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February 19, 2014

Self-Disruption: How Sprint Blew It

Our latest research ‘Self-Disruption: How Sprint Blew It’ shows how Sprint’s necessary shutdown of Nextel turned into a commercial disaster, losing valuable customers, reputation, and market share. Our analysis shows that amidst the drama of the Softbank deal and the complexity of a major network upgrade, SMB customer needs were neglected, and its competitors (VZW, AT&T and T-Mobile) stepped smartly in.

We’ll be discussing the US market further at the Onfuture America 2014 Brainstorm (May 20-21, Mountain View) including insights on from the Telco 2.0 Transformation Index research on AT&T, Verizon, and the overall CSP Benchmarking study.

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February 18, 2014

Comcast, Vodafone, NBN, Sprint, Apple, Lenovo - Telco 2.0 News Review

Comcast jumps in on Charter-TWC; continued cable consolidation coming; Liberty Global; Ono

We were all watching the Charter-TWC deal, and then it turned into a Comcast-TWC deal. Comcast, not content to pick up assets Charter might offload, jumped in with a $45bn bid for the whole of TWC this week and got a yes. Much reaction is here.

This takes Comcast to 30 million subscribers, by far the biggest of the US cablecos and also bigger by some way than either Verizon or AT&T’s fixed operations. Quite recently, a deal between Discovery and Scripps was abandoned because Discovery decided on balance that it had all the scale it needed - now, it’s more than likely that we’ll see further consolidation of the cable business, especially in the light of Comcast’s vertical integration with NBC’s content business.

It may be more important still, as Jodie Griffin at Public Knowledge points out, that Comcast might have as much as half the US market for triple-play. She argues that either the FCC or the antitrust regulators should veto the deal, not so much because of its consequences for consumers, but rather because of its potential impact on content providers. A case in point is Netflix’s effort to get its app onto cable STBs, which is now very much on hold.

Comcast is likely to sack most of the TWC executives. The point is made that Comcast has a lot of regulatory pull - the new FCC chair, Tom Wheeler, is a former cable industry lobbyist, and in the other direction, Meredith Attwell Baker, the FCC official who signed off on Comcast-NBC Universal, is now Comcast’s lobbyist.

In other cable news, TWC has started free-upgrading its top tier of subscribers from 50 to 100Mbps. Liberty Global has results; 7.6 million out of its 21 million subscribers are still on analogue, which is surely a huge upsell opportunity, and 10 million are taking only TV. Not surprisingly they’re very keen to push broadband to them.

Also, Liberty has 2.5 million subscribers with TiVos, of which 2 million are on Virgin Media. They also have half a million on their own platform in Europe. Is it time to go all in on TiVo, or even acquire the company?

Ono, meanwhile, is considering Vodafone’s offer of £6bn. The key point is probably this:

Selling at €7bn would clear Ono’s debt of €3.42bn and give the investors a return of €3.58bn. The four investors put in €1bn for a 54 per cent stake and would see a return of €1.8bn. This is a moderate rate of return in the VC business.

Nice work if you can get it. The Ono deal may, in part, be explained by this regulatory row between Vodafone.es and Telefonica - VF alleges Telefonica’s deal to share fibre-to-the-home assets with Jazztel is anticompetitive. Perhaps that’s why VF is £6bn keen to own broadband assets there.

Vodafone deploying ftth.ie; NBN political shambles; BT denies underspending fibre budget

Vodafone is increasingly interested in fixed broadband. In Ireland, it’s planning to run fibre to 450,000 homes using the Irish electricity grid’s rights-of-way and civil works. Legislation to that end is passing through the Irish parliament, and Vodafone picked the ball up and ran with it.

In Australia, the NBN build goes on despite communications minister Malcolm Turnbull’s efforts to stop it. In fact, Turnbull the minister has a problem; however little he likes it, the NBN is now his network and he’s got to look after its interests. Now TPG Telecom wants to run its own fibre-to-the-building into some of the most promising deployment areas. Will he let it? Or let it build, then buy it? Or what?

Similarly, the Aussie government is in the difficult position of having both opposed the NBN, but also having promised to build it faster. Here’s a minister promising rural Australians super-fast broadband:

Fletcher said the goal is to beat Labor’s coverage targets through the extensive use of fibre to the node (FTTN). He claims that placing equipment within an exchange in a rural town with a 100-metre radius will provide most premises NBN services.

In the UK, it looks possible that BT may reach its self-imposed targets for FTTC rollout without spending all the money it budgeted. Although this is in part because Openreach was more efficient than expected, the carrier seems a little embarrassed by the whole issue, presumably because it can already hear the calls for more fibre.

Meanwhile, the closure of South Yorkshire Digital Region is set for 15th May, and the government is being asked for another £10m to overbuild it. Belfast city council has £16m available to spend on faster links for SMBs, but it’s only going to use “over £9m” of it. The rest is going on a public wi-fi system and we wouldn’t bet against it ending up in BT’s Wireless Cities line of business.

What does seem to encourage BT to roll out fibre is….competitors rolling out fibre. Meanwhile, Bogota’s FTTH network launches phase one.

The Google Fibre Blog has a guide for communities interested in fibre.

Apple joins WebRTC; BBM gets voice; Viber = $900m to Rakusen; Ericsson brings Kodiak PTT to Europe

Apple has joined the WebRTC Working Group, the Cisco Mobile twitter feed announces with 140-character concision. This is an important moment - not only does it signal Apple’s interest in voice, it’s also an unusual case of Apple getting involved in an open, interoperable networking solution - they usually prefer to keep everything within the walls.

The last time we remember them doing something explicitly protocol-based was Bonjour multicast-DNS, and that caused iTunes, so watch out! Disruptive Dean discusses the possibilities, and argues that Apple is likely to give FaceTime more developer options, try to build it up as the primary telephony option on the iDevices, and to use WebRTC to batter Adobe Flash further.

Meanwhile, BlackBerry has added free calls to the BlackBerry Messenger app:

Japanese retailing giant Rakuten has acquired Viber, for the little matter of $900m in cash. That brings Rakuten a half decent mobile VoIP app, its supporting infrastructure, and some 300 million users. On the other hand, Viber is one of those companies where “stickers” are part of the business model, so it’s up to Rakuten to find something useful to do with it.

Here’s another hybrid, MVNO plus option, UppWireless.

Chatternets is a WebRTC app that lets you talk immediately to anyone who’s looking at the same webpage. You probably want to think carefully about which pages you try that on.

Check-Connectivity.com is a Web site that returns debugging information on your WebRTC app.

Meet RAVEL, your new favourite acronym, for Roaming Architecture for Voice over LTE with Local Breakout.

Ericsson and Kodiak Networks are trying to push a hosted PTT solution in Europe. Telstra is offering a cloud-based version of BlueJeans’ videoconferencing solution.

Simwood has a report coming up on the various fraud, spammers, and wildlife that gets trapped in their VoIP honeypot.

Voice has got so complicated these days - in the 1950s, innovation meant making a handset that was “little, lovely, and it lights!”


Sprint results less horrible than expected; T-Pricing cut; VZW gives an inch; demand more WiFi spectrum

We were waiting for this - Sprint results. They weren’t as bad as you might expect. In the fourth quarter, they managed to add customers at last (477,000), taking the score for the year to a net loss of 2.3 million subscribers. That said, a postpaid ARPU of $63.29 shows why the US market remains interesting.

Financially, they lost $1bn in Q4, compared with $1.3bn in Q4 2012 - but the worrying bit is the driver of this improvement, as RCR Wireless points out. CAPEX seems to be slowing down, which isn’t what you’d expect from an operator carrying out a huge network upgrade. And voice seems to be a problem:

“During the construction phase, there is a period of disruption to our network service which will manifest itself in higher voice service drops and blocked calls,” [CEO Dan] Hesse explained. “Voice performance is very noticeable to customers, so heightened blocks and drops contribute significantly to churn.”

Read our Executive Briefing on Self-Disruption: How Sprint Blew It today

Meanwhile, T-Mobile USA has given its quick-upgrade product another turn. Jump! subscribers who pay $10 a month extra can now have an upgrade whenever they want, as long as they’ve paid 50% of the last one off and trade it in.

Verizon Wireless held out the longest of the US operators, but it has now given just a bit of ground to the price war. No price points are changing, but subscribers who take their pay-for-upgrades plan or who sign for 2 years will see bigger data bundles. The company is also closing 5 call centres with the loss of 5,200 jobs.

Masayoshi Son is still hoping for a crack at Sprin-T-Mobile.

Meet WiFi Forward, a campaign to get the US TV whitespaces assigned for unlicensed use, and specifically, more WiFi bandwidth.

The US Department of Labour writes to carriers, pointing out that five tower climbers have been killed this year so far.

Vodafone has signed up Moneygram, the remittance network, for interoperability with M-PESA. That creates an additional 16 million addressable users for the platform. Vittorio Colao, meanwhile, is displeased by Facebook’s 0.facebook.com wanting to be zero-rated.

Singapore state holding company Temasek is looking at selling its stake in Thai 3G operator Shin Corp. As a first step it’s going to be offered to SingTel. Back in 2006, the tax treatment of Temasek’s acquisition of the shares was a contributory factor in a military coup against Thai president Thaksin Shinawatra.

The Indian 2G reauction is over, at $9.8bn in bids. Vodafone, Idea, and Bharti came off best; Reliance Jio and Uninor stayed in the game; the rest are getting out. As a result, Bharti Airtel has offered $110m for Loop, a deal that would bring them 3 million subscribers.

App-le; Lenovo boss says he will “turn Motorola around in a few quarters”

One of the most remarkable phenomena about Apple is the enduring appetite for third-party apps for the iOS platform. Customers keep spending and developers keep hacking. The result is nicely summarised by Horace:


So, the iTunes operation is getting on for half a Google, and interestingly, it’s driven by apps (the red sector on the chart) above all. Apps have also accelerated sharply since Q1 2013. He also points out that it’s half a Google with something like 25% greater margins, and that it all fits together:

The missing piece in the puzzle is that the iPhone and iPad and iPod touch and Apple TV are pieces of an inter-dependent network of assets. The iTunes stores, Apple’s services and Apple Retail are easily ignored because they are not “profit centers” but I believe they are a key component to the sustainment of these margins

This blog post points out that apps make up the great majority of Facebook’s advertising revenue - when will Apple or Google launch something to address this, and what will that do to Facebook?

Elsewhere in hardware, Lenovo’s CEO reckons they can turn Motorola Mobility around within “a few quarters”.

Asus, meanwhile, shipped a flaw eight months ago that lets users on the Internet access any network-attached storage on the LAN side of their N66U-series routers. This week, a hacker decided it was time for action and wrote a script that crawled the Internet for the routers, tested for the vulnerability, and left a text file warning the user of the issue.

Wyless, the M2M-focused MVNO, has bought Aspider, a similar Dutch company. Lighting that leads you to the cheese. Spotify staffs up for an IPO. YouTube battles clickfraud. Cloudflare is hit by a giant NTP denial of service attack. Neul realigns itself, trying to appeal to telcos. A study shows the rays aren’t controlling your thoughts.

And oh dear, oh dear, oh dear. Free-space optics has its uses, but whoever is selling it to high-frequency trading companies on the grounds that the laser beam is “faster” than fibre-optics is either an idiot or someone with a genuinely twisted sense of humour.

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NFC v BLE v SIM v Cloud: the Mobile Marketing and Commerce technology battle

We’ce recently published a new report that will help digital commerce players assess some tough technology and strategy choices in the on-going mobile marketing and commerce battle.

The report addresses questions such as:

  • Will bricks and mortar merchants embrace NFC or Bluetooth Low Energy (BLE) or cloud-based solutions?
  • If NFC does take off, will SIM cards or trusted execution environments be used to secure services?
  • Should digital commerce brokers use SMS, in-app notifications or IP-based messaging services to interact with consumers?
  • What are the big players backing, and what will be the key indicators that a specific technology is likely to win?

You can read an excerpt of the report here and we’ll also be covering Mobile Marketing and Commerce at the Onfuture America 2014 Brainstorm (May 20-21, Mountain View) and OnFuture EMEA 2014 (June 10-11, London) - email us at contact@telco2.net to apply to participate.

Chart Excerpt from Mobile Commerce Technology Battle Report

mobile marketing tech battle main feb 2014.png

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February 10, 2014

Vodafone results; Cable deals; B4RN; Voice; Google CAPEX - Telco 2.0 News Review

The Telco 2.0 Transformation Index, launched today, gives an overall comparative benchmark and in-depth analysis of the progress of five leading telcos (AT&T, Verizon, Telefonica, SingTel and Ooredoo) in terms of transforming their operations and building new ‘Telco 2.0’ business models. Overall, it shows that SingTel and Telefonica have made more progress than AT&T, Verizon and Ooredoo, but that all are still at a relatively early stage of maturity and have much still to do. Click the image for more details:

Telco 2 Transformation Index.png

Vodafone FY - basically horrible in all developed markets; M-PESA moves on shore in Kenya

Vodafone’s results for the year are in. Where you stand on Vodafone basically depends on whether you think the price war in the US will be more brutal than the continuing economic crisis in peripheral Europe. If yes, it looks like selling VZW was sensible. If no, it looks like they sold the best mobile operator in the world to buy more assets in a string of bombed-out economies. It’s fair to say that the results back the second option; service revenue was down 4.8% quarter on quarter, with yet another double digit slide in Spain and Italy. You might have hoped that the Southern European markets would have bottomed out by now, but the slide is actually accelerating, with Italy off by 16.6%.

It’s not just the Mediterranean, though.

Elsewhere around the company, Vodafone UK has 370,000 LTE subscribers, which compares poorly with EE’s 2 million. And Vodafone service revenue fell 7.9% in Germany. Despite the hype about “Project Spring”, CAPEX was £1.8bn, up from £1.5bn the year before, which is hardly the stuff of a major strategic initiative.

There was some good news - service revenue in India, Turkey, and South Africa grew strongly, and both enterprise and M2M did well. Zooming in, Vodacom saw revenue up 10.5%, data revenue up 40%, and subscribers 12.3%. 23.3% of its subscribers are M-PESA users, and M-PESA accounts for 20% of its revenue in Tanzania, the biggest single Vodacom M-PESA deployment.

In Kenya, the original M-PESA market, Safaricom’s new mobile banking product, M-Shwari, has 24 billion Kenyan shillings in deposits and 7.8 billion in loans after the first year of operations.

Vodafone Group takes about 11 per cent of Kenyan M-PESA revenues as a royalty, we learn in an interesting Business Daily Africa story. This is going to change; so far, M-PESA the software application has been hosted in a Vodafone data centre in Germany, but Michael Joseph, Safaricom director and Vodafone Group head of mobile money, expects to move it onshore in Kenya this year. Specifically, the move will happen when the next major version, currently in testing, deploys. As a result, the royalty agreement will be renegotiated, letting Safaricom keep more of its money. It’s also telling that Kenyan data centre infrastructure is now up to the job.

Vodafone’s statement mentions a lot of fixed activity:

Our organic fibre build programmes in Spain and Portugal are on-going, and planning for our fibre-to-the-cabinet project in Italy, fibre-to-the-business in South Africa and DSL expansion in Spain are now at an advanced stage

So it’s no surprise people are speculating about a re-entry to the UK residential fixed market. As ThinkBroadband points out though, Vodafone would face the challenge of differentiating itself from all the other players who are basically resellers of BT’s VDSL product. The CEO is apparently concerned about a possible BT femtocell-plus-MVNO threat.

Elsewhere, DTAG buys out the other investors in Czech T-Mobile, Boost Mobile punches prices in the US again, offering open slather voice and messaging and 2.5GB of LTE data for $35/mo for the first six months, AT&T stops paying T-Mobile subscribers to churn, and a couple of appointments at Zain.

Vodafone bids £5.8bn for barely profitable Spanish cableco; TWC numbers

Meanwhile, Vodafone’s bid for Ono is official, and they’re offering £5.8bn for the Spanish cableco. We shall see how Liberty Global responds. Perhaps not much, going by the following key figures:

Ono provides telephone, television and internet services to its customers and had revenues of €1.57bn in 2012 but took in just €52m in net profit

As we wait for the next move in the Charter-TWC deal, TWC’s results show us why it’s up for sale. Over the full year, it lost about 7% of its customer base, with 217,000 net losses of video customers in Q4. TWC, unlike the other US cablecos, chose to put off the DOCSIS 3 upgrades rather than pushing broadband speeds - it may well have been reaping the rewards.

That said, they’re now trying to catch up. While video revenues fell by $436m, nonvideo (primarily broadband) revenues were up by $734m, and broadband net-adds were enough to get the customer base into positive territory on a “primary service unit”, i.e. unique subscriber, basis.

Here’s an old-school cableco story: Virgin Media is suing one of the four men found guilty in 2012 of running a pirate network with 6,600 subscribers out of a house in Derby, trying to recover £2.5m in lost business.

Virgin Media Business, meanwhile, has scored a major contract with 3UK to provide their backbone network, linking 15 aggregation sites and 3 data centres around the UK.

B4RN, the fastest broadband in Europe; British rural broadband policy descends into utter shambles

Forbes reports on B4RN, the Lancashire-based community fibre provides that provides the fastest rural broadband network in Europe. For a £150 signup and £30/month, its subscribers get gigabit connectivity, plus the spectacular condescension of this BT spokesman:

A spokesman from the UK’s biggest telco BT questioned B4RN’s long term viability and sustainability. What B4RN is doing is epic, but can they achieve the extras, he asked?

Perhaps those extras include 3% packet loss, which BT Wholesale told one of its ISP customers doesn’t count as a fault.

Bitterness is growing about the fate of the UK’s BDUK rural broadband project. In Devon, a local council leader refused to allow a vote to be taken on whether to proceed with a community FTTH project or to accept a subsidised BT FTTC build, while also ruling that a report on the BT offering was “commercially sensitive” and therefore secret.

Here’s an argument that OFCOM should intervene to make BT publish its network maps. Elsewhere, community fibre builders at Wessex Internet are looking at deploying fixed-wireless to reach beyond their footprint. The South Yorkshire Digital Region project is shutting down, but not surprisingly, the subscribers don’t want to leave.

What, precisely, is the Broadband Stakeholder Group and what is it doing?

The good news is that a DCMS consultation is open about the future of the UK ISP infrastructure, so it’s your opportunity to be the squeaky wheel that gets the grease.

Netflix vs. Verizon - neutrality controversy, or another Cogent depeering spat? Competing with YouTube; YouView in trouble

The spice, or rather online video, must flow. Except when Netflix and Verizon are having a peering dispute which impacts subscribers’ quality of service. The Public Knowledge blog explains the issues and asks why the FCC seems both unengaged, and more worryingly, incurious about the problem. It’s telling, meanwhile, that a content provider like Netflix can be involved in a peering dispute.

GigaOm speculates that it’s something to do with net neutrality, but between the comments there and Public Knowledge’s links, it seems quite plausible that it has more to do with Netflix’s move to take its CDN in-house. Apparently, they buy a lot of transit from Cogent, and the IP carrier price leader’s record of peering disputes speaks for itself.

Dean Bubley, meanwhile, is sceptical of “sender-pays” as a business model.

Here’s a long and interesting piece on being a major content producer for YouTube. Jason Calanicas argues that a) the platform and Google support are enormously impressive and also that b) it’s too expensive, and wonders if “10 of those [major content creators] got together and built a competitor it might be a major blow to YouTube”. We suspect he is hugely underestimating how much engineering and infrastructure (notably in the data centre) goes into making the YouTube platform as awesome as he says.

BT is offering streaming movies for sale via its YouView TV platform. That said, the BBC is looking increasingly sceptical about the troubled project.

Building “ski lifts” with WebRTC; Sprint goes with Broadsoft; US diplomats needed RedPhone; Chromebox for Meetings

Here’s a really good piece on the opportunities for Voice 2.0 in the call centre, using it to create a “ski lift” to the customer’s real problem, with a neat graphic:


Ericsson networks EVP Johan Witberg argues that major VoLTE investment will begin in the second half of 2014, and that a key motivation will be clearing the 2G and 3G spectrum preparatory to refarming.

Sprint picks Broadsoft’s BroadWorks voice applications server, tooling up for both VoLTE and richer unified comms features.

Chris Kranky points out that the sheer bulk of new features in HTML5 is a barrier to awareness of WebRTC. He’s trying to do something about that, with the new WebRTC Weekly. But voice awareness is a problem for a lot of people.

Like the US State Department. It turns out that US diplomats typically have encrypted data service on their mobile devices (i.e. a VPN) but not encrypted voice. As a result, “someone” (probably the Russians) intercepted them discussing Ukrainian politics and leaked it on the Internet, where the politically sensitive and foul-mouthed conversation ended up as a house remix (note: swearing). You see what comes of not using a secure voice app like Moxie Marlinspike’s Redphone.

Twilio blogs a customer using their service and LiveOps’ call centre platform to deliver pizza during the Super Bowl.

Public Knowledge provides details of the FCC’s IP transition trials.

The popular FreePBX project, a development of Asterisk, has recently added support for high-availability configurations with failover between active/active pairs of servers. Here’s a short talk from the Digium corporate blog:

And here’s a surprise: Chromebox for Meetings, a Google videoconferencing product, and it’s hardware! Asus makes the gadget, which runs Chrome OS on an Intel Core i7 CPU (i.e. quite some power) and uses Google Hangouts as the server. It costs $999, plus a recurring $250 annual fee.

Google CAPEX surges in 2013; is it data centres, or network?; Facebook looks at faster construction

Up in the cloud, Google spent $7.3 billion on data centres in 2013. This is double what it spent in 2012, and marks a major acceleration in data centre investment. Until quite recently, a $1bn CAPEX quarter for Google was exceptional, but Google broke through the barrier in all four quarters in 2013. All the investment is going into further phases at existing sites, rather than green field projects. (And some people think 10 or so videographers could build a competitor to YouTube…)

The architect of all this is of course Urs Hölzle. Here, he recalls the very first Google cage in their very first data centre.

What are they doing with all that money? The answer may be “running fibre between the data centres”. Matt Asay argues that much of the investment in the data centre infrastructure is going into networking, and that networking is Google’s angle vis-a-vis Amazon Web Services.

High Scalability discusses how Google backs up data, a major engineering challenge in itself.

IBM offers a service that virtualises your data. Facebook is looking at how it could build a data centre in half the time, and it is considering two different approaches. Fascinatingly, the demands of Facebook’s scaling are changing the architecture of the building as well as the technology inside it.

Apple: “artificial sapphire for 100 million, Alex”; HTC turnaround plan; HTML5 second-best paying ecosystem

Google created a data centre industry; Apple creates a manufacturing industry. 9to5Mac has detail of the factory it’s paying for in Arizona that makes artificial sapphire displays. The first batch of 518 machines is apparently capable of producing 106 to 113 million screens a year. Critically, their new set of quality inspection tools from Intego GmbH were shipped in January, so we should be expecting product fairly soon. Here’s a picture of an artificial sapphire furnace:


After that, Steve Wozniak saying that Apple should do an Android phone seems tame. The importance of Apple and Samsung’s deep value manufacturing investment is nicely shown up by HTC’s turnaround plan, specifically this quote:

“Many years ago we started looking at smartwatches and wearables, but we believe that we really have to solve the battery problems and the LCD light problems,” she said in the interview. “These are customer-centric problems.”

That said, IBM is considering getting rid of its fabs, although it will keep the chip design operation.

Microsoft is occasionally touted as a possible candidate to fork Android and replace Windows Phone. Ars Technica explains why the Google apps are the real issue and the real way Google influences the project.

Meanwhile, Nokia and HTC are the latest phone makers to settle their patent disputes.

Samsung will launch the Galaxy S5 at MWC. Apparently, they’re hoping to dispel the perception that the S4 was too similar to the S3. They may also show a Tizen phone, but it may not matter much, as Sprint, Telefonica, and NTT DoCoMo have all lost interest.

The UK is 59% smartphone, with 27% Android and 26% iPhone. Jolla has an interesting API for hardware add-ons. Google now owns a chunk of Lenovo.

Vision Mobile’s Developer Economics report, meanwhile, reckons that iOS is the best paying ecosystem, but the surprise is the second:


Snowden “scraped the NSA intranet”; IMSI catchers mounted on drones; BlackPOS news

Edward Snowden wrote a web scraper to collect the whole of the NSA’s internal wiki, it turns out. Meanwhile, much more data is disclosed on how the NSA uses telecoms call-detail records and various network exploits, notably an IMSI catcher mounted on a drone, to cue-in drone strikes and commando raids.

The potential impact on the politics of the Internet is discussed.

HP’s security research blog analyses the BlackPOS virus used by the attackers who took control of Target’s credit card terminals. The CEOs of the retailers, meanwhile, were hauled over the coals at the US Senate’s Judiciary Committee.

All you need to spy on GSM users: an account with a managed HLR company. Tunnelbear is a slightly cutesy but very simple mobile VPN app.

100 years of wireless history, in 135 slides at the 3G & 4G & 5G Wireless Blog. It’s NANOG60 this week, and the notes will be along shortly as always.

And the French privacy regulator, CNIL, ordered Google to pay a fine and place a message on the google.fr home page. The message included a link to CNIL’s web site. Predictably, CNIL’s web site couldn’t serve the traffic.

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February 5, 2014

CSPs / Telcos: Join our Enterprise Mobility Programme

If you work on behalf of a Communications Service Provider (CSP) in marketing, strategy, technology, IT or product development/management, we would like to ask you to join and participate in a strategic research programme we are undertaking on Enterprise Mobility.

This programme will conduct and produce research to help key decision makers define and evaluate their Enterprise Mobility strategy. As part of the programme we will share a report detailing Enterprise customers’ needs and challenges in successfully deploying Enterprise Mobility solutions and, also, benchmark CSPs’ current offerings against those needs on a regional (non-player specific) basis. Having identified any gaps between customers’ needs and telco activities, this research will define a strategy for CSPs to establish a stronger foothold in the enterprise mobility market.

To participate and receive the research in full, please complete this anonymised 4-minute survey focused on your current Enterprise Mobility offering and portfolio. (NB It does not require you to reveal competitive or strategic information).

The survey can be found here

We’ll also be exploring Enterprise Mobility in further depth in our research and our executive brainstorms in Silicon Valley (May 20-21) and London (June 10-11).

For those who would like to know more, below is an introduction to some of the hypotheses that STL Partners is investigating:

  1. In pursuit of agility, efficiency, new revenue sources and closer customer relationships, enterprises are turning to mobility to transform the way employees work with engaging mobile apps that harness device-specific functions and capabilities. These apps generally need to connect to and exchange data with back-office systems, many of which pre-date the mobile era. As a result, organisations are looking to partners to provide the tools, technologies and skills to customise and develop apps, do the heavy lifting of deployment and lifecycle management, and accelerate business value.
  2. Telcos need to identify alternative ways to grow revenues from enterprise customers. These include:
    • Monetising the growth in data creation and consumption to offset the inevitable decline in voice services (from consumer and enterprise markets)
    • Pursuing new service offerings such as Machine-to-Machine (M2M), Cloud Services, and real-time insight from the cellular network
    • Providing infrastructure and technology services that offer flexibility and economies of scale, allowing enterprises to focus on exploring new technologies instead of maintaining and managing existing ones.

Telcos have a timely opening to take an enterprise mobility proposition to market. However, to date, deployments have been niche and opportunistic rather than part of a long-term strategy.

In our recent report: The 50bn Enterprise Mobility Opportunity: four steps for Telco to take today, STL Partners identified a four-step structured approach that telcos can embark on today, and gain competence and confidence as they move up the enterprise mobility stack to higher value offerings. The four levels of evolution involve:

  • Level 1 - mobilising their own operations and internal processes

  • Level 2 - offering a managed environment to enterprises for their apps, whether on premise or in the cloud

  • Level 3 - providing hosted mobility together with off-the-shelf enterprise apps, with the option to add “last mile” customisation to the enterprise’s specific requirements and provide an enterprise app store

  • Level 4 - providing hosted mobility and developing bespoke, highly differentiated apps that solve customers’ unique business challenges

However, building out these capabilities will require substantial commitment and investment - not only in platforms and tools but also in people, via a transfusion of talent from related industries.
STL Partners is inviting telcos to participate in a study to explore their appetite for and inhibitors to establishing a foothold in the enterprise mobility market, the findings of which will be revealed in a forthcoming report.

Access the survey here for a complementary copy of our next in-depth study on Enterprise Mobility

The survey is split into two sections and explores CSPs’ internal and external Enterprise Mobility strategy, ambition and implementation challenges.

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February 3, 2014

US Regulators and Post-PSTN; Apple and Google Q4s - Telco 2.0 News Review

The Telco 2.0 Transformation Index, launched today, gives an overall comparative benchmark and in-depth analysis of the progress of five leading telcos (AT&T, Verizon, Telefonica, SingTel and Ooredoo) in terms of transforming their operations and building new ‘Telco 2.0’ business models. Overall, it shows that SingTel and Telefonica have made more progress than AT&T, Verizon and Ooredoo, but that all are still at a relatively early stage of maturity and have much still to do. Click the image for more details:

Telco 2 Transformation Index.png

Testing the Post-PSTN; how 706 changes US regulation on voice; Charter-TWC deal; AT&T Q4s; Sprin-T-Mo, no dealio

The FCC has issued a call for proposals on how to test the future IP-based replacement for the PSTN. The tests will be carried about in defined geographic areas, and participation will be voluntary, something net neutrality activists were vocal about.

Proposals are to be filed before the 20th of February, after which point the regulators will publish them and invite public comment up to the 31st of March, before making a final decision. The commission also declared the following principles:

  • Public safety communications must be available no matter the technology
  • All Americans must have access to affordable communications services
  • Competition in the marketplace provides choice for consumers and businesses
  • Consumer protection is paramount

Harold Feld explains the complicated interaction between the PSTN transition and that from the Open Internet Order to Section 706. Increasingly, voice services that are traditionally subject to common carrier requirements are provided over IP, and therefore escape from regulation. This is a serious problem for rural operators, who sometimes have trouble getting the majors to complete calls. Another issue is the “carrier of last resort” requirement, which means that regulated telcos have to offer service to anyone who will pay for it - something like Comcast’s cable VoIP service isn’t covered by this, for example.

On the other hand, Feld argues, 706 makes the various state laws that prevent municipal broadband rollouts unworkable and grants substantial new powers to the state-level regulators, the PUCs. An example of one such is in Kansas, where the cable lobby that wanted it is now displeased with the final text. Feld’s colleague John Bergmayer says that the problem with the Open Internet Order was that it was too subtle, too complicated, and too lawyerly, compared to, say, re-classifying under Title II. Who could disagree?

Meanwhile, Charter’s bid for Time Warner Cable has gone hostile, and Charter has a deal with Comcast, which will take about 3 million of the 15 million TWC subscribers off their hands, thus making regulators happy and immediately repaying some of the debt involved.

AT&T announced a solid Q4, mostly on the basis of mobile data revenues and U-Verse TV sales. Mobile net-adds are down quite sharply from the corresponding quarter a year ago, thanks to the emerging price war with T-Mobile.

In the price war, the latest move from AT&T is a $100 gimme for anyone who takes out another SIM on their account - the thinking is that the more SIMs on an account, the more hassle it will be to churn. Family plan customers with four lines can now get unlimited voice and messaging, plus 10GB of monthly data for $160. Ars Technica works through the details.

The Wall Street Journal hears that a Sprin-T-Mobile deal would probably run into regulatory trouble, interestingly not so much with the FCC as with the anti-trust regulators at the US Department of Justice. At the same time, T-CEO John Legere gave the strong impression that he sees the future of T-Mobile USA as one of organic growth as an independent operator.

Third time lucky - Indian 2G; SFR/Bouygues numbers; Belgian 4G

The Indian 2G spectrum re-auction has kicked off, despite a last-minute legal challenge by Vodafone and Bharti Airtel, who argued that the terms of their licences meant that they should simply be allowed to keep the contested licences in the key circles of Mumbai and New Delhi.

SFR reckons that the network-sharing agreement with Bouygues will save SFR €200 million a year and Bouygues €100 million a year, but the savings will only start to flow from 2017-2018 - until then, more CAPEX will be needed to pay for the decommissioning of the spare cell sites.

The owners, Vivendi, hope to list SFR on the stock market in July.

Deutsche Telekom has denied wanting to acquire more shares in OTE beyond the 40 per cent it holds already.

Telekom Austria, meanwhile, has put up its activation fee by 40 per cent, supposedly because “the smartphones have become more complicated”.

Belgacom turns on 4G for all its customers, while offering speed-based service tiers.

BT and BSkyB; Vodafone versus Liberty Global, Virgin Media speed boost

In the UK, BT has its Q3 results out this week. The carrier added 150,000 new broadband subscribers, and claims that 4.5 million people have “access” to its BT Sport channel, although this includes wholesale and even people who have the STB but not the channel. This got BT Retail’s revenues to £1.87bn, up 4% year on year, but on the other hand, Wholesale and Openreach did poorly. Openreach was subject to a regulatory price cut, while Wholesale is losing traditional voice and also broadband lines as local-loop unbundling presses on. Overall, revenue was up 2% at £4.6bn and pre-tax profits up 8% at £722m.

Arch-rival BSkyB reported revenues up 7.6% at £3.75bn for H2 2013. Operating-level profits were £895m, down 8% due to higher costs for Premier League football rights (themselves due to the bidding war launched by BT). The telecoms operation reported 110,000 broadband net-adds in Q4 - it’s worth noting that BT’s number includes upgrades of existing customers.

Elsewhere, it looks like Liberty Global is also bidding for Spanish cableco Ono, which Vodafone is after. The Daily Telegraph discusses the emerging rivalry between Liberty Global and Vodafone, and looks into the possibility of a Vodafone offer for the whole cable company.

Back in the UK, Virgin Media is about to up the speeds on its cable network, with the current top 120Mbps package rising to 152Mbps and the entry level 30Mbps to 50Mbps. Vodafone, meanwhile, has finally achieved the mobile broadband coverage requirement in its 3G licence.

EE and 3UK, of course, live on the same shared network infrastructure through their MBNL joint venture. They have just agreed to invest £1bn in the JV, although apparently this will result in a greater degree of separation between the networks.

ICUK has joined the SuperConnected Cities scheme, which offers vouchers for small businesses to pay the one-off costs of getting “super-fast broadband”.

And the videos from this year’s UKNOF event are online. Here we have an interesting discussion of deploying FTTH “for the last 5%”.

Google Q4s - leaving Motorola to Lenovo, sliding ad prices; Yahoo! getting back into search; Lenovo buys the world

Google Q4s were mildly disappointing, but the real news was Motorola, which had another poor quarter despite the launch of the Moto X. As a result, Google is getting out, selling the division to Lenovo, having already got rid of the factories and kept the patent portfolio. Lenovo pays $2.91bn, of which $1.5bn is a loan from Google and only $660m is cash. Google is therefore sitting on a loss of $5bn-plus, perhaps as high as $7bn depending on how charitable you are about the patents. And they apparently consider NEST worth more than Motorola Mobility.

Things aren’t perfect in the core business, either - average cost-per-click is down 11% year-on-year. Paid clicks were up 31% year-on-year, which saves the day in terms of revenue but only confirms that the price of advertising is falling. The problem is well known - Marissa Mayer, meanwhile, claimed that mobile was a major driver of growth at Yahoo!, but without contributing material revenue. They’re also looking at getting out of the deal under which Microsoft does their search and building their own new search product.

Lenovo’s CEO, interviewed by Fortune, says that they considered breaking up Motorola with Google back in 2012 and taking the hardware business. He claims that their aim is to ship 100 million smartphones and “surpass” Apple and Samsung. A sceptical take is here.

Here’s a good discussion of last week’s Lenovo acquisition of the IBM x86 server business. Over the weekend, it was rumoured that Lenovo is also interested in acquiring Sony’s VAIO PC business. Sony denied it, but admitted that it was considering all options.

Lenovo seems to have had nothing to do with COS, or China Operating System, a government-backed effort to develop China’s own OS. And wisely so, as it’s been a flop, and seems to be a thinly disguised version of Android.

Apple Q4 - flat profits, strong Macs; Samsung steps away from the software; Microsoft joins Open Compute

Apple’s Q4 set a record for revenue, $57.6bn, but profits were flat year-on-year. Gross margin was 37.9%. Out of their four main product categories, iPhones, iPads, and Macs all increased sales strongly, while iPods were down dramatically, although they only account for 1.7% of revenue these days. By contrast, 56% of revenue comes from iPhones. Interestingly, the Mac was the best growth product, up 19% year-on-year.


Elsewhere in phones, Samsung has been persuaded to de-emphasise its own-brand Android apps, and possibly to drop the whole Magazine UX Android shell, in favour of stock. As a Samsung user, we can’t disagree with this.

Reddit asks its redditors which apps they use that aren’t on the Google Play Store.

Microsoft, meanwhile, has joined the Open Compute Project, and as a result, it’s open-sourced the servers it uses inside Microsoft Azure, Bing, and Office 365.

Intel’s app store is closing down. Fairphone is a fairtrade Android.

Apple sacks Akamai, starts building CDN; L(3) clutches TV industry close; LTE Broadcast for stadiums; two-sided Roku

Apple has to move a lot of content, and even more software patches, all the time. So far, they’ve done this by paying Akamai Technologies about $100m a year and Level(3) a further undisclosed sum. Akamai recently said they were negotiating with their “largest client” about pricing, and it looks like Apple has decided to walk, setting up their own CDN capability. Apparently, Apple has been hiring networking experts for some months as a skunkworks is staffed up. This is horrible news for Akamai specifically, but not so bad for L(3) as Apple will still want backbone connectivity to reach the CDN nodes. It does look as if all the big consumer IT brands will eventually see CDN as part of their integrated hardware/software/content platforms.

L(3) ran the video streaming for this year’s Super Bowl, using their VenueNet stadium system to serve all the cameras, studios, and mixers, and their compression solution to JPEG-encode it all, before delivering it to the TV infrastructure. It also has to provide some special voice services.

L(3) also had a related product announcement, its Cloud Content Exchange, which delivers very large video files for the media industry.

Telstra, meanwhile, is trialling LTE Broadcast at the Sydney Cricket Ground in a partnership with Ericsson. The handsets have to have a special Samsung firmware build installed.

Here’s a good piece on Roku, whose business model is becoming increasingly two-sided, getting content providers to pay to be pre-loaded on the menus, as it competes with the Apple TV and Google’s Chromecast. They also want to licence the software to smart-TV makers like Samsung, but so far they want to build their software in-house.

And requests for content from the BBC iPlayer are up by a third.

WebRTC and virtualisation - it’s awkward; monetising IM; drivers of HD voice deployment

VoIP expert Tsahi Levent-Levi advises you not to rely on Amazon Web Services for your WebRTC hosting, due to the magic inherent in cloud-scale virtualisation not playing well with the requirement for voice and videoconferencing latency to be both low and predictably low.

Here’s a survey of how you can monetise an IM app. A lot of the options are a bit…embarrassing. (Stickers!)


Here’s an interesting conference session at ITEXPO - “Smart Voice”, defined as “any service that treats voice as information, rather than a separate function.” This blogger argues voice interaction is “the God particle”. A lot of that is Siri/Google Voice Search stuff, but we know Siri tunnels queries back over the network, so the art and science of telephony is very much to the point.

So who likes Fraunhofer’s new site devoted to promoting not just HD voice as in AMR-WB, but even higher quality voice?

You’ve got a Google Hangout. If you make it a Hangout On Air, you can stream the whole conference to a YouTube URI, so nonparticipants can watch it live and you can refer to it later. But if you do that, you can no longer have people dial in from the PSTN. How can you do both? MGraves explains. It’s complicated, and apparently copyright is at the bottom of it.

DTAG: NSA embarrassment is our opportunity; Shape obfuscates your website; huge Orange leak

Deutsche Telekom argues that the Snowden disclosures are a major opportunity, and says that it’s turned up A5/3 encryption across its mobile networks and deployed START-TLS on all its e-mail servers. Meanwhile, Secusmart, a German company that produces a security-optimised BlackBerry, claims it’s sold more than 2,000 devices to the German government, including Angela Merkel’s new phone. Interestingly, it’s a BlackBerry - which means your data probably passes through either the UK or Canada, on our radioactive fibres.

The Guardian has published the video of the celebrated moment when it destroyed three MacBooks on the orders of GCHQ. One of the paper’s executives, Sheila Fitzsimons, is shown applying an angle grinder to a hard disk in an image that will surely become iconic.

In an entirely unrelated event, the director of GCHQ has resigned. One of his predecessors, Andrew France, has just scored the top job with security startup Darktrace.

Another security startup, Shape Security, is being heavily backed by Silicon Valley white-iPad VC money. It promises to protect big Web sites by obfuscating their code, in the hope that attackers won’t be able to understand it.

Orange leaks 800,000 clients’ information.

Should we eliminate passwords?

The British government, having pestered the ISP industry into a default-on filter, is now repenting at leisure as more and more cases of overblocking come to light. That said, it’s better than the Scottish police’s “cyber tsar” and his unique approach to encouraging people to encrypt their WLAN: suggest/threaten that they might end up being raided as suspected terrorists/paedophiles/music downloaders.

And did you know DuckDuckGo can generate strong passwords, produce cryptographic hashes, identify hash algorithms, and look for hashes in leaked data?

You’ve heard of those Google Internet balloons. The US Army is thinking more of Internet beachballs, as a quick way to deploy VSATs. Danah Boyd’s book on online teenagers, It’s Complicated, is out. And here is a surprisingly vicious row about royalties on ZX Spectrum games.

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