Facebook IPO round-up, Telenor’s Indian nightmare, and BT & HTC suffer - Telco 2.0 News Review
- Facebook: Facebook IPO roundup
- India: Telenor’s entire Indian spectrum holding disappears!
- Voice 2.0: BT Retail call volumes down 1.5bn minutes
- Technology Disruptions: HTC Q1 shocker, wave of cheap ‘droids
- Google: FRAND? That’ll be 2.25% of iPhone sales thanks
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Facebook Facebook Facebook Facebook. It’s here - they filed the S-1 this week. It turns out that their revenues were $3.1bn last year with profits of $1bn, rather less than expected in terms of revenue and a little better in terms of margin. 12% of the company’s revenue (and 40% of its profit) comes from one advertising deal, the one with Farmville games developer Zynga. Essentially all the revenue is ads, but then that didn’t stop Google, did it?
On the other hand, revenues are far more concentrated on a few big deals than Google’s, and Facebook doesn’t yet make anything from mobile although mobile devices drive a lot of traffic (and hence cost) through the web site. Also, 5% of Facebook’s mobile traffic is accounted for by client apps that randomly start up whether you want them or not (or even whether you use Facebook or not), like the one on my Android that’s irremovable without root privileges.
Unsurprisingly, Mark Zuckerberg and a small cadre of directors and top engineers stand to practically drown in stock. The point is made that there are precisely no women on the board of directors.
Advertising, especially the big-account display kind that characterises Facebook as opposed to the search-driven, highly automated, long-tail kind pioneered by Google, is a relationships business. Reuters profiles Caroline Evertsen, former chief of ad-buying for Microsoft and a top advertising exec at Viacom and Disney, who has the job of making sure the 85% of Facebook’s revenue that comes from ads keeps coming. She joined 12 months ago, since when Facebook’s revenues have grown almost $2bn, so she’s probably doing something right. Feminists would like to know why the board features neither her nor COO Sheryl Sandberg.
Peter Kafka at AllThingsD notes that we know very little about Facebook advertising except that there is a substantial traditional media-sales operation as well as an automated system.
And Ars Technica notes that deleted Facebook photos still won’t go away.
Like everyone in the world except Google, Facebook would love to get into the Chinese market, if they could get a satisfactory deal with the government and make headway against the locals. In many ways, the great firewall serves as protectionism for Chinese web companies as well as a means of censorship.
“If we could get a deal with the government”…well. Last week saw an unexpected turn in the scandal over Indian GSM licences when the courts struck down the original auction and demanded the return of 122 GSM licences out of 281 in total. The “shorter” is that because the 3G licences went for so much more, it was widely assumed that the 2G licences had been sold for a song thanks to corruption - although many people think the 3G licence fees were driven up to silly levels by a bidding war. The then minister decided to issue them on the basis of first come, first served rather than an auction, which was certainly unusual, and this is why he might end up in jail. A compendious Wikipedia article is here.
The result is to throw all the plates in Indian mobile into the air. Especially hit is Telenor, whose entire holding of 22 licences has been revoked. Telenor has written off $722 million of assets as a result, although they aren’t giving up - they intend to appeal to the Indian Supreme Court, and may bid for the spectrum when it is re-auctioned, and they also don’t intend to stop rolling out the network and creating facts on the ground. Those of us who remember the various disputes between Telenor and its Russian and Turkish joint venture partners will note that they were astonishingly stubborn back then and eventually came out of it rather well, so expect a long one.
Meanwhile, an Indian court demanded that Google, Facebook, and Twitter remove content considered to be religiously offensive (often a matter of life and death in India) or face “a crackdown like that in China”.
BT’s Q3 results were out this week, and execs were keen to emphasise sales of BT Vision IPTV although much less keen to talk about revenues from it. Overall, it was a poor quarter, with a startling decline in voice calls at BT Retail (almost 1.5bn minutes down year-on-year) which management blamed on the weather. Meanwhile, the fibre deployment targets were quietly scaled back on the somewhat odd grounds that interest rates are low (BT’s pension bill expands when rates fall). And nobody wanted to talk about the SMB line of business…
As a result, expect trouble between BT and OFCOM, as BT will be looking to raise prices where it can in order to help its margins. Right on cue, OFCOM suggested it would rather like to lower the prices BT Openreach charges other ISPs, while Computing reviews progress or rather the lack of it on the BDUK program and suggests that BT might come under pressure to widen the scope of its layer-zero access product.
BT was the launch customer for Microsoft’s Mediaroom IPTV platform, but it’s now quitting in favour of something Linux-based, although it’s not actually the YouView platform, quite.
Vodafone, meanwhile, abandoned its acquisition of Wind Hellas in the face of opposition from the European Commission. It seems that three is the minimum number of operators considered tolerably competitive, which raises the question of what happens if one goes bust.
In Austria, traditionally one of Europe’s most competitive markets (at one time there were six operators), Hutchison buys out Orange. More trouble at LightSquared, after a senator claims they offered him a call centre in exchange for support. AT&T states its conditions to the FCC - they want the same coverage requirement for DISH as for LightSquared.
HTC’s Q1s are out, and they’re poor, with revenue being revised down drastically. The company blames preparation for a “product transition”, but it’s just as likely that the commoditiser has been commoditised, struggling in a sea of cheap Androids. Last week, we reported that HTC is planning to prune its range and concentrate on a couple of hero phones.
Forbes, meanwhile, points to the emergence of ZTE and Huawei as vendors of ultra-cheap, operator branded Androids as the reason why Sony Ericsson, LG, and now HTC are getting a beating.
Apple, meanwhile, is first in profitability and in revenues among mobile vendors, and third in volume. Interestingly, RIM is still up there with Apple and Samsung for profitability, pulling past Nokia and HTC, as the Chart of the Week shows.
Meanwhile, developer relations veep Alec Saunders distributes free PlayBooks to developers.
You’re not a top smartphone vendor until you’re involved in a vicious lawsuit with regulators. Samsung crowned its recent success by falling out with the European Commission trustbusters. It’s about those key patents in the UMTS standard that Samsung has been using to put pressure on Apple, Google, etc - back when the standard was created, ETSI tried to make the vendors pool the patents to prevent anyone monopolising the technology, as it had done with GSM. Now the EU is trying to enforce the original agreement.
Motorola Mobility, aka Google Hardware, makes its opening offer - 2.25% of Apple iThing sales in exchange for FRAND licensing of Moto’s 3G patents.
In the cloud, Amazon Web Services S3 is up to 762 billion objects and 500,000 GETs a second. Building the DataScope. And if your requirements aren’t as big as Google’s, why not consider throwing more RAM and Flash drives at your problem?
Red Hat is officially a rival to the OpenStack project, but behind the scenes, its engineers are checking in substantial amounts of code. Note the presence of Asterisk identity Russell Bryant. A problem with MongoDB, or with NoSQL generally?
Swisscom is the latest carrier to go with Ericsson’s M2M platform. Embedding electronics into fibre. Alcatel-Lucent lands America Movil LTE contract. More detail on Nicira, the virtualised-network startup. Interestingly, Diane Greene of VMWare and now Google Enterprise is an early stage investor.