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October 29, 2013

Digital Commerce 2.0: Disrupting the Californian Giants

Amazon, Google, Apple, eBay/PayPal and Facebook are the big five brokers of digital commerce. But the disruption caused by the rise of mass-market smartphones, and the personal data they generate, means the medium-term leadership of these California-based companies is not assured. Each of them has weaknesses that could hinder their progress towards securing a strong strategic position in the new Digital Commerce 2.0 marketplace, and render them potentially vulnerable to competition from telcos, banks and/or start-ups.

Read an excerpt from our new briefing Digital Commerce 2.0: Disrupting the Californian Giants here, and join us at Digital Arabia, 11-13th November, Dubai to explore digital commerce opportunities in the MENA region.

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October 28, 2013

Carrier Roundup; Apple; Content, Devices, and China: Telco 2.0 News Review

Digital Arabia 2013 is just two weeks away. Apply now.

Telco results roundup: Etisalat, Orange, MTN, China Mobile, China Telecom, Bharti Infratel, AT&T Mobility, America Movil

We start off today’s news with a wedge of telco results. Etisalat’s net profits for Q3 were down 18 per cent at $498m, with capital spending up 39% year on year. Orange’s EBITDA for Q3 was down 7.7% (they don’t give a quarterly net income) after revenue fell 4%. Interestingly, Orange managed to add almost 300,000 subscribers in France but their revenues there still fell almost five per cent - the Free disruption continues. Price pressure is a theme everywhere - Orange’s enterprise and wholesale business saw its revenues drop 7.2% although they didn’t lose customers, implying they had to slash prices to get contracts renewed.

At MTN, they were able to increase data revenues by 34% and mobile money subscribers by 10%, while overall subscribers were up 1% quarter on quarter at 203 million. There’s a distinct difference between its developing markets and its middle-income ones, which start to look much like Europe or North America, with pressure on prices and voice-data transition. MTN Irancell is losing subscribers, and South Africa is described as “challenging”, while operations like Ghana and Cameroon are both adding subscribers and deepening the market with data and mobile money services.

Subscribers in China were up 0.9% in September, according to the latest MII stats. China Mobile remains by far the biggest operator, as well as being the biggest 3G operator and the fastest growing 3G operator.

China Telecom’s net profits for the first 9 months were up quite impressively, while Bharti Infratel said its net profits were up 12% in its Q2 because it managed to get more carriers’ equipment onto its towers. Indian media, meanwhile, claim Vodafone has set a range of 40-60 billion rupees of CAPEX, about $650m-$1bn, annually.

AT&T Mobility, meanwhile, had a more than decent quarter, adding both revenue and subscribers. T-Mobile USA announced tablet pricing. RCR Wireless reckons that AT&T and Verizon aren’t doing so well with price-sensitive customers and that the explanation of both AT&T and T-Mobile gaining subscribers is that they’re still leaking out of Sprint.

A slightly enigmatic story has private-equity fund KKR putting $100 million into something called “Associated Partners” that’s going to “build wireless infrastructure in rural areas”. Verizon Wireless, meanwhile, adds more features to its telco-OTT Verizon Messages product.

America Movil reports rather poor Q3 results - net profit is off 46% year on year, although a lot of this is down to foreign exchange movements and financing costs, to say nothing of chasing KPN around Europe. Perhaps more worrying is service revenue, which fell 0.9% during the quarter.

Deutsche Telekom, meanwhile, says it wants to be a software-defined operator. And Numericable’s IPO is go for launch, at about €650m for between 20 and 40% of the company.

Apple Q4 coming, the 1TB SSD laptop is with us, Microsoft sells masses of cloud and terrible power consumption

Apple’s Q4 is going to land this evening, and AllThingsD discusses what we can expect. ZDNet provides some detail on the latest lot of MacBook Pro computers, which you can get with a 1TB solid-state disk! and 16GB of RAM. Ars Technica does a review, although not with that much SSD.

TelecomTV notes that the new version of OS X is free, and wonders if and when a telecoms operator will try to be “the Apple of connectivity”.

Qualcomm’s CMO described Apple’s move to 64 bit in the A7 as a “gimmick”, and got reassigned for his pains.

Jeff Atwood of Coding Horror, long-time Microsoft developer and advocate, compares the battery life of his Microsoft Surface Pro with other tablets. It’s not good. He points out that a Surface Pro is a “proper” Intel x86 machine, not a mobile phone, and should be compared with laptop hardware. He compares it with laptop hardware, specifically, Apple hardware…and it’s worse. Much worse. Worst of all, he finds someone running Windows 8 on a MacBook Air and discovers that the inverse-hackintosh’s battery life is about half what it is running OS X, but that’s still better than the Surface Pro. Stop it, you’re making the polar bears cry.

Despite that, Microsoft’s Q1 was excellent, with earnings per share beating exceptions by a substantial margin. As you might expect from a company whose biggest product is called Office, it’s the licensing of enterprise (“commercial” in their terms) software and the cloud services to run it that are providing the growth.

Chinese ODM seeks content-device integration like Amazon’s, might be more like smart TV

Here’s an interesting look into Xiaomi, pretty much the ideal type of a Chinese Android ODM and a company that’s been pushing out a lot of smartphones in the last two years. They’ve gone from zero to 6% of the Chinese market, more than HTC or Lenovo, at least if you’re willing to buy market share information based on ad-serving. But the mention of HTC should tell us something here - even quite impressive Android builders can get disrupted fast unless they have some other hook on the business, like Samsung’s command of components or Amazon’s deeply customised, content-focused version.


Flurry reckons that Xiaomi users spend a lot of their time on “media & entertainment” apps, which might reflect a strategy of being the device people use to get at content. Xiaomi has a locked-down app store, so this may make sense even if calling them “the Apple and Netflix of China” is epic hyperbole. It might be more useful to consider whether they are the YouTube of China - frantically building scale while seeking a business model. Lenovo, for its part, is investing in an online-TV startup via its in-house VC fund.

The problem with “content-focused devices” is that they might be too much like smart TV. Wired has an on-point critique of the smart-TV concept from Gary Myer, DirecTV founder and Sony exec. We especially like this having spent part of the weekend wrestling with one.

Samsung is very keen on them, and in fact made the one we were struggling with. Why couldn’t the smart TV be as good as the Samsung mobile phone we were using to search for tips on how to fix it? Silly rabbit. Samsung didn’t make the phone’s operating system. Similarly, they customised Android heavily for the Galaxy Gear wearable device, which is getting returned to Best Buy at a rate of 30% of sales.

Their shares, however, surged on the expectation of strong memory chip sales.

Another kind of device-integrated content might be the sort of enterprise data you find in a SAP system, or perhaps BlackBerry’s unique messaging system. SAP, however, has denied any interest in acquiring BlackBerry, and although 10 million people have downloaded the new BBM client for iOS and Android devices, there’s a queue to get activated.

Netflix’s CDN - meet “Chaos Kong”; Amazon results; Terremark outage; Google Boat

Here’s a long and detailed readout of a talk by Netflix’s Jeremy Edberg on how their CDN and cloud systems work. After the Chaos Monkey, the app that randomly kills machines in order to test their failover at the data-centre level, and the Chaos Gorilla, which does the same with Amazon Availability Zones, they now have Chaos Kong, which does the same but with continents.

Amazon, for its part, has huge sales but not much margin. The company reported a net loss of 9 cents a share for Q3, blaming it on the daily-deals site LivingSocial. Daily deals sites: remember them? Revenue, though, was better than expected, and another way of looking at them is as a company that rolls profits from its mature businesses into expansion and new products.

They also decided to up the minimum order that gets free shipping, whether to save on shipping or to encourage customers to spend or to encourage them to sign up for Amazon Prime.

AWS, meanwhile, is being talked up as perhaps having its first $1bn quarter in Q4. Meanwhile, did you know Jeff Bezos considered calling the company relentless.com, and the domain name still points to amazon.com?

It’s probably fair to say that if your business is providing rock-solid managed hosting and private cloud services to enterprises, you don’t want to be behind an outage that affects healthcare.gov - which is just what happened to Verizon Terremark this week.

Rackspace has hired the team behind ZeroVM, an ultra-lightweight, fast-starting hypervisor that provides an isolated virtual machine for a single process, and could be integrated directly into storage nodes.

Mirantis, a little-known company but one that contributes large amounts of code to OpenStack, is very sceptical about PaaS.

IBM is licensing ARM chips for its networking products, very good news for ARM, which has been looking for more data centre exposure for years. LINX is helping create a Scottish IX.

And is Google building a data centre on a barge in the middle of San Francisco Bay? The answer seems to be “quite possibly” although the question should probably be “why?”

T-Mobile UK sells data at half the price T-Mobile USA does; “superfast” “broadband” reaches “75%” of UK; Ericsson Q3

Really fast broadband is available in US cities, but it costs much more than it does elsewhere. And the cheapest way of buying 2GB of mobile data connectivity in the US is twice the price it is in London - which is interesting, as both offers are from T-Mobile.

OFCOM reckons that the UK is at “around 75% coverage by premises” for “super-fast broadband”, which is defined as 30Mbps downlink. Well, 73%. And the figure of 30Mbps is fairly obviously set to be just about what BT could already achieve on good copper, on short lines, give or take a bit of “up to” licence.

Ericsson announced a reasonable quarter, with sales up 3% year on year but revenue cut about 3% by exchange rate effects.

Alcatel’s employees are marching against the planned 10,000 job cuts.

In Dublin, a hosting provider, HiBB, is now offering genuinely superfast (up to 3Gbps) point-to-point links using EHF line of sight wireless, no doubt at a price. Two early customers are Sharp Security, and Vodafone’s backhaul network.

EU: any more complaints? Telekom Austria owns all the spectrum; Feld vs. AT&T

The European Commission is asking around the various parties to its anti-trust case with Google, notably the so-called “FairSearch alliance”, to find out whether they’re happy with the latest offer from Google.

Austria’s regulator is getting a hard time after a spectrum auction finished with Telekom Austria holding 54% of all the spectrum below 1GHz, including two-thirds of the 800MHz band. TA left the building with 140MHz of new paired spectrum, while 3 Austria got 25MHz and T-Mobile 45. This is especially telling given that the regulator forced 3 to sell spectrum as a condition of being allowed to merge with Orange.

Harold Feld, fresh from his win over Verizon in the Battle of Fire Island, is after AT&T, setting out five principles of US telecoms law that must be defended in the transition to an all-IP network. AT&T, back in 2011, argued to the FCC that “conventional public utility-style regulation” must go when the PSTN goes. Feld’s complete testimony is here.

OFCOM wants subscribers to be able to exit their contract with 30 days’ notice if operators put up their prices.

Snowden to Europe: NSA downloaded ALL THE CDRs. Also, if they give you an encrypted mobile, use it

Revelations from Edward Snowden are getting to be as regular as the seasons. It emerges that the NSA collected 60 million phone calls - presumably, call-detail records - in Spain in one month, December 2012. The US ambassador is summoned. That’s about the same number we learned last week that they collected in a month in France, interestingly.

Between those two revelations, we also learned that they tapped German prime minister Angela Merkel’s mobile phone. German security specialists concluded that the intercept was an over-the-air one, from something (probably an IMSI catcher) based in the US Embassy. Details here (in German) show that it was her unencrypted, personal phone, albeit one paid for by her political party, on Vodafone.de’s network. Apparently, it’s difficult to get politicians to use the secure ones because they’re a bit lame compared to the civilian ones.

Fortunately, there’s an app for that. A thought: perhaps there would be more outrage about this in the UK if it wasn’t for the fact the newspapers already did much the same thing to most of the government.

Meanwhile, OFCOM is trying to collaborate with other agencies, like the FCC and CRTC, to fix international caller ID and get rid of spoofed calls.

Mozilla Lightbeam is a browser extension that tries to log which websites are spying on you.

Valley news: a succession of really bad ideas

LinkedIn is very proud of how it’s managed to embed LinkedIn profiles into your e-mail, and even more so of how it got around Apple iOS security restrictions to do so. This does mean sending them all your e-mail, and letting them embed an iFrame web bug into each message so they can tell if you’ve read it.

In other Silicon Valley news, Facebook was planning a new video advert product that would autoplay as soon as the ad was delivered. The notion of “ads of absolutely unknown content that randomly start yelling” does not sound immediately appealing, and quite rightly they’ve put off the launch to think again.

Google, meanwhile, did an experiment, placing a truly hunormous banner advert just under the search bar if it noticed you might be searching for a brand name.

They may be looking at a subscription version of YouTube.

Twitter’s updated S-1 is available.

Salesforce.com is staking its hackathon with a million dollar reward for the winning app.

The experiences of a professional video pirate.

And Qualcomm is working on a “NPU” or neural processing unit, a chip that would work more like your brain than a von Neumann-architecture computer.

M2M enablers; Korean night buses and big data; Telco OTT, but using Twilio’s API

ABI forecasts 32% annual growth in M2M “applications-enablement” technology and analytics.

Here’s an example of telco big data in action, from the 3G & 4G Wireless Blog. KT Corp subscriber data is used to decide where Seoul’s night buses stop.


Here’s a nice piece of Telco OTT, Sprint’s DriveFirst app, which catches incoming SMS and calls while you’re driving and reminds the other party to call back later. Telling, though, that Sprint’s own developers used Twilio.

Twilio, meanwhile, explains how you might go about sending cat pictures over a phone call using SSB TV. Yes, really.

Finally, on a very different tone, more tower climbers have been killed in the US this year than any other since 2008.

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October 23, 2013

Cloud 2.0: Securing Trust to Survive the ‘One-In-Five’ CSP Shake-Out

The Cloud market is on the verge of the next wave of market penetration, yet it’s likely that only one in five Cloud Service Providers (CSPs) in today’s marketplace will still be around by 2018, as providers fail or are swallowed up by aggressive competitors. So what do CSPs need to do to survive and prosper? Download our latest free research briefing here.

Drivers of Cloud Adoption

cloud drivers figure oct 2013.png

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October 21, 2013

Revenue growth “over by 2018” - Softbank slings $1.5bn into gaming - Google results. Telco 2.0 News Review

Digital Arabia 2013 is only two weeks away. Book now.

Revenue growth to end in 2018; EU and US smartphones saturate by November 2015; Bernabé quits the GSMA

Ovum reckons that global mobile service revenue will fall for the first time ever in 2018. The problem is quite simply that ARPU will fall faster than the subscriber base grows. The only growth area is likely to be in Africa, which will pose its own challenges in terms of margin per user even if revenue is still growing. Now there’s disruption for you.

At the same time, it’s getting possible to forecast a date for the saturation of the market with smartphones with a modicum of certainty. Horace reaches for the analyst’s best friend, the Bass diffusion curve, and fixes on November 2015 in both the EU and North America, with a total of 425 million users.


In other gloomy news, China Mobile’s Q3s missed expectations, with net profit down 9%. That wasn’t as bad as Mobistar, down 26%. And, after the KPN Foundation exercised its right to acquire a blocking position in KPN shares, Carlos Slim seems to have walked away from the deal.

Franco Bernabé, the Telecom Italia boss and GSMA chairman, is now neither of those things having resigned from the GSMA. He left the company earlier this month after the shareholders voted to sell more of it to Telefonica.

And here’s an aggressive disruptor going after international and roaming call rates with a clever use of SIM Toolkit. Charming.

AT&T sells towers; VZW sets VoLTE and network strategy; Telekom Austria M2M platform; Softbank puts $1.5bn in gaming

AT&T is selling off towers, 9,700 of them, to Crown Castle for $4.85bn. More precisely, Crown Castle buys 600 of them up front and leases the rest for 28 years, at the end of which time they have an option to buy them out for $4.2bn. In the meantime, AT&T pays Crown Castle $1,900 a site a month for a guaranteed term of 10 years with the rent rising 2% annually. Crown reckons it can add at least one more tenant per tower on average.

Verizon Wireless, meanwhile, says it won’t turn up VoLTE until “the first half of next year”. More practically, they’re waiting until their LTE coverage equals their CDMA 1xEV-DO coverage. They’re also trying to stratify the network, moving their high-value postpaid customers to the LTE and progressively filling the 3G network with prepaid and wholesale.

While the UK’s universal broadband project struggles to make any impact, EE is beginning to offer a fixed-wireless broadband product to rural customers stuck on long copper runs. Pricing is expected next month.

More names have been announced for the NBN strategic review, and a lot of them are Telstra old-timers.

The world market for M2M hardware modules is going to double by 2020, mostly driven by smart-meter deployments. At the moment, it’s $532m and growing at a 12% CAGR.

Telekom Austria has a new M2M applications platform, a partnership with Austrian software company Microtronic Engineering.

And our old friend, the Softbank Samurai, is investing in a mobile/tablet gaming company. And this is no small-stakes sunday-for-monday press release project - he’s putting down $1.5bn for 51% of Finnish games developer Supercell.

British rival King, meanwhile, is preparing for an IPO in the US, while Google Ventures acquired another chunk of shares in Kabam.

Amazon looks at HTC and HTC looks back; being a BlackBerry enterprise customer; iProducts; Firefox OS flies down to Rio

Amazon may be planning to launch a smartphone, to be manufactured by HTC. The Amazon phone has been heavily rumoured, of course, and in some ways the distinction between a Kindle Fire and a smartphone is just the screen size. For HTC, this would be a very welcome development - even if being a contract manufacturer is a step down, it would likely be a very big job and one that would keep the company in the game. That said, their previous partnership with a big Web brand, the HTC First “Facebook phone”, was a damaging flop.

Here’s a deep article on BlackBerry, the enterprise IT buyers who don’t love it as much as they used to, and the problems of its strategic pivot to concentrate on the BES and its associated device management and network infrastructure. As with everything at BlackBerry, the new version of the BES which lets it support other manufacturers’ devices was delayed, and a thicket of new competitors has sprung up. Further, Gartner doesn’t seem to think MDM in general has much of a future.

Lenovo is apparently considering a bid for BlackBerry, again, and in the meantime they’ve done a tiny Android-based laptop to be going on with.

Tomorrow, Apple, Nokia, and Microsoft are all going to launch new tablets. Inventory data seems to suggest Apple has flushed the supply chain of Retina MacBooks, Retina iPads, and Mac Pros.

At the same time, they’ve altered the iPhone production mix, cutting back the 5C and adding more (lots more) 5S.

Even Apple’s not perfect, of course. This week, MacBook Airs from 2012-2013 were the object of what amounts to a product recall. You are advised to run a software update that checks the serial number of the SSD, because a substantial number of the machines contain disks from a bad batch. If it fails, you’re off to the Genius Bar for a replacement.

Also, the iPhone 5S accelerometer may be as much as 5 degrees off-level. Fortunately there’s an app for that although this won’t help if you used it as an artificial horizon.

Telefonica is preparing to launch Firefox OS into Brazil later this year. Here’s an interview with their director of open Web services, Yotam Ben-Ami. Apparently 12% of their smartphone shipments in Venezuela are Firefox OS, and they claim a battery advantage of 20% over comparable Android devices.

Olilla: Nokia didn’t get software, listened to operators; how Google controls Android; Oracle is no.2 in the world(sort of)

Jorma Ollila reflects on Nokia, and concludes that they made two fundamental mistakes - they didn’t understand software, and they listened to the carriers too much. The first is rather like our Nokia vs. Apple analyst’s note from 2010, the second is worryingly similar to recent BlackBerry news.

Here’s an excellent discussion of the real dynamics of Android, starting from the important premise that “Android winning” doesn’t necessarily mean “Google winning” even if charts like this one are unavoidably impressive:


Over time, rather than trying to “control Android”, Google has instead switched its software development efforts to the closed-source pack of Google applications that come with it. This is also where the various agreements with carriers and with the Open Handset Alliance of vendors bite, and it explains why Samsung insists on shipping its own collection of basic apps like the calendar - in case they ever need to cut ties in a hurry. Interestingly, the company that is most committed to building alternatives to as many Google APIs as possible is…Amazon.

In other software news, Oracle claims its Q3 numbers make it the world’s second-biggest software company. More specifically, IBM’s Q3s make Oracle the world’s second-biggest software company - they were rather poor, with the upshot that Oracle could tot up its software revenue and IBM’s and make the announcement. IBM, of course, also makes money selling hardware, consultancy, and cloud services.

Github, builders of the world’s favourite distributed version-control system, describe their radical “open allocation” strategy. It works very well for software developers developing software-development software for other software developers, as long as you’ve got really good software-development software, put it that way.

And the United States has just witnessed the highest-profile web application launch ever, healthcare.gov. This didn’t go well. Businessweek looks at whether open-source software and methods might have helped.

Google results, selling Facebook ads

Google’s Q3 results are in, and they’re good - revenue was up 12% year on year, $14.89bn, of which $9.39bn was advertising. This breaks down to a mammoth 26% surge in paid clicks on adverts - i.e. volume - but an 8% drop in the cost-per-click, i.e. price, and all other things being equal, profit. Like everyone else, Google finds that mobile clicks are worth less than clicks from PCs, but this far they’ve managed to make this up by driving more traffic. Interestingly, revenues from Google Apps, Chromebook, and Play Store revenue-shares were up dramatically, 85% year-on-year, at $1.2bn or about 9% of Google revenues.

One of the ways Google is trying to generate more volume is selling Facebook ads, via integration between the DoubleClick Bid Manager and Facebook’s FBX ad exchange.

Advertising with Facebook seems to be enormously more valuable if it gets served to iPhone users than Android users. That said, this isn’t the case for e-commerce or gaming sites, which make up a very large proportion of the total. It’s interesting, though, that there doesn’t seem to be a corresponding price differential.

Kiip is a new mobile advertising startup that claims that it helps brands target ads to “moments” within a selection of 1,500 apps. Here’s the video pitch.

Google CAPEX; Microsoft fights the cloud price wars

All this activity has hard physical consequences, of course, and Google is still building data centres. Data Center Knowledge points out that Google spent $2.29bn in Q3 on CAPEX, and that this is the second highest ever. The record was Q4 2010, at $2.5bn, but that was almost all down to the trophy acquisition of 111 8th Avenue in New York. This time, it’s a broad-based upsurge of investment across the data centre portfolio.


Serious engineering, too. Here’s an interview with the Googler behind a new book on optimising Web applications for speed.

Elsewhere in the cloud, Microsoft cut prices in Azure up to 22%, undercutting Amazon Web Services’ latest round of price cuts. This is what is technically known as a price war, and anyone without either extensive differentiation or brutal scale is going to lose.

Apparently unfazed, AWS announced new features for its CloudFront CDN/caching product. CloudFront now supports the HTTP operations that cause writes, like POST and DELETE, as well as just read-only GETs, so you can use it to collect user input and deliver it to mission control as well as using it to distribute content from the centre to the edge.

They also added audio to Elastic Transcoder.

Yahoo! is spending $170 million on another data centre.

OnSIP lines up some more disruption; Tropo fail

OnSIP drops another voice disruption - they now offer both free browser-based video chat with WebRTC and also free voice calls via SIP-over-Websocket.

Tropo apologises for the outage and explains that its quality assurance team aren’t based in the US and therefore expected phone numbers to be “normal” as it were.

Twilio announces new SMS features in Europe.

WhatsApp’s cryptography is still not OK.

Snowden: it’s France’s turn now

Edward Snowden reveals that the NSA collected very large quantities of call detail records, SMS messages, and possibly also recordings from France as recently as the end of 2012.

The French foreign ministry has summoned the US ambassador for a telling-off, but then, some time ago the French intelligence services themselves leaked that they were collecting enormous amounts of telecoms data. It is almost certain that the NSA got the data because the French shared it with them, so presumably the foreign minister will promise himself he won’t do it again.

The deputy chairman of Huawei, barely able to believe his luck, announces that the company has never been asked to change any of its products in order to facilitate espionage.

Here’s an OFCOM consultation on better location services for 999, which is going to be problematic in the current environment.

And the Iraqi government recently tried an unusual approach to industry regulation. When they wanted to impose a regulated price cut, they cut off internal access to the main cable landing station. Either fortunately or unfortunately, it looks like there’s enough fibre into Iran and Kurdistan that this didn’t work. (Kurdistan? But that isn’t a country? Says who?)

PiracyData.org exists to tell you whether or not that movie everyone’s torrenting is actually available legally.

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October 14, 2013

American / Japanese Voice use; T-Mobile USA; Euro-Brazilian LTE; Apple; Huawei; Alcatel; ISIS; Alibaba; Telco 2.0 News Review

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.

Americans use hours of voice, the Japanese hardly ever - until you see how much VoIP they’re doing

Mashable reminds us that nobody burns through mobile voice minutes quite like Americans, with an average of 356 minutes per subscriber per month, compared with 126 in the UK or 78 in taciturn Germany.


But as Chris Kranky points out, the forces of disruption are careering towards the US voice market. The Japanese may only get through 91 minutes of monthly billed mobile voice, but Japanese VoIP users - 68% of the smartphone base - are really yakking away, generating US levels of usage in the parallel universe of mobile VoIP.


We see at once the continued relevance of the most natural form of telecommunication, and also the menace to a business which still accounts for a majority of the US top four carriers’ revenue. Will the coming launch of VoLTE with AT&T and Verizon do anything to defend it? RCR Wireless asks the readers and promises that it will be interoperable.

Dean Bubley, for his part, is worried that too much effort in telcos is going into integrating WebRTC with IMS.

But is all of this just beside the point? Is the problem with the idea of a “phone call” in itself?

Twilio’s blog has some examples of working with context.io, a startup that provides a webhook API for your e-mail inbox. Meanwhile, the Harvard Business Review blog looks at the idea of inserting predictive or recommendational content into your to-do list, which may well sound a lot like spam. At least it’s not just 120-year-old phone conventions reimplemented with layers of new technology, though.

This voice-driven CRM startup is also organised around the idea of priorities, action items, and queues. So there are a couple of ideas to be going on with until the new Telco 2.0 strategy report comes out.

T-Mobile USA goes after roaming; Sprint purge; Euro-Brazilian LTE roaming; EE scores BT MVNO account

T-Mobile USA’s price blitz goes on. With some help from Shakira, CEO John Legere this week announced that the operator (sorry, uncarrier) is going to dramatically cut its data roaming charges and set a flat $0.20/minute rate for roaming calls. On the same day, they drew down $5.6bn of funding from the Deutsche Telekom mothership.

Whatever T-Mo USA is up to, DTAG is very much a carrier rather than a uncarrier back in Europe, like its pals in the E-5 group. Rewheel’s latest pricing review is out, with the following fine chart showing prices and data bundles for an unlimited voice & messaging smartphone package.


Three points stand out - as they say, bigger operators are more expensive (perhaps because the UK, French, German, and US economies aren’t as bombed-out as Italy, Spain, or Portugal). DTAG is pricey. But that said, it’s less ironic than it might seem - prices at the US top 2 carriers are significantly higher than DTAG mainline, so there’s scope for T-Mo USA to split the difference even if corporate might not want to go full-on Free Mobile.

Over at Sprint, meanwhile, has carried out a major reshuffle of the board. CMO Bill Malloy and chief of sales Paget Alves are out. The unusual post of chief sales officer is broken up, with Dow Draper of Clearwire taking over prepaid, chief service officer Bob Johnson taking over retail, and wholesale boss Matt Carter moving to become president of enterprise solutions.

A major strength of the Sprint-Softbank deal was meant to be that the two companies would have a single buyer for devices. In order to implement this, the head of customer acquisition (a CMO, a head of sales, *and* a head of customer acquisition?) is taking over the job of VP of product development, thus relieving Fared Alib to move out to Silicon Valley and take charge of an alliance with distributors Brightstar that’s meant to handle device procurement for the whole company.

Verizon’s bid to shut off Fire Island’s copper is still reverberating around the industry. The Washington Post blogs that old copper must go. Here’s a case that carriers should be made to sell the networks to someone who’ll love them, like Frontier, Windstream, or Fairpoint, rather than cut the wires.

AT&T is pulling older data plans in order to only sell the ones that let you use the same data allowance on multiple devices. Prices are slightly higher, so AT&T is betting that multi-devices feels like a bigger bundle. And the Canadian government has blocked a sale of MTS’s business division to Middle Eastern telecoms identity Naguib Sawaris on “security grounds”.

LTE roaming is coming, specifically, between TIM Brasil and Telecom Italia Mobile. This is thanks to Telecom Italia’s wholesale division, Sparkle, expanding its GRX/IPX operations to provide LTE roaming services. It’s obviously also a bid to retain the upper hand in its efforts to avoid selling TIM Brasil to the competition.

Vivendi hasn’t named the day for the spin-off of SFR, but they’re dropping heavy hints that it’s sometime this autumn. Meanwhile, Vodafone’s acquisition of KDG closed this week.

EverythingEverywhere, though, has nabbed the BT Mobile job from Vodafone UK, which has been providing MVNO service to the ex-incumbent for years. EE wholesale has been doing strong business lately, but the interesting question here is whether BT is going to lend EE some of its 2.6GHz 4G block, or perhaps use it for enterprise small cells with EE overlay coverage on top?

OFCOM, meanwhile, is going to sting the UK operators for a fee if they want to keep the GSM spectrum that was handed out for free back in the day. Evidently this affects the Original Two most of all, but since EE had to sell some of its 1800MHz holdings, even 3UK has some of the freebie spectrum.

Reaction is here - nobody likes it very much.

Ovum reckons that mobile value-added service revenue will fall by 7% in Europe this year, but the sector will still make it to a 10% global CAGR thanks to good growth in Asia and Africa.

So it’s good news that having hooked up the West Africa Cable System (WACS) last month, MTN Zambia has turned up dual-carrier HSPA+.

Apple seeks TD-SCDMA clue; iPhone 5cs going free!; Firefox OS 1.1 out

Junk Charts highlights this superb visualisation of the rise and fall of the BlackBerry, reminding us of how the iPhone re-disrupted after the 3GS and how important the concurrent, separate entry of Android was.


Meanwhile, more details have emerged about former half-CEO Mike Lazarides and Doug Fregin’s rival bid for the company.

Apple, for its part, has been advertising in China for a carrier-approval manager conversant with TD-SCDMA. It’s the place to look, after all. More seriously, TD-SCDMA means China Mobile, so this is another step towards the arrival of the iPhone on China Mobile, one of the world’s least well kept secrets at this point.

If you’ve got an old smartphone, Best Buy Mobile will give you at least $100 trade-in credit. With Apple’s price set at $99 for a US 16GB iPhone 5C, that makes it a freebie. There does seem to be some difficulty in moving them.

It looks like 3 Denmark will be carrying Jolla’s Sailfish OS gadgets - we also have the impression it refers to getting the OS via an app store, but our Danish isn’t that good. There’s also going to be a second wave of pre-orders coming up.

Mozilla, meanwhile, pushed a major update to Firefox OS, taking it to v1.1 and fulfilling their promise of quarterly minor versions so far.

Huawei says no to acquisitions; disaster at Alcatel; Nokia Networks partners with Juniper

Huawei is not going to make any major acquisitions, says Guo Ping, one of the company’s three deputy chairmen, who rotate the post of CEO.

Alcatel-Lucent is doing the opposite - it’s cutting 15,000 jobs, although it hopes to create 5,000 elsewhere for a net loss of 10,000. The CEO, ex-Vodafone man and French deep-telco technocrat Michel Combes, is trying to focus the company on IP, optical, and mobile broadband networks, which means dropping some of its BSS-OSS and software empire. At the same time, they’re pushing software-defined networking/network functions virtualisation hard through the CloudBand initiative.

One solution is selling the company to NSN or as we now call it again, Nokia Networks. Nokia might not be all that interested, as they just set up a strategic partnership with Juniper Networks. The idea is that Juniper puts the routers and security technology in the backhaul side of Nokia’s radio networks.

ISIS rolls out to the pad, loses 2 banks; volunteer for Google’s Sponsored Stories clone? thought not; Alibaba wants to be Amazon.cn

ISIS, the US carriers’ payments joint venture, is coming - the app is ready and launch is set for some time in the next few weeks. iPhone users will have to get a case with an NFC chip to make use of it, but it will be accepted at 1.3 million locations around the US and at 24 of the top 100 merchants.

AT&T, Verizon Wireless, and T-Mobile have all agreed to have the service promoted in their shops and in their marketing campaigns, which is a good sign, but the big question is surely whether anyone will bother to get the NFC gadget. Further, although American Express and Chase are signed up, two other credit card companies who took part in the field trial in Salt Lake City have decided not to go ahead with the launch into production. That will be Capital One and Barclays, so no pressure then.

TelecomTV notes that US carriers are increasingly interested in telco-OTT solutions for things like home automation. We’d point out that as well as telco-OTT solutions, riding on someone else’s lines, there’s also the option of “M2M as OTT”, using the mobile network to compete on these things in other companies’ fixed homes.

Meanwhile, Google’s Shared Endorsements will put your name and face next to products you +1’d…unlike Facebook’s Sponsored Stories, though, which ended up in a mess of lawsuits, it will only do it if you volunteer.

For its part, Facebook has acquired an Israeli mobile analytics startup, Onavo.

Yahoo! has acquired Bread, a URI-shortener, to “strengthen its mobile advertising”. It seems to be a talent acquisition more than anything else.

More interestingly, perhaps, Yahoo! is about to roll out a new advertising product, intended to be common across its services, which will be similar to Facebook’s news feed, a continuous scroll of targeted ads. AllThingsD notes that the advertisers, so far, are a bit lacklustre.

They also point out that Yahoo!’s business is benefiting from the flow of dividends it draws from its stake in Jack Ma’s giant Chinese B2B marketplace, Alibaba.com. This week, Alibaba had a genuinely big announcement - it’s investing $16bn in creating a fulfillment network, payments system, and analytics capabilities, in other words an Amazon-like e-commerce platform for China. Now there’s something to write home about.

Remember Virgin x BBC iPlayer? Now here’s Netflix x your cable competition; Twitter-TV integration

Netflix is in talks with US cable operators - and some other cable operators closer to home - about distributing its video over their networks, into their set-top boxes. This is a playback of Virgin Media’s canny decision to integrate the BBC iPlayer into their cable offering, both improving the content and offloading traffic from the Internet service. Virgin itself, as well as Com Hem in Sweden, have already signed up.

Comcast, and its NBC Universal TV mates, have a new deal with Twitter. The idea is that you can embed a call to start playback of on-demand TV, change channels to a live broadcast, or set the DVR within a tweet, creating a call-to-action that can be promoted virally. Now that sounds interesting - not least because it implies the existence of a back-end web API.

Here’s an interesting post about Video Factory, the system developed by the BBC that transcodes, prepares, and cues up the content that goes into the iPlayer.

Keeping traffic from the NSA, but not from the BND; Beware D-Link routers

Renesys blogs about Anycast IP, why it can mean traffic within the building routing around the world, and why it might be worthwhile doing it anyway. Also, there seems to be a problem with Google’s internal routing in Latin America.

Deutsche Telekom is considering changing its routing policy to keep more traffic within Germany and therefore theoretically away from the prying eyes of Edward Snowden’s former colleagues - which would be a nice idea if it wasn’t for last week’s disclosure that the German spooks were taking traffic from the DE-CIX.

A whole selection of D-Link home routers are accessible to anyone who sets their browser user-agent to “xmlset_roodkcableoj28840ybtide” (hint - read it backwards).

The Internet is on in Aleppo.

And here’s something genuinely interesting: an old missionary HF radio network is repurposed to help civilians survive the Lord’s Resistance Army.

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October 10, 2013

Telcos can grow total revenues +5% in 5 Years with ‘Digital Commerce 2.0’

Our major new report Digital Commerce 2.0: New $Bn Disruptive Opportunities for Telcos, Banks and Technology Players shows that if telcos fully commit to taking new roles as ‘intermediaries’ and ‘enablers’ in Mobile Commerce (advertising, marketing, payments, loyalty) and Personal Cloud, they could grow new revenues amounting to 5% of today’s core revenues in 5 years.

Using a unique business model analysis framework, and dissecting the strategies of leading players (including Google, Facebook, Apple, Visa, Amazon, Weve, Isis), the report provides the world’s first comprehensive strategic guide for players looking to disrupt markets and deliver new growth within the digital commerce space.

It also includes evaluations of the related strategic opportunities of ‘raw big data’, professional data services, and internal data use, and a detailed strategy (including proposition, organisation design and business modelling) substantiating how telcos could achieve this growth. More here on our research portal, and join us at Digital Arabia, 11-13 November, Dubai.

two way commerce draft 1 oct 2013.png

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October 7, 2013

BlackBerry, Samsung, Oi/PTel, Free, SeaMicro: Telco 2.0 News Review

There’s only a month left to go before the next Telco 2.0 event, Digital Arabia 2013, from the 11th-13th of November in Dubai. Here’s a video from last year’s:

Rogers: no space for the BlackBerry Z30s; how the iPhone was won; Samsung mobile product chief exit-interviewed

There was talk this week that there might even be another buyer for BlackBerry out there, but by far the most telling news story about them was that their hometown carrier, Rogers Wireless, won’t be stocking the Z30. This comes after Gartner advised its enterprise clients to replace their BlackBerry fleets over the next six months.

At the root of all this disruption, the iPhone.

Here’s a fascinating piece on the early development of the Jesus Phone, from an upcoming book entitled Dogfight: How Apple and Google Went to War and Started a Revolution. If this is a dogfight, BlackBerry is now at the point of being out of airspeed and ideas.

Horace remarks that the biggest problem for both RIM and Nokia in responding to the iPhone was that the information they got from their primary customer - the carriers - was misleading. For a long, long time, the carriers increased their orders for smartphones in order to hedge the iPhones, thus convincing RIM and Nokia that things were going well. Also, asking enterprise buyers (rather than users) what they needed led Nokia to cripple out features from the E-series devices.


Meanwhile, Microsoft has been trying to get HTC to offer Windows Phone on more of its devices, rather than Android. (Ironically, even on the PC, Microsoft’s latest and greatest Windows 8 is growing more slowly than Windows 7.)

Samsung, the other great winner from the smartphone disruption, says goodbye to its chief product officer for mobile, Kevin Packingham, who is among other things responsible for their crucial decision to take control of marketing from the carriers, spending Samsung’s own money and making their own calls.

Here’s an interesting example of the M7 sensor co-processor in the new iPhones: the ARGUS fitness app will drain between 20 and 30 per cent of the iPhone’s battery capacity just because it has to run a background service to pick up events from the accelerometer, unless it runs on a new iPhone. As well as being more battery-efficient, the M7 also caches the events so the app can just grab the lot when the user wakes it up.

Google, meanwhile, has launched an update to the Google Play Developer Console that embeds various functions from Google Analytics, so (for example) you can track the sources of referrals to your app. We remember that years ago, around the time of the PlayBook launch, BlackBerry did precisely this with their SDK…

Oi merges with PTel; E-Plus with O2.de; Telefonica adds to its carrier billing service

Brazilian operator Oi is merging with Portugal Telecom, in a deal which requires Oi to issue €2.7bn of new stock while PT contributes €2bn of assets. The combined operator will have just over 100 million subscribers. The Brazilian regulator has to agree, but the minister seems delighted and both parties’ shares surged.

NTT DoCoMo reported a bad, in fact a terrible, month’s sales, after they ran out of iPhones while the competition…didn’t.

Elsewhere, KPN’s shareholders agreed to sell E-Plus to Telefonica, taking Germany down from 4 to 3 operators. KPN gets €5bn in cash and 20.5% of the combined carrier, which will be the market leader by subscribers. They intend to spend some of it on more fibre in the Netherlands and Belgium, and pay out a special dividend - if, of course, the German regulator agrees. Meanwhile, there’s still no deal with America Movil.

Telefonica has signed up mobile-money specialist Mopay to provide improvements to their carrier billing service. Mopay’s app will now provide the option to pay via the phone bill and will integrate with the BlueVia API for billing. Telefonica reckons that their carrier billing is taking off in Latin America, where it’s available in 9 markets.

There’s also some more more detail here about their £1.5bn M2M contract with the UK’s smart meter project. Meanwhile, their network in the UK had a major outage, also taking down MVNOs Tesco Mobile and Giffgaff.

Verizon Wireless, famously, has some customers who signed up for an unlimited data plan years ago and had to be grandfathered-in for contractual reasons when they stopped doing that kind of thing. In an effort to starve them out, they’re not allowed an upgrade when the contract is renewed unless they pay the full unsubsidised whack. Except this week, when a software bug permitted some of them to snag a new gadget.

Meanwhile, VZW is required to offload some 700MHz spectrum by the terms on which it acquired a block of the 1700MHz AWS band from Spectrumco (the Sprint-cablecos joint venture). This week, it sold a chunk of 700 for $189m, to something called “Grain Management” (we’re as mystified as you are), which promptly leased them a slice of 1700 and 2100MHz it got from AT&T.

T-Mobile USA is planning to launch “Uncarrier 3.0” next week, and they’re handing out tickets to a Shakira gig as part of it.

TeliaSonera’s head of mobile, meanwhile, has been sacked over their dealings in Uzbekistan, and it’s finally emerged from another dump of Edward Snowden’s documents that the German secret services are indeed monitoring the DE-CIX exchange point.

Free pushes on to gigabit FTTH; US MVNO outbreak; SK Tel’s “Cloud RAN”

T-Mobile USA may call itself an “uncarrier”, but what about Free? Here’s the latest surprise. Existing Freebox Revolution fibre subscribers are being upgraded to 200Mbps up/1Gbps down, the first gigabit consumer product in Europe, at no price premium. Free is swapping GPON shared-medium technology for a “home-run”, point-to-point Ethernet deployment.

At the same time, they’re deploying a home-grown soft DSLAM and a software patch for the Freeboxes that lets them support ADSL up to VDSL2+, with the modems training to the highest possible speed given the line length, attenuation, and SNR, so a lot of the DSL customers can expect either a speed boost or a more stable connection. All this fixed-line investment, of course, also serves their femtocells and public WLAN and therefore adds capacity to Free Mobile.

Elsewhere, the US MVNO outbreak continues, as Target prepares its own prepay virtual operator for launch. T-Mobile is the enabler. There’s more detail on FreedomPop’s smartphone plans here.

Tom Alexander, formerly of Virgin Mobile when it was the first MVNO ever and then of T-Mobile UK when it was the wholesale provider to essentially all the British MVNOs, as well as being CEO of EverythingEverywhere, is joining Viacloud, a startup described as an MVNA or “mobile virtual network aggregator”. That seems to mean that it provides a platform for the quick creation of other MVNOs, and buys the wholesale radio capacity in bulk for all its customers from the same carrier - in this case, EE. The board is rich in other mobile and altnet people.

SK Telecom, meanwhile, announced this week that it hopes to get the (theoretical) peak download speed on its LTE-A network to 150Mbps, now that it’s acquired a 35MHz block of 1800MHz spectrum. Interestingly, they’re working on a fully virtualised software base station with Intel, rather like the “smart cells” they demonstrated at MWC. The 3G and 4G Wireless Blog has more information about SKT’s “Cloud RAN”, including the point that they try to use all the fibre they pull to customers to support the mobile network too - rather interesting in the light of Free’s news.


The 3G & 4G Wireless Blog may also become a bit of a misnomer, as they have an interesting China Mobile presentation on their plans for 5G.

OFCOM, meanwhile, has named the companies taking part in the whitespace radio trials and has also issued a consultation on spectrum policy for the next 10 years.

Verizon picks SeaMicro for a cloud of microservers; IBM plans for SoftLayer; Cisco & Facebook make adverts

Verizon’s Terremark division has picked the SeaMicro line of micro-servers for its next lot of cloud products. SeaMicro, these days a division of AMD, is best known for its Intel Atom-based low-energy machines, but apparently it’s not about the electricity bills, and Terremark will be specifying Intel Xeon or AMD Opteron chips.

Instead, the point is to reduce how much the servers contend for bandwidth on the local area network, letting Terremark offer its customers guaranteed levels of I/O performance. It’s another example of how cloud services are getting increasingly differentiated, and how the line between “private cloud” and “managed hosting” is getting increasingly blurred.

Are we looking at another surge in data centre investment? Data Centre Knowledge reports that the availability of data centre space on the market has dropped sharply. So-called “super wholesale” transactions have allowed major users like Facebook and Rackspace to lock up space in data centres in multiple markets ahead of time, and now Microsoft is getting interested. The result is that the market is increasingly tight.

Meanwhile, IBM has given some details on its plans for huge hosting/cloud provider SoftLayer. IBM especially values SoftLayer’s automation and management tools - they made near-cloudlike automation a unique selling point, by contrast with arch rival Rackspace’s promise of “fanatical support” - and wants to build more SoftLayer data centres outside the United States. However, they intend to let the company run on autonomously at least until 2015 to understand the business better.

IBM has also Cisco and Facebook have a partnership to provide ad-funded free WLAN in shopping malls and the like. “CMX for Facebook” lets you put in WLAN access points that users will log into with their Facebook credentials, so you can tie their location and browsing history with information pulled from their Facebook profiles, to the delight of advertisers.

Here’s a useful blog post about streaming video with Amazon CloudFront. Here’s a High Scalability post on how Salesforce works.

Twilio+Facebook; Telus relaunches PTT, but where’s the API?

Parse is part of Facebook you don’t hear that much about, a developer platform they acquired. Now it’s integrated with Twilio.

Telus was Canada’s equivalent of Nextel in that it was the biggest provider of PTT service for a whole range of enterprise applications. Unlike Sprint-Nextel’s decision to kill off the iDEN network, Telus is launching its Next-Generation PTT service running over its HSPA and LTE networks.

But here’s the question: is there an API?

Google+ Hangouts On Air is a powerful combination of video conferencing and Web video publishing, but watch out: Dan York discovered that it has a maximum time limit of 4 hours.

An interesting piece on the way WebRTC and XMPP are converging.

Twitter: buy our shares, we’re losing money

Twitter has filed the S-1 form for its IPO, which tells us that it’s a lossmaker ($79m in 2012 on revenues of $317m) and that the great bulk of its revenue is earned in the US, while 77 per cent of its 218 million monthly-active users are outside the US.

AllThingsD reckons that they could take “a billion dollars of revenue from YouTube” if they only started hosting online video - a remark which seems to take very little account of the fact they’d have to build a video-serving infrastructure the size of YouTube’s to do so, without being able to piggyback on Google.

That said, a tweet at the right moment can be genuinely valuable. Back in August, US investor Carl Ichan tweeted that he was going long Apple shares and within the hour Apple’s market capitalisation increased by $17bn.

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October 3, 2013

Do you work for AT&T, Axiata, Etisalat, Ooredoo, Singtel, Telefonica, Verizon or Vodafone?

If so, and you work in technology, IT, product development/management or strategy we would very much like you to contribute to a unique research programme about business model transformation.

Your input would be to complete a 20-minute survey focused on technology transformation and we would give you the results of the survey in return.

The survey and full details can be found here.

For those not ready to click, more details follow below…

STL Partners is conducting a global survey with 8 major Communications Services Provides (CSPs) to explore technology transformation as part of a wider benchmarking of business model transformation. The 8 CSPs we are exploring initially are AT&T, Verizon, Telefonica, Vodafone, Etisalat, Ooredoo, Axiata and SingTel . You can see some initial analysis on Telefonica’s marketplace and competitive position here.

We would very much like to access the ‘wisdom of crowds’ in the technology survey rather than get input from one or two senior folks (though it would be great if they take the survey). It will take around 20 minutes to complete and participants will get a free copy of the results which should be fascinating and insightful.

Again, you can access the survey here.

It covers 3 core technology areas:

  1. Existing technological capabilities

  2. The technology changes needed to develop and deliver new ‘Telco 2.0’ business models

  3. How well each CSP is doing in making these required changes.

Responses will be aggregated and each CSP will be benchmarked so you can see how your company is doing against its peers.

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

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