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August 31, 2012

New Report - Telco 2.0: Killing Ten Misleading Myths

‘Telco 2.0’ has evolved considerably since we put forward the original concept for telcos’ future success in 2006. We’ve just published a new report on our research portal dispelling ten myths and misunderstandings that have also evolved that can misdirect strategy.

We are also about to publish a new strategy report ‘A Practical Guide to Implementing Telco 2.0’ and will be previewing findings at the invitation only Executive Brainstorms in Dubai (November 5-7, 2012), Singapore (3-5 December, 2012), Silicon Valley (19-20 March 2013), and London (23-24 April, 2013). Email contact@stlpartners.com or call +44 (0) 207 243 5003 to find out more.

The Ten Myths

As an organisation devoted to driving innovation, Telco 2.0’s thinking has continually evolved. Today, most of our work is focused on how to implement new business models, and helping industry players develop strategies and activities to address new threats and opportunities presented by adjacent players.

We have also learned that as the thinking has evolved it has spawned some myths and misconceptions. (NB. This is not an attempt to stifle insightful criticism or debate, as intelligent challenges and critiques are essential to the development of sound strategy and well informed decision making, and we welcome such challenges.)

What matters about these myths is that they can inject a misleading or distracting idea capable of derailing balanced strategic consideration. The propagandists’ favourite weapons of ‘fear, uncertainty and doubt’ can easily and accidentally be triggered in this way. To counter this, here in summary are our ‘Telco 2.0 realities’ to what we’ve found to be the most prevalent and injurious misconceptions of Telco 2.0 (further details here).

Telco 2.0: Misleading Myths Vs. Realities misleading myths and reality antidotes Aug 11 2012.png
Source: STL Partners / Telco 2.0
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August 28, 2012

Apple / Samsung; UK 4G; Cisco, VMWare and others in the Cloud - Telco 2.0 News Review

(Ed. Join us next at Digital Arabia in Dubai, 6-7 November, and Digital Asia in Singapore, 3-5 December. The agendas cover the Digital Economy, Digital Commerce and Digital Entertainment in each region.)

It’s finally here: OFCOM has made its decision and given EverythingEverywhere the go-ahead to launch LTE in its surplus 1800MHz spectrum. Apparently, they already have test networks in place, so the first UK 4G service could be on line very soon. Until the lawsuits hit, of course, as this doesn’t resolve the whole spectrum mess, and is only likely to provoke Vodafone and O2. EE’s owners, of course, contend that the “original two” operators already have an unfair advantage because they might get to refarm their 900MHz GSM holdings.

Meanwhile, there was a brief suggestion that two 4G networks were coming, which then vanished. A condition imposed on their merger by the European Union requires EE’s owners to dispose of a substantial chunk of the 1800s, and this week they sold 2 15MHz channels to 3UK. There’s a detail, though - EE doesn’t have to move out until late 2013 for the first 2x10MHz and 2015 for the rest, so 3UK won’t be at the LTE start line. However, the proposed rules for the 4G auction are set up to ensure 3UK gets a serve. If they have a chunk of 1800MHz spectrum already, to go with their 2100s, they may well decide to go for the 800MHz digital dividend block, which leaves the Original 2 with the 2600s.

Huawei engineers have been out installing the LTE radios and pulling more fibre to the EE GSM1800 sites, so there’s a good chance that some form of service will be available on the 11th of September when the regulatory clearance kicks in. Unless the courts intervene. For its part, 3UK has contracted Samsung for its LTE RAN, which means that it’s reducing its commitment to the MBNL network share with (half of) EE.

Meanwhile, the cost of laying backhaul fibre into the countryside may come down.

Telstra gives some details of the next wave of 4G deployments in Australia. A call on the Aussie opposition not to wreck the NBN after more people than expected signed up for 100Mbps service.

At the device end of the tube, Apple won its case against Samsung, successfully defending its patent monopoly on bevelled corners…well, there is some more serious stuff in there, mostly regarding UX interactions, but still, bevelled corners. Samsung gets to pay $1.05bn in damages, and Apple is trying to get a number of phones banned (list here).

Interestingly, that doesn’t include the Galaxy S III or the Galaxy Note, which has led some people to question who really won the case. For example, ZDNet argues that a ban on the GS II might lead to more GS III sales, probably nothing but good news. The Monday Note also points out that the hit list covers a small percentage of Samsung’s volume and revenue, while GigaOM notes that the fine amounts to two days’ revenue and suggests that being publicly outed as producing something very like an iPhone might not be such a bad thing.

In other Android litigation, Google denies it paid any bloggers to take its side, but does release a list of people who commented on the case and had been paid by Google unrelatedly. And Stanford University tries to estimate just how much IPR Intellectual Ventures has bought up.

ZTE hopes to double its sales of smartphones. Nikon launches an Android-based, hybrid smartphone/compact digital camera - it looks remarkably like a Samsung device with a huge lens sticking out of the back we saw back in 2006.

Apple names the new heads of software and hardware engineering. RIM changes personnel in Europe.

A chewy announcement from Cisco - they are making a significant move into software-defined networking and the cloud. In practice, this means that there is now a unified API for programmers working with the whole line of routers, across all three Cisco operating systems, a new virtualised switch product which implements OpenStack standards, and implementations of OpenFlow controllers and agents. The OpenFlow software is only a proof-of-concept, but it’s a major milestone that the technology is being taken seriously by the company that makes 80% of the world’s routers.

VMWare was having its annual shindig this week and took the opportunity to change a pricing plan which, rather perversely, charged customers more if they managed to run more virtual machines on the same hardware. So, the better use you made of the technology, the more it cost.

The reason for the change, as Ars Technica points out, is that Microsoft’s Hyper-V, plus the availability of a free solution in OpenStack, is putting them under price pressure.

VMWare, as a result, is talking up its features and specifically those of its vCloud Director management solution - this High Scalability post argues that cloud deployment is all about automation, which implies they have a point. Product details are here.

In other product news, IBM has announced its new line of mainframes. As the NYT points out, it’s a surprisingly big business and one that has a lot in common with the cloud.

Here’s some detail about a major Facebook internal project, Prism, which provides a global job routing and balancing service for their Hadoop clusters. Like Hadoop itself (and a lot of Facebook infrastructure), it’s an effort to replicate a proprietary Google system. Like Hadoop, Facebook plans to release the code as open-source software. Meanwhile, Google itself has yet another new cloud data-mining innovation, this time a distributed column store (like a key-value store, but the key matches a stream of values not a single value).

Rather than a Chart of the Week, meanwhile, here’s a Talk of the Week, from Google’s infrastructure king Urs Hoelzle. He says GMail costs less to run than self-hosted e-mail by a factor of 100.

Here’s an Amazon Web Services blog post on their high performance computing features in EC2. The post includes a link to launch an EC2 HPC cluster instantly. There’s also a HOWTO on running the ArcGIS geoserver in their cloud.

The cloud isn’t magic, though: Salesforce’s Q2s are pretty dreadful.

China Mobile will store 16GB of your stuff in their cloud.

Facebook’s new app for iOS relies for its instant messaging and status updates on a new network protocol invented by IBM Research for M2M applications, interestingly enough. MQTT (Message Queueing Telemetry Transport) is designed to serve devices with minimal power budgets, like M2M sensors, but provide real-time push delivery - a combination which is always challenging for mobile devices.

The Facebook Engineering blog has a detailed technical discussion here.

Elsewhere, dating network Zoosk’s CTO tells High Scalability about the realities of delivering instant messaging at scale using XMPP.

Skype has introduced a new photo-sharing feature.

Salesforce’s developer blog has an interesting post about using the Tropo API to take calls and transcribe voicemail, then push their content into the Salesforce task queue.

Forcing customers to the Web site doesn’t necessarily save on call centre costs, Telstra may have found out.

Virgin Media updates its CPE firmware and breaks the SIP application-layer gateway. Businessweek interviews Viber about their Belarussian developer farm.

Dan Rayburn reports that Akamai has guaranteed AT&T at least $100 million in revenues from their CDN reseller deal.

Juniper Networks, meanwhile, has opted not to build a full CDN solution.

What exactly are value-added services in a CDN?

The BBC pushes a new version of iPlayer, optimises its websites, and does fundamental research on TV user behaviour.

Is TV ripe for disruption?

Mobile infrastructure as catalyst for community solar power. Syria relies on PCCW for transit. When fancy pricing attacks. And Internet advertising’s uncanny valley.

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August 20, 2012

Gold in the 100Mbps Streaming: Telco 2.0 News Review

Telco 2.0 Top Stories

(Ed. Join us next at Digital Arabia in Dubai, 6-7 November, and Digital Asia in Singapore, 3-5 December. The agendas cover the Digital Economy, Digital Commerce and Digital Entertainment in each region.)

The BBC Internet Blog has a superb series of posts on the challenge of building their Olympic Games web site and delivering the vast volumes of HD streaming video involved to the public. This covers the video-pushing element of the problem - interestingly, the BBC engineers chose to deliver the live feeds exclusively using HTTP streaming with adaptive bitrates, in order to make use of the corporation’s whole web serving and caching capacity, while their Flash streaming infrastructure was used for the on-demand catchup service. The system was first used for last year’s Wimbledon and progressively rolled out to bigger events (such as the football European championships) in order to load-test it. Some more detail is here.

Beyond the video (and of course audio), there was also a massive challenge designing, building, and serving up the Web application, documented here with this week’s undisputed Chart of the Week:


There’s much more here, including the detail that the Beeb’s coders built an application to simulate the entire Olympic Games, just as a test-harness for the web site.

In other TV news, Netflix started its expansion around Europe, turning up service in Norway, Denmark, Sweden, and Finland. Streaming is unlikely to be a problem, but you can expect that the studios will insist on another round of heavy upfront payments.

Meanwhile, AT&T may have decided to give up trying to build its own CDN, and concentrate on reselling either Akamai or Limelight Networks. As part of the deal, AT&T’s digital media group would move to the new partner, but Dan Rayburn thinks the licensed CDN deal with EdgeCast will continue. He also reviews four new smart-TV devices.

Apple may be going to make the new Apple TV, when it lands, more like “the YouView model”. Does that mean late, expensive, and crippled by endless content-provider arguing?

Jason Kilar is leaving Hulu, and the owners are looking at a major strategy change, with the site no longer being the first point of contact for their content. Which does make you wonder what the point of it is…

Finally, the 3G & 4G Wireless Blog reports that Samsung has demonstrated enhanced MBMS (Mobile Broadcast-Multicast Subsystem), but between Zahid, Kym Larsen, and Qualcomm they can’t work out why!

NTT DoCoMo announced this week that it’s reached the mark of 5 million LTE subscribers. Axtel in Mexico upped its FTTH speeds to 150Mbps. Meanwhile, the UK still has neither LTE nor FTTH. Should we start counting the weeks until the LTE mess is sorted out?

Anyway, TalkTalk is an MVNO now.

Australian analysts, who must be truly dedicated, have attempted to estimate how much it costs to maintain the copper infrastructure, and they reckon that the deployment of the NBN’s fibre will save about A$600 million a year.

T-Mobile has a think about LTE quality of service and goes with Diffserv.

The smart meters that ate Philadelphia - or rather, they set it on fire.

Ubiquisys closes another $19m of venture capital.

HP has spun-off the WebOS team into a quasi-startup, Gram…and then they created a new Mobility unit, led by the former head of MeeGo at Nokia, to have another crack at tablets and possibly phones! On the other hand, another tablet project is staying in the PC group. Those wild and crazy guys!

Elsewhere, another of those web-serving to market share exercises reckons things are dire at RIM. However, here comes the shiny: CEO Thorsten Heins is doing a roadshow of major carriers, demonstrating two new phones with the beta of BlackBerry OS 10.

Should they license the OS?

A Finn succeeded in throwing an Olympic javelin distance with an old Nokia phone this week. Ere Karjalainen said he prepared “mostly by drinking”. Well, perhaps he should have waited for the 5th of September, when some sort of joint Nokia/Microsoft announcement is planned, probably the new line of Windows Phones.

Has Microsoft discovered the joys of the subsidised hardware plus bundled services business model? Surface tablets might be surprisingly cheap because MS makes its money on an Office 365 subscription.

iOS hacker demonstrates a massive SMS security hole. The latest Apple vs Samsung action. And HTC Q2 sales are down 24%.

In the cloud this week, we now know what’s up with the new Facebook data centre. Project Sub-Zero, which is rising next to the main data centre, seems to be a massive backup farm. The aim is to radically reduce power consumption without needing to store data on tape.

Just down the road in Prineville, Oregon, Apple is building yet another monster DC, which will take the town over 1 million square feet of datacentre space.

Meanwhile, James Hamilton has a must-read post on Facebook and energy efficiency. Interestingly, Google’s implied server count has stopped growing, implying that their virtualisation, load balancing, and job routing technology - the heart of the cloud - has progressed fast.

After all, they’re the only company that buys its parts direct from Intel’s cloud division. Although the fact that Google builds all its own servers was fairly well known, this is actually the first time either party has put it on record.

And this is interesting. “Dremel” is an internal cloud service at Google that lets you do SQL queries over huge data sets, instantly. While everyone else was still ooh-ing over NoSQL, it’s interesting that both Google and Akamai found it necessary to re-implement the relational query language over their NoSQL data stores.

We blogged about AOL’s micro-data centre, a sealed, lights-out pod designed to be distributed closer to users, a while ago. Now there’s an indoor version with wheels.

Amazon Web Services is working on its channels and customer support. Specifically, having just launched their Amazon Partner Network, they’re starting a “Premier Consulting” tier to reward the most successful partners.

They’ve also added support for Python applications in Elastic Beanstalk and integrated it with their Relational Database Service. This basically makes the EC2 cloud into a giant factory for websites using the popular Django web framework. A detailed how-to is here.

Somebody asked High Scalability for advice, and the comments thread gave it.

And the OpenStack community has named the new members of the board. Note the lack of anyone from the telecoms industry.

China Mobile announced its numbers for H1, with $9.7bn profits on $41bn in revenues. The big news, though, is that even they are feeling the pinch from price wars and OTT competitors in particular.

Just who are those competitors? Essentially, a world of Android apps. This post on the Guardian Apps Blog is focused on fighting the Apple vs Google share wars, but it does make clear that Android is exploding in China.

China Mobile, for its part, is buying into a local startup that’s developing a Siri-like voice assistant. That must be quite a challenge in a language with syntactically-different tones. This comes after Apple fell out with the carrier over licensing Siri.

On the other hand, a wave of bankruptcies has torn through part of the Chinese Web - more than 3,000 Groupon clones have failed this year.

Elsewhere, the judge in Oracle vs. Google’s demand that both parties name the bloggers, journalists, and other opinionators they’re paying has caused a huffy. Both parties deny doing so and accuse the other. Bang their silly heads together, Your Honour.

Facebook, Groupon, and Zynga shares tank as the lockups begin to expire. OnLive is on the edge. Cloudsters Joyent try to back out of their “Lifetime” hosting product.

A crack at estimating OTT revenues. Pirates attempt to stop compulsory phone registration. Orange Jordan down. Adventures with BT support.

20 years of ThinkPads.

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August 13, 2012

‘Free’ Google Fibre; AT&T apes Apple and Amazon; RoboFacebook - Telco 2.0 News Review

(Ed. Join us next at Digital Arabia in Dubai, 6-7 November, and Digital Asia in Singapore, 3-5 December. The agendas cover the Digital Economy, Digital Commerce and Digital Entertainment in each region.)

The UK admits that its target for high speed broadband has been missed and it’s not even 2015 yet. In better news, 2 million lines now get speeds over 25Mbps, 10% of the total. Cable operator Virgin Media is responsible for most of the growth.

The House of Lords communications committee has published an alternative plan, which Analysys Mason has tried to cost out. It is reminiscent of both the US National Broadband Plan and also the French open-access middle mile projects. The bad news is that it would cost more - the good news is that there is some wriggle-room in the existing budget.

On the other hand, the infrastructure stood up to the Olympic Games streaming blitz, as RevK points out (even if the BBC did break out the old test cards at one point).

Meanwhile, Google Fibre is go for launch in Kansas City. There’s a basic free service, and then tiered plans up to 1Gbps symmetric with an extensive line of TV channels (but not ESPN). There’s also some interesting hardware, including a powerful home router and a separate “storage box” - or to put it another way, a Free.fr Revolution setup, not that Google would admit it.

The parallels are even stronger when you look at this GigaOm post, which does notice the similarities, but not all of them.

Elsewhere, it gets ever more obvious that Verizon is getting rid of the copper network, even if it’s going slow on rolling out FiOS further into the woods.

US pay-TV operators had a difficult month, with the cablecos suffering the most. VZ attributes its own subscriber losses to putting up its prices.

EverythingEverywhere saw a bigger loss this quarter, largely due to spending on the network in preparation for their 4G go-it-alone. T-Mobile USA had a bad quarter, blamed on its MVNO and M2M operations not bringing in customers as well as expected. EE just signed up Atmovia, a portal which lets you start an MVNO in 10 minutes (they say).

Hutchison 3 in Austria has given away 20MB of data/day with free SIM cards, in what sounds like either suicide or a desperate bid to persuade the regulator to let them buy Orange Austria. If they get the green light, Tele2 may re-enter with an MVNO.

Meanwhile, both France Telecom and Telefonica reported rather poor Q2 results. And having killed their handset subsidies, Vodafone Spain brought them back.

Telenor wants to auction its stake in Indian operator Uninor as part of the fallout over Indian GSM licences, but the move has been held up in the courts.

Surrounded by all these problems, operators turn to the magic of small cells. A survey for Amdocs suggests that 59% of operators are planning to increase their small cell deployments tenfold. But as this interview points out, the radio planning challenges are serious.

Sprint Nextel, nevertheless, has signed up both Samsung and Alcatel-Lucent for a major small cell deployment, including ALU’s LightRadio technology. Ben Verwaayen, meanwhile, confesses that ALU was too optimistic this year.

Finally, here’s a parliamentary debate from 1895 about a national telecoms policy. Should city councils get licences, should there be a licence for a national private operator, or should the government do it? Should there be a universal service obligation? Even if Sir Arnold Morley thought that “it was no use trying to persuade themselves that the use of telephones could be enjoyed by the large masses of the people in their daily life”, the debate still foresaw everything we argue about to this day.

Glenn Lurie of AT&T is interviewed by Wired about how the operator has learned from Apple and Amazon. Design, simplicity, and quick activation are the major take-home messages, and it’s also interesting that hiding the presence of a telco in the value chain (as with Whispernet) can be surprisingly profitable.

SKT and MetroPCS were the first to cross the start-line for VoLTE this week. MetroPCS, so far, only provides the service to one phone and one market (Dallas), while the SKT deployment is rather more thoroughgoing. Interestingly, a major motivation for MetroPCS is to shift their voice traffic off CDMA circuits and therefore make it possible to refarm the CDMA spectrum for LTE data use.

In other Telco 2.0 themes, here’s a bit of information about the developer features in Deutsche Telekom’s M2M portal. Vodafone is opening a developer centre and it’s inevitably in Shoreditch.

Is there $30bn to fight over in OTT profits?

Telefonica has formed a partnership with Samsung to provide major enterprises with end-to-end mobile solutions. Here’s a group of British M2M companies. And MVNOs have 35.9% of the Dutch market.

Telenor Broadcast has added many more features to their satellite TV distribution platform.

All four US national carriers have joined a committee with Google, ISIS, and Verifone to work on mobile payments. Google Wallet, meanwhile, has become cloudier and added more credit card support, plus the ability to remote-wipe a wallet.

Up in the cloud, meanwhile, NASA’s Mars Science Laboratory successfully landed on Mars, and the live stream was served up out of Amazon EC2. AWS has a case study here including the following Chart of the Week.


We think it’s just missing a red dot and the word “Mars” at the other end of the satellite feed.

Meanwhile, Dan Rayburn takes a look at the latest Cisco VNI report and notes that the share of traffic accounted for by video is actually going back a bit, possibly because P2P is making a comeback.

Video can be produced in the cloud as well as delivered from it. Dreamworks is one of the launch customers for HP’s cloud services, using both their private and public cloud as part of a hybrid deployment. Another big boost for OpenStack this week was the launch of the China Open Source Cloud League, which includes huge web portal Sina.com, China’s biggest Linux house, Intel Research, and Jiaotong University.

Joyent, a mobile-centric cloud based on Node.js.

And Microsoft has issued a list of the top 10 best practices on sustainability. The key point, an important one in the whole cloud computing concept, is to be ruthless about utilising capacity fully. This chart, the real Chart of the Week, makes the point.


Dan Rayburn goes after Apple TV hype and fuzzy maths. Popcorn recommended.

Perhaps some people think being able to remote-wipe a wallet is a feature. Read this, and you might not - Wired reporter Mat Honan recounts the experience of hackers social-engineering his Apple ID, getting into all his accounts, and doing a remote-wipe of his laptop to cover their tracks. The exploit started because they found a way of getting Amazon to reveal the last four digits of a credit card number. That let them force a reset of the Apple ID, which permitted them access to his backups and hence to his e-mail, Google, and Twitter accounts (which was what they were after all along)…and also to initiate a remote wipe of his MacBook.

Both Apple and Amazon have taken steps to seal the breach, but it does tend to point-up the nastier possibilities of integrating the cloud into the OS.

Horace has a crack at forecasting iPhone 5 volumes and notes that Apple Store staff aren’t on commission, while somebody in Japan has tried to make one from grey market components.

Samsung, meanwhile, is sticking to low prices as a strategy - but that didn’t work for HTC, whose profits warning shocked the market and started people talking about their new phone lineup as a flop. On the other hand, Samsung is now at 45% of European smartphones.

Google documents released during the Authors’ Guild lawsuit say that they started scanning books explicitly in order to attack Amazon.

In what may be a truly fascinating consequence of the Google/Oracle lawsuit, the judge has ordered all parties to the case to name anyone they’ve paid for favourable comment.

The YouTube app will no longer ship with iPhones. A new Google product: Google Fired. 5,000 jobs go at Motorola Mobility.

Nokia has sold the Qt cross-platform UI framework. They’ve also just alienated a group of key Symbian developers. Here’s a review of Google Now.

80% of one start-up’s clicks on Facebook ads are coming from Internet wildlife, whether by accident or design. They’ve pulled all their advertising from Facebook now, unsurprisingly as they had to pay for all the noise under the cost-per-click model. An interesting Hacker News thread discusses it.

Elsewhere, why isn’t Gordon getting any Facebook ads? Informa’s Telecoms.com points out that Google and Apple have also struggled to derive revenue from mobile ads.

Facebook is now looking at advertising apps in the mobile app’s news feed, based on the apps that are already installed. But do app developers really have a substantial marketing budget? And why would I want apps that are similar to the ones I’ve already installed?

ZDNet has a bit of detail about their data-crunching efforts, but still doesn’t know who’s meant to pay.

In other news: Microsoft has a row with itself about whether to call its new UI “Metro” or just “Windows 8” or something else. They also announced Outlook.com, the successor to Hotmail, and its Metro/Modern/Win8/whatever-based look and feel. HADOPI’s budget has gone. A difficult day at MTN Liberia: accused of being arm-chopping tyrant Charles Taylor’s business. OAuth 2.0 - vampire or zombie? Why Apple laptops feel weird when the power adaptor is connected.

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