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April 29, 2013

Vodarizon, “BT Cellnet 2.0”, WebRTC, Blackberry Q10s - Telco 2.0 News Review

[Ed: the EMEA Telco 2.0 event is coming. Make your plans.]

Upstick unoffer - Vodafone shareholders hold out for more money

Whether you take Vodafone-Verizon rumours seriously or not, a group of investors who speak for 1.3bn Vodafone shares have come out to say that $100bn isn’t enough and any bid would have to offer more, at least $120bn or even as much as $135bn, to compensate for the loss of the Verizon Wireless stake. The point is made that VZW is growing and profitable, which cannot be said for some of Vodafone’s other markets in the battered economies of Europe’s rim. Numbers of this size are approaching the point where Verizon might as well make an offer for the whole of Vodafone ($146bn at today’s prices).

Reuters points out that the feasibility or not of a deal has a lot to do with tax, and specifically whether the transaction could be arranged so that Verizon wouldn’t acquire any assets from Vodafone’s US holding company. The employees of Vodafone’s Oxford Street shop, regularly the target of protestors against tax-evasion, would be well advised to batten down the hatches for a long siege.

What Vodafone would actually do with the money is another question. Pay off debt? Make the shareholders really happy? Buy more assets in bombed-out southern European markets?

Meanwhile, MetroPCS shareholders agreed the merger with T-Mobile, after T-Mobile offered them more money. T-Mobile’s no-contract offer, though, isn’t no-contract enough for its home state of Washington.

Sprint increased its service revenue by 9% year on year in Q1, which enabled them to lose rather less money in the quarter. They’re still struggling with the consequences of the iDEN shutdown, too - although mainline Sprint gained 351k subscribers, Nextel lost 771k iDEN subscribers.

You might think the pain of closing down iDEN would put Sprint off closing any other networks for a long time to come, and you’d be right. They’ve committed to keeping the 2G CDMA net alive after AT&T and VZW shut down, in order to look after M2M customers. AT&T says the 2G will go in 2017 and VZW is looking at 2021, so there’s no hurry in any case. It may be worth noting that the end of iDEN will free up Sprint’s 800MHz spectrum, handy for applications where coverage and building penetration are critical and bandwidth is less so.

The merger activity at Sprint is not getting any less complicated, as an investor in Clearwire sues Clearwire’s directors and Sprint itself over the terms of the buy-out. Perhaps the next stop will be a Clearwire investor suing themselves?

China Unicom has passed a milestone - 52% of its revenue is now from 3G customers, and 35% of its 250 million customers are on 3G. This compares to 11% at China Mobile, probably because Unicom ended up with China Mobile’s UMTS network in the reshuffle of the Chinese industry. But China Telecom beat that by getting 46% of its 168 million subs onto 3G. That said, their fixed-line base is actually shrinking in terms of lines, although the DSL base is growing.

AT&T, for its part, just launched its home security product. It looks like it’s primarily based on their DSL and a “hub” they provide, with cellular as a backup link. It’s their first venture into the Internet of Things, as we discussed at our recent event.

Telenor Q1s were down a touch, with sales down 1.6%. Although getting out of 7 Indian circles dramatically reduced the Indian unit’s losses, the numbers from Denmark were horrible - off 19% on a mixture of regulatory cuts, lower ARPU, worse handset sales, and fewer subscribers.

ZTE’s sales are slow, and they sold their stake in a surveillance company. Alcatel-Lucent is still losing money, but it would be much worse without their lock on the US LTE market. Ericsson says its Brazilian factory is working at full capacity to supply the country’s MNOs as they build 3G and 4G capacity ahead of the footy.

The law of wireless gravity states that a bit, once released on a wireless network, will migrate towards fibre. It’s better than most technology “laws” - backhaul is an inescapable reality for all mobile operators.

BT moves back into mobile, virtual O2-BT integration?

BT is looking back to mobile again. MWL reported that they were looking for an operator partner for 4G services, and quoted an exec saying that they have “excellent 4G spectrum”. That suggests there’s more to it than just an MVNO or reseller deal - BT had one with Vodafone for years, anyway.

It didn’t take them long to decide - they went for their old mobile network, O2 UK. Under a 10-year contract, O2 is going to provide BT with 4G wholesale services, while BT will upgrade O2’s backhaul network. Nobody’s saying it out loud, but it seems quite possible that the block of 2.6GHz spectrum BT obtained will be part of the deal.

This might be the first step on the road to re-integrating BT with O2, especially once there are BT subscribers on BT spectrum and BT backhaul and perhaps a BT MVNO core. Of course, this sort of deal is a lot cheaper and kinder on the regulator than an actual merger.

Meanwhile, Telecom Italia is looking at a deal of some sort with Hutchison, which would involve spinning off the Italian fixed-line infrastructure. Rather than re-integrating the wireless with the fixed network, they’re doing the precise opposite - which is interesting, given Telefonica’s interest in both companies.

Deutsche Telekom has introduced a data cap for its German fixed-line ISP, something which is about as popular as it is anywhere else. DTAG excludes its own IPTV service from the cap, claiming that it’s not the Internet. This has initiated a predictable net neutrality row.

Vermont Telephone is deploying gigabit fibre to the home, for $35 a month, after getting a chunk of broadband stimulus money ($94 million for their 17,500 customer premises) and a kick in the pants from Google Fibre. We may see more of this.

RevK is pleased with Ruckus Wireless hardware.

More questions about the “FTTN option” for the Aussie NBN - so what is going to happen to voice?

Neelie Kroes on messaging, and will WebRTC mostly serve vertical apps?

Neelie Kroes observes that instant messaging is overtaking SMS in terms of volume and says telcos should “smell the data coffee”, whatever that may mean.

Is Verizon Wireless close to launching VoLTE? Chris Kranky argues that it is, and the launch will be a major step forward for…WebRTC, as it will be a major signal of confidence in the ability of IP networks to deliver quality voice. Also, tablets will encroach on the role of the phone and the PC at once. He also argues that WebRTC is primarily about vertical apps…even if telcos get to do the dirty work of deploying VoLTE.

A calm-down view is here, arguing that nothing much will happen in the next 12 months. On the other hand, here’s WebRTC.io, a JavaScript library that aims to provide all the bits you need for WebRTC as a drop-in component.

This Google presentation is informative about WebRTC generally, and especially about precisely which codecs Google wants you to use.

Screenshot from 2013-04-29 14:06:03.png

Sprint, meanwhile, pushed back the launch of HD voice and warned that interoperability is still a bit “almost”.

Cisco blogs about its new SIP phone for meetings in hi-fi audio. Interesting, but the form factor seems grey and enterprisey - won’t people just bring iPads?

Microsoft is hiring engineers to work on its “Viewport” 3D-video technology, announced by Microsoft Research last summer. Interestingly, the job posting suggests that the project is in the Skype division. Mind you, it’s been a while since they began staffing up “Skype for Browsers”, and nothing much has happened. And the idea of a 3D environment that feels like the inside of Skype is worrying.

Everyone’s favourite Northern Irish Asterisk specialists, Integrics, have launched version 11 of their VoIP service provider solution. And telco API specialists and Telco 2.0 allies Aepona have been acquired by Intel for $120m.

It’s too easy to hack Skype accounts.

World shipments go majority-smartphone, Q10s sell out at Selfridges

IDC estimates that Q1 saw more smartphones shipped than featurephones, for the first time ever.

BlackBerry launched the Q10, the first of the new BlackBerrys to have a keyboard, this week. AllThingsD reviews the gadget, and seems pleased. An interesting feature is that it has a pseudo-command line/natural language interface so you can type things like “SMS Bob”.

Seeking Alpha’s Michael Collins went to see the first units go on sale at the Selfridges’ branch of Carphone Warehouse, and reports that the place was packed with unofficial exporters filling suitcases wth the gadgets until they ran out.

Samsung, not surprisingly, had more than decent Q1 figures, although one wonders if they will ever break out smartphones from the division that also makes laptops.

Robert Scoble really likes his Google Glasses. We mean, really likes them. Possibly too much.

I have barely taken it off since getting it other than to sleep…I will never live a day of my life from now on without it (or a competitor). It’s that significant….I’m now extremely addicted to Google services.

Elsewhere, Ars Technica reviews Dell’s developer-focused Linux ultrabook and clicks “like”. Or they would do if people who buy specialised Linux hardware used Facebook.

A nice review of classic early pocket computers.

Private cloud trigger point = $10,000/month spending

Up in the cloud, Rackspace customers reckon that public cloud makes sense up to $10-12k monthly spending, and then it’s time to move to private cloud or self-hosting.

Heroku lands in Europe.

The Open Data Center Alliance has been testing virtual-machine interoperability between major hypervisors, and the report is here (pdf).

A talk with Facebook about high scalability, from High Scalability.

Why developers use the Amazon app store

Why would you use the Amazon app store? Well, there seems to be more money in it. OK, but why? Here’s an effort to find out. Developers who use it appreciate the fact there are fewer apps and less junk content, and therefore it’s more likely to surface your project. Also, porting is easy because it’s still Android. On the other hand, price points are usually lower.

Ever wanted to hand over your decisions to the faceless, howling Internet mob? There’s an app for that, and it is Seesaw, which lets you ask its users to vote on which option you should pursue. Wait until that gets into your Google Glasses.

An interesting point: many business apps have a life of a month or so.

And Facebook distributes the wrong kind of app - banking trojans.

Security expert Ross Anderson blogs from a meeting on privacy standards with the “world’s default regulator”, aka the European Union. Meanwhile, the British government quietly voids your copyright in every photo that doesn’t have your name on it.

Is the British government trying to mandate IPv6 transition, trying to ban the IPv6 privacy extensions, or just confused?

Silly ad-injection business models again.

Perhaps the best geek giveaway yet: a trip to the Large Hadron Collider.

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April 26, 2013

Digital Entertainment: What Gets Measured Gets Money

For mobile entertainment services to generate revenues commensurate to the attention they receive, the industry needs to improve ‘discovery’ tools, create more effective creative inventory, and deliver proof of its effectiveness. Our summary of the Digital Entertainment 2.0 session at the Silicon Valley brainstorm ‘Digital Entertainment: What Gets Measured Gets Money’ is now on our research portal.

Practical steps to deliver better consumer experiences in digital services (including service ‘discovery’), the Digital Economy overall, Digital Commerce and the Internet of Things will also be explored in depth at the EMEA Executive Brainstorm in London, 5-6 June, 2013. Please email contact@telco2.net or call +44 207 247 5003 to find out more.

Silicon Valley 2013 Digital Entertainment Vote.png

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The Internet of Things (IoT): What’s Hot, and How?

‘The Internet of Things’ (IoT) is one of the big ideas of the moment. But what are the areas in which value is being created now, and what is still technological hype? Our summary of the findings of the Digital Things session at the Silicon Valley Brainstorm ‘The Internet of Things (IoT): What’s Hot, and How’ is now on our research portal.

Practical steps to develop and execute strategies in the Internet of Things will also be explored further at the EMEA Executive Brainstorm in London, 5-6 June, 2013, and we also run dedicated IoT Strategy Workshops.

Silicon Valley 2013 Digital Things Vote.png

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April 23, 2013

EE: Running To Stand Still

Everything Everywhere, the joint venture between Orange and T-Mobile in the UK, recently announced its Q1 results that give a little further insight into the industry’s journey into the ‘digital hunger gap’. (Ed. We’ll be exploring this and what can be done about it at the EMEA Brainstorm, 5-6th June in London).

EE is very proud of adding 166k postpaid subscribers, for a total of 348k since the launch of their LTE network, but the two underlying operators also shed 571k prepaid customers, while the “steady service revenue performance” is steady in the sense of “steadily falling”, down -0.4%, or -5.4% counting the effects of changes to the termination regime.

Importantly, EE is now a majority-data carrier, with 51% of its revenue being non-voice, and 82% of its postpaid subscriber base on smartphones. The problem is illustrated by the following chart:


Although data revenues are going up, voice and messaging are eroding fast, and the chief answer seems to be migrating more customers onto the LTE network. The problem here is that migrating them over usually implies supplying a top-of-the-range phone, and therefore a slug of handset subsidy, and also that whatever uplift in data revenue is achieved must both compensate the loss of voice and messaging revenues and also pay for CAPEX as the new network rolls out.

(This said, it’s worth pointing out that there EE decommissioned 548 cell sites in Q1. So there may be savings from LTE deployment, providing that the decommissioning is not instead a result of post-merger network rationalisation.)

The change in user behaviour is well illustrated by the infographic EE included with the results presentation.


It wouldn’t be quite right to say that the voice and messaging that accounts for 49% of their revenues is hidden in the 8.2% of traffic marked “video calling and other” - having opted to provide 4G voice via circuit-switched fallback, this traffic would be carried on either Orange or T-Mobile’s 3G or 2G networks. But it is certainly illuminating just how dominant general Internet activity, web-based video, and web-based music are.

We’re also a little amused by the fact 0.77% of total 4G traffic is accounted for by Speedtest.net, the 10th biggest single attraction - that’s got to be worth something in terms of publicity.

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April 22, 2013

DISH-Sprint, China Mobile Q1, Apple “shock” or Apple “queues”, Facecloud, Indian M-PESA: Telco 2.0 News Review

[Ed: The Telco 2.0 EMEA Executive Brainstorm is coming, on the 5th and 6th of June in London.]

So, that DISH-Sprint deal. ZDnet has a presentation from the DISH CEO laying out their strategy, which seems to be about broadcast-Internet integration, with the Internet element coming from Sprint wireless broadband and the broadcast from DISH’s satellite. Obviously, a huge question here is whether wireless broadband will ever quite cut it. DISH will be hoping that the enormous Clearwire spectrum holdings answer that question, and also that they get to refarm their own 45MHz of spectrum for wireless broadband rather than satellite use. They would be far from the first company to try to move US satellite spectrum into cellular, though. Another problem will be getting permission to build enough cell sites to cover DISH’s rural-heavy customer base.

Also, if they get away with it, Softbank will have paid Sprint to buy out Clearwire and to pick up a block of 1900MHz from MetroPCS, and then hand it to DISH.

The Financial Times highlights a different side of the deal, noting that DISH CEO Charlie Ergen is also talking about selling advertising on mobile/fixed-wireless/satellite. He’s also talking up Aereo’s pick-up-the-telly-and-put-it-on-the-net model as a scare factor.

Wired is predictably all excited.

China Mobile reported flat profits in Q1, with monthly ARPU of RMB63, down from 71. Typical features of high penetration markets are beginning to make themselves felt, such as increasing numbers of multi-SIM users.

Mexico’s senate has passed the telecoms bill that for the first time creates a real regulator for the country’s telecoms market. The measure goes back to the lower house for the final approval, but America Movil and Televisa shares are already off sharply in anticipation of disruption.

Telstra is planning a T-Mobile or Free-style SIM-only, no-lock-in tariff.

T-Mobile UK has been told off by OFCOM for blocking P2P traffic while calling its tariff “unlimited”.

The US’s four national carriers are being sued by the American Civil Liberties Union for not rolling out Android updates in a timely manner.

The French regulators dump data on network roll-outs.

Vodafone UK can’t restore service on a BTS in Southampton until the peregrine falcon chicks have left the nest, expected in June.

Australia’s politicians continue their effort to avoid the long national nightmare of open-access fibre to the home. Malcolm Turnbull devoted most of a question session with the NBN Co CEO and CTO to quizzing them about how much money they might save by using VDSL rather than fibre to serve blocks of flats. Only about 4% of Aussie households are in blocks of flats, land being rather available in Australia, so why he’s so obsessed is a mystery.

The whole point is that Turnbull forecasts that the job will cost A$90bn, not A$37bn as NBN Co projects. As it turns out, the company hasn’t gone over the budget yet. That link also provides a bit of interesting data in that 31% of early subscribers have gone for the 100Mbps full monty option. The sample is small (11k), but then again, a national opinion poll in a country the size of Britain is usually a tenth that size.

Meanwhile, Geoff Huston of APNIC remarks on “a rich history of making very poor technology choices” in the telecom industry and argues that we’re doing it again by trying to make carrier-grade NAT work rather than just deploying IPv6.

Unless you’re Verizon Wireless. According to the Internet Society, 26.25% of their network traffic is now IPv6, which is by far and away the record for a customer ISP, even beating pioneer IPv6 specialist hosting and transit provider Hurricane Electric. There’s a good APNIC presentation on how they did it here.

The 3G & 4G Wireless Blog notes that LTE Broadcast, aka eMBMS, deployments are beginning to happen, although oddly VZW’s isn’t mentioned.

And Google Fiber has kicked off another round of “whoo! free WiFi!”, with next to no discussion of its all-critical enabler, publicly-owned post and duct infrastructure. Further, Google has taken over a municipal fibre network for $1 including its outstanding debts.

Speaking of Google, a major issue these days is whether Google has any real control of Android. Obviously, nothing stops Chinese vendors (or Amazon) from forking the OS, or Facebook from skinning it. On the other hand, the sheer quantity of Google engineers’ contributions to the project gives them a powerful gravitational pull, as this excellent blog post explains, taking the browser engine WebKit as a case in point. WebKit originated as the guts of the KDE Linux desktop’s browser, Konqueror, which Apple first subsidised and then forked. Later, the KDE developers decided to use WebKit themselves, and the developers of Nokia’s Web browser did likewise.

In 2008, Google joined the project, basing the Android browser and Chrome on it. This is what happened next. The chart plots the number of code commits that passed review, by organisation.


Now, Google has since forked WebKit, but this isn’t the point; just look at all those Google commits. The same kind of resources, indeed more, are going into Android, so whatever happens they’re likely to have a large say in its technical direction.

Meanwhile, revenues from Google Play are estimated to be about a third of Apple’s revenues from the app store. As a rule, app stores aren’t a primary line of business but rather a way of providing apps that sell something else - hardware if you’re Apple, advertising if you’re Google - so don’t put too much reliance on that. Also, Google pays revenue-share with carriers and OEMs out of the Play bucket, unlike its competitors.

Android founder Andy Rubin, now out of Google, says that he originally set out to invent a new digital camera.

Google chairman Eric Schmidt, meanwhile, attempts to defend the fact Google paid a total of £6m in UK corporation tax, when the UK is Google’s second biggest market, perhaps not entirely convincingly. Elsewhere, Google attempted to dispel any faint suggestion of arrogance that might cling to the company by applying for planning permission to build an entire private terminal for their private jets.

In hardware news, the Apple rumour-flow is currently set to “negative”. The latest one is that the tool-up for the iPhone 5S (or 6, or whatever) is sliding right because it includes a fingerprint sensor and the supplier is struggling to find a coating product that doesn’t interfere with it. There’s also a rumour that a whole batch of iPhones failed Apple’s quality control.

LG Display, which puts the shiny face on the shiny gadgets, reported that its sales to Apple are down significantly. It may suggest Apple has another supplier for displays out there. (Also, Spirent ain’t doing so well and that’s a hugely different market, so perhaps it’s the horrible macro-economy.)

That said, T-Mobile USA was selling iPhone 5s for $99 and their stores couldn’t cope with the rush. As well as the obvious benefit of a $70 discount on the latest Apple gadget compared to the competition, this quote is telling:

The sales staffs at the Washington-area T-Mobile stores said that the fact that they were in an area served by T-Mobile’s newly launched LTE seemed to spur a lot of sales. “Everybody wants to know how fast the LTE is,” one salesperson said. “All I know is that it’s really fast.”

For more of the bull case, there’s Horace, who also reminds us that Apple is quite a good computer company, too:


Elsewhere, Microsoft seems to be holding up despite the slide in PC volumes and the disappointing Win8 kickoff, probably because of Office and enterprise products generally. Nokia saw a little uptick in Lumias but this was overshadowed by Symbian’s final exit, and there was an unexpected, slithering thud in the Asha featurephone line, off 46% by volume, possibly due to cheap Androids spreading.

Should IBM flog its x86 server lines to Lenovo?

And Raspberry Pis infiltrate the enterprise.

Facebook is building a giant data centre in Altoona, Iowa. It’s their fourth data centre build, the budget is $1.5bn, and the project foresees three 466,000 square foot phases. Meanwhile, they’ve released a set of dashboards tracking their power and water efficiency.

Vint Cerf speaks on SDN.

Scaling out at Pinterest. Interesting point that a scalable system is one that doesn’t add more technologies as it gets bigger.

Meanwhile, there’s a dramatically different approach to scaling out at AirBnB, which decided it didn’t need a database at all so much as a cache.

Amazon S3 passes 2 trillion objects.

Vodafone and ICICI Bank are rolling out M-PESA in India, which will very likely be its biggest deployment ever. This FT interview with Michael Joseph, Vodafone’s MD of m-payments, describes some of the challenges and the regulatory requirement for a banking partner.

A network of US retailers is building a mobile payments system optimised for the merchants, something that is well overdue. One message from our Silicon Valley event was that retailers are as mad as hell about interchange fees and they won’t take it any more. Interestingly, they’ve decided to go with an on-screen barcode or QRcode rather than NFC/RFID or even SIM authentication, thus maximising how much of the roll-out just consists of software and getting away from the NFC first-fax problem.

That may be very wise. The European Commission suspects manufacturers of smart cards of operating a cartel. The name they don’t want to use is of course Gemalto, maker of most of the world’s SIMs and key partner in that merchant-focused payments project.

Elsewhere, Akamai is planning to provide two-factor authentication from its cloud of CDN nodes. The authentication itself comes from a partner, CGI Group, which has already been certified by the US government for its own security needs, and is extensible to use up to 7 factors.

Our near neighbours in Silicon Roundabout, product designers BERG, have got the Internet of Things religion, and are launching their own IoT platform based on ZigBee short-range radio. This means you need to deploy their “bridge” base station somewhere near the devices, with access to the Internet and a power supply. The developer docs are here.

The roll-out of Voice 2.0 moves on. Twilio has deployed with KDDI in Japan, and with hipsters into east London theatre projects.

Globe Telecom, meanwhile, is hosting a voice apps challenge now that they’ve deployed Tropo.

Twelephone is WebRTC in your Twitter. Chris Kranky asks if telcos can act quickly enough to get ahead of whatever Microsoft is planning with Skype, and asks why it’s so hard to find a TURN server implementation, when the technology is required by the WebRTC specs.

Need VoIP geek-out? Here are the slides from Kamailio World. All of them.

Amazon’s original content operation, Amazon Studios, will among other things, ask viewers which of a number of pilots they’d like to see developed further. YouTube wins again vs. Viacom.

Yahoo! is trimming its line-up of mobile apps, and concentrating on a few key products. One of those is the weather, and the new app for iOS is here. It gets the weather forecast and your location, and queries Flickr’s vast pile of photos for an image that illustrates the weather where you are.

Does anyone really want MS Office on an iPad?

How simple is your app, really?

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April 18, 2013

Digital Commerce: Show me the (Mobile) Money - Actions for Key Players

Many companies are struggling to build a mobile commerce business case that generates significant incremental revenues in the next five years. But some will ultimately use digital wallets to create a valuable platform that bolsters customer loyalty and produces substantial revenues from location-based marketing, advertising and the management of personal data.

Our latest research report Digital Commerce: Show me the (Mobile) Money describes the barriers, how can they be overcome, and the key actions for telcos, major Internet players, banks and payment networks. Digital Commerce strategies and the findings of this report will also be explored in depth at the EMEA Executive Brainstorm in London, 5-6 June, 2013. Email contact@telco2.net / call +44 (0) 207 247 5003 to find out more.

The Cycle and Functions of Digital Commerce
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April 15, 2013

DISH for Sprint, Google Fiber economics, Rackspace licensed cloud, PC sales sink: Telco 2.0 News Review

Telco 2.0 News Review

[Ed: Don’t forget to book now for the Telco 2.0 EMEA Executive Brainstorm, in London on the 5th-6th June]

In the US, we’ve had the Sprint-Softbank acquisition. We’ve had the T-Mobile/MetroPCS deal and T-Mobile’s price disruption. Now for the DISH Network bid for Sprint. Yes, really. DISH is offering $25.5bn, of which $17.3bn is cash and the rest, shares. If you’re wondering about the cash, $8bn of it comes from smashing the DISH piggybank and the rest is borrowed from Barclays Bank.

The big idea is selling satellite TV along with Sprint mobile, and using the huge Clearwire spectrum block to get fixed-wireless out in the outback - rather like DISH’s “cantenna” partnership with Verizon Wireless, which sounds cheaper.

The GSMA has published a report on universal service, arguing that emerging markets’ universal service funds tend to be ineffective and are very often sitting on large amounts of money paid in by operators but not used. India, for example, may have as much as $4.1bn.

This isn’t going to make anyone any friends, of course; the hugely bubbly 3G auction brought in so much money that the Indian political scene was immediately convinced that mobile operators had ripped them off over 2G, while the operators have been struggling to pay back the licence fees and the cost of their investments in a low-income market crowded with players.

Fitch points out that Indian operators are investing much less in their networks than comparable players elsewhere in Asia. Chinese MNOs typically invest about 30% of their service revenues, those in the Philippines about 20%, while Indian operators invest about 16%. It’s much worse if you look at investment or spectrum per subscriber. And the figure is rising in China, while it’s falling in India.

Fitch argues that the problem is that the Indian MNOs borrowed too much money to pay for the licences, and now the repayments are eating the economic surplus. With data revenues beginning to grow, this is going to be a serious problem.

The US Department of Justice wants to make sure smaller operators have a fair crack at the wall-punching low frequency bands, after all, and Benoit Felten is trying to get Susan Crawford picked as FCC chairman. Here’s her pitch:

WiFi is blazingly fast in the big city, slow everywhere else. Cellular is slow in town, and in the outback, but shines in the suburbs.

Meanwhile, EverythingEverywhere’s secret product launch turned out to be bigger LTE channels.

In the fixed world, Google’s announcement of fibre in Austin, Texas called forth a press release from AT&T promising “an advanced fibre-optic infrastructure capable of delivering speeds up to 1 gigabit”. Teresa, The Voice of Broadband points out that Google Fiber happened in Kansas City because the city let them use the city-owned power poles and other civil works, for zero dollars, not a penny more, not a penny less. AT&T wants the same terms Google gets from Austin.

Business Insider quotes Bernstein’s estimated costs for Google Fibre. The main take-home messages: adding TV to broadband ups the cost-to-connect, but dramatically ups profitability and take-rates. Also, access to the civil works makes deployment much cheaper. Ars Technica picks up on the same work but highlights the possibilities to scale up, estimating that Google Fiber could reach 15% of US households at a cost of $11bn over five years.

None of this will be new to Telco 2.0 readers.

In Australia, meanwhile, more political storms swirl around the industry. NBN Co is steadily digging away, blowing open-access fibre through Telstra’s ducts, while the political opposition want to shut it down and have fabulous FTTC, keeping the Telstra copper, just like we do in Britain. Apparently, the British market is considered a great success in Australia, proving once and for all that it really is upside-down down under.

Hilariously, though, the opposition spokesman on the issue turns out to have bought into France’s national FTTP plan in the most literal way possible, buying a boatload of FTel stock. Not, say, BT stock, or any other operator that’s going with the FTTC-and-no-unbundling strategy (aka “facilities based competition”) that he recommends for Australia. FTel, the one that’s building a lot of wholesale FTTP.

Further, his estimates for the cost don’t seem to account for the copper OPEX, which is usually an important economic driver.

Meanwhile, a good point: “on-demand FTTP” is like an “on-demand street”, especially in a GPON system like NBN.

In the voice world this week, Chris Kranky points out that “the secret weapon of WebRTC is the data channel” - that is, the ability to transfer structured data between the parties to a conversation, before, during, and after it - and it’s a great opportunity to make IVRs and call centres much less hellish.

Twilio’s blog has a great HOWTO on making two-factor authentication for a basic website, and another on working with node.js and their browser client.

Here’s an interview with Voxeo Labs and Alan Quayle.

Vodafone sells a very traditional unified comms deployment to British local governments.

Pain over WebRTC codecs.

JPMorgan reckons Samsung will move 320 million smartphones this year, and 80 million of those (or precisely 25%) will be Galaxy S IV supershinies.

They’ve also got a Note III coming at some point, perhaps at IFA. It’s suggested here that they prototyped the GS IV with a metal body but didn’t launch it because it was difficult to manufacture at the time, but now the tooling is in place and they’re ready.

Meanwhile, Huawei is worried that it’s being cannibalised by cheap Chinese Android ODMs, and is therefore in a hurry to move up the value chain. The question is whether they can get more like Samsung (or Apple) before they end up like HTC.

Interestingly, a survey of north American mobile users suggests that there is surprisingly little platform loyalty or lock-in. However, is the industry just competing to offer “moar”, rather than anything genuinely interesting?

Blackberry 10 is meant to be that. This week, a US stockbroking firm suggested that returns were very high. BlackBerry disputes this and the lawyers are out.

Jeff Bezos gave some insight into Amazon strategy this week, in a letter to shareholders. He claims that the company has a policy of always releasing new features and cutting prices first, in order to avoid building up technical debt and to keep disrupting the competition.

The company also handed out a wedge of stock options to its executives. More importantly, this move came as it added Apple to the peer-group it uses as a performance benchmark. Amazon now considers Apple a key competitor.

The AWS Blog marks a year of CloudSearch.

Rackspace is selling what is, in essence, a licensed version of its OpenStack cloud. To some extent, this competes with Rackspace’s own main-line cloud product, but the point is to scale up faster in order to compete with Amazon Web Services.

Interestingly, the product is targeted at service providers, especially regional majors where Rackspace is unlikely to build their own infrastructure and the AWS Death Star hasn’t been finished yet. If this reminds of you of something, you probably want to refer to our Cloud 2.0 Strategy Report, and if it doesn’t, why not read it for the first time?

So you’re a telco and you’re worried that you’ve bought too many VMWare licences, but you’re not convinced you can build your own cloud. This may be the product for you.

Meanwhile, here’s a photo tour of Microsoft’s Dublin data centre, concentrating on the fresh-air cooling system. You know you want to. And Google is spending $390m on an expansion of its Belgian data centre, the home of GMail in Europe.

And Salesforce is offering its own mobile app framework to wrap around the APIs to its enormous cloud of CRM. There’s something ironic about a company whose logo is a NO SOFTWARE sign advertising…software.

Facebook Home rolled out this week, and the first reactions are in, from the reviews on Google Play. They are not necessarily encouraging:

You have to be a complete facebook junkie to use this for more than 5 minutes,” reads another. “It takes away the ease of your phone actually being a phone and even adds complication to using facebook. Uninstalled

The theme is that Facebook obsessives tend to 5-star it and everyone else hates it, which is rather what we argue in our Facebook Home note, available for download to Telco 2.0 subscribers. For a long time, Facebook had one website to rule them all, that was meant to be all things to all their users. Facebook Home seems to represent a move to focusing on the company’s fans, and risks disappointing the others. The problem is whether there are enough “true fans” out there - Facebook was certainly a business driven by them in 2009, but you might question that now.

As a two-sided business, Facebook needs to delight one customer, the advertisers, without alienating the other, the users. Home is a user-facing play, and here’s the advertiser-facing play: Partner Categories. (The Facebook announcement and screenshots are here.)

This application pulls data from a variety of other retail data miners into the Facebook Studio ad-planning tool, so you can (for example) target the friends of people who buy a lot of washing powder in given geographies but who don’t fly United Airlines much. Evidently, this could be the very definition of “creepy”, and advertisers would be well advised to use it with care.

Perhaps they could stop serving ads into pages with names like “drop kicking sluts in the teeth”?

Meanwhile, Eric Schmidt is ironically concerned about the privacy threat from privately-owned surveillance drones, although it seems a remote concern compared to, say, Google’s cars taking photos of everyone’s house and logging your WiFi traffic. Perhaps someone’s been flying one over his pool in Palo Alto.

After all, Google has just offered to settle with the European Commission over search issues, accepting to mark more content as Google-owned, show more competing results, and to sell ads to competitors in the all-paid sections of their sites.

Google also did a clean-up of the Google Play app store this week, killing off 60,000 apps for spamming, data-grabbing, spreading viruses, etc. The problem is whether this sort of periodic spring-cleaning is enough, or whether an Apple-like model with more stringent approval might be better.

Freedom to Tinker discusses the other week’s major DDOS attack on Spamhaus, and points out that the worst security threats are the ones that make use of economic externalities. For example, BCP 38 implementation benefits everyone, but individual networks have relatively little incentive to fix their egress filters. Bruce Schneier’s comments thread is as good as usual.

Microsoft pushes out a security fix and then reverses it because it’s not secure.

Mobile phones, unlike computers, have a nationality - the country code in their phone number. Who is it in Hong Kong that’s targeting South Korean Androids?

Here’s a fascinating piece on how the FBI investigates mobile devices. There’s an IMSI catcher, but there’s also so much more.

The headlines were exciting: “Plane hijacked with Android phone!” The story was a bit less sexy.

Arrgh. IDC’s PC sales estimates for Q1 are out, and they show a sickening thud, with shipments off 14% on an annual basis, or the worst ever since IDC started counting in 1991. Gartner’s slightly different metric suggests they fell 11%. Either way, it’s a nasty surprise for the industry.

IDC reckons that the launch of Windows 8 hurt, rather than helped, PC sales. However, this is possibly an arteface of Win8 being more touchscreen-oriented and shipping on a lot of hybrid tablet/notebook machines, which aren’t necessarily counted as PCs. IDC, for example, doesn’t consider anything with a detachable keyboard to be a PC. (It wasn’t so long ago that pretty much everything that was considered a PC had a detachable keyboard, although you couldn’t do much without it.)

The shrinkage breaks down very unevenly across the major manufacturers. HP’s shipments fell 24% in Q1, while Lenovo held steady. They sell heavily into Asia and into emerging markets more broadly, and they also sell into enterprises well - all three are sectors that are still growing.

ZDNet’s Simon Bisson argues that hardware innovation has slowed down, while Microsoft has put much more effort into improving performance in software, and a software upgrade is cheaper than buying a new computer. Further, we’d add, Apple holds a lead in the hardware beyond the CPU, like displays and graphics. So if you want a better computer, you’ll either change the software (whether to Win8 or Linux), or you’ll get a Mac. Apple is still gaining share in the US.

Is Microsoft’s entire approach simply arrogant?

Meanwhile, another set of forecasts suggests that the netbook may actually go extinct by 2015.

The company that must be really worried by all this is of course Intel. It should come as no surprise that they have decided to make a touchscreen part of the basic Ultrabook specification.

Here’s something interesting. HP may be suffering in the PC market, but for all that, they’re putting their formidable engineering resources into the cloud and the servers and networking equipment that underlies it. Project Moonshot is a new line of servers that are small, cartridge-like devices that plug into a box of 10 to 40 devices. Each one’s exact configuration is entirely customer-specified.

The big draw is less power draw, with the devices typically consisting of a chunk of Flash storage and either an Intel Atom or ARM/Qualcomm CPU. The other major draw is their ability to add more flexibility to cloud deployments; with 40 machines per rack, it’s easier to offer different architectures and hardware options to a cloud.

Meanwhile, IBM is spending a billion on Flash storage R&D. The other week, we read about Andy von Bechtolsheim, and an all-star cast of Sun veterans, , and their chip startup that wants to “move the computer to the data” by integrating a really tiny Linux VM on each chunk of RAM or Flash storage. And of course there’s Intel’s Next Unit of Computing. As this was also the week Margaret Thatcher died, we couldn’t help thinking of the Inmos Transputer. Everything old is new again.

On the network side, a whole new SDN standards effort has emerged, called “OpenDaylight”, which looks like it’s an alternative to OpenFlow and perhaps also to the emerging carrier world NFV project. It includes most of the router and switch vendors you’ve ever heard of, but neither Google nor Huawei.

Microsoft has sold its Mediaroom IPTV products to Ericsson.

And the Apple/Google patent feud has finally exhausted the court’s patience.

“The parties have no interest in efficiently and expeditiously resolving this dispute; they instead are using this and similar litigation worldwide as a business strategy that appears to have no end,” U.S. District Judge Robert Scola in Miami said in an order dated yesterday. “That is not a proper use of this court.”…

The case in Florida involves more than 180 claims related to 12 patents and disputes over the meaning of more than 100 terms, Scola said in his order. Apple and Google were unable to streamline the case, he said, calling the companies’ actions “obstreperous and cantankerous conduct.”

“Without a hint of irony, the parties now ask the court to mop up a mess they made by holding a hearing to reduce the size and complexity of the case,” he wrote. “The court declines this invitation.”


Mourning the end of iTunes DJ mode. Twitter buys a music recommendations startup. Statusboard is an app for displaying any kind of data as a big shiny status board.

And here’s a ticker counting how often bar codes get scanned, as we count down to the 40th anniversary of the original augmented reality application.

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April 11, 2013

Facebook Home: what is the impact?

Facebook has launched ‘Facebook Home’, technically a shell around the Android OS, that in theory creates valuable new advertising inventory on the screens of users’ phones. What will its impact be in practice for Facebook, and on Google, mobile operators, and other device manufacturers?

Our new analysis on Facebook Home is now on our research portal, and we’ll be discussing these issues further at our Brainstorms in London, 5-6 June, and Dubai, 12-13 November. Call +44 (0) 207 247 5003 or email contact@telco2.net to find out more.

Facebook Home - Screen Shots

facebook home image 1 april 2013.png

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April 10, 2013

The Great Compression: surviving the ‘Digital Hunger Gap’

In the next 10 years, many industries face the ‘Great Compression’ in which, in addition to the pressures of ongoing global economic uncertainty, there is also a major digital transformation that is destroying traditional value and moving it ‘disruptively’ to new areas and geographies. For the incumbent industry players we call the near-term results of this disruption ‘The Digital Hunger Gap’ - the widening deficit between past and projected revenues.

Our analysis of the top-level findings of the Silicon Valley Executive Brainstorm is now on our research portal (here), and we’ll be discussing these issues further at our Brainstorms in London, 5-6 June, and Dubai, 12-13 November. Call +44 (0) 207 247 5003 or email contact@telco2.net to find out more.

2. Digital Transformation, Chris Barraclough, STL Hunger Gap.png

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April 8, 2013

40 years of mobile; Apple draws ahead again; growth at T-Mobile USA; “copper luddites”; Facebook Home; Hulu - Telco 2.0 News Review

[Ed: Don’t forget to book now for the Telco 2.0 EMEA Executive Brainstorm, in London on the 5th-6th June]

It’s been 40 years since the first cellular mobile call, from Martin Cooper of Motorola Research to the tribal enemy at Bell Labs. And if Gartner and ReadWriteWeb are right, mobile has “killed the PC market”.

And this week, Comscore’s rankings suggest that in North America, Apple is catching up on Android. 57% of US subscribers now have smartphones, with 91% of those being with the Big Two platforms. Horace argues that the increasing availability of older iPhones on free offers, and more carriers providing them, is behind this. As usual, the charts are pretty good too.


On the other hand, pioneer smartphone vendor HTC is suffering. Profits for the last quarter hit a record low, dropping through the analyst estimates, after their latest phone launch went off at half cock. The HTC One was meant to launch in 80 markets and made it to the start-line in three.

Here’s the first low-cost BlackBerry OS 10 device, the R10 Curve. Meanwhile, Canada’s export promotion agency vendor-financed 500,000 BlackBerries for Telefonica.

A nice 40th anniversary early adopter story.

T-Mobile USA has joined the price disruptors, and it’s working - for the first time in four years, its “branded” customer base - i.e. excluding wholesale - is growing. Overall, they added 587,000 customers in Q1, concentrated in prepaid and in wholesale.

You’ll also note that last week’s AT&T/Verizon x Vodafone merger story has been denied to death, although of course the tale of the Verizon Wireless shares runs on.

Italy may be heading down to 3 MNOs, after Telecom Italia and Hutchison 3 Italy confirmed they are planning to merge.

Bouygues Telecom is going to launch LTE on the 1st of October, once its 1800MHz refarming is complete.

TIM Brasil has gone with Nokia Siemens Networks to build a LTE network in time for the footy.

China Mobile and Vodafone are jointly bidding for a licence in Burma.

Etisalat, which is trying to buy Vivendi’s 53% stake in Maroc Telecom, has taken out a $8bn loan to pay for it.

Zain has put off floating its Iraqi operation until the second half of the year, while their boss is apparently “keen” on moving into Libya. Maybe life is boring after they sold the old Celtel sub-Saharan businesses to Bharti Airtel.

And Idea Cellular gets a $710m tax bill.

BT CEO Ian Livingston complains about his competitors being “copper luddites”, because they want regulated access charges for BT’s FTTC network.

He’s responding to Charles Dunstone of Carphone Warehouse’s remark that “there is so much government money going into subsidising higher broadband speeds but no one really knows where it is going and how it is being spent” - of course, Dunstone knows very well where it is going, because it’s essentially all going to BT, strengthening its position as incumbent vis-a-vis the, er, “copper luddites”.

The Daily Telegraph also runs an uncritical profile of Openreach CEO Liv Garfield.

Meanwhile, Google Fiber may be coming to Austin, Texas. Google also commissioned Benoit Felten to write a paper on net neutrality.

The UK’s emerging small cell industry is being bought up. PicoChip was snapped up by Mindspeed Technologies, Cisco grabbed a stake in ip.access, and now Ubiquisys is a Cisco division for £205 million.

22% of the British use public WiFi at least weekly. We’ll be updating this Analyst’s Note on public WiFi very soon.

Indosat is looking to double its WLAN assets, in what it describes as “WiFi offload”. We must have heard that one before?

Tests on UK 4G deployment suggest that TV interference isn’t a problem.

Twilio is now available with Google App Engine, and they’re giving away minutes for new GAE users. It just gets easier to deploy voice. They also took part in a hackathon sponsored by the FCC, which set a challenge to do something about robocalls. The upshot, basically a voice spam filter, is described here.

Simwood discusses Ofcom’s review of narrowband. The DEA doesn’t like Apple’s iMessage, as the encryption actually works. RevK has finished implementing the PABX functions in his Firebrick routers.

As well as fixing the problems with HTC One launch, HTC is pinning its hopes on a new product. Facebook announced its “Facebook Home” this week. It’s not exactly a Facebook Phone, but rather a UI overlay for Android, but it will mostly be shipped with the HTC First phone on AT&T and Orange, so a lot of users will probably experience it as such. We’re covering this development in far more detail in a separate note, so watch this space.

Hulu is up for sale again, and the leading bidder for the TV networks’ online TV network is a former News Corp executive, Peter Chernin, whose buyout vehicle is offering $500 million. As always with Hulu, and indeed media operations more generally, the key will be the terms on which it can get content from the rightsholders.

Dan Rayburn is scathing about the hype around Aereo, the company that wants to pick up broadcast TV and re-stream it on the Internet. We would go further. If Aereo is meant to compete with cable TV, it has a huge problem: the cablecos are very good at distributing online video, whether because they have more capacity for Internet streaming, or because they can just broadcast it via the traditional CATV channel. It makes no fundamental economic sense to take content from a more efficient distribution system and distribute it via a less efficient distribution system, unless something subsidises the distribution heavily.

Dan also thinks you should calm down about HEVC, the magic video codec that will solve all your problems according to its promoters. It’s still expensive and there’s no content, and those are the least of the problems.

What’s the online business model most likely to succeed? According to a leading VC investor, it appears to be selling something to people who will give you money for it, an option so radically new you can be certain nobody’s considered it before.

However, TenCent says it has no intention of charging for WeChat or QQ. But Nokia is charging the equivalent of 1.5p a month for Nokia Life, its emerging market SMS-based service, which just landed in Kenya.

Free Android apps are worryingly spammy.

After Google shuttered the Reader, Should Yahoo! jump in to save RSS as a format?

A group of Sun Microsystems veterans are working on a big data/cloud optimised storage module that integrates some processing into the storage. Understanding Google’s flit from WebKit. Firefox 20 update drops.

Ever wondered where all the patents are coming from? A study suggests the US Patent Office lowered its standards to keep up with the pace.

From the Internet of Things to the Web of Things: High Scalability notes an interesting dissertation on the future of M2M.


BBC Research introduces the Stagebox, a device that plugs into TV production equipment and puts it on the Internet, thus making an all-IP production environment possible.

Don’t miss UKNOF 25 in London on the 18th April, which has a truly impressive line-up.

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April 2, 2013

VZ, AT&T want to buy Vodafone; The Internet under attack; P2P CDN in your browser; EBay goes OpenStack; Android wins 2012 - Telco 2.0 News Review

[Ed: We hope to see you at the EMEA Executive Brainstorm, 5-6 June, here in London]

Verizon and AT&T are rumoured to be considering a bid for Vodafone. Perhaps it would be better described as a “big”, as we briefly misspelled it, as the transaction would be the biggest merger in history at $245 billion. The idea is apparently that Verizon would get the 45% share in VZW and AT&T would get everything else.

Vodafone is lobbying the Indian government over the terms of the licences it took over when it acquired Hutch-Essar.

The Indian government holds that they run out in 2014, and must then be re-auctioned. Vodafone thinks they should be renewed, instead. Their problem here is that politically, the Indian side can’t be seen to do anything like the “2G scam” again, and since the 3G auction, they’ve also got a dose of the belief that spectrum auctions = lots of free money, common among politicians.

TeliaSonera can’t sell its Spanish low-cost operator Yoigo. Tele2, however, is seeing a bidding war for its Russian operation.

MetroPCS is wrangling with its shareholders over the terms of the T-Merger. More detail of the new T-Mobile tariff is here. Meanwhile, AT&T says HD voice is coming.

This post about kitting out a startup cheaply pointed out a British low-cost MVNO, Ovivo, we hadn’t met yet.

Benoit Felten tells Australians about French broadband. Meanwhile, Marc Lebourges of FTel says there’s plenty of space in the ducts, enough for multiple facilities competitors to get fibre to 80% of French households!

The EU has published a draft regulation on open access.

BT is the only player still bidding for British rural broadband funding and not surprisingly it got the contract. OFCOM wants carriers to notify their subscribers of any change in pricing ahead of time and Vodafone spin doctors respond.

The week the game changed, says Simon Woodhead of the massive denial of service attack against Spamhaus. He has some interesting suggestions for what to do about it. And it wasn’t just the DDOS attack, either. Somebody also hijacked Spamhaus’s BGP routing, pretending to be Spamhaus’s service provider and diverting their traffic, thus carrying the attack into the core infrastructure of the Internet. Woodhead argues that the defence must be built into the core, with source-address filtering being deployed in Internet exchanges.

Akamai’s chief network architect, Patrick Gilmore, points out in a blog post that we know how to prevent the attack used on Spamhaus, and we have done ever since the publication of BCP 38 in 2000, which specifies that ISPs should filter out any traffic that doesn’t have a source address inside their network or their customer’s network before it leaves their network. The problem is getting everyone to deploy it, or at least to filter everyone who hasn’t deployed it.

ReadWriteWeb has a good explanation of DNS amplification attacks, and a worrying chart from Arbor Networks. The green line shows the volume of traffic generated by the biggest denial of service attack recorded that month.


Meanwhile, the Internet was also under attack in a more direct, physical, and sinister fashion, as the Egyptian navy caught a group of divers cutting submarine cables, including the key SMW-4 Europe-Asia link. The Renesys Blog reports on the impact, which was substantial. Here’s the effect on round-trip latency between Bharti Airtel and Frankfurt DECIX.


Higher on the chart is higher latency, signalling either that traffic was diverted via a longer geographical route, or that a network link was congested. The sharp increase in latency clearly marks the moment of the cable cut. The colours show which operators were in use, so the chart also tells us they lost their route via a peer at DECIX and fell back on transit via Deutsche Telekom, Telia, L(3), and others, probably going westbound or via the Cape given the far higher latency. Wired has more, including the point that the suspects say they cut the wrong cable, and that there are some 14 submarine telecoms cables in very close proximity at this point.

F-Secure blogs on best practices for ISPs cleaning up after malware outbreaks. Voice denial of service attacks target 911 centres.

Computing pioneer Alan Kay, who has an excellent claim to have invented the very first mobile computing device with his 1970s Xerox PARC Dynabook project, thinks there is nothing new around.

“The past 30 years have been completely mundane. It’s all been scaling (of old technology) and Angry Birds”

We’ll try and prove him wrong. So, that WebRTC. Everyone’s busy re-implementing Whatsapp in the browser, or if you’re Chris Kranky, hoping it will replace phone numbers, but here’s something genuinely interesting. WebRTC, of course, lets you create browser-to-browser tunnels for media, usually but not at all necessarily voice or messaging. But what if you served content over the tunnel? PeerCDN wants to do just that and create a peer-to-peer distribution network for your web site.

Telco 2.0 ally Dean Bubley has a report out on WebRTC, and we’ll be covering it in a forthcoming Voice Strategy Report. In other VoIP news, one telecoms operator is proud to say “We’ve reduced the number of SIP profiles we support to eighty”. Only eighty? The great thing about standards is that there’s so many of them…

Remember when everyone was worried about BitTorrent hogging all the tubes? They’ve been busy, working on improving the protocol’s congestion management and localisation, and now they have a completely new solution for the P2P distribution of live streaming content, basically implementing multicast for UDP packets. This is neat because it saves bandwidth in a big way, and because it’s UDP things just get thrown away in the event of congestion.

There’s a (less technical) interview with the CEO over at TorrentFreak. We are amused by the fact they call the multicast element a “screaming” protocol rather than just a streaming one.

OnApp is an interesting CDN business model, allowing existing resellers to upgrade to a licensed-CDN model more easily.

Small business SDN from the cloud.

Twilio on node.js and as a padded cell for spammers. Another SMS-bashing machine.

In the cloud, EBay is preparing to flush 80,000 VMWare virtual machines, starting with the 10,000 at PayPal, and deploy OpenStack instead. They’re working with Silicon Valley OpenStack consultants Mirantis.

Meanwhile, the founding CTO of OpenStack’s startup has delivered its new product, which will work either as an instant OpenStack cloud appliance or else as a high-performance controller for a much bigger cloud.

“76% of cloud users run Linux, and 75% of enterprises used Linux servers for their new projects” says the Linux Foundation.

With the best will in the world, nobody is likely to remember Apple as that great cloud company. The company that made the Macs? Yes. The iPhone guys? Sure. The people who eventually delivered the promise of NeXT OS in OS X? Of course. But the cloud?

Famously, Steve Jobs called an all-hands meeting about their cloud backup product, asked the product manager to explain what its features were, and then exploded: “SO WHY DOESN’T IT DO THAT?” And the less said about Apple Maps, the better.

This Hacker News thread suggests that iCloud isn’t going to change that. The following quote should be scary for Apple:

If it’s consumer-facing it’s years in development and polished. If it’s for us lowly developers, well don’t hold your breath

As the iPhone triumphed in large measure because it won with developers and consequently had a wealth of excellent apps, this is a bad sign.

Much more is here. None of it is good. Of course, Apple does have a card up its sleeve here - cash. If they can’t fix mapping, they could always buy TomTom, poach its employees, or subsidise OpenStreetMap. If they can’t fix cloud, they could always repeat the trick of buying PA Semiconductor and buy a start-up somewhere in the Valley.

If you’re one of the telcos that’s investing heavily in VMWare-powered cloud infrastructure, here’s your competitor, PeakColo, which exclusively sells this stuff via channels.

Kantar’s sales numbers are out, and it looks like Android gained on iOS in the States during 2012, RIM suffered, and Windows Phone did reasonably well. Microsoft prefers IDC’s scoreboard, because it’s more, although it also says that Symbian still outsold them in 2012…

Here’s a positive hands-on with the keyboardy BlackBerry Q10.

Apple has been the subject of a wave of angry media reporting about its warranty policies in China, and Tim Cook this week apologised publicly. It’s the country that invented the word “kow-tow”, after all.

Meanwhile, you might not associate Apple products with construction, but here’s a use-case from Balfour Beatty’s project to build a new airport terminal in Dallas. Rather than print 60,000 pages of blueprints, reprint them many times to cover all the people who needed copies and to provide spares, and keep track of the inevitable changes to the plan during construction, they bought each supervisor an iPad and kept the lot in digital form. They also used Apple TVs and big monitors to display plans in site offices. So far they’ve saved $1.2m on printing (!).

More importantly, it’s a common problem in the industry that some people end up using out-of-date drawings, and by the time anyone notices, something has been built in the wrong place. Do we change the plan to fit it, or do we knock it down and start again? Either way, it’s expensive and time-wasting. So far they’ve avoided this entirely.

Steve Wozniak wants to make speech recognition to the next lot of iPhones what Applescript was to early Macs:

And perhaps Cupertino is listening - the message “Siri, hire all the geeks!” went out this week. They’re seeking interaction designers, “speech operations engineers”…and someone to triage the bug reports.

Businessweek has a fascinatingly weird profile of Samsung, the company, which comes over as a sort of AMOLED-stroking industrial religion. They point out that Samsung, like Apple, hit the return to vertical integration early and hard and is reaping the benefits. And back in 1995, when some phones didn’t come up to scratch, the chairman set fire to the entire stock of them outside the factory, during a mass meeting of the 2,000 strong workforce, before driving a bulldozer over the smouldering mess and threatening to do it again. If you read nothing else this week, read this. Includes this rather interesting chart.


Facebook is going to do a big splash announcement on Thursday, and it looks like some sort of skin over Android, probably running on an HTC device. ReadWriteWeb points out this means the abandonment of their HTML5 with everything strategy.

If there’s a business model for this, presumably it’s something about “sponsored content”. Google is not pleased with the amount of advertorial its crawlers are sucking up and they want it out of Google News.

So, if Facebook wants to be Google, apparently Google wants to be Amazon, as they’re experimenting with a retail delivery network around the Bay Area. So does Rakuten, the Japanese e-commerce firm founded at the same time with a markedly similar business model, which is now planning to launch in the US.

And, seeing as they just bought a book review community and jacked up third-party merchant fees, it’s a fair assumption Amazon wants to be Amazon.

Browser adoption stats are here.

US Army Intelligence personnel have been issued with a specially prepared Galaxy Note II. But what does the pen do, Q?

The BBC releases TV Application Layer, the kit of parts from the iPlayer, in open source. An interesting conference on payments. QR codes for…the dead.

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

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