - was FTTH. The AT&T-T-Mobile deal is sliding right.

US Cellular says no to the iPhone - it’s too expensive. Sprint raised $4bn in bonds, but said whatever it does it won’t go above a 50% stake in Clearwire. Vodacom sees growth slowing down. Best Buy buys out Carphone Warehouse, putting some sugar on a deal that turned out poorly. A mixed set of results from BT - magic spade or no magic spade. EverythingEverywhere promises the windfall from selling spectrum (that it got for free) will be reinvested.

Where the well-equipped tyrant goes for telecoms surveillance kit. An interview with the Internet Watch Foundation. HOWTO evade pirate-blocking on BT’s network - use HTTPS.

BlackBerry Music is a go - it looks like there is much more available than the limit of 50 songs mentioned in the past. In fact, the effective limit is who’s willing to share their stuff with you. This is the same model as BlackBerry Messenger in messaging - the exclusivity is a selling point in itself.

CBS says no to Apple, but Disney says yes to Google. A deep dive into Groupon. This is interesting: EMI’s developer API for their back catalogue, with revenue sharing. France Telecom and Publicis have a VC fund.

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November 2, 2011

Vodafone, Telenor, BT and Colt - whipping up a storm on Cloud 2.0…

Here’s a detailed outline of what top execs from Vodafone, BT, Telenor and Colt will be sharing about their strategic approaches to Cloud services at the Cloud 2.0 session at next week’s EMEA Brainstorm in London. If telcos’ cloud strategies matter to you, you really should join us there - register here, or call +44 (0) 207 247 5003.

Bob_Brace.jpgFrom Vodafone, Bob Brace, Head of Unified Communications and Cloud Services, will talk about live customer experiences of One Net, Vodafone’s cloud based telephony service that provides fixed-mobile convergence and integration with Microsoft Office 365. He’s also got some interesting things to say about telcos’ opportunities with Platform as a Service (Paas) and will touch on the issues of user privacy.

Stuart_Hill.jpgFrom BT, Stuart Hill, VP London Olympics 2012 Programme, will talk about how a cloud-based IP Telephony service is a key component in BT’s delivery of the communications infrastructure for the 2012 Olympic games in London.

Peter_Roe.jpgAlso from BT, Peter Roe, Global Banking and Financial Markets, will be talking about the cloud needs of the global Financial Services sector, and the niche that exists for some telcos to serve these needs. Peter will describe how BT’s strategy is to combine available high quality infrastructure assets with partnerships with ISVs, customers and other innovators to deliver a hybrid of end-to-end cloud services and a 3rd party platform.

Frank_Elter.jpgFrom Telenor, Dr Frank Elter, Director of Product & Business Development, will give a top-line insight into Telenor’s approach to enterprise cloud services and will give concrete examples on new services and role in the eco system. Further, based on an ongoing research project with University of Oslo and the LSE, Dr. Elter will share some research findings that gives a new view on where to look for Cloud services and Telcos role in Cloud services.

Mirko_Voltolini.jpgFrom Colt Technology Services, Mirko Voltolini, Director Network Design and Architecture, will describe Colt’s overall re-positioning as a technology service provider and its approach to deliver seamless integration of network and cloud services.

Plus Telco 2.0’s Research Director Andrew Collinson will give an introduction and overview of findings from our recent research report ‘Cloud 2.0: don’t blow it telcos’, and there will be our usual high-octane mix of ‘Mindshare’ interactivity and voting and debate with the panel of speakers.

You can find more on the Cloud 2.0 event agenda here, register here, or call +44 (0) 207 247 5003.

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November 1, 2011

Sample participants: New Digital Economics Exec Brainstorm EMEA, 8-10 Nov, London

Our New Digital Economics EMEA event will take place from 8-10 November in London next week. Below is a sample of some of those so far booked in to participate in the brainstorm. They’ll take advantage of our interactive ‘Mindshare’ format.

Many thanks to everyone who is coming and, in advance, to those busy this week preparing high quality stimulus material to make it a productive gathering…

CTO, 3 UK; Director of Product and Strategy, Alcatel Lucent; Vice President, Market Strategy, Amdocs; Director Strategy, Avaya; Head of Digital Payments, Barclaycard; Director, Telecoms Research Europe, Barclays Capital; CEO, Beecham Research; Head of Emerging Technologies, British Gas; VP, Central Govt & London 2012 Delivery Programme, BT; Director, Voice, BT; Strategy & Business Development, BT Global Services; Head of Film, BT Vision; Chairman & CEO, Cellum Group Corp; MD IBSG, Cisco; SVP Merchant Services, Click and Buy (a Deutsche Telekom company); Director Network Design and Architecture, Colt Technology; SVP Corporate Strategy, CSG International; SVP Core Telco Products, Deutsche Telekom; Head of International M2M Competence Center, Deutsche Telekom; Head of Innovation Management, Deutsche Telekom; Eircom; Director of Marketing & Product Development, Eircom; Group Senior Vice President, Etisalat; Group Chief Marketing Officer, Etisalat; Head of Mobile Payments, Everything Everywhere; Managing Director, Experian; Creative Director, Frog Design; Director Business Development, GSMA; Project Manager - Embedded Mobile Programme, GSMA; Senior Consultant, Hewlett Packard; Strategy Manager, Huawei; Director of Service Strategy, Hutchison Whampoa Europe; M2M Marketing Manager, KPN; General Manager All IP, KPN; Non-exec Director, Logitech; Group Head, Emerging Payments, Europe, MasterCard Europe; Chair, MEF; Founder & CEO, Mydex; European Managing Director, Nielsen; Global Head of Solutions Portfolio, NSN; SVP Mobile Multimedia and Devices, Orange; Vice President Marketing Vision, Orange Group; Director International M2M Center, Orange Group / Mobistar; CEO, Placecast; Strategy Department Director, Polkomtel; Senior General Manager, Research & Development Center, PT Telekomunikasi Indonesia; Executive Director, Business Solutions, Qtel; Senior Manager, ICT & Mega Projects, Qtel; CEO, Rebtel; Co-Founder, Solaiemes; Senior Manager, TD Bank Group; Senior partner, TDG; VP, R&D, Telefonica O2 Europe; Director New Business Development, Telefonica O2 UK; Director of User Modelling, Telefonica Digital; Market Development Manager, Telenor Business Norway; EVP Corporate Development, Telenor Group; Product & Business Development, Telenor Norway; Head of Business Renewal, Mobility Services, Teliasonera; AVP Service Strategy, Telkom Indonesia; CTO, Tellabs; VP Marketing, Tribold; Chief Product Officer, Turkcell; Director, Identity Services, Verizon Business; Head of Mobile Market, Visa Europe; Head of Unified Communications & Cloud Services, Vodafone; Head of M2M Northern Europe, Vodafone; CIO, Vodafone Group; Data & Communications Services Director, Vodafone Group Services...

More details here, register here or call +44 (0) 20 7247 5003. If you can’t come to the event, there are ‘distance participation’ packages where you can access all the materials and brainstorming output.

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Customer Experience 2.0: learn from Apple - simplify

One of Apple’s great strengths is the simplicity and elegance of its product design, delivering an outstanding customer experience born from on an extraordinarily effective and single-minded product management ethos. We’ll be discussing optimising the customer experience at the EMEA brainstorm in London next week, and also previewing findings on Apple from our ‘Dealing with the Disruptors’ report.

In this guest post, Ernest Margitta, VP Marketing of Telco 2.0 partners Tribold argues that simplifying and explicitly managing products in a single enterprise product catalogue, telcos/CSPs can deliver enormous benefits including lower costs, greater commercial and operational agility, and increased customer satisfaction.


Investments aimed at improving the customer experience will be undermined if CSPs do not also invest in better product management, since the product experience is such an integral part of the customer experience. Likewise enhancing product management also complements investments made in business intelligence and analytics, as it supports a 360° view of products, enabling CSPs to monitor and optimise their performance.

The importance of the product to a successful commercial strategy, and to the customer experience, means that CSPs now urgently need to consider how they manage their products so as not to risk undermining both their strategic goals and investments.

The need to deliver a good customer experience

The Communication Service Provider (CSP) industry is currently awash with talk about the importance of optimising the customer experience. The customer experience is considered to be a key area of differentiation, and delivering a good customer experience as essential for those CSPs who wish to retain existing customers and attract new ones from rivals.

However, in order to truly optimise the customer experience, there is a vital dependency on optimising the product experience. The product experience is what underpins a satisfying customer experience: the products are what drive a customer to engage with a service provider; the diversity and attractiveness of offers and services are what generate additional revenue; and the quality and consistency of the use of those products is what keeps the customer loyal.

Ultimately, the customer experience is substantially defined by the customer’s interaction with the CSP’s products, from purchase, to delivery, to use, to payment. At the same time, communications products and services are no longer static, long-lived or few in number. CSPs are increasingly defined by the products they offer, and to stay competitive and deliver against customer expectations they must manage and refresh a complex and dynamic product portfolio. And to add further pressure, the increasingly competitive CSP market requires that service providers closely monitor how their products are performing, so that they can make better commercial and strategic decisions, and continually evolve their product strategy.

The business challenge behind the experience comes down to a basic premise: what should I be selling to my customers and what do I need to do to effectively deliver and manage that? So the successful retailers who deliver on customer experience are the ones adept at product management and at understanding the relationship between customers’ wants and needs and the products designed to fulfil them. However, delivering on this targeted style of customer management on a large scale is only possible through an “industrial” (ie automated and scalable) approach to designing and managing products; not through the “artisan” (ie labour-intensive) approach we commonly see throughout the industry.

The central role of ‘product’ in the customer experience

When we consider what the customer experience actually involves we quickly discover this is a rather more complex question than it first appears. It encompasses far more than just customer service or customer service channels, as important as these are to the customer experience. Rather it is defined by the sum of all the touch-points a customer has with a CSP.

There are in fact a wide variety of touch-points that together create the customer experience. The common element throughout an end-to-end experience, as Figure 1 shows, is the product: the product is being offered, sold, provisioned, used, billed for, or enquired about at a given touch-point. The lure of a particular product offer is often what attracts a customer to a CSP in the first place. How these products perform in terms of delivering against the customer’s evolving wants, needs or desires contributes substantially to customer satisfaction, retention, lifetime spending and support costs.

Figure 1 The central role of the product in the customer experience central_role.jpg
Why the product experience needs to be explicitly managed

The central role of product in the customer experience makes it essential that CSPs have explicit control over the entire end-to-end lifecycle of products, as well as having accurate and timely insight into how these are performing operationally, commercially and from the customer’s point-of-view.

However, delivering this level of insight is often far from trivial, since the concept of “product” is fragmented throughout the order-to-install-to-cash-to-care process. Moreover, the proliferation of CSP products, the increasing velocity of product rollout, the speed of change and decreasing product lifespans mean that CSPs need to centrally and explicitly manage products.

It is now broadly recognized that using a common reference of product information throughout the selecting, buying, using, paying and customer care phases holds the key to centralized control and effective management. And with the product portfolio central to running the business itself, the requirements are obvious: a product management strategy that delivers simplification and accuracy; standardization with flexibility; reliability and low cost.

Delivering this type of centralised product management not only optimises the product experience, but also increases operational efficiency in a wide range of processes and supports greater commercial agility.

The benefits of delivering a better product experience

Understanding, and ultimately managing, the key role that the product plays in the customer experience delivers a wide range of commercial, operational and customer benefits, as shown in Figure 2.

Making the case for such an approach can be challenging, however, if trying to quantify the total losses as a result of a sub-optimal product experience: direct losses (such as higher operational costs and billing errors) are spread over a number of operational areas, while indirect costs (such as opportunity costs or sub-optimal competitive positioning) are notoriously difficult to quantify.

Alternatively, the upside of such an approach can be more easily quantified and even proven.

Figure 2 Benefits derived from better product experience management


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Telco 2.0 CEO at ITU World speaking on ‘Personal Data’ on Futurists Panel

As a warm up to our EMEA Brainstorm in London next week here’s a link to a video of Telco 2.0’s CEO, Simon Torrance presenting at the ITU World event in Geneva last week on ‘Personal Data as a new class of Social and Economic Asset’ on a panel of ‘futurists’ looking at the Future of the Networked Society. Simon’s presentation is about 11 minutes into the session and there are charts accompanying the video.

simon at ITU video screenshot.png

The graphic below was created by artists at the show, trying to summarise the key themes.

Visions networked graphic sarah clark oct 2011 ITU.JPG

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

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