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June 25, 2013

Google Enhanced Campaigns - An inflexion point for HTML5?

There has been much anticipation and commentary around HTML5 and how it will alter the mobile “app” landscape (see Telco2.0 posts on this for more background). Many believe the web standard is not yet mature enough to deliver on its promises. However, recent STL Partners’ research suggests that we could be reaching an inflexion point in HTML5 adoption and that this could create new opportunities for telcos in the mobile web & apps value chain.

In this blog post, we argue that we shouldn’t consider pure HTML5 “apps” as a direct competitor to native apps (e.g. from Apple’s appstore and Android Play). Firstly, we point to the next-generation of Google’s Adwords as both a driver and indicator of HTML5’s progress.

Google Adwords - Enhanced Campaigns

Google Enhanced Campaigns is more than a minor upgrade to Adwords. It will have a major impact on the world of search advertising. Google is bringing a host of improvements to its ad platform and also some smaller yet significant changes. One of these relates to the way that advertisers can determine which devices their ads appear on. Today, marketers & merchants can decide to only advertise to PC browsers (this makes sense if the website is not designed for other devices and many advertisers choose not to place sponsored links to smartphones). However, from the 22nd July, desktop and tablet bids will be forced to be the same as mobile bids, creating a new, unified device targeting functionality.

Website owners who have not sought to build a good mobile user experience will face a predicament. Although not the only solution, HTML5 offers developers a way out as (amongst other things) it is intended to deliver a much better user experience on all devices. It also allows for more functionality to be supported “off-line” in the browser allowing developers to create feature-rich app-like webpages that can be saved as icons on devices.

If a website offers a poor mobile experience, then it is unlikely that the owner will want to pay to drive mobile traffic to it. However, as Google Adwords is removing the option to distinguish between desktops/tablets and mobile users, this provides incentives for the rapid uptake of mobile friendly content. Mobile browsing (increasingly HTML5 content) is expected to receive a boost from this. It is unlikely that Google would do something that would upset a significant proportion of customers, so this is also an indication that Google has confidence that the vast majority of its adwords customers will be ready for the change; many using HTML5.

Don’t compare pure HTML5 “apps” with Native apps

Industry commentators are focussing too heavily on a “contest” between pure HTML5 “apps” and native apps. HTML5 is a fast and cost-effective way to create a better mobile web experience using app-like interfaces, but this does not necessarily mean it competes directly with Native apps. For example, smaller companies that do not have the resources to create and maintain a native app (or multiple versions across the different OSs) can use HTML5 to deliver both a desktop and mobile experience that work on any mobile device. It can be developed once and it will run on many different platforms, making it cheaper and easier to maintain.

What is telcos’ role in the growth of HTML5?

STL Partners has recently undertaken research into HTML5 and the opportunities, rewards and challenges that its growth can bring for Telcos. Our findings suggest that there is a real chance for Telcos to secure a role in an emerging content and apps value chain, especially as the growth of HTML5 creates needs around monetisation, discovery and distribution (since HTML5 apps do not have to be sourced though a traditional native app ecosystem, such as Apple’s appstore or Google Play).

Complete our survey and receive a complimentary copy of our research report

What is your perspective on HTML5? We’d like to hear from you through our online survey, whether you are from a Telco or non-Telco. The survey will take approximately 5 minutes to complete and we will send a complimentary copy of our research report for your participation. Please use the following link to complete the form.

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June 24, 2013

Data = 45% of revenue, net neutrality wars again, Huawei to be “higher than Apple”:Telco 2.0 News Review

[Ed. We’re just analysing and writing up the output from the excellent New Digital Economics Brainstorm in London last week, and will be publishing reports and highlights shortly. Next in the Brainstorm series is Digital Arabia, November 11-12 in Dubai - the agenda is now up here. Please email contact@telco2.net for more on how to participate.]

US market approaches 50% data by revenue

The US mobile market is approaching the cross-over point between voice and data revenues. With mobile data revenue at $21bn in Q1, 45% of the industry’s sales are now data, and 50% should be reached later this year. This is being driven by three factors - smartphone adoption, which tends to add more data users, the erosion of messaging revenues, which reduces the traditional revenue base, and interestingly, a steady drift upwards in spending on data by existing smartphone customers.

In this context, Masayoshi Son told a meeting of Softbank shareholders that he thinks Sprint will be easier to turn around than Vodafone Japan, and said that he hopes Softbank will become the world’s biggest company. He said this as the end of the soap opera hove in sight - although Clearwire’s board recommended the Dish offer, Softbank outbid Dish, upping the offer to $5 a share or a 14% premium, and signed up 45% of the shareholders, forcing Clearwire to sign a $155m break clause. Sprint shareholders vote tomorrow.

Elsewhere, Vodafone and Kabel Deutschland agreed on a price of €7.7bn. Interestingly, Vittorio Colao said that the deal was “consistent with our strategy of providing unified communications services”, suggesting he sees quad-play and cable as part of UC. There may yet be a referral to the German anti-trust agency, but a rival bid would be more likely to cause trouble than regulatory action as there is so little overlap.

There’s a writeup here of Reliance Industries’ TD-LTE wireless broadband deployment in India, although not much detail. Industries’ Mukesh Ambani will be renting towers and fibre from his brother Anil’s Reliance Communications; clearly, nothing can go wrong with this arrangement. Virgin Mobile will be one of Saudi Arabia’s first MVNOs. It’s a deal: O2 Ireland is sold to Hutchison for €780m. BT once bought that network for €2.8bn back in 2001.

Turkcell failed to hold its AGM after the long-running dispute between shareholders Cukurova and Altimo broke out again.

Vodafone’s Open Femtocell programme aims to deploy rural small cells into “notspots”, perhaps as a community-led project. EverythingEverywhere is deploying a 4G-backed WLAN hotspot on a tractor at the Glastonbury festival, and is adding more LTE over Telco 2.0 HQ in Silicon Roundabout. Libya is having another go at issuing new telecoms licences. And Ian Livingston leaves BT to join the House of Lords.

German net neutrality; peering wars; Alcatel

There’s been another bout of skirmishes in the net neutrality wars. Last week, DTAG threatened to cap data usage on its fixed ISP connections, but to let some content providers off if they paid up. Cue the storm. Tim Höttgens, who is expected to be the next CEO, says he was taken by surprise by the outrage and political involvement, and tries to calm the troubled waters by pouring on a bit more bandwidth. Specifically, the new rules won’t kick in until 2016, premium users will still be able to pay for flatrate, the volumes will be reviewed in 2016 (sensibly enough), and the throttling will be down to 2Mbps not 384Kbps.

It’s not enough, though - the government minister responsible is determined to impose net neutrality via a regulation he plans to issue before the elections this autumn. Meanwhile, the E5 carriers send their dreadnoughts steaming out again to do battle with Brussels.

The Wall Street Journal has a detailed report on peering rows, in many ways the flip side of net neutrality arguments. It’s worth reading, as is the NANOG thread discussing the issue, especially as one of the WSJ writers took the trouble to attend NANOG.

Verizon, for its part, has gone public and blamed another backbone carrier for poor quality of service on Netflix. Long-standing readers may not be very surprised to find out it’s Cogent.

The point is made that even the Cisco VNI has dramatically revised down its traffic-growth forecasts.

A trip to the DRC, where the landing of a new submarine cable has inspired the government minister to announce that “the country of Joseph Kabila has therefore made its entry into the club of major world powers as having the powerful tool, internet broadband”. He didn’t mention that an official with the incumbent operator had been jailed for stealing the funds for the landing station. Or that there may be a fibre from the landing to Kinshasa but there is no road. Or that the incumbent doesn’t seem to actually operate a network at all.

That said, unlike Angela Merkel, he didn’t say that the Internet was new territory for all of us.

Michel Combes announces his plans for Alcatel, which involve paring quite a few things back and concentrating on the sort of thing you associate with Alcatel. The day Network Solutions lost control of its DNS database. Australia drops data retention.

Move over PRISM, here’s TEMPORA; Facebook data breach; open-source surveillance in the cloud

Yet more surveillance revelations - this time it’s the British. So many submarine cables land in the UK that it would be astonishing if the intelligence services didn’t take an interest, as they did ever since the telegraph era, but perhaps we didn’t quite expect them to try to tap everything, as Project TEMPORA seems to have tried to do.

Facebook, meanwhile, confessed that its “Download Your Information” tool could have been better described as “Download Their Information”, as it accidentally exposed 6 million users’ phone numbers and e-mail addresses over a year.

In the light of this, it is no surprise whatsoever that Google’s acquisition of Waze is subject to regulatory scrutiny, on this occasion from the US Federal Trade Commission. So far, the FTC is mostly interested in competition, but you’d be amazed if the privacy issues didn’t come into it.

DuckDuckGo, the search engine that doesn’t keep any logs of your searches, has experienced a spike in demand lately.


However, Danny Sullivan of SearchEngineLand argues, this is growth from such a low base relative to Google that it is more like evidence that the public don’t care about private search. (Note: one Telco 2.0 analyst is already a DDG user.)

Meanwhile, Barclays Bank is going to start selling anonymised data on its customers.

IEEE Internet Computing is putting out a special open-access edition on the Internet as an arena of competition between systems of control, which is likely to be worth reading. Telex is an original approach to avoiding censorship.

And when the NSA set out to analyse all the data they dug out of Google & Co, where did they go for the technology? Hadoop, the open-source map-reduce system, it turns out.

GE’s “Industrial Internet” launches, in AWS

In cloud news, General Electric launched its cloud-based platform for M2M (sorry, “Industrial Internet”) applications this week. It’s based on Hadoop and technology GE acquired with a startup called Pivotal earlier this year. And like the CIA’s systems last week, it’s running in Amazon Web Services.

DTAG has added a M2M kit to its dev platform. It consists of an Arduino board with a GSM modem, access to the API, and a SIM good for six months’ usage.

The 3G & 4G Wireless Blog is looking for input to its presentation on “Economical M2M with LTE”.

Microsoft is building another huge data centre in Iowa. Here’s an interview on how Mailbox scaled up.

Huawei to be “higher than Apple”; “No progress” for Android vs. iOS? Major carriers back Ubuntu Phone

Huawei has launched its Ascend P6, which it claims is the thinnest smartphone in the world. There’s a detailed interview here with the CEO of devices, who describes the Samsung Galaxy S IV as “a so-so smartphone” and promises to be “higher than Apple”.

Apple is very pleased with this chart, comparing the breakdown of users across the versions of iOS and Android.


Obviously, fragmentation is far more of an issue with Android, as as discussed here. Radio Free Mobile argues that there has been “no progress for Android vs. iOS”.

The WSJ reports on HTC struggling to survive, and says that the CEO is staying…for now. BlackBerry shares fell as an analyst predicted disappointing results.

Canonical has formed a “carrier advisory group” to support Ubuntu Phone. It includes SKT, KT, Deutsche Telekom, EE, Telecom Italia, and Portugal Telecom among others. And its chairman is none other than Psion/Symbian veteran and chairman of singularitarian network Humanity+ UK, David Wood.

Foxconn plans to hire 3,000 engineers to work on Firefox OS apps.

Joyn starts up in France, Skype starts video messaging

Orange turns up Joyn in France. The story is interesting for the point made by a SAP executive that only the biggest global carriers will want to run their own infrastructure for the technology, and the others will be interested in a hosted solution. Admittedly, SAP Mobile Services would probably add “like ours”, but the point is a sensible one.

Skype has introduced a video-messaging feature, which is free. Chris Kranky points out that mobile networks like to assume one SIM = one device = one user = one phone number, but WebRTC and to a lesser extent other VoIP technologies don’t.

Cisco distinguished engineer Cullen “Fluffy” Jennings played a key role in the standardisation of SIP, and the last time we met him he said he wished he hadn’t. Here’s a detailed howto presentation of his on working with WebRTC.

iTunes users - still buying mostly apps

Horace has another crack at estimating the iTunes video business. The upshot is that it’s growing, it’s mostly movies rather than TV, but it’s still a relatively small chunk of iUsers’ spending, compared to music, apps, or books. Even if Apple says users download more TV episodes than movies, they’re not spending money on them.


Facebook may be working on the much-sought replacement for Google Reader, a “newspaper for mobile devices”. Digg is working on something similar. The secret of Tumblr’s UX design: sketches on paper.

And it’s both 65 years since Manchester University started up Baby, the first stored-program computer, and therefore, the beginning of software and also, Alan Turing’s 101st birthday.

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June 17, 2013

Paranoid Panic; iOS 7; Net Neutrality wars in Germany - Telco 2.0 News Review

[Ed. We’re just analysing and writing up the output from the excellent New Digital Economics Brainstorm in London last week, and will be publishing reports and highlights shortly. Next in the Brainstorm series is Digital Arabia, November 11-12 in Dubai - the agenda is now up here. Please email contact@telco2.net for more on how to participate.]

Paranoid panic - James Bond (or Alan Turing) vs BlackBerry, Swedish “no” to Google Apps, T-No USA strikes again, Apple “encrypts everything”

Another news review, another wave of NSA revelations. Apparently, the UK’s signals intelligence agency GCHQ intercepted BlackBerry traffic between delegates at the G20 summit in 2009 despite the fact BlackBerry network traffic is meant to be encrypted. There’s no clue to whether GCHQ has an exploit against traffic on the air or on the wire, whether RIM cooperated, whether they hacked a BlackBerry Enterprise Server, or whether they took legal action to get data from one or more carriers providing hosted BlackBerry service.

They were also running a social-graph plot of call detail records that required real-time, online processing:

The September meeting of finance ministers was also the subject of a new technique to provide a live report on any telephone call made by delegates and to display all of the activity on a graphic which was projected on to the 15-sq-metre video wall of GCHQ’s operations centre as well as on to the screens of 45 specialist analysts who were monitoring the delegates.

Now we want one of those for the office. Not particularly surprisingly, the New York Times reports, NSA analysts seem to have repeatedly overstepped the legal boundaries by overcollecting more and more traffic. Another NYT story reports on the tech industry’s efforts to push back on the demands for data.

The spooks put their own case to Congress, arguing that PRISM has repeatedly helped to foil terrorist attacks whose details, of course, are secret.

It’s fairly well-known that the earlier, illegal surveillance program was refused by Qwest, whose CEO later landed in jail on charges of insider trading. It’s less well-known that T-Mobile USA also said “no”, on the grounds that its European customers roaming in the States might be affected, which would violate the laws of Germany. This story confirms this and states that both T-Mobile USA and also Verizon Wireless escaped through this loophole, thanks to their European co-owners.

It’s surely a fascinating insight into Verizon that the long-lines Verizon Business division could give the NSA literally all the call-detail records, but their own mobile operator could point to the Vodafone stake and refuse. Although, Verizon fixed-line is deploying carrier grade NAT to extend its IPv4 life, while VZW deployed native IPv6 in its LTE network, so there’s certainly a precedent for a big internal culture gap.

The other prospective foreign owner of a US national carrier, Softbank, meanwhile proposes to appoint the former head of the US armed forces, Admiral Mike Mullen, as its chief security officer, so you can probably assume they intend to comply with enthusiasm.

Sweden’s privacy regulator says no to storing personal data in Google Apps, for fear of PRISM. This is amusing in the light of the Swedish legislation that permits FRA, their sigint agency, to tap literally all telecommunications crossing Swedish territory. And, thanks to the Netnod IX in Stockholm and Telia Wholesale’s very successful transit business, that’s a lot.

Paul Sweeney says this technology is very impressive, but how will the NSA monetise it?

Bruce Schneier argues that the move towards cloud-based products, integrated mobile devices, and curated app stores has provided a major improvement in end-users’ information security over poorly managed Windows PCs, whilst also creating the potential for massive breaches of privacy. The Economist has a good discussion of the principles involved, pointing out that this is actually just a special case of the general failure to settle the issue of privacy. Google is spying on us anyway, and the NSA just muscled in on the pile of data this created.

Apple informs its customers how often the feds demand data from them, and states that both iMessage and Facetime have end-to-end encryption using keys Apple doesn’t possess. Like BlackBerry? Microsoft and Facebook also disclosed a count of warrants.

Net neutrality wars break out again, in Germany

Stand by for another round of the net neutrality wars. DTAG wants to cap data volume in its fixed-line business, while excluding its own streaming offering and trying to get content providers to pay to be excluded. As they have 45% of the German market, a complaint to the competition authorities whether at national or EU level is a matter of when, not if.

Meanwhile, the Indian regulator has decided to let operators stop charging national roaming fees. It may be something to do with the fine imposed on Vodafone for providing a service that let customers dial locally and avoid the roaming charge.

Economic Times has an in-depth feature on Aircel, forever delayed by a government inquiry into Maxis Communications’ investment. The network is at 60% utilisation, the company is running short of cash, and they’re selling wholesale airtime to their biggest competitor.

The White House has gone for another run at releasing more spectrum, setting up a task force on spectrum-sharing. OFCOM, for its part, has told radio hams to get out of various bands they currently share with the Ministry of Defence so the spectrum can be auctioned.

The British government (although neither OFCOM nor the responsible minister, but rather a vague advisor) wants default-on content filtering by 2014. Adrian Kennard of A&A makes the case against, on TV.

Sprint/Softbank: the latest thrilling instalment

Clearwire’s board were swept off their feet by the satellite cowboy this week, in a last-minute change of heart. They’re now recommending the DISH offer, which Softbank has since denounced as illegal.

Meanwhile, Softbank issued a new bid for Sprint. According to analysts who scored it, it’s actually worth slightly less overall, but more of it is in cash.

Elsewhere, SFR may be floated on the stock market and Vodafone confirmed that it’s been in talks with Kabel Deutschland.

Telefonica, for its part, denied that AT&T had bid €70bn for the whole company, plus taking over its debts, and that the Spanish government had invoked reserve powers to veto the bid.

After France Telecom CEO Stéphane Richard was placed under police investigation last week, the President himself has given him a vote of confidence. Like they do with football managers.

TeliaSonera has recruited the CEO of Vodacom International as its new boss. T-Mobile NL has started deploying Huawei SingleRAN base stations, saying that it will turn up LTE in the 1800MHz band and DC-HSPA in the 900MHz when the job’s done.

27 billion WhatsApp messages a day; world’s last telegram

WhatsApp recently achieved 27 billion messages in a day, confirming that alternative messaging apps are now accounting for more traffic than SMS and also demonstrating the enduring power of double counting. They logged 10bn “inbound” messages to their servers and 17bn “outbound” messages from them, but then, who sends a message “inbound” without wanting it to go “outbound”?

In a punchy blog post, they rejected the idea of selling adverts and said they would concentrate on direct-to-customer.

Within weeks, says the Saudi regulator, they could be banned from the KSA unless they comply with government demands for access to the traffic, which is currently protected by SSL encryption. The Hajj is coming up.

Does the UK need a neutral registry for phone numbers mapping to SIP URIs?

Using the iPhone as a SIP device. An open-source SIP-based telepresence solution. US Navy signals introduce LOWER CASE LETTERS.

And after 160 years, the world’s last public telegraph service is shutting down. Indian state telco BSNL will turn off the service on the 14th of July, unless one user’s “Gandhian fast to death” changes their mind. STOP.

iOS 7 - inching away from the carriers

Apple does seem to be gradually distancing itself from the carriers. At last week’s WWDC, the new version of iOS dropped in beta, adding among other things free VoIP as well as the existing video calling between Apple users. If the encryption is real, this could be the replacement for “classic” Skype we’ve all been waiting for.

Carriers certainly won’t like yet more OTT competition for billed minutes of use, especially not with Apple quality. Neither will they like the fact iOS 7 implements the Wireless Broadband Alliance’s Hotspot 2.0 standard, permitting secure password-free automatic login to lots and lots of WLAN hotspots, plus a variety of location-based service APIs.

AT&T is doing its best to manage this, signing up more WLAN roaming agreements and publicising the WBA initiative. After all, even if there’s not much incremental revenue to be had in WLAN, at least it’s pain relief for the radio network and the spectrum position.

There’s also a new local-area sharing API, Airdrop, which lets iOS users share arbitrary objects over ad-hoc WLAN. It looks like Apple NFC support just got put off again.

Here’s a review of the new Mac Pro, the US-built desktop for super-high-end users Apple announced at the event. Meanwhile, the new line of MacBook Airs have the Intel Haswell low-power processors and are supposedly good for 9 hours on battery. A teardown is over here.

Interestingly, a test run suggests Intel’s current run of mobile CPUs has a power consumption advantage over ARM.

Microsoft Office 365 now has an iOS app. Horace discusses the value of Apple users.

In other hardware news, Jolla gets a customer, Finnish operator DNA. Analysts go bearish on Samsung GS IV sales.

CIA: Amazon Web Services is just better

IBM and AWS are suing each other about a large government project, valued at $600m. Specifically, the CIA wanted a chunk of private cloud for some mysterious aim of theirs involving hundreds of terabytes of data and MapReduce analysis jobs. Now, the spooks have responded by saying that they picked Amazon because they were just better. This table, part of The Company’s evidence, summarises the point.


Especially telling: the CIA wanted to set up auto-scaling groups, aka Amazon’s Elastic Beanstalk cloud-management technology. Even more telling: the CIA already uses AWS.

Facebook’s new datacentre in the Swedish Arctic has gone live. They claim a PUE of 1.07, and hope for much lower CO2 emissions thanks to using hydroelectricity for power and the cold external air for cooling. They also used only Open Compute Project hardware of their own devisin’.

This High Scalability post is fascinating on the interaction between software and hardware and how we might learn to “code green”. Meanwhile, here’s Cisco’s latest monster router and here’s a compendium of recent Google research papers.

New mobile Web-focused CDN

Here’s a new CDN startup, specialising in Web application acceleration in the mobile context. The team includes people from Akamai and also from XenSource and VMWare in the cloud/virtualisation world. There’s a technical whitepaper here.

Amazon Web Services adds more features to its CDN product, gradually catching up in terms of feature coverage with Akamai Dynamic Site Acceleration.

Look out for the presentations from Dan Rayburn’s CDN event.

Here’s a comparison of the streaming element of Google Play with Spotify and Rdio.

The auction is over and Waze belongs to Google.

Crowdsourced advertising.

Designing the Secret Life of the Cat; designing the camera mounted on the cats.

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June 10, 2013

Telco 2.0 News Review: PRISM, Orange, Softbank, SoftLayer

[Ed. We’re just analysing and writing up the output from the excellent New Digital Economics Brainstorm in London last week, and will be publishing reports and highlights shortly. Next in the Brainstorm series is Digital Arabia, November 11-12 in Dubai - the agenda is now up here. Please email contact@telco2.net for more on how to participate.]

Still under surveillance

No prizes for guessing the week’s top story. It turns out the bulk surveillance scandals of the 2000s didn’t go away, they went legit. It’s argued here that the National Security Agency’s PRISM program, which accesses data held by big Web companies, is probably based on some sort of accelerated legal process rather than a technical exploit. It also emerged that a secret court order exists to collect all Verizon’s CDRs on a regular basis. It’s hard to say what the upshot of all this will be, but it’s likely to be dramatic. Some people already want to boycott US tech companies.

No wonder, then, that delegates at the NDE Brainstorm this week said security, privacy, and control of their data was their top priority when looking at moving applications into the cloud.


Orange CEO quizzed by police, Softbank looks to the BATNA

Elsewhere, Orange CEO Stéphane Richard was questioned by police over his role in a controversial arbitration process that ended up with the government paying out a large sum of money to the even more controversial businessman Bernard Tapie. Richard’s contract runs out next year, the first head of a French state corporation to come up for renewal by President Hollande.

About 38% of Deutsche Telekom shareholders opted to take their dividend in shares, as the company tries to conserve cash for investments in the network. The German government, tellingly, turned down the offer and insisted on hard cash from its one-third of the company.

No wonder Vodafone cried off the Myanmar spectrum auction; Ooredoo is looking at spending $15bn on its roll-out there if they win.

Vodafone has been under pressure lately after it emerged that the company didn’t pay any UK corporation tax, again. As a result, they issued a table showing their total tax contribution, capital investment, and employment by country. Touchy, much?

AT&T Mobility claimed 500,000 net-adds in postpaid for Q2 and said that it expects EBITDA margins around 28% on full-year revenue growth up 2%.

Between Masayoshi “Mr. Miyagi” Son and the Satellite Cowboy, Charlie Ergen, it’s getting time to get reacquainted with the concept of BATNA, the Best Alternative To Negotiated Agreement.

Dealbook reports on the situation. Sprint’s shareholders vote on the offer on Wednesday, but this might be put off to let Dish formalise its offer further. Then Clearwire votes on Thursday. But Softbank is now talking about the possibility of instead buying out DTAG’s 74% stake in T-Mobile USA. As Reuters points out, such a deal could be simply a private transaction, avoiding the possibility of someone jumping in.

Would T-Mo, without the Clearwire spectrum resource, be worth having from Son’s point of view, or is he just trying to worsen the Sprint shareholders’ BATNA?

Here’s a particularly rasping effort to grind into the US oligopolists’ margins - FreedomPop is promising 500MB of data, 200 minutes of voice, and unlimited texts for free! Well, free when you buy an HTC Evo for $99 or something better for $199. The idea seems to be that some margin on the devices, plus sales of extra products like unlimited voice ($10/mo) or extra data ($18/2GB), will be enough to pay the MVNO bill from Sprint. Also, all the voice is provided via their own custom VoIP app.

The US cable operators’ WiFi roaming venture now has 150,000 hotspots, which makes it the biggest WLAN in the States. Relatedly, here’s a startup that sells WiFi capacity on demand, targeting mobile operators.

Ericsson snagged the contract to run the MBNL joint venture networks in the UK, those being EE, 3UK, and “legacy” T-Mobile and Orange. The first job will presumably be to find out what happened to 3UK’s data network last week.

Here’s an interesting interview with Zeinal Bava of Portugal Telecom, which touches on consolidation in Europe, or its absence, piloting products in Portugal to deploy them in Latin America, using TV as a driver for FTTH, and more. Meanwhile, Neelie Kroes walks back a bit on net neutrality, if you define net neutrality as “not selling packages with different speeds in”. But who does?

OFCOM, meanwhile, put off the first copyright infringement letters until 2015, lacking agreement on how to split the bill between ISPs and the record industry. Meanwhile, in the US, it turns out that the copyrighted material downloaded in a lawsuit was seeded on BitTorrent by…the rightsholder.

IBM buys SoftLayer for its cloud

In the cloud, IBM acquired SoftLayer, one of the world’s biggest providers of Web hosting and data centres, in order to strengthen their enterprise cloud offering. They bring 13 data centres worldwide, 21,000 customers, and something like 100,000 servers (aka “a Google”) to IBM. The deal is reported at $2bn but IBM isn’t officially saying.

Meanwhile, Netcraft estimates the size of Amazon Web Services’ cloud at 158,000 servers, hosting 2.1 million Web sites. To put it another way, each identifiable machine in AWS supports 13 Web sites - virtualisation with a vengeance, especially as this doesn’t count anything that doesn’t expose a Web server and have a domain name.

Switch & Data already has a whole park of big data centres in Las Vegas, notable both for their size and also for their high power-density. Now they’ve opened another, taking the site to 20,000 cabinets and 200MW of power.

Where there is power, there must also be cooling - it’s the iron law of data centre design. Facebook Prineville was one of the first to use outside air rather than chillers, and in the summer of 2011, it went badly wrong. Hot air was recycled into the evaporative cooler, making it cooler and also humid. Somehow, the system got into a loop, until the air entering the cold aisles was so wet it formed clouds - physical ones - and rain started to fall on the servers.

Facebook this week announced a new data warehouse system providing for SQL queries across its distributed data stores, another milestone in the move from NoSQL to NewSQL.

Here’s a Hacker News thread on how one startup left Google App Engine for Google Compute Engine. We wonder, meanwhile, how long it will be before GAE or GCE provides a NewSQL tool like Google’s internal-use Spanner and catches up with something like Amazon Redshift.

Meanwhile, AWS moves its Relational Database Service into General Availability.

Adrian Holovaty moves his startup out of Heroku and directly into AWS, and explains why. The British Government’s Gov.uk team describe their stack and explain why.

Weve is go for launch, Google Wallet flops

Weve, the UK mobile operators’ advertising joint venture, will launch its first campaigns this summer, and it plans to have a financial/payments platform running by next year.

Google Wallet, meanwhile, is losing money according to its former head, who quit on the 20th of May. Businessweek reports it still has only 10 million downloads in 2 years, supports only Sprint-Nextel among US carriers, and is paying far too much on each credit-card transaction.

On the other hand, 4 in 10 YouTube views are now on mobile devices.

Waze is the object of a bidding war - Google ups the offer to $1.3bn.

Facebook is slashing the range of ad products it offers, by rolling up most of the features into a single ad product. This also means that the “Sponsored Stories”, ads injected into user content, are now automatic for all advertisers.

Salesforce, meanwhile, acquired ExactTarget, a company that provides text, e-mail, and social media ad campaigns, for $2.5bn.

“The CMO is expected to spend more on technology than the CIO by 2017,” said Marc Benioff, chairman and CEO of Salesforce.com.

Android penetration has peaked in the US

Horace notes that according to comScore, Android penetration in the US seems to have peaked. Last week, we noted that some Microsoft executives have started saying that iPads are used as PCs and that this wasn’t good news for Windows market share. Here’s a quantitative illustration.

You’ll soon be able to trade in your old iPhone. Foxconn reports sales up 2.1%.

Galaxy S4 shipments may not be that great.

Here’s a preview of Intel’s proposed UI for Tizen.

Facebook and Google pushed updates for Facebook Home and GMail respectively.

The worst Android trojan yet.

China Mobile does Telco-OTT

China Mobile has a mobile VoIP client, “Jego”. It sounds pretty basic, offering free calls and messaging between Jego users only, and is targeted on Chinese travelling internationally.

Alan Quayle discusses Twilio’s latest VC round of $70 million. He’s a bit less enthusiastic than others and doesn’t like the fact it’s Asterisk under the bonnet.

Chris Kranky says standardise signalling in WebRTC before the “telco types start yapping about mapping SS7 to WebRTC”. Elsewhere, it’s argued that signalling is already dead. Struggling with SIP. Multiple GSM modems, Asterisk, and a RaspberryPi.

And iDEN is over on the 29th of June. We’ll miss you - you were great back in the day.

Zynga is slashing jobs as its valuation goes from $7bn to $2.7bn. “Music was playing loudly. People were ripping up Zynga hoodies and T-shirts.”

Google brings back one of the closed APIs.

Ars Technica is liveblogging 10 different events later today.

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June 4, 2013

Cloud 2.0: Surviving the Commoditisation Crunch

We’re researching the current drivers and barriers to the adoption of cloud services in the enterprise market, and are now seeking input from experts and practitioners from telecoms service providers. There’s a link to a short online survey at the bottom of this article and contributors will receive a full copy of the survey results.

Below is an introduction to some of the hypotheses that we are investigating by Bob Brace, Senior Analyst Telco 2.0, who leads our Cloud 2.0 Programme, and who is the lead author on our research report series Cloud 2.0: Telco Strategies in the Cloud. (Ed. We also run Cloud 2.0 Strategy Workshops - please email contact@telco2.net for more.)

Enterprises of all sizes have started a journey to cloud, but there is no single path that will suit all organisations. Some will stay with “in-house” solutions; others will look to cloud brokers. We are interested in what the “end game” might look like for enterprise cloud adoption and identifying some of the steps along the way or options that service providers might take to accelerate adoption.

One of our hypotheses is that Cloud Service Providers who are able to best help their enterprise customers to move more activities, more quickly, into cloud services will have a survival advantage when the inevitable commoditisation “Cloud Crunch” takes place as the market matures.

Enterprises moving to cloud are facing a number of issues; there may already be a degree of cloud adoption within their workforce as users adopt seemingly harmless external services such as Evernote, Google Drive, etc. They are also faced with a number of inter-related technology decisions that could have a major impact on how they manage and grow their business in the future. Decisions taken now may impact or influence future service roll out or the ability to offer seamlessly integrated services to their users. But what are the key drivers and barriers?

STL is undertaking research with Cloud Service Providers and Enterprises into the forces and trends that are shaping cloud service adoption. We are seeking answers to a number of key questions such as:

  • What sort of cloud services will enterprises finally adopt (Private Cloud, Virtual Private Cloud, IaaS, PaaS, SaaS… and various hybrid)?

  • And perhaps of more importance, how will they get there and who can help them?

In exploring the “Cloud End Game” we have identified the three following potential scenarios that apply both to individual Enterprises and the wider industry. Each scenario corresponds to a “type” of cloud provider model.

1. Global Platforms. In this scenario, any given enterprise has adopted the cloud services from one or more of the big global providers (Google, Microsoft, Salesforce etc) and has either their own private cloud or a virtual private cloud from a cloud service provider. They are in effect doing their own integration between the external services and their own and are competent to provide their own support and manage multiple billing relationships. They are also confident that their data is secure and cannot be accessed by other companies who use the big global providers services. Enterprises that buy their horizontal business enablers as SaaS direct from Microsoft (or Google) have a billing relationship with Microsoft and in addition, the standard Microsoft or Google solution stores all their user data (files). The enterprise may also use Microsoft Dynamics or Salesforce.com for CRM and this will mean yet another billing and technology relationship. Vertical applications such as Finance, HR, stock control etc are candidates to be hosted by a Cloud Service Provider. At this point we see the enterprise with at least 3 billing relationships, multiple locations for data storage plus security concerns over data location and access and more than one place to go to get support issues resolved.

2. Bespoke Cloud. In this scenario, System Integrators provide enterprises with Cloud services much as data centres’ services and hosting were the past. Services running on this infrastructure are “built to spec”. Although such a tailored approach has its merits, it does not deliver the full promise of cloud services. However, unless specifically paid for on an exclusive basis, the infrastructure is virtualised and shared with other public users. Generally data is not encrypted and platforms are multi-tenant. Enterprises must be confident that the CSP has adequate controls and systems to protect their data.

3. Service Brokerage. In this scenario, enterprises work with Cloud Service Providers who provide a brokerage service. Cloud service brokers aggregate, integrate and customise multiple cloud services as well as provide (ideally their own) secure data storage and connectivity. Combining multiple best-in-class SaaS services with single sign-on, billing, support, compliance and end-to-end security, we see cloud service brokerage as a potential sweet spot for the Cloud Service Provider (CSP). By offering what is effectively a brokerage solution, the CSP could manage the other providers, provide support and even host and secure the data stores providing encryption and migration tools.

We anticipate that these three scenarios will continue to co-exist for many years along with in-house IT. This hybrid scenario is most likely to persist for some time (physical, virtual, cloud in combination) and managing the data across these boundaries, with consistent security policies/management, will be the biggest challenge.

However, as stated above, we believe that the third scenario offers the best potential for addressing the needs and overcoming potential concerns of most enterprises. Furthermore, this scenario offers the best prospective outcome for many Cloud Service Providers (CSPs) including those originating from telecoms and hosting as it allows them to provide clear differentiation and USP’s.

However, to succeed, these CSPs must convince their customers that they have overcome the key concerns of moving to the cloud:

  • Security

  • Migration

  • Support

  • Billing

Although some CSPs are already doing so, most still need to rethink their approach to security and their associated capabilities to successfully sell and deliver Cloud Brokerage. Rather than limiting security to a functional sign-off step in product development, some of the more advanced CSPs are putting security into the very core of their proposition and building the capabilities to deliver this: encryption, policy enforcement, migration assurance and auditability, for example. After all, as the following vote from the EMEA 2013 Brainstorm showed, many still see ‘security’ as the top customer issue to be overcome.

emea cloud barriers vote june 2012.png

Like all emerging and new technologies the Cloud is going through a hype cycle and before the end game is reached, we expect many CSPs to either fail or be subsumed by more successful rivals. The survivors will be those that have set out their stall and focused on delivering services that meet their customers’ needs and overcome the biggest barriers to adoption.

But what do you think? Please contribute to our online Cloud 2.0 CSP Survey here. It will take about 10 minutes, is entirely confidential, and participants will receive a full copy of the survey results.

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June 3, 2013

Apple CAPEX, Kill Your PBX, When Facebook ads go bad - Telco 2.0 News Review

Coming, ready or not! The Telco 2.0 EMEA Brainstorm is this week.

Operators face up to the brutal future in Europe

2013 is a “Darwinian tipping point” for European telcos, who will have to embrace innovation in key sectors like the cloud, mobility, and big data, and create strategic relationships with other players like the CDNs, says IDATE. You may have seen this somewhere before - it’s as if they were facing a brutal future or something.

And, indeed, we see the impact of this on the players most exposed to the economic crisis. Telefonica is looking at selling O2 Ireland in order to raise €700m and reduce its debts. Telecom Italia is selling off the fixed operator preparatory to a merger, perhaps with Hutchison although no decision has yet been taken. And Vodafone is spending £900m on network CAPEX in the UK, as it fights for share and prepares for 4G.

We could do with more of that. The GSMA points out that 20% of connections in the US are on LTE compared to 2% in the EU, US mobile industry CAPEX has gone up 70% since 2007, and it’s actually falling in Europe.

Free Mobile does reverse quadplay, selling fixed services to people drawn into the shop by the cheap mobile service, but of course it also has some millions of fixed customers to upsell. They can now get the discount on a second mobile plan, deepening Free’s presence in its fixed-line households. This is also possibly a step further towards profitability - by definition, Free already has a WLAN hotspot, small cell, and Internet link in place to serve these people.

At the very last moment, as the auctioneer cries “Going…Going…” and lifts the hammer, who’s this buckskin-clad figure barging into the hall? It’s the Satellite Cowboy himself, with a new offer for Clearwire, upping the price by a dollar a share and promising to take over the $80m/month funding roll. Meanwhile, the cable companies who own stakes in Clearwire have not surprisingly come out against DISH’s bid, being DISH’s competitors. And another dignified public event degenerates into a vulgar brawl. You’d think they were doing it on purpose.

As a result, the final-final vote gets put off to consider the offer. Boringly, Institutional Shareholder Services recommended its clients, who speak for much of Sprint, to vote for the Softbank deal and put an end to all the fun.

Kevin Russell, who was usually quotable as CEO of 3UK, is now running Optus in Australia.

Australia’s telecommunications industry “has gone backwards in the past five or six years - I don’t think any of us have covered ourselves in glory….You can’t rely on fifteen-year-old children going over their caps and having two or three thousand dollar data bills. That’s just wrong - it’s wrong morally, it’s not sustainable.

Apple buys a Yahoo! worth of machine tools every three years

The killer app in mobile, it seems increasingly clear, was really manufacturing. Horace points out that Apple fans (and knockers) who wonder why they don’t make a big acquisition with their money are missing the point - Apple’s capital investment is the equivalent of buying a Yahoo! every three years. And nobody thinks the iPhone production tooling is a worse investment than buying Yahoo! Probably not even Yahoo! Over the years since the iPhone launch, Apple has invested $21bn in manufacturing and the scary thing is that they’re planning to spend another $10bn this fiscal year.

Google spends money on Glass and self-driving cars and Internet balloons and robot kites and whatnot, but you suspect Apple is probably building a Death Star to exterminate its competitors. Or perhaps it’s an iWatch, or an iHat? Mary Meeker certainly thinks so, but Tim Cook thinks wearables are only ever going to be a niche.

Anyway. In fact, Apple actually invests more money in manufacturing than Intel…if not as much as Samsung, although Samsung also makes a lot of other stuff that’s out of scope here.


Samsung, though, is not totally committed either to competing with Apple, or to being a component vendor competing with Intel. They announced this week that the new flagship Android tablet would use an Intel processor, and the first major Samsung device to use something other than ARM technology.b

Meanwhile, here’s a rundown of the new Intel CPU architecture, Haswell. At the moment, it’s going into the super-high performance, less power critical areas like desktops and servers, leaving the Atoms to deal with mobility, but power consumption is a key element of the new chips and Intel plans to use them in Android devices and Ultrabooks in the future. Intel also just acquired STEricsson’s GPS chip business.

ARM, for its part, also has a new line, providing a CPU similar to the Apple A6, fitting in their range between the Cortex A9, now considered a low-cost option, and the top dollar quad-core A15.

Says Microsoft: The future is killer devices, connected to amazing cloud services, and we should think of tablets as being PCs because people very often use them in the same way. The only problem for Microsoft there is that presumably you’d have to count iOS on the iPad as a PC operating system, and that wouldn’t do anything nice for the Windows market share numbers. The point is also made in comments here that iPads should be considered to be the supposedly missing low-cost MacBook.

Apparently, a Samsung Galaxy S4 will survive marginally longer underwater than an iPhone but the iPhone will withstand being dropped from a greater height. But will it tell Cupertino about your irresponsibility? Apple settles a lawsuit over the iDevice warranty, after it turns out that the telltale alkaline strip hidden in the device to detect if water has got in and therefore provide grounds to refuse your claim may change colour just because the atmosphere is humid. In other Apple news, they respond to the devaluation of the yen by putting up prices.

Firefox OS tablet a-coming. And Bloomberg Businessweek reports on Android getting everywhere, making Google “the dominant software player in a connected world” on every metric, except for revenue or profit. They use a NASA project to build small satellites cheaply using Android as an example, but how many nanosatellites running Android are going to click on adverts?

4.5bn smartphones times YouTube = get serious about mobile CDN

Ericsson presented its forecasts for the industry today, and it expects the number of smartphone subscriptions globally to get to 4.5bn by 2018, or to put it another way, the end of the non-smartphone. That means a lot of cat videos, and as a result, they forecast 60% annual growth in video traffic over the same period.

Cisco, for its part, issued its own crystal-ball exercise at the same time. As has happened over the last year or so, the Cisco VNI has walked back some of the spectacular forecasts for IP traffic growth it used to produce - they’re expecting a 23% CAGR for 2012-2017, although that covers all Internet traffic. That said, they expect Internet traffic to be majority-mobile by 2016, so the two forecasts are not that contradictory.

Cisco, predictably, expects the major rules-of-thumb of the Internet to remain in force. Busy-hour traffic will increase much more than average traffic, representing the structurally high peak-mean ratio typical of IP networks that also sells routers via the provision-for-the-peak principle. Peering will still be the basic architecture of the Internet, with metro-area traffic growing much faster than backbone traffic. And CDNs will be very important, delivering 65% of the total video on the Internet by 2017.

Given that video will be 80% of the total traffic, that implies a lot of CDN growth, and we made you a report on what to do about it. Cisco also made you a bigger router, and only a terrible cynic would see anything other than coincidental in the timing. Meanwhile, Nokia Siemens Networks joined Intel’s Smart Cell initiative to deploy applications (like CDN nodes) to the small cell.

No wonder, then, that a Verizon-Limelight Networks deal is on the cards.

Could the UK benefit from more openness about 4G network planning?

A problem for both the NBN and TurnbullDSL: Telstra’s ducts are crammed with undeclared asbestos. We remember when OFCOM’s infrasructure-sharing trial project discovered that a surprisingly large percentage of BT’s ducts were full of raw sewage. At last, someone’s beaten that one.

This piece on the Iranian Internet notes that Iran is very much in the business of providing Internet transit as well as cutting it off. Renesys, meanwhile, points out that cutting off the Internet in Turkey is easier said than done, given that there is no monopoly transit provider and a wealth of international cable landings - even after the Turkish prime minister said Twitter was the “greatest scourge in the world”.

Major mobile money JV; understanding M-PESA in society; Netflix on really big cloud systems

Caixabank, Santander, and Telefonica have set up a joint venture to develop new digital businesses. Seeing as this is two banks and a telco, you might expect it to be some kind of digital wallet/m-payments play, and you’d be right.

the company will begin its activities with the management of an online community to ease the connection between merchants and consumers when it comes to offers, discounts and promotions. This community will be a new tool for retailers to boost sales.

Additionally, the joint venture will develop a Digital Wallet in which customers can keep all their cards, which will serve as identification in stores and for making purchases within the digital community, as well as being a person-to-person (P2P) mobile payment service for community members

Here’s a fascinating read on the user anthropology of M-PESA, by far the most successful of m-payments projects. Notably, you shouldn’t expect it to be used by the poor (they have no money), at least as first, and it’s very important to understand when money isn’t money and when it’s more than just money. And mobile money sometimes makes men economically more like women.

There’s a bidding war on for Hulu, but it looks like it’s going to end up in the TV industry. On the other hand, if you want to understand either online video or the cloud, Netflix is the company to ask, and specifically its CTO, Adrian Cockcroft. Here he is speaking to the Linux Foundation on why the cloud is “dystopia as a service”.

And IBM has a robot that maps your data centre.

Enterprises chuck out the PBX; call centres considered harmful

Enterprises are spending much less money on voice hardware, with the market for PBXen falling 10% in the first quarter, putting it back where it was in recession-hammered 2009. On the other hand, spending on unified communications solutions and software is growing strongly, up 21% in the same timeframe.

It looks like the underlying provision of telephony is being commoditised, deflated, and demonetised, with value shifting to features, integration, user experience, and adjacent systems - the core message of our voice practice since the beginning of Telco 2.0. On that note, the BBC goes to see Calltrunk.

Salesforce thinks the call centre is finished, because today’s kids will just use Twitter. However, at least in Australia:

For every customer that says an issue was resolved through Twitter, another claims their tweet to a company was ignored.

Chris Kranky looks at how VoIP is evolving towards a couple of huge proprietary ecosystems and a vast diversity of verticalised apps, mostly around the definition of identifiers. Dan York blogs FCC CTO Henning Schultze’s recent presentation on the future of the PSTN and the future of telephone numbers as an application-layer identifier that is relatively trustworthy, memorable, and highly interoperable.

This is also why Cisco is suing Microsoft.

RevK experiments with his own replacement identifier, and the comments discuss the surprisingly large phenomenon of SIP spam. DarkReading discusses what to do about SIP denial-of-service attacks. Voxygen builds its own Thunderbirds communicator with a RaspberryPi, their API, and some casemodding.

And here’s a Twilio co-founder on how to price cloud services:

When targeted ads attack

The problem with algorithmic ad-targeting - what if the algo determines that your customers like both your product, and rape? It seems to have happened to Nissan, the Nationwide Building Society, and Dove skincare products, whose adverts were automatically targeted by Facebook on a variety of highly offensive posts whose content is probably not worth going into further. The selection seems to suggest that this is a bug, but it’s quite possible that ad-targeting might tell you things about your customer you’d rather not know.

Meet the Big Data sceptics.

Amazon customers click “like” - workers, not so much.

Is Marissa Mayer’s Yahoo! doubling-down on the old “web portal” concept, or is it aggregating a lot of tools that all do one thing well, like Unix utilities, or is it just trying to remind us that it exists?

Replacing all your newspaper photographers with iPhones.

And the search for 3.5 million buried computer games.

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