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August 28, 2013

A different commitment: how Online Retail & Telecom can Innovate Together


This is a guest post by Peter Briscoe, Executive Director of Innovation, Business Unit Support Solutions at Ericsson, on the opportunities for telcos and retailers to innovate together.

Currently there is a strong drive within the telecom’s industry to define future service models and the focus on digital services has never been stronger. The recent New Digital Economics Brainstorm in London was a welcomed opportunity to not only discuss and debate the future among colleagues, but also to discover alternative points of view from banking, online retail, web service and other sectors.

By looking at existing online retail models we can see some challenging areas with fundamental differences that Communication Service Providers (CSP) will need to address, including zero future commitment and short duration services.

Until recently, only a small number of CSPs used payment models based on zero future commitment, where there is no recurring component and involve no additional cost for the consumer after the initial purchase. In most cases, this model is based on pay-before-delivery.

In contrast, most non-retail services, including utilities and telecommunication services, involve a minimum commitment - usually more than one day and in many cases months or years. It is therefore interesting to see how a CSP could adapt this alternative approach and address the challenges it can bring.

This lower level of commitment drives a new breed of short-duration services. With care, these service can provide higher margins and compensate for declining revenue streams elsewhere. People are willing to pay more for a short-duration service if it can be delivered in an immediate, efficient and simple way such as watching a downloaded film.

For short-duration services, greater real-time service enablement will necessitate additional partnerships and introduce new methods that do not require the same level of device pre-configuration and network configuration as required today.

The ability to bring all of these different views together will be the balancing act that many operators will attempt, and centre stage to this approach is how to create the right service enablement platform that can meet all of these demands and drive new business.

For us at Ericsson, the brainstorm was also a great opportunity to hear how companies are looking at new ways in which they can experiment and innovate on top of these new service enablement platforms. Mobily’s Head of Innovation, Gaurav Basra, provided a great example of this. He explained not only how they enable internal innovation but bring gamification to the process with a virtual internal stock market for employee ideas.

Mixing retail and telecommunication companies shows that there are great benefits to be found in better understanding the existing online models and exploring how we can enrich them together. With this combination, I believe it will spark the next transformation in both markets.

Background on Author

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Peter Briscoe is executive director of innovation, Business Unit Support Solutions at Ericsson. He directs new programs intended to address evolving priorities in telecom software operations platforms. Briscoe has spent more than 19 years working in telecom operations support, with experience in consulting and software creation spanning fault management, service fulfillment and planning. He has worked on several large deployments around the world, specializing in new network technologies and equipment.

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August 27, 2013

Gold iPhone; Kindle by satellite; China Mobile LTE contracts; exit Ballmer - Telco 2.0 News Review

Digital Arabia is coming to Dubai on the 12th-13th of November.

Any iPhone you like as long as it’s gold; Amazon looks at satellite Kindles

The Apple rumour machine is operating at nominal capacity this week, and the pick is probably the suggestion that the new iPhone will be gold. Of course, Apple would no doubt come up with some sort of elegant champagne hue, but would they really indulge in Vertu-style bling?

A bit more seriously, Apple Store staff have apparently been briefed about a new trade-in program for old iPhones as an effort to increase the proportion of the devices that sell through Apple’s own retail channel. We note that they’ve been in an investment phase in retail for some time.

It’s suggested that the frame-rate might be dramatically increased.

And Apple has patented the “silent disco”, a recent trend according to TechCrunch but one we remember happening in Waterloo Station as long ago as 2005.

Amazon’s next lot of Kindles may use Globalstar’s satellite network for their Internet connectivity rather than the cellular operator partners in Whispernet. If they do go ahead with this, it suggests that they’re more than ever convinced that the devices are about receiving and consuming content and their general-purpose features are secondary - the latency would make browsing very sporky, but then if you’re browsing the web on a Kindle you’re probably desperate.

As predicted, the Ubuntu Edge didn’t get to its crowdfunding target. On the other hand, Jolla has apparently sold all the pre-order gadgets.

China Mobile LTE contracts are out, and the lucky winner is…

The mother of all infrastructure contracts is here: China Mobile announced the first $3bn in a $7bn rollout of TD-LTE, including some 200,000 eNodeBs. Unsurprisingly, the biggest winners were Huawei and ZTE, who each got 25% of the job. The other half of the contract was divvied up between Ericsson, Alcatel-Lucent, and Nokia. China Mobile may yet spend as much as $18bn in CAPEX this year over and above what it’s spent already, so there’s plenty more to play for.

We shall see whether the share-out is enough to prevent a trade dispute between China and the European Union - the EU trade commissioner has been sitting on a complaint, waiting for the result of the China Mobile deal. Now the result is in.

China’s .cn DNS root was the target of the biggest ever DDOS attack over the weekend.

AT&T, meanwhile, promised to add another 50 LTE coverage areas by the end of the year. FierceWireless has a good overview of US LTE deployment - even with the new deployments, Verizon Wireless is still well ahead.

AT&T also opened another of their “Foundry” innovation centres this week, in Atlanta:

VZW stopped offering unlimited data plans in 2011, but had to “grandfather in” the existing customers who insisted on their right to renew the contracts. They’re now trying to persuade them to give up the sought-after contracts by offering them more shiny, via their “Edge” get-a-phone-quicker program.

Turkcell’s long-running ownership dispute, between the local investor Cukurova and Russian telecoms group Altimo, got so bad lately that there weren’t enough board members to sign the Q2 results. They’ve now had two neutral members imposed by the regulator, and as a result, we know the company’s profits were up 4.1%.

Telefonica, meanwhile, upped its bid for E-Plus quite substantially, and scored the approval of Carlos Slim in his effort to acquire its owner, KPN. The deal would give Telefonica control of E-Plus and merge it into O2 Germany, while also leaving KPN with 20% of the combined company as well as the €8.5bn in cash.

Slim also OK’d Telekom Austria’s plan to issue €500m of new stock. America Movil owns 24% of the operator, second only to the Austrian government’s 28%.

The recent surge of emerging markets angst has shaken up some operators. Telkom in Indonesia, for example, responded to the slide in markets and a request from the government by offering to buy back stock. In India, Reliance is talking about selling a stake in its submarine cables, but then it has been for the last 12 months.

Orange, meanwhile, is planning a visit to South Africa, where it intends to start an MVNO and also to join a joint venture operating WLAN hotspots. Benoit Felten looks at some options for the Aussie NBN.

And meet the people worried about BT turning off dial-up service because they can’t get broadband. In Uzbekistan, meanwhile, where the government ordered MTS out of the country a while back, they still can’t find a buyer for the operator, and now mysterious new billboards are appearing. Detergent? Green tea? Or…a new mobile operator?

VMWare and Savvis roll out hybrid cloud; The Data Centre as a Computer, 2.0

VMWare held its annual shindig this week and Ars Technica was there. Major announcements include a new (ish) SDN solution, “NSX”, which claims to provide a full networking stack in software from Layer 2 to Layer 7, more detail on their hybrid cloud service, and the new version of the core virtual machine, vSphere.

Savvis will be providing data centres and connectivity for the new cloud product. China Telecom, meanwhile, has been building what it claims is “Asia’s largest cloud computing base” on the grasslands of Inner Mongolia, where (among other things) the wind power is cheap.

Update your local buzzword cache: welcome to Fog Computing, which is what Cisco calls a view of the cloud that moves more processing to the edge, closer to the user, and emphasises M2M and mobility.

Here’s a half-hour talk on how Reddit scaled up.

And Google has published the second, completely revised edition of the classic The Data Centre as a Computer, the paper that launched the cloud. You can download it here, free.

RingCentral is go for IPO, Calliflower gets refreshed

Chetan Sharma notes that voice and messaging revenue fell year-on-year in 21 different Vodafone markets.

The good news: RingCentral, a cloud-based unicomms product for SMBs, is going for an IPO at $100 million. Or, a valuation equal to last year’s sales…

Voice on the Web reviews the refreshed Calliflower, including its new look and feel, its WebRTC support, and its use of the Opus HD voice codec.

Chris Kranky argues that Rogers Wireless’ OneNumber FMC product is a buggy mess and should probably have been built in WebRTC to begin with.

DialDrive is a comprehensive marketing and virtual call centre tool based on Twilio’s WebRTC client.

A Balancing Act talks to the Microsoft exec responsible for Office Online, the communications module for Office 365, and hears that it “just works” whenever latency is better than 250ms - which includes more of Africa than you might think.

Ballmer exits Microsoft; a fly on the wall at Yahoo!

Steve Ballmer leaves Microsoft, saying that he didn’t want to be IBM and that there is no real enterprise/customer distinction. We’ll remember him for “developers, developers, developers” - something Apple and Google grasped and Nokia never did.

Here’s a form guide to the potential candidates for the succession.

Here’s a deep profile of Marissa Mayer.

Mark Zuckerberg explains Internet.org, which turns out to be much like 0.facebook.com.

Baidu has a new HTML5 app store that is designed to save you downloading apps you only use once.

And it’s time to kill Windows XP before it comes for you.

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Location Insight Services (LIS): Monetising an $11bn Resource

We’ve just published a free new research report, Making Money from Location Insights that provides a detailed analysis of the $11Bn Location Insight Services opportunity, with specific use cases and an explanation of both why and how operators are uniquely placed to secure a significant share of this exciting new market.

Although the market has been quick to capitalise on ‘location’ by developing a range of Location Based Services (LBS), which some analysts say is already worth nearly $10bn, there is a growing conviction among operators that a wider opportunity exists in Location Insight Services (LIS). These, as opposed to LBS, do not necessarily require real-time data.

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Location Insight Services have a simple premise: by leveraging the aggregated and anonymised data asset derived from connected consumers’ mobile location data, Telcos can identify patterns in location activity over time. This not only enables a much deeper understanding of the consumer in terms of behaviour and motivation, but also builds a clearer picture of the visitor profile of the location itself.

LIS could be worth $11bn globally by 2016

Following consultation with key stakeholders within the emerging ecosystem, STL Partners has developed a detailed market taxonomy framework to help operators identify and prioritise the potential demand sources for LIS. Of particular note is the scale of the LIS opportunity in both retail and sales & marketing. An illustrative use case at the intersection of these is advertising evaluation:


  • Problem: “I know that advertising has an impact on sales, but how effective are my promotions in generating store traffic?”

  • Solution: LIS groups sites and catchments by promoted and non-promoted, and enables calculation of relative uplift (broken down by audience profile).

  • Value: Improvement in advertising attribution and media efficiency.


For more, please visit our research portal to register and download the report here.

Report Background

This analysis was independently conducted and written by STL Partners and kindly sponsored by JDSU. The following interview with Tim Davis of STL Partners and Dr Michael Flanagan, CTO of Arieso, a JDSU mobility solution, gives further insight and background.

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August 19, 2013

Telco 2.0 Transformation Index launches: Telco 2.0 News Review

Don’t delay: places are going fast for the Digital Arabia event in Dubai on the 11th and 12th of November

Mobile voice “the most discounted product” in telecoms; Joyn? No thanks; Telco 2.0 Transformation Index launch

Fixed service revenue may grow faster than mobile in Europe, Analysys Mason reckons. Or rather, it’s going to shrink less. The really interesting quote is this one:

Mobile voice appears to be the most discounted part in the marketing of quadruple-plays. The knock-on effect is a swift erosion of the value of mobile voice in the market as a whole. For example, almost all of the revenue and EBITDA erosion caused by Free Mobile’s entry to the French market (with an entry-level EUR2 per month offer when bundled with a fixed triple-play) was attributed to mobile, whereas revenue attributable to fixed-line services did not shift from its long-term trajectory

We pointed out that “reverse quad-play” - pushing fixed services to the people drawn through the door by the low, low mobile prices - was a big part of Free’s business model back at the time.

They also point out that the fixed operators have largely succeeded in keeping the notion of a line rental charge alive while its value proposition shifts from voice to data, and therefore have protected a big chunk of their revenues. Arguably, rebundling plays like Vodafone RED are trying to achieve something similar by establishing an overall price point that’s independent of the service mix inside the bubble.

So, mobile voice is the most discounted product in the industry. How’s that new Joyn thing coming on? Not so good.

According to the researchers, of the 40 or so MNOs and MVNOs, only 7 per cent now believe Joyn is the solution to combat the threat of Over The Top (OTT) voice and messaging services. A further 29 per cent say they believe that Joyn had the potential to be the solution, but it has taken too long to launch — seven years from concept to commercial launch compared to six months for WhatsApp. In fact, a full 29 per cent believe that Joyn is, flatly, not the solution, and more than a third (36 per cent) are uncertain of the impact the GSMA-based standard will have on their ability to tackle OTT players.

And in the US, FierceWireless recently pointed out that US carriers’ subscriber growth has been flattered by the flow of refugees from Sprint Nextel’s iDEN network, and that with the final shutdown, this support will end. Sprint had the very first voice applications ecosystem, with a remarkable range of enterprise applications built on top of the iDEN network in things like WinForms. They chose a strategy of tearing off the plaster, rather than trying to organise a graceful transition…and it looks like 60-70% of the subscribers just left.

If anyone’s nostalgic, though, here’s a tutorial on how to send (or indeed receive) SMS inside an Excel spreadsheet.

So, we face an industry disruption. Where do we go from here?

AT&T tells Mobile World Live that the future is bright and the future is M2M. 14 million connected devices is a lot, but we can’t help but notice that they’re not saying much about the ARPU on that, still less the margin.

The idea of “sender-pays data” is one that’s been discussed for years, and apparently it’s been getting some consideration in the US - ESPN, for example, was looking at paying carriers to zero-rate its video content. But Verizon CFO Fran Shammo isn’t sounding hugely enthusiastic, pointing out that the practicalities of such a business model get involved with advertising media metrics, as if that wasn’t complicated enough in itself.

He also makes the worthwhile point that VZW’s Share Everything tariff, which bundles unlimited voice and messaging, has the big advantage that it generates fewer calls to customer service, and as a result, VZW might never use the time-of-day and other dynamic billing capabilities it has.

For our part, Telco 2.0 has been beavering away at a new project, which aims to measure how well major global operators are coping with the environment of systematic disruption they face. The Telco 2.0 Transformation Index provides in-depth analysis into 8 multinational carriers in phase 1. Our MD and Chief Strategist, Chris Barraclough, introduces the project:

Telco 2.0 customers can download a sample here.

O2 LTE; EE user study; Israeli voice price wars

O2 UK announced its plans to launch LTE, and the plan is very similar to Vodafone’s and EE’s - a couple of quid more on the basic tariff. O2 bundles more content at the basic level than Vodafone, but doesn’t offer as much data, and throws in access to its WLAN hotspots.

If you believe EE’s user study, that shouldn’t matter too much, as the LTE users they polled claim to use WLAN hotspots much less since they moved to 4G. They even have some who claim to use fixed broadband less.

However, this is based on opinion polling, rather than measurement - smartphones are famous for camping on whatever WLAN is available, so do the users really notice the difference? And does EE actually know? If the user takes their fixed service, presumably yes, but it’s quite possible that the OS vendors know more about this than the operators.

Perhaps the most interesting fact in there is that occasionally, EE is seeing more uplink than downlink traffic. Better touchscreens and web browsers demanded more downlink; perhaps better cameras demand more uplink.

Vodafone, meanwhile, is constantly under fire over its tax affairs. Both the company and the UK government insist that they are in order, but a lot of people are convinced VF is getting away with something. As a result, the staff of the 360 Oxford Street Vodafone shop in central London have become inured to angry demonstrations outside their front window - probably because demonstrating outside Vodafone’s suburban HQ in Newbury wouldn’t get much attention, but it’s got to be rough on the shop workers.

And this week, Vodafone has indeed had to pay out a substantial sum in back tax, in order to settle a dispute with the Revenue. However, as part of the settlement, they also got a €67 million refund from the Irish taxman, so it’s probably fair to say nobody is happy.

Elsewhere, Reuters reports that T-Mobile USA’s operational revival has gone down very well indeed with the bond market, where its credit has improved dramatically.

Verizon, meanwhile, is quietly getting on with fibre deployment - Fran Shammo expects 300,000 more FiOS lines this year.

Canadian operators have come up with another reason why Verizon shouldn’t be allowed to enter the market: the Americans will spy on everyone! It would be a good point…if Canada wasn’t a full member of the Anglo-American intelligence alliance, and therefore almost certainly up to its eyeballs in the whole issue.

In Israel, Cellcom’s results are suffering, as a price war crushes margins on mobile voice. Where have we heard *that* before?

China Mobile’s KPIs for H1 show “traditional” voice revenues down 1.2% and SMS revenues down 5.5%, from a subscriber base that grew 8.4%. It sounds hellish, but on the other hand, data revenues were up 62%, enough to push up operating-level revenues across the board 10%.

iPhone! iPhone! iPhone! iPhone! iPhone!

We can probably expect a lot of iPhone news, or rather “news”, from now until the 10th of September. Forbes points out that if you’re looking for something with real impact on Apple’s bottom line, it probably has to involve selling them in China, which both implies that the devices will need to be cheaper and that Apple will need to sell them to a Chinese operator. If that’s China Mobile, they will also need to have a TD-SCDMA radio.

The Gordian solution would be, of course, to go with China Unicom instead and dodge the whole standards issue. But Apple has spent so much time and money courting China Mobile..surely they wouldn’t do a thing like that. Of course they would.

Something else Apple’s done: patented hyperlinks embedded in an audio stream.

Bad news for Samsung: NTT DoCoMo has dropped the Galaxy S4 from their range for this winter, because they didn’t sell enough.

Things at BlackBerry aren’t going well, and last week they started a committee to look at selling or breaking up the company. John Paczkowski at AllThingsD looks at the patent portfolio and argues that it might be worth as much as $3bn. The big question would be whether the buyer is another industry participant, or just a patent-troll.

Meanwhile, The Verge reports on an alternative plan that would have seen them dump BB OS 10 and concentrate on the enterprise side of the company.

You will no doubt be as touched and reassured as we are by the news that CEO Thorsten Heins is likely to make a lot of money whatever happens. In the event of a sale, his change-of-control clause pays out $56 million; if he’s just fired without a change of control, he gets $22 million.

But the good news for BlackBerry is that at least they’re not HTC. Not so long ago, they were so pleased with getting Dr Dre’s headphones startup on board, they wanted to buy a stake in the company. Now, Beats Audio wants to buy them out. At this rate, Beats will be trying to buy HTC next week.

Handelsblatt interviews the head of Nokia’s location services, who does a great job generally pushing maps but doesn’t escape the point that the division isn’t making money.

And Tesco wants its own tablet - is it more about selling content, or about crosspromoting goods, and how does Tesco’s MVNO play into this?

Ubuntu’s biggest crowdfunding ever fails, cloud business does better; Rackspace adds 52 servers/day

The crowdfunding drive for the Ubuntu Edge has been the biggest ever, but it needs to find another $20 million in the next six days, or give all the money back.

A cynic might suggest Mark Shuttleworth threw the whole thing as a publicity stunt. Here’s an interview with him - he claims that Canonical could become profitable at any time by scaling back to its server and cloud activities, but he’s willing to fund it because (basically) he wants to believe.

That said, the Ubuntu shop has more revenue-earners than just orange Tux mugs - as well as the Red Hat-style consulting and support business, and the proprietary Landscape data centre management tools, Canonical earns royalties when cloud computing firms provide Ubuntu virtual machines to their customers, and there are a hell of a lot of those around. Interestingly, some of the biggest providers of Ubuntu in the cloud are telcos, including some of the same ones who expressed an interest in the mobile version.

Canonical, of course, is a major contributor to OpenStack, like Rackspace. For their part, Rackspace claims to be adding 52 physical servers a day to its cloud infrastructure, bringing them to 98,884 machines under management at the end of Q2.

Amazon Web Services, meanwhile, has a whitepaper out on the best practices for their Elastic MapReduce big-data product, and has just added a bulk-notifications feature to EC2.

Google flips server encryption on; fun with censorship; “pay per gaze”

If your data is in the cloud, it’s where the feds can get at it. This was always a favourite complaint of grizzled old hackers, but these days it’s on everyone’s mind. Google has just announced that data in its Compute Engine storage services will be encrypted on the server by default. With this move, Google catches up to where Amazon Web Services was in October, 2011, although in fairness AWS requires the user to opt for encryption and Google’s is default-on.

At the same time, Google’s been arguing that the UK’s privacy laws don’t apply to it, rather like they argue the tax laws don’t apply to them. Perhaps the new European HQ is technically an independent state. They also recently claimed that GMail users have no “reasonable expectation of privacy” because of the ads, but it might have been going too far to convince everyone they had no reasonable expectation of service with last week’s 5 minute total Google outage.

A UK court ordered ISPs to block a website that offers unauthorised football, and hilarity ensued - the site used a DNS redirection service, and the court managed to ban the redirection service, thus incidentally censoring all their other customers. RevK points out that such a site could easily include the IP addresses of important third parties in its DNS records as a defence strategy.

Hackers make Samsung smart-TVs watch you.

Google has patented the use of Google Glass’s eye-tracking technology to find out which adverts you look at, and bill the advertiser on a “pay-per-gaze” basis. Those could be adverts in Glass, or indeed adverts on billboards, TV, or the printed page.

The Snowden wars, New Zealand edition.

Twitter’s radical origins. Emergency mesh networking that Bruce Schneier likes. How Lavabit used to work.

Cord-cutting has arrived, and telcos benefit!

There’s been a lot of talk over the years about “cord cutting”, the idea that what with all the video all over the Internet, Americans will stop paying for cable TV. (It’s usually Americans; pay-TV is so much more about live sport elsewhere.) It now seems to be happening, with the caveat that there is a strong seasonal effect and this might just be a big seasonal downswing. The beneficiaries seem to be Netflix and telco-provided TV services, in that order, as a fine chart shows.

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In Germany, a court has ordered the regulator to look again at the acquisition of KabelBW by LibertyGlobal, which might have to divest large contracts or break up the venture.

BT Sport screened its first football match, and 764,000 people tuned in (if that’s the right word), not counting users of their app. Sky’s big kickoff got 3.1m viewers - in fairness, that was a Manchester United game, but then BT’s featured Liverpool.

French tower company TDF wants to sell its French towers to pay off debts, but can’t.

And is PeerCDN going to wreck the CDN industry’s tea party?

“I’m 13 and none of *my* friends use Facebook!”

Here’s a SMS applications tool, a bit like FrontlineSMS or RapidSMS, but with a visual programming editor reminiscent of Yahoo! Pipes.

The Indie Web wants you to self-host everything. On your Ubuntu Edge, no doubt.

Goodbye, “20 per cent time”.

And finally, it’s the 30th anniversary of MIDI, the networking standard for musicians.

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August 16, 2013

Telco 2.0 Transformation Index: Understanding Telefonica’s Markets and Market Position


Over on our research portal we’ve just published an extract from the Telco 2.0 Transformation Index that shows our analysis of Telefonica’s markets and market position, including economic and digital market maturity, regulation, customers, competition and pricing.

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It is one part of our overall analysis of Telefonica’s progress towards transformation to the Telco 2.0 business model. The other parts of the Telefonica analysis are: Service Proposition, Finances, Technology, Value Network, and an overall summary. Telefonica is one of the companies analysed and compared in the first tranche of analysis that also addresses Vodafone, AT&T, Verizon, Axiata, SingTel, Etisalat and Ooredoo (formerly Qtel).

There will be also a world first preview of highlights from the Telco 2.0 Transformation Index at our Digital Arabia Executive Brainstorm in Dubai on 11-13th November 2013. To find out more about any of these services please email contact@telco2.net or call +44 (0) 207 247 5003.

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August 12, 2013

Sliding to the new iPhone; T-Mobile USA revival; waiting for the China Mobile 4G gig - Telco 2.0 News Review

Eid Mubarak. That was last week. Now it’s back to work, and time to book your slot at Digital Arabia 2013.

Apple’s “precipitous slide” to a new iPhone

Is Apple losing its way, not innovating, in a “precipitous slide”, and worst of all, losing key personnel like Guy Kawasaki to the forces of Android? Or have we just been waiting for the next tactical bound? Well, AllThingsD reckons a new iPhone is landing next month, and possibly another iPad to boot. They even have a date, the 10th of September.

Horace reckons, on the basis of past iPad and iPhone pricing, that there will be two new devices, a flagship and a mid-market device, which you can look at either as creating a product mix for iPhones like the iPad and iPad Mini, or else as maintaining the mixture of iPhones after the iPhone 4 goes the way of the 3 and the 3GS. He also points out that Apple has been winning share back from Android in the US lately.

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Tero Kuittinen at Forbes notes that the price points for midmarket devices have been creeping up lately, and that Apple might spring a painful surprise on the vendors by pricing around $350.

LG, meanwhile, introduces a radical innovation: buttons on the back of the phone. Will BlackBerry go private? Or will it sell the company? Or spin off the software unit? They’ve set up a committee to look at the options.

And T-Mobile USA has terminated its very popular promotion on iPhone 4S and 5. Almost as if they were clearing the decks for some sort of product launch in the near future.

T-Mobile USA gains 1.1 megasubs in Q2

It wasn’t that long ago that DTAG was trying to sell off T-Mobile USA, which was widely seen as a minor operator. If anything exciting was going to happen, it would happen at Sprint once Softbank got their hands on the company. But that took longer than anyone expected, and in the meantime T-Mobile has got its act together, thanks in part to a wedge of wedge from DTAG, the AT&T break fee, and iPhones. In Q2, the first full quarter after the integration of MetroPCS, they posted 1.1 million net adds, just ahead of VZW, well ahead of AT&T, and trouncing Sprint, which had a net loss of 2 million subscribers. And two-thirds of the gain was postpaid.

The cost? A $5 hit to monthly ARPU, which was pulled down to $46. It does look like the pricey US cellular market is getting a dose of price disruption, just from T-Mobile rather than Sprint.

Elsewhere, Satellite Cowboy Charlie Ergen is not discouraged by the Sprintbank soap opera and is thinking about a bid for T-Mobile. He’s also considering buying LightSquared and taking on the curse of Philip Falcone’s spectrum investments, which ought to keep him busy for a while yet.

China Unicom has signed up its 100 millionth 3G subscriber, pushing up its service revenue by 20% and its net profits by 55%.

Telekom Austria, meanwhile, complains of uncertainty in Bulgaria, which when you put it like that sounds like a euphemism for something. In fact, their net profits were up sharply, but this is the effect of a low base (they were up to €52 million). Revenue was down 1.9%, mostly because the Bulgarian operation’s ARPU fell 19%, due to a combination of a terrible economy, regulatory termination rate cuts, and the arrival of Telenor in the country.

Yota, with its valuable Russian LTE spectrum, has been acquired by Megafon, the biggest Russian MNO. This may be less important than it seems, as they share the same owner, Alisher Usmanov, who probably also owns your football club.

Vodafone UK has named the day for its LTE launch, and it’s the 29th of August. Tariffs are set at a small premium over the “Vodafone RED €30/£30 a month” level; £34 a month gets you a Samsung Galaxy S4, 2GB/mo of data, and six months of “premium content”, which is either Spotify Premium or Sky Sports. The network covers London at launch and will roll out to 12 more cities by the year end.

Olaf Swantee of EE, meanwhile, says that floating the company on the London stock exchange would make it “more British”. Is that good?

Bouygues may be in line for a substantial payout, after a French court ruled that Orange and SFR acted anti-competitively by offering free calls on-net. At the time, they controlled 85 per cent of the market between them, so this was substantially more useful to the subscriber than it could be for the third MNO.

And the bid is in for KPN, apparently shaken out by Telefonica’s offer for E-Plus. Carlos Slim’s offer is €2.40 a share, paid in cash, which values KPN at €10bn.

European Commission holds fire ahead of China Mobile 4G super-contract

The European Commission is apparently planning a major anti-trust case against Chinese network vendors, but it won’t move until it knows who gets the China Mobile LTE contract, aka the biggest infrastructure payday ever. None of the European vendors has been willing to file a complaint, for fear of retaliation, but the commissioner could go ahead on his own initiative - unless the Chinese cut Ericsson, Alcatel, and NSN in voluntarily.

NSN? It stands for something different these days - Nokia Solutions & Networks, although how long will it be before we all start calling it “Nokia Networks” again?

China Unicom is preparing to trial the Chinese-style TDD version of LTE, but would prefer to use the international standard. Haven’t we heard that before. Unicom came out of the reorganisation of the Chinese industry with the right to use UMTS, while China Mobile got to pioneer TD-SCDMA, and you see the results in their results, above.

“We are going to work very seriously on our [3G] WCDMA construction work and actively promote the evolution of WCDMA to FDD-LTE. This is our long term strategy, and there won’t be any wavering on this issue,” Chang said.

OFCOM is seeking opinions on the possibility of providing more unlicensed spectrum in the 5GHz bands, perhaps as much as 300MHz worth. The regulator needs something it can take to the 2015 World Radio Conference.

In Australia, do Rupert Murdoch’s newspapers all hate the NBN because Foxtel would like to keep the Telstra co-ax cable network?

China Unicom cooperates with OTTers; Telefonica bins Tu Me

China Unicom also had something interesting to announce with regard to voice, messaging, and social networking. Everyone in China’s on Wechat, a social networking product from Tencent, the folk who gave you QQ. As a result, substitution from SMS to generic data usage is going great guns and doing operators’ margins no good at all. So here’s a solution, or at least a clever idea: a SIM card, branded and sold by Wechat, that bundles the service, thus keeping the operator in the value chain.

Telefonica, meanwhile, shut down their OTT telephony app Tu Me, concentrating instead on the more radical and less cannibalistic Tu Go. The point is made that although Movistar has a Joyn implementation, there’s no sign of that deploying outside Spain. After all:

And what of the Joyn carrier initiative for next generation messaging, which Telefonica also supports?

“We don’t want all our eggs in one basket. We need to be able to move quickly and that’s more difficult if there are a lot of other carriers involved.”

WhatsApp passed 300 million users and celebrated with a new feature, which lets you record voice messages for a group of fellow users.

Here’s another click-to-call startup: eVoice, which includes it as part of an SMB-focused Voice 2.0 and CRM package.

Chris Kranky reviews some new WebRTC demos and points out that the summer interns can build a telephony app these days. He also wonders if the hosted videoconferencing business is going to be disrupted by a P2P solution based on WebRTC.

Here’s Streak, a CRM app that’s based on GMail. Here’s a crowdfunding drive for an e-mail service that’s not horrible. And the YouTube founders have a new app, MixBit - it’s like Vine, with the distinction that it’s all about cutting and mixing your video clips together.

New ads in Google Maps; retail big data is everywhere; Amazon federated ID

Google has a new feature in the Google Maps app, but it’s not one you’ll have heard of, because it appeals to Google’s real customers and is actually significant to them. Ads will now appear in the search results, and a pay-per-click event occurs when the user clicks on the link to expand the details and see the ad in context on the map.

Consult Hyperion, the UK payments consultancy of M-PESA fame, has hired back Susie Lonie, one of the original M-PESA team, to run a new practice dedicated to developing world m-payments - something you might think they’d been doing all this time.

Google Wallet, meanwhile, has dropped its loyalty and gift card features, advising customers to spend any balance by the 21st of August. Oddly, they’re also promising that it will be back in some form in the future.

Meanwhile, ISIS gains support from American Express, whose person-to-person Serve payments app is joining the platform.

Retailers are being offered data harvested from passing smartphones by WLAN devices installed in City of London dustbins. And here’s another retail/big data/surveillance play, this time in the United States. There’s a video.

M2M Group is a joint venture by British companies who specialise in vertical M2M applications.

Amazon Web Services has a new “playground” page to explain how its federated identity service works.

The boss, Jeff Bezos, has meanwhile bought the Washington Post to go with his space rockets.

Leap seconds demand data-centre instrumentation; Firefox OS direct-to-consumer

Last year’s leap-second bug in Linux caused Facebook and many other major data centre operators to experience huge surges in power consumption. As a result, they’ve been investing in better management tools.

Google adds load-balancing to Google Compute Engine.

Microsoft is preparing a “CloudOS for Government”. The immediate comparison is the special Amazon availability zone for government customers, but MS’s product is apparently a special version of Windows Server rather than a pool of Windows Azure hosts in a special data centre.

Meet the Ubuntu for Android engineers, in a Reddit IAmA.

Get a Firefox OS phone for $80, direct from ZTE on Ebay.

The creator of Cow Clicker really, really doesn’t like Facebook. The Android Bitcoin app has a vulnerability linked to the Android pseudorandom number generator.

A whole succession of hardened e-mail providers have shut down, starting with Lavabit, Edward Snowden’s e-mail host, in a protest against pressure from the US government to accept NSA surveillance. On the other hand, Kim Dotcom is launching a new high-security e-mail startup. Interestingly, the biggest technical challenge is providing features like search while also keeping the data encrypted on file, so all the work has to happen on the user’s local machine.

And finally, some Xerox photocopiers have a weird bug that unpredictably replaces numbers in the original document with different ones in the copy. Official Xerox advice was originally to avoid using “normal” mode, until it turned out that this doesn’t guarantee fidelity. Software patches are coming.

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August 5, 2013

Disruption in Italy: TI warns on profits, sued by Vodafone; Apple meets China Mobile; It’s not vectoring that damages the FTTH business case, it’s cable - Telco 2.0 News Review

Digital Arabia returns to Dubai from the 11th-13th November 2013. As a key component of the New Digital Economics Executive Brainstorm & Innovation Series, it will build on output from recent events in San Francisco Singapore, London, and New York with new market research and analysis and will focus on driving new business models and growth opportunities in digital commerce, IOT, content and the cloud in the Middle East and North Africa, providing a vital forum for industry leaders. Apply now to participate.

Disruption in Italy: TI warns on profits, sued by Vodafone

Disruption in Italy: Telecom Italia warned on profits for the year, pointing to the terrible macro-economy and the intensifying price war in mobile. Further, growth in Latin America has been slower this year. The big question is whether they can get away without having to sell the relatively high-growth Brazilian operation.

They’re also being sued by Vodafone, which alleges TI used its incumbent status to stop Vodafone, Fastweb, and others competing effectively in the fixed-line sector. VF demands a billion euros in damages.

Elsewhere, Vodafone may have to sell its stake in Bharti Airtel after the Indian government decided to forbid cross-shareholdings between operators that serve all 22 of the country’s telecoms circles.

In Germany, Telefonica O2 is looking at buying KPN’s E-Plus operation. A problem: the regulator has written to remind them that they can’t simply keep their spectrum licences, as these are linked to specific, independent companies, and they might have to give back valuable spectrum. DTAG, of course, is lobbying intensely to achieve this, claiming that the merged company would have an unacceptable dominance of spectrum above 1GHz. There is, of course, a precedent from the UK, where the T-Mobile/Orange merger resulted in spectrum being redistributed.

In the UK,3UK has half-year results and they are relatively good, with 263,000 contract net-adds, revenue and profits up, and an EBITDA margin of 18.8%. A typical 3UK subscriber is using 1.5GB of data every month.

Canada’s national mobile market is already pretty thoroughly consolidated, with only three MNOs controlling 90% of revenue. Now, Verizon wants in, hoping to buy either or both of two small operators. The incumbents are hitting back, with Rogers Wireless plotting to take control of the minnows’ spectrum through a joint bid with two Canadian private equity firms. Canadian regulators now have to choose whether they dislike a scheme to maintain the three-opoly or Verizon moving in more. For additional complexity, there’s a spectrum auction coming up.

Apple meets China Mobile; waiting for the next bound; Lumia 1020

The CEOs of Apple and China Mobile met in Beijing to discuss “matters of cooperation”, as a genuinely gnomic statement put it. As Reuters says, the big issue will be whether and when and how Apple iProducts will appear on China Mobile’s TD-SCDMA network. China Mobile would like to do something to up ARPU and margins as its voice and SMS revenue starts to get substituted.

Horace rounds up data on Apple stores. The military have the idea of a “tactical bound”, which is the period of time a particular decision or set of decisions covers - a bound of six hours means you’re planning for the next six hours and will be back in six hours to review what happened and issue orders for the next six hours. This chart on their investment in retail suggests we’re at the start of the next bound.

Screen-Shot-2013-07-30-at-7-30-2.47.21-PM.png

He also reviews the competition. Ambassador, with these charts you are spoiling us.

Screen-Shot-2013-07-30-at-7-30-10.47.14-PM.png

Elsewhere, Germany is now 62% smartphone by installed base. 41% of shipments are Samsung devices, followed by 21% Apple and 9% Nokia.

That sounds almost good for Nokia these days. Ars Technica reviews the camera-optimised Lumia 1020, and argues that it’s so good as a camera it makes the whole point-and-shoot product class obsolete. The new gadget consists of the computing and radio guts from the 920, the fancy gorillaglass/AMOLED screen from the 928, and a 41 megapixel camera based on the Pureview 808 demonstrator’s technology, but with back- rather than front-side illumination. Ars explains as follows:

Back-side illumination constructs the sensor similar to that of a cephalopod eye, with the wiring behind the photo diode. This is more complex, but it allows more light capture

Squidtastic. It sounds impressive, especially the new app that controls all the photo kit. It’s also damned expensive. Elsewhere, Nokia has licenced its indoor-navigation databases to Qualcomm. And Qualcomm, for their part, have been badmouthing the competition’s “octo-core” chips.

HTC, meanwhile, reports sales off 37% year on year. Ouch.

Here’s a comparison of the new Moto X and its rivals, from AllThingsD. Google is very proud that the gadget is being assembled in the US in order to support Dell-like mass customisation. So why did they flog all those Motorola factories a few months back?

Android has now got a device-management setup like iOS had three years ago.

T-Mobile USA, in keeping with its new “uncarrier” image, has signed up for the Ubuntu carrier advisory group, although this does not mean they’ve agreed to supply the phones.

It’s not vectoring that damages the FTTH business case: it’s cable

The Voice of Broadband asks if VDSL2 with vectoring is “destroying the FTTH business case”, and argues that it’s probably not, but only because the business case wasn’t all that good to begin with.

In many ways, if there’s a technology that’s done real harm to the business case for FTTH, it’s DOCSIS 3 cable. In most advanced economies, and quite a few others, while the incumbent operator clung to the copper and the fibre brigade struggled to reach the start line, the cablecos kept iterating and eventually delivered much faster broadband. TVoB goes to the cable industry’s shindig and reports that their carrier-WiFi group, the Cable WiFi Alliance, is now claiming 150,000 hotspots in North America, three times as many as it had last year.

That said, Virgin Media’s Q2s were horrible - they lost 23,500 customers, revenue in the Business sector was down 11%, and less worryingly the ADSL side of the business wasn’t looking too clever either. They boast that 40% of their subscribers are now getting over 60Mbps downlink - nobody else in the UK can say anything of the sort.

Of course, more speed in the access network is no help if the peering is congested. Ars Technica has an intelligent long-form piece on peering wars and video, well worth reading.

Siemens prepares “Project Ansible” for enterprise Voice 2.0

Siemens has called in Frog Design - UX/product experts and occasional Telco 2.0 event participants - to help with their effort to meet the challenge of Voice 2.0. As they sell masses of enterprise PBX kit, this is a crucial issue for them. Especially, as Chris Kranky points out, because price disruption is very much on the cards. Here’s the video.

Meanwhile, at IETF 87, there’s a meeting on how to create a secure caller-ID for VoIP. The STIR Working Group’s page is here and this being the IETF, all the action will be on the listserv, here.

Another big decision at IETF 87 was that DTLS got the nod for voice encryption in WebRTC, which bunch of multi-letter acronyms or MLAs means that WebRTC-SIP interworking will require decrypting packets out of WebRTC and re-encrypting them in SIP.

And here’s a really simple example of how to do something intelligent with hold messages in a conference call, from the Twilio blog. If your IVR doesn’t say how long you’ll be waiting, you really have no excuse with tools like this.

Showrooming: a myth?

Everyone knows that mobile users tend to “showroom” - walking around shops looking at products, checking reviews and prices on their smartphones, and then going home to buy on the Internet from the cheapest supplier.

Or do they? Advertising Age reports on a survey that asked consumers both whether they did so in general, and also whether they did so for specific purchases. The second question suggests that they do so much less.

The US government wants Apple to allow apps to link to other sources of e-books (like Amazon) rather than just the iTunes Store. Apple, predictably, disagrees.

And here’s a really interesting integrated print/mobile/TV/ads/retail play, from the Sun.

Panic in the cloud; Lenovo PCs not banned after all; hacking the smart toilet

The Cloud Security Alliance says 10 per cent of its non-US members have already cancelled a contract with a US cloud provider for fear that the US government might do something weird with their data. And 56 per cent of them said they were less likely to use a US provider as a result.

Last week, the Australian Financial Review claimed that the Australian defence ministry had banned Lenovo PCs from its classified networks. The security-conscious, of course, would have understood that Australia is one of the countries that use common information security standards on their classified systems, and therefore that Lenovo was banned from the UK and US defence establishments. The story turns out, according to CIO.com, to be fake and probably put about either by competitors or else to distract attention from the latest lot of NSA revelations.

M2M systems are unusually demanding from a security point of view. Meet the Insteon HUB, a home-automation product that shipped with authentication on the web interface off by default, and didn’t even have a robots.txt file, so the devices turn up in web searches.

But even that pales by comparison with the Satis Smart Toilet, which anyone in Bluetooth range can control from an Android app. There is no password and the Bluetooth pairing key is “0000”.

Every day, for about ten minutes, GPS is jammed near the London Stock Exchange. This is annoying for low-latency financial systems that need precise time sources. GPS jammers cost £50.

A major hidden-service hosting company has been raided for distributing child porn. The big question: how many other TOR users were compromised by the FBI hack involved?

How criminals fool the British PSTN. We tried the exploit for ourselves and it worked.

And sometimes, information security can be a really disturbing hobby. Security blogger Brian Krebs offended a group of hackers, who plotted to plant heroin in his house and then call the police.

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

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