Down to three carriers? Sprin-T; cablecos; Aussie NBN; Google; Chinese 4G - Telco 2.0 News Review
- US Focus: US mobile “two-thirds more expensive” than UK; iPhone saturation in 2015; Sprintbank Samurai after T-Mobile; Malone and Charter after TWC
- Strategy & Finance: Obermann: more consolidation, and less spying; shock Telecom Italia raid flops; Greek carriers up rates 15%; Aussie NBN replaced by “50Mbps cable by 2019”
- Smartphone Roundup: China Mobile 4G and the supply chain; new Qualcomm CEO; free upgrades to BES10; Android Asha?
- M2M: M2M impacts on the network; Orange/Renault in unsurprising connected car partnership; new search engine for online sensors
- Google: Google flirts with ARM servers; offers and then removes Android privacy controls; eats bulk e-mail companies; builds giant robots
- Valley Roundup: PayPal chief’s savage burn on NFC; Vodafone Wallet launches, with NFC; Kindle Fire HDX on instalments; Facebook’s latest feature, autoplaying video ads
- Privacy & Security: NSA may make Snowden an offer, hacks A5/1; curious lawsuit; how much do the police pay telcos for data?
US mobile “two-thirds more expensive” than UK; iPhone saturation in 2015; Sprintbank Samurai after T-Mobile; Malone and Charter after TWC
The United States is still a pricey cellular market. OFCOM estimates that a phone with 200 minutes, 50 SMS, and 200MB of data costs £14/mo in the UK and £57/mo in the US on average. Not surprisingly, the price gap is attracting disruptors into the field, and the new unlocking policy that the top five carriers have agreed to will only facilitate the process.
So will the saturation of the market with smartphones. Horace’s diffusion model reckons we passed peak growth in October 2012 and will arrive at the end of the mass market adoption phase in October 2015. And Apple will probably win most of the remaining growth by adoption. The classic Bass diffusion curve is nice, but this chart explains the point about Apple, still marching along a linear growth path:
A lot of people, ourselves included, thought the acquisition of Sprint by the Softbank Samurai, Masayoshi Son, would fire the starting gun for disruption. Instead, it all took so much longer, Sprint’s shutdown of iDEN was so much more damaging, and T-Mobile USA beat them to the punch. Also, the decision to rebuild the Clearwire WiMAX network as an LTE network while also moving Sprint mainline from CDMA to LTE led to what CEO Dan Hesse calls “dust issues”. Note he also admits to losing 60% of the business accounts that took an iDEN service.
So, what now for the Samurai? A bid for T-Mobile, naturally. The big question will be whether the FCC is happier about Sprin-T than it was about AT&T&T. The point is made that T-Mobile is a GSM operator and Sprint isn’t, but this is probably much less of an issue than it would have been five years ago, as both of them are now focused on deploying LTE. More to the point might be the very different customer bases - geeks and bargain hunters at T-Mobile, southern small businesses at Sprint.
One of the points that emerged from our work on North American carriers for the new Telco 2.0 Transformation Index is that the US cable operators have become increasingly impressive broadband ISPs, connectivity-focused players who give the historic Bell operators a very hard time. Among them, there’s a deal afoot, as Charter tries to buy Time-Warner Cable. Liberty Global and its owner, John Malone, recently bought 27% of Charter, and it seems to be their idea. At the same time, Time-Warner is looking at a merger of the cable operator with the market leader, Comcast. Malone and Charter presumably fear getting stuck with an 800lb gorilla competitor, and don’t want to rely on anti-trust regulation.
And is Orange going to move into Canada, perhaps as an MVNO?
There’s also an interesting Canadian net neutrality row going on. Is leaving your own mobile TV service out of the data cap against the rules?
Obermann: more consolidation, and less spying; shock Telecom Italia raid flops; Greek carriers up rates 15%; Aussie NBN replaced by “50Mbps cable by 2019”
The Sprint offer for T-Mobile immediately caused Deutsche Telekom shares to leap. CEO Réne Obermann is leaving soon, to take on the job of running Dutch cableco Ziggo, and he’s been speaking out quite a bit. Among other things, he says DTAG is still too small to be a global competitor, despite being the second biggest European telco, and Europe could do with more consolidation.
He also has something to say about the Snowden affair:
“This spying has shaken the confidence in two pillars of our society, free communications and privacy…I do not understand the pussyfooting [around the Americans],” said Obermann. “It is negligent that so little has happened.”
No doubt the hack of Angela Merkel’s phone has stimulated German opinion, but It wasn’t that long ago that DTAG was caught secretly providing CDRs on journalists, trade unionists, and competitors to a network of German corporate security chiefs. You remember - it was in the Telco 2.0 news review! Fortunately for Obermann, who had just taken over when the story broke, most of the blame landed on his predecessor, Kai-Uwe Ricke.
In Italy, a coup de theatre occurs in the Telecom Italia story - US investor BlackRock turns out to have quietly been buying up stock, taking its stake to 10 per cent of the company. They didn’t, however, tell the Italian stock exchange, and now they face a fine and the possibility of having to sit out critical votes.
TeliaSonera, meanwhile, is clearing up after the scandal and the exit from the former Soviet Union. The Eurasian business unit gets a new boss, and the company promises a new business model based on customer focus.
If the FCC is sceptical about going down to three carriers, or the European Commission disagrees with Réne Obermann, you might not need to look further than the next story for the reasons. In economically bombed-out Greece, all three wireless carriers have raised their prices between October and December, by as much as 15 per cent. Rewheel estimates that the marginal price of a GB of mobile data in Greece is now €16, while it can be as low as €0.2 in Denmark and Finland.
It’s enough to make you burst a blood vessel. Like the man who’s been ordered by his doctor to drop his complaint against Telstra because it’s endangering his health. The Aussie NBN installers, still building until someone tells them to stop, have passed his home with fibre but Telstra is dragging its feet about activating the link, and practising what the Germans used to call “strategic incompetence” when DTAG did it to unbundlers.
You might query whether having yourself photographed for the front page of the newspaper waving a phone bill is an ideal way to relax, but he’s got a point. The NBN strategic review is back, and it foresees a drastic cutback in the NBN rollout. They will now not be building fibre out where there’s an existing cable network, and users in these areas are promised “50Mbps downlink by 2019”. But any half-way competent cableco should be able to deliver 50Mbps downlink yesterday. If you can’t, you obviously haven’t deployed DOCSIS 3 yet.
Elsewhere, the plan is now “fibre to the cabinet”, leaving the copper in place. The strategic review team have, incredibly, not taken a view on the copper quality or the line runs. So users still get to pay for the whole thing, while being promised nothing they shouldn’t already get, but only after waiting another six years, or they might get nothing if they happen to be on a long DSL run. You’re probably well advised to get the NBN fibre hooked up if you possibly can.
Bill Morrow, of Vodafone, VHA, and (ahem) Clearwire fame, gets the poisoned chalice of managing NBN Co.
While the politicians wrangle, both the installers and the regulators push on. The agreements under which NBN Co provides wholesale service have been published.
In Uganda, a new operator is preparing to launch, but it doesn’t have a name yet and the public are invited to suggest one. The investor behind it is, of all companies, Afghanistan’s Roshan. The public might be forgiven for asking if they really need a seventh GSM core network, rather than more coverage, and also if Roshan should really be exporting capital out of Afghanistan, the poorest country on earth.
MTN, meanwhile, is buying into AIH. This is an interesting company, essentially somewhere between an investment trust, a start-up incubator, and a mini-conglomerate, that invests in African online and e-commerce businesses. It was originally set up in 2012 by another telco, Millicom International Cellular, and the Berlin-based VC fund, Rocket Internet. MTN is taking a 33% stake, which will divide the company’s capital equally among the three backers. (In an additional twist, Kinnevik, the owners of Millicom, also own a chunk of Rocket directly.)
Rocket is best known for a string of web startups that basically cloned better-known ones from the US in internationalised versions. This might not work so badly in this context, but it would be exciting if they could do the opposite too.
A&A ISP, back in the UK, is relaunching its national roaming MVNO.
China Mobile 4G and the supply chain; new Qualcomm CEO; free upgrades to BES10; Android Asha?
Here’s a deep look into Chinese 4G and its impact on the phone supply chain. Terry Yu of Display Search expects that China Mobile will subsidise Apple iPhone 5s/5c devices, not least because of the significant unofficial fleet of old iPhones running on their 2G network. These early adopters are likely to be an easy upsell to a new iPhone with a 4G contract. At the same time, CM has relaxed its requirement that all devices support 5 baseband modes, so devices that support only GSM, TD-SCDMA, and TD-LTE are acceptable. The point is to make it easier to support 4G in $200-ish Androids - and perhaps also to make it harder to churn to the competition, as the opposition have FD-LTE, WCDMA, and CDMA2000.
Samsung, meanwhile, is already shipping G4s and Notes to China Mobile, and can be expected to pour marketing spend into China.
So far, though, the supply chain is still waiting for demand to ramp up - Imagination Technologies revised down its forecasts for demand substantially.
Qualcomm has a new CEO, Steve Mollenkopf, with Paul Jacobs becoming chairman.
It’s almost traditional to decry labour practices at Apple’s suppliers. There is no particular reason to think Samsung’s (or anyone else’s) outsourcers are any better, and China Labour Watch’s investigation into one Samsung supplier sounds like they might well be worse.
Elsewhere, HTC has appointed its CFO as head of sales.
There’s a steady drip, drip of stories about major enterprise customers dropping their BlackBerry fleets, usually in favour of Apple or just letting the users bring their own, which means the same. The Australian Government is one, and Goldman Sachs is another.
BlackBerry is beginning to respond. Anyone with an existing support contract for the Enterprise Server 5 gets a free upgrade to BES 10, which actually looks quite impressive - it can provide a segregated, encrypted, virtualised container for enterprise apps and data on any smartphone, managed from the BES admin console, and it supports up to 100,000 users per server. The app even looks reasonably iOS-y.
Over at Nokia, the idea of an Android-based Nokia is knocking about again. Apparently there’s an Asha codenamed “Normandy” that might yet see the light of day. Hold on, didn’t Nokia just buy a Linux-based OS for the Ashas not so long ago?
M2M impacts on the network; Orange/Renault in unsurprising connected car partnership; new search engine for online sensors
The 3G, 4G, and 5G Wireless Blog has an interesting presentation from EE about the impacts of M2M devices on their network. It’s more complicated than you might think, and it’s probably not realistic to expect that “low bandwidth” will make it easy.
In other M2M news, Telkomsel is joining the quite substantial list of carriers who support Jasper Wireless. Orange, meanwhile, has started a research project with Renault to decide what use to make of the SIMs Orange Business Services supply to the car maker.
Usman Haque, Pachube founder and Telco 2.0 event speaker, has a new company, Thingful. This is basically a search engine for sensors that are connected to the Internet, “like Google for the Internet of Things”.
Google flirts with ARM servers; offers and then removes Android privacy controls; eats bulk e-mail companies; builds giant robots
Google may be considering using ARM chips in its vast fleet of servers, and may even design its own chips, like it already does servers. Because their servers are deliberately minimal in design, this would involve less work porting the software than it might for general use. An alternative reading is that Google is just trying to get a bigger discount on Intel x86 chips.
The big motivation for using ARM’s technology, beyond just putting the squeeze on Intel, would be saving power. There’s more detail, notably about what kind of chip they might consider, here. Note that Google bought a small chip design firm a couple of years back. There’s some more here.
Elsewhere in the cloud, Alcatel-Lucent’s CTO and president of Bell Labs expects much more of his product line to be cloud-based (i.e. NFV or SDN), and regrets losing 40 engineers from the Labs to Google, who apparently took with them much of their expertise on cloud security.
Google’s latest version of Android provides quite impressively rich control over third party apps’ demands for personal data and system resources. Using a new API, you can view and manage precisely what all your apps can get up to, rather than just having to either turn down or accept everything they offer at install time.
Oh. Now it doesn’t. The next Android release took the feature away again, although users of the alternative ROMs can still get it. Google says it was an accident and they’re worried that it might break some apps.
Sometimes Google breaks apps, but sometimes it breaks whole business models. Starting now, GMail will cache any images included in HTML e-mail, serving them to users out of the Google CDN, transcoding them down to sensible sizes for mobile devices, and presumably de-duplicating them. This will probably improve the user experience noticeably.
It will also mean that bulk e-mail marketers will no longer get meaningful information about whether their image-laden mailshot was opened. One of the main reasons a lot of e-mail clients filter images is that when the image loads, the sender gets to read the recipient’s browser context, as well as knowing if and when the recipient viewed the message. Now, all the sender will learn from GMail addresses will be that the Googlebot downloaded the image.
It’s a fine line between “opt-in e-mail that we track to optimise the user experience” and “spam that spies on you to boot” - although probably about 99% of those affected are spammers or close to spammers, you do have to worry about Google the advertising company killing off a lot of its competitors.
In an effort to reassure us all, Google then bought a company that makes giant military robots.
PayPal chief’s savage burn on NFC; Vodafone Wallet launches, with NFC; Kindle Fire HDX on instalments; Facebook’s latest feature, autoplaying video ads
An interesting suggestion - is Patrick Gelsinger, VMWare CEO, a potential boss of Microsoft?
David Marcus of PayPal likes Bitcoin and very much dislikes NFC:
“It’s technology for the sake of technology or for the sake of pushing the agenda of the companies supporting it, versus solving real people’s problems,” Marcus said of NFC.
“Instead swiping or using a PIN pad, they’re tapping. How is that really better? How is that changing your life? People don’t want that. Today a merchant has Internet connectivity at the point-of-sale terminal. All the consumers have phones with wireless networks. Why do you need to be at a place in a store to make a payment? [NFC is] too little too late.”
Ouch. Vodafone this week launched Vodafone Wallet across Europe, a mobile payments service based on Corfire’s technology. It uses NFC, but don’t worry - if you don’t have an NFC phone, you can get an NFC sticker!
Amazon will now sell you a Kindle Fire HDX on monthly instalments. They claim that the financing terms are 0% interest, and they might be - after all, Amazon likes to roll its cashflow into investments. The reason is of course that Kindle users spend hundreds of dollars more on Amazon products than others.
Facebook has an update for its iOS app. The new feature is that any video in the newsfeed (which includes ads) will autoplay, silently unless you tap the screen. It’s free, although quite a few people would want to be paid to put up with autoplaying video ads and some of us actually use software to prevent that kind of thing.
NSA may make Snowden an offer, hacks A5/1; curious lawsuit; how much do the police pay telcos for data?
The NSA is considering offering Edward Snowden a deal, the BBC reports. This may be because they now think he’s got even more files squirreled away than they suspected, and anything is better than the revelations just going on, and on, and on. That said, the quality might be a bit patchy - it should be no surprise to anyone that the obsolete A5/1 cellular encryption standard is now very vulnerable, not just to the NSA but to reasonably effective individual hackers.
Here’s a rather tangled piece of Snowden fallout. A pension fund is suing IBM, claiming that they supported a surveillance law (CISPA) that actually never passed through the US Congress, and because of this, their sales in China have fallen, and therefore they should get some money.
Bruce Schneier, security expert, cryptographer, and vocal surveillance sceptic, has resigned from BT, which acquired him along with his consulting shop Counterpane back in 2006. BT denies it has anything to do with the Snowden affair.
US operators were paid $26 million last year in exchange for data that the police wanted. AT&T got $10.2m, Verizon Wireless just under $5m, and T-Mobile was the unexpected champ in this unusual form of two-sided market, clearing $11m. Perhaps the low, low prices are attracting the wrong sort of crowd. Sprint wouldn’t tell.
France has nearly passed a very swingeing authorisation for surveillance indeed.
And Microsoft has joined a standards group that hopes to replace passwords.To share this article easily, please click: