AT&T-VZW-Sprint-T-Mobile, BT, NBN, Qualcomm - Telco 2.0 News Review
- Strategy & Finance: AT&T hopes 4G will push closer to VZW; VZW says “no” to unlimited; Sprint & T-Mobile say “yes”; everyone but T-Mobile says “no” to consolidation
- Broadband Connectivity: BT’s line rental hike “nothing to do with sport”; Vodafone builds Gulf cable
- Telco 2.0 Themes: NBN builds on; Qualcomm “HTTP for M2M”: Telenor’s classified ads for Asia
- Smartphone Roundup: BlackBerry, the crash inquiry; Windows Phone surge in Europe; iPhone 5S teardown
- Voice 2.0: Google vs Death - so we’ll need a bigger data centre; Roku refresh; smartphone laser attachment
- And Finally: What future for the Iranian Internet?
Here’s Andrew Collinson on what Telco 2.0 can do for you. Interested? Come to our next event in Dubai on the 12th and 13th of November.
AT&T hopes 4G will push its margins closer to VZW; VZW says “no” to unlimited; Sprint & T-Mobile say “yes”; everyone but T-Mobile says “no” to consolidation
AT&T CEO Randall Stephenson hopes that LTE deployment will push up margins in their wireless business by 5 percentage points, catching up with Verizon Wireless, now that the company has finished buying small operators for their spectrum for the time being. He also thinks the AT&T/T-Mo decision has closed the book on further consolidation for at least another three years.
Lowell McAdam at Verizon, meanwhile, thinks that Sprint and T-Mobile’s aspirations for disruption are just that, and they will eventually be forced to stop offering unlimited data plans by spectrum constraints. He agrees with his colleague that it’s unlikely that another national-level merger will be permitted.
Both companies are seriously looking at LTE Broadcast, the video-streaming technology we used to know as the 3GPP Multicast-Broadcast Multimedia Subsystem. (Why did they have to change the name?) VZW made an announcement around the time of this year’s MWC, and now AT&T is dipping a toe in the water. Specifically, AT&T now owns the 700MHz block Qualcomm used for their failed MediaFLO broadcast network.
VZW, meanwhile, has started offering an LTE-based Wi-Fi router that provides a standard jack for a landline phone, strongly suggesting they still mean it about withdrawing some of their copper network. The gadget is made by Novatel Wireless, manufacturers of hordes of MiFis. Pricing is $30/mo for voice and 2GB of data on a 2-year contract with a $30 payment for the device. Interestingly, there are multiple cellular radios in there - the voice service is provided on the 1xEV-DO CDMA network and the data service on the LTE.
Sprint’s CFO, meanwhile claims that they have more than enough spectrum to support their unlimited data packages, with LTE deployment in the 1900MHz band going on until the middle of next year and 2.5GHz starting this autumn. That said, they’re also doing extensive managed WLAN offload in order to conserve spectrum.
“Wi-Fi or off-load has been something that we’ve been working on for a while and it will continue to be an integral part of the deployment of the network,” Euteneuer said. “The more traffic we can push on Wi-Fi, the more efficient our network becomes”
It might remind you of our Mobile, Fixed, and Wholesale Broadband Business Models strategy report. They’re also likely to bid for more 1900MHz in the so-called H-blocks, where our old friend the Satellite Cowboy’s DISH Network is also likely to be bidding. Save the date.
Another interesting point about Sprint is that, despite all the LTE, the shutdown of iDEN is still causing customers to leak out of the company. Apparently, more people than they expected had an iDEN product for some sort of specialised application and a mainline Sprint CDMA device for everything else. Unsurprisingly, when Sprint pulled the rug on their iDEN app, they didn’t stick with Sprint for their other telecoms needs.
T-Mobile’s CMO, meanwhile, didn’t promise to keep the unlimited offer but did claim he was specifically targeting AT&T because they had “the most unsatisfied customers”. Also, he claimed that T-Mo is porting in 2 AT&T or Sprint customers for each churner leaving.
Their CFO, though, suggested that there still might be another merger - perhaps a Sprint-T-Mo alliance, or perhaps an external actor buying a regional carrier. The options for that are getting a bit thin with the consolidations of Leap and MetroPCS - it really leaves US Cellular.
The US is often considered to be the pioneer LTE market, but there are actually some countries further ahead: Japan, South Korea, and (only just) Australia, as this chart from Juniper and the GSA shows.
Interestingly, both VZW and AT&T are interested in Ericsson’s new “Radio Dot System”, which provides a very small small cell (it fits in your hand) for in-building applications and is apparently a hybrid between a distributed-antenna system and a small cell. Competitor SpiderCloud’s CMO is unimpressed and perhaps a little confused:
“If it walks like a pig, eats like a pig (capacity), then it is a pig. With lipstick,” he said.
Finally, former Qwest CEO Joe Nacchio is out of jail, and he reports that it’s done his fitness a world of good. It will be interesting to see if he says anything about the Edward Snowden case, as it is still widely suggested that his conviction for insider trading was something to do with Qwest’s refusal to participate in warrantless surveillance.
BT’s line rental hike “has nothing to do with BT Sport”; BDUK fiasco; Vodafone building Gulf cable; it was a dark and stormy night when FLAG went off line
BT announced a round of price rises this week - specifically, the line-rental charge is going up by 3.5%. This of course affects people who get their Internet service from other DSL providers. At the same time, voice pricing is going up as much as 6.5% on “plans BT no longer offers”. Rates to 0870 nongeographic numbers are up, the flag-fall charge to set up a call (remember that?) is going up, and BT Privacy, a nuisance call filter, is no longer free.
BT claims that this has nothing to do with the cost of buying football rights for BT Sport, but it’s telling that people who take BT Sport are exempt. Meanwhile, the parliamentary public accounts committee issued a highly critical report on the BDUK rural access programme. Somehow, all 26 projects have landed with the incumbent, all the other participants have pulled out, BT has contributed £203m less than expected, and the taxpayer has put in £236m more. And the roll-out won’t even get to the last 10 per cent of population coverage.
The community broadband community is furious because BT won’t say which areas it’s going to miss, and therefore they can’t make any plan to cover them. The mobile operators, especially Vodafone and EE, are furious because they were excluded from bidding.
TalkTalk’s commercial director and UK ISP industry figure, David Goldie, has resigned.
In less depressing news, Alcatel-Lucent has given some details of its win with China Mobile. 11% of the Phase 1 LTE rollout goes to ALU. Elsewhere, Nokia is apparently thinking about a merger with ALU, spending some of the money from Microsoft and going all-in on a strategic shift to infrastructure.
Telecom Italia might try to raise more capital through a rights issue rather than sell more assets, it seems, after the news that the Brazilian regulator won’t have Telefonica’s scheme to break up TIM Brasil. Telefonica, meanwhile, walked out of the Czech 4G auction because they insist on keeping some spectrum for a new entrant. The likely new entrant has also dropped out of the bidding.
IDC reckons six million people are likely to become smartphone users in Burma in the next four years, and operators Telenor and Ooredoo are “frantically” handing out SIMs. MTN, meanwhile, is Africa’s top brand.
Vodafone has become a major investor in fixed-line, submarine cable, and data centre assets over the years - we occasionally call it “the other Vodafone” - and they’re joining a consortium to light up a 1,300 kilometre fibre network around the Gulf from Fujairah to Kuwait, as well as trying to buy Tata’s Neotel metro-fibre network in South Africa.
The Economic Times of India reports on the cable ship Niwa’s voyage to repair a failed repeater on FLAG Europe-Asia’s branch to Fujairah. The wind was over 35 knots and the swell was between 20 and 35 feet, and the cable was 4,000 metres below the surface. And while the repeater was being replaced, the branch cable parted and the main line vanished back into the deep. In all, the job took 40 days.
NBN builds on, costs improve; Qualcomm “HTTP for M2M”: Telenor’s classified ads for Asia
Australia’s new government, having promised to get rid of the NBN, or at least turn it back into a frog (or Telstra), is now having some second thoughts. Communications Minister Malcolm Turnbull has directed NBN Co to keep building as fast as possible while the advertised 60 days of strategic review are carried out, finishing 300,000 premises currently in progress and perhaps also cracking on with another 900,000 jobs on order.
Interestingly, a leaked internal document suggests that the cost-to-connect has about halved since the production roll-out began, going from A$7,400 to A$2,200-2,500 depending on how much drilling and traffic control is required. This really shouldn’t have surprised anyone, as this has happened on literally every FTTH rollout we’ve heard of.
Here’s a new gigabit fibre project in Norway. Note the *brave* pricing for businesses.
Dimitris Mavrakis blogs about carrier WLAN deployments, and notes that iOS 7 and recent Samsung Androids support the Hotspot 2.0 and Passpoint standards, providing some scale (at last). Also, Hotspot 2.0 has a production deployment, in Chicago O’Hare airport.
Qualcomm says it wants its AllJoyn M2M discovery technology to become an open standard and possibly open-source.
Telenor has acquired a range of classified advertising businesses in Asia and Latin America, and will fold its existing CellBazaar business in Bangladesh into it. Sounds like a big new e-commerce platform.
The 3G & 4G Wireless Blog points us to Alan Quayle’s “independent review of telecom APIs”.
Amsterdam’s AMS-IX is helping develop a major French IXP, something that rather surprisingly doesn’t exist yet.
BlackBerry and the telcos, a crash inquiry; Windows Phone surge in Europe; iPhone 5S teardown
Here’s a detailed crash investigation into BlackBerry, whose news last week was as bad as you might expect, before they were acquired by a Canadian private equity fund for $4.7bn.
A telling and interesting point from the investigation is the role of RIM’s interactions with telcos. RIM’s half-CEO Mike Lazaridis apparently pulled an iPhone apart to see how it worked, and rather than being suitably impressed, he was worried that letting the user have a proper Web browser would cause all sorts of trouble for the network. Later, Verizon Wireless commissioned RIM to develop an all-touchscreen “iPhone killer”, which became the BlackBerry Storm. When that didn’t work out, VZW turned to Motorola and the Android ecosystem.
Later still, VZW informed the vendors that it was planning to make its LTE investment the centrepiece of its Christmas 2010 marketing campaign. RIM tried to persuade them that 3G would do, the 4G-capable BB10 not being ready, and lost much of their marketing spending and retail space.
Elsewhere, here’s an argument that Microsoft should have bought RIM.
Instead, of course, they bought Nokia. After last week’s revelations about Stephen Elop’s vast rewards for his brief tenure at Nokia, the Finnish prime minister asked him to renounce at least some of the money, but he said he needed it to pay for his divorce. Meanwhile, the chairman of Nokia was caught out telling the papers that Elop was hired on identical terms to Olli-Pekkua Kallasvuo, when he hadn’t. Specifically, Elop had a change-of-control clause while OPK didn’t.
Kantar Worldpanel estimates that Windows Phone, or for practical purposes, Nokia is regaining share in Europe, around 9.2% across the continent, 12% in the UK, and nearly level with Apple in Germany. The Lumia 520 and 620 are the key drivers of growth.
Waiting for the first hard numbers about the new iPhones, the usual game of hanging around Apple Stores and scrutinising ad-serving data has started. It’s suggested here that three iPhone 5S are being sold in the US for each iPhone 5C, which if true is nothing but good news for Apple, as their gross margin on the hardware is estimated at $631 for the poshest 64GB option. As usual, Apple makes a fortune on reselling Flash storage - an additional $20 worth of storage sets you back $200.
Similar anecdata from Japan confirms the 5S/5C breakdown and also that Apple is generally selling very well there.
Apparently, the new look and feel of iOS 7 makes some people seasick. And HTC is exiting Beats by Dr. Dre, the hip-hop legend’s high-end headphone company, just as Carlyle Group buys into it in a deal that values the firm at $1bn. How long before it’s worth more than HTC?
OpenRMC, another “carrier backend for WebRTC”
More and more people want to provide the telco-like back-end for your WebRTC app. Here’s OpenRMC, which wants to:
simplify the in-browser communication interfaces, and run carrier-class call processing back-end systems which hide the complexities of setup, signaling and termination of voice, video and multimedia interactions
Meanwhile, here’s an argument that the technology of Voice 2.0 is basically done, and it’s time for more innovation in applications. We’re not going to disagree with that. He also points out that we could do with better microphones and other inputs, especially as mobile devices are pulling ahead of PCs.
And Twilio is putting on its conference in the UK.
Google vs Death - so we’ll need a bigger data centre; Roku refresh; smartphone laser attachment
Google is starting up a start-up dedicated to health, Larry Page’s G+ page reveals. Not like Google Health, though. Wired makes the excellent point that Google could do with more focus, that Larry Page promised to put “more wood behind fewer arrows” in future, and that inventing a self-driving car and defeating death itself are both rather large projects even if you take them one at a time.
More practically, Google is adding $600 million worth of extra data centre capacity in The Dalles, Oregon, bringing its investment in the site to $1.2bn since 2005. They also bought a 1.4 million square foot abandoned Gatorade factory in Oklahoma and the whole output of a wind farm nearby, so you can probably guess what they’re planning there.
After Google’s Chromecast device launched earlier this year, streaming-gadget maker Roku has refreshed its product lineup, with an iPhone 5C (or Nokia N9) look and a gaggle of incremental improvements. Pricing is still much higher than Chromecast.
Here’s Valve’s latest hardware project, a games controller with a touchscreen that can be programmed to provide different interactions through the API.
King, a British mobile gaming startup, is looking at an IPO in the US.