Vodafone H1s, UK focus, T-Mobile USA, MTN, Voice 2.0, Apple CAPEX: Telco 2.0 News Review
- Strategy & Finance: Vodafone endures hellish H1, hopes for European recovery. Will the users change back?
- US Carriers: T-Mobile USA grabs another million subscribers; US spectrum; where did that exaflood get to?
- Emerging Markets: Facebook joins GSMA; South African market on point of change; “We’ll prioritise Skype”
- Cloud Computing: Amazon - the cloud is all about energy; Kinesis massive stream processing; Mayday customer service; Workspace virtual desktops
- Voice 2.0: Netflix redesigns, drops the embedded HTML5 browser
- Smartphone Roundup: Apple doesn’t just buy tooling, it invents tooling; Chen gets the $1bn for BlackBerry
- Privacy & Security: Who gave the NSA your stuff? Paranoia hits Cisco’s sales
Vodafone endures hellish H1, hopes for European recovery. Will the users change back, though?
It’s Vodafone H1 time and the results were fairly awful, with service revenue down 4.2%. Europe was the problem, again, with the Southern European markets down 14.9%. But even the North & Central European businesses were down 3.9%. In fact, however grim things have been in the UK, it was the least bad of the European markets, with a drop of “only” 2.5%. VF blames “intense price competition”.
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The whole justification for selling out of VZW was that the US market was a disruption candidate, and Europe was about to see a strong recovery. Vittorio Colao’s slides literally say this, promising a return to growth in 2013-2014 and an end to pressure from regulators. But the Eurozone has just had a quarter perilously close to deflation, and a strong case can be made that users’ behaviour has been permanently reset, with much lower voice and messaging usage, high sensitivity to the edge of the bundle, and a strong preference for WLAN where possible.
That said, Vodafone has made its choice. Implementation is focused on “Project Spring”, an additional £7bn in CAPEX over the next two years, and on deepening its engagement with customers in general, by adding more content, more fixed-line, and more unified comms. Colao is talking about going into UK pay-TV and owning content, and perhaps acquiring more cable assets. Telco-as-media is surely the business model option with the worst record in the industry, although cableco distribution and network capacity would no doubt be handy.
Out on the blue water, Vodafone’s emerging markets businesses in the AMAP division turned in a solid six months. South Africa is now the second-biggest contributor of EBITDA in the Vodafone Group, for example, and India is the fourth. Project Spring money is being channelled partly into building up 3G and backhaul provision ahead of 4G, and partly into a major expansion of M-PESA.
Elsewhere in the UK, TalkTalk provided some qualified encouragement, adding 167,000 new TV customers by pricing below the sports-focused operators for a basic service. That’s more, as they boasted, than Sky, Virgin Media, and BT added put together. They also pulled through 5,000 net adds for broadband.
The prime minister asked for a meeting with the heads of the five families…sorry…the UK’s major telcos and ISPs to ask them nicely to lay off the prices a tad.
Broken Telephone has got hold of a report drawn up for TalkTalk claiming that BT’s pricing for wholesale and LLU access to their FTTC network has been arranged to make it impossible for competitors to survive. Officially, the pricing should be “close” to their estimated costs, but OFCOM doesn’t actually regulate this, making it a dead letter.
Meanwhile, BT resorts to frankly notable tactics in its effort to keep all the BDUK money. Perhaps the prime minister’s time could be better spent. Our own sources suggest extending price regulation to FTTC is exactly what OFCOM is considering, but don’t hold your breath.
Ironically, Openreach CEO Liv Garfield is off to join Severn-Trent Water, which is itself subject to a nice letter from the minister asking them to, you know, go easy on the, ah, pricing.
And here’s an Economist award for RISC and BBC Micro inventors Steve Furber and Sophie Wilson.
T-Mobile USA grabs another million subscribers; US spectrum; where did that exaflood get to?
T-Mobile USA’s Q3s are out, and they show a continued streak of subscriber gains. They added another million net subscribers, just behind the heavyweight champ Verizon Wireless and ahead of AT&T, and beating Sprint into a cocked hat. Churn was also down. This came at a price - ARPU was down by $5 year-on-year at a still respectable $45. The carrier made a $33 million loss in the quarter.
Looking ahead, they’re planning to float a substantial amount of stock in order to pay for more spectrum. And the Satellite Cowboy, DISH’s Charlie Ergen, is still interested in bidding for the company now he can’t have Sprint.
Sprint, for its part, doesn’t want to bid on the H-Block 1900MHz spectrum. This is the block the Cowboy had to get rid of in exchange for clearance to use the 2GHz satellite band for mobile. Now, he’s suggesting he might buy it back, or maybe sue LightSquared, or both. Sprint, for their part, are keeping their powder dry for the 600MHz auction.
Meanwhile, Republic Wireless, the hybrid MVNO/WiFi operator, is offering plans that start at $5 a month if you pay $299 for a Moto X, not a bad deal. That rises to $40/mo for unlimited LTE. Either way, they’re punching prices.
Sandvine, a vendor of network monitoring and DPI kit, has issued a report on Internet traffic growth, and DSLReports reports that it’s fairly steady and there is no sign of the famous “exaflood” that was going to cause “Internet brownouts”. DSLReports goes on to investigate the political background to the exaflood concept and you might be surprised by what they find, but surely the best bit of the story here is that the debunking comes from one of the firms that makes the equipment you need to selectively throttle video streams.
In further irony, swinging off the same report, BitTorrent accuses Netflix of being a bandwidth hog, because US downlink traffic by type looks like this (note that Sandvine evidently trimmed the protocol classes that are less than 1% of the total):
They also make the point that their own protocol is designed to back off from congestion, and P2P distribution is fundamentally efficient, and that perhaps Netflix could make some sort of deal? As usual, when this issue resurfaces, it’s because there’s something important happening at the FCC. A court is due to hand down its decision on the Open Internet Order, and at least one senator is planning to replace it with a bill putting Internet disputes under the authority of the anti-trust regulators.
AT&T, meanwhile, is getting interested in software-defined networks via something it calls the Supplier Domain Program 2.0.
And ISIS has launched, quietly.
Facebook joins the GSMA; South African market may be about to change; “We’ll happily prioritise Skype”
Facebook is the newest member of the GSMA, which frankly stretches the notion of an association of GSM operators. Of course, they’re only an associate member until they actually buy spectrum and turn up service, but it’s telling that they want to be involved.
In South Africa,Telkom is considering its options about what to do with the mobile operation. A sale may be on the cards. Their competitor, Cell C, meanwhile argues that MVNOs in Africa should target the premium market, rather than being hard discounters like they usually are in Europe. Virgin Mobile Australia is an example.
Telekom Austria spent a billion on LTE spectrum last week. This week it reported Q3 profits down by 48%.
LTE operator Smile has launched in three African countries (Nigeria, Tanzania, and Uganda) with a data-only service, and this week they said they would “happily prioritise Skype traffic”. They’d also like to launch in South Africa.
MTN, meanwhile, signed up with Etisalat to use their Smarthub IPX based at the Fujairah cable landing in the UAE. SAP reckons 56% of operators are now connected to at least one IPX, up from 30% in 2011. Interestingly, the most common service hooked up is still voice.
Amazon - the cloud is all about energy; Kinesis massive stream processing; Mayday customer service; Workspace virtual desktops
It’s the time of year Amazon’s AWS:Invent shindig rolls around. James Hamilton usually brings something special in terms of presentations to the show, and this year’s surprise is that AWS is making its own electricity substations, which involves writing firmware for the electrical switchgear. He pointed out that once servers are installed, any price point that is higher than the cost of the power draw and cooling is worth having, explaining both why AWS can be so cheap and why they are so militant about energy.
It’s not just AWS. This Data Center Knowledge post has the week’s top five stories in their view, and all but one are about energy. Facebook is buying wind turbines to drive a new data centre. 3M is offering immersion cooling for servers. Schneider Electric is rewiring old car showrooms into data centres. Apple is operating a pair of solar power stations. And Microsoft is looking at generating electricity with fuel cells directly in the rack, getting rid of the whole power distribution network.
How long before someone gives their DC its own nuclear reactor? It’s the kind of thing Google would do, surely?
AWS, meanwhile, announced products. Amazon Kinesis is a solution for capturing and processing very high volume streams of data in real time, natively sharded and distributed among AWS Availability Zones.
Amazon Workspaces is their move into the virtual desktop market, which lets you run Windows 7, Microsoft Office, and that sort of thing in the cloud and access it from a whole variety of client devices (notably iPads). You need an Amazon virtual private cloud instance and a VPN to set it up.
Amazon Mayday, the tech-support solution built into the Kindle Fire, is discussed by Asterisknik Tsahi Levent-Levi, who thinks it’s an example of the future of contact centres and a threat to telcos’ business with them.
LooseBolts has a list of people worth listening to about data centres.
Tropo rolls out to Singapore and the UAE; more contact centre innovation
Tropo has more carrier deployments. Last week in Dubai, we heard from Etisalat about their deployment of the Voice 2.0 platform, its first step outside the global north. This week, Starhub in Singapore turned on its SmartFoundry developer platform, based on Tropo.com for the voice and messaging features.
Here’s an interview with the developer behind OnSIP’s integration with WebRTC.
We blogged a hackathon project to log, transcribe, and analyze service calls with Twilio and an undocumented Google speech-to-text API the other week. The Twilio blog has more detail and an interview with the developers.
HD voice makes its way into the contact centre and enterprise.
And here’s the read-out of last week’s VoIP Users call, which focuses on the key open-source tool that is Kamailo, your first choice for a big SIP proxy.
Netflix redesigns, drops the embedded HTML5 browser
Netflix is carrying out a major UX redesign, which requires it to drop its purist HTML5-everywhere approach. In order to guarantee a seamless cross-platform user experience, Netflix was actually shipping a whole headless web browser based on WebKit as part of its app, providing its own runtime for the HTML5.
This is obviously clumsy, and tied up a lot of engineering resources maintaining a browser project, while even then, the cross-platform experience wasn’t perfect. Roku devices, for example, couldn’t look at individual profiles or auto-play TV content. So it’s back, or perhaps forward, to native code.
There’s some more detail at the Netflix blog.
Meanwhile, do the service ecosystems, and even content, pale in comparison to Apple’s sales of hardware and the software that goes with it? The 3G & 4G Wireless Blog thinks it’s just wisest to get your Netflix fix over WiFi.
Apple doesn’t just buy tooling, it invents tooling; Chen gets the $1bn for BlackBerry
Apple is going to spend $10.5bn in 2014 on CAPEX. Some of that is a new headquarters building, but as usual, a very large chunk will be invested in machine tools for Apple’s supply chain. Fascinatingly, Apple employs roboticists and production engineers who are deployed for long periods of time to their suppliers’ facilities, and they even sometimes invent their own tools.
Bloomberg Businessweek quotes the example of when the iPhone 4 gained a gyroscope. This had to be tested, and nothing suitable was on the market. As a result, Apple made one:
The resulting contraption has a granite base and cubes that spin several iPhones around 30 degrees a second to test that the movement-tracking technology is functioning, said the person. Apple then had enough of the machines made to place at the end of suppliers’ assembly lines in China for iPhones to run through
Apple also often provides suppliers with finance out of its cash pile, typically by paying for part of the production run in advance. Horace, quoted in the piece, blogs that Apple’s 2014 CAPEX budget is about 75% of a US Navy aircraft carrier. Samsung’s may actually be more, depending on how much of the Display Products division you reallocate.
John Chen, the new CEO of BlackBerry, says he’s confident in his plan to “rebuild for all our constituencies”. He’s got the $1bn of financing he was after, which no doubt helps.
Jolla’s first SailfishOS phones should land on the 27th of November. They’re preloading Yandex’s unofficial Android app store in order to have a reasonable app inventory at launch.
Cyanogenmod now has a somewhat less user-hostile installer.
Who gave the NSA your stuff? Paranoia hits Cisco’s sales
Major US tech companies are suddenly keen to make a clean breast of their cooperation with NSA surveillance, Forbes says. As a result, here’s a neat infographic.
What is Yahoo! up to? (Probably running outsourced e-mail, is our guess.) Meanwhile, it emerges that the NSA tried to persuade Linus Torvalds to compromise Linux.
Cisco, whose quarter just came round, has seen a sudden and dramatic plunge in emerging market sales, notably in Brazil. CEO John Chambers thinks it’s because nobody trusts US vendors any more and other companies will be similarly affected. There’s some more here at the Financial Times.