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March 31, 2014

Google vs AWS in the cloud: Telco 2.0 News Review

Google goes after the cloud majors; AWS hits back with product suggestion API; learn from DTAG’s Terastream

It’s been said before that Google’s cloud offerings seem disappointing coming from a company synonymous with the technologies that underly the cloud, as if they weren’t fully committed to it. Google App Engine had a brief heyday among the developers until Google introduced a new billing scheme that hit some of them with huge bills, and they flocked away to Heroku, AWS, and others.

Last week, Google took the offensive.

Timing their announcement to spoil Amazon Web Services’ customer conference, Google cut prices on some of its cloud products dramatically (as much as 85 per cent for the on-demand version of the BigQuery NewSQL tool) and re-organised the rate card to compete more directly with AWS. Pricing was also cut by lesser, although still impressive, amounts on storage and computing products.

Google also announced a new product, Managed VM, which packages resources from Compute Engine as a virtual machine controlled through an API, offering a greater degree of configurability than App Engine but less of an initial investment of time than Compute Engine on its own. This again makes Google’s product more directly comparable to Amazon EC2, Heroku, Rackspace Cloud etc. TechCrunch has some more detail.

AWS, for its part, pushed some more features. What else? Amazon Virtual Private Cloud users can now peer, while CloudSearch has been completely rebuilt. Interestingly, AWS is now using the Apache Solr open-source search engine as the basis for CloudSearch. And even more interestingly, one of the search options in the new CloudSearch is “suggest_product”, suggesting that Amazon is opening up some of its recommendations nous to its customers. There were also price cuts.

Cisco, meanwhile, announced its new cloud services business, Intercloud, which promises an “Internet of clouds” (or was it a cloud of Internets?)

After CEO John Chambers’ keynote at MWC, we should expect a lot more of this. Chambers picked out Deutsche Telekom’s Terastream network architecture for special praise, so here’s a detailed presentation on exactly how it works from DTAG engineer Peter Lothberg, who is of course a Cisco luminary. The slides can be downloaded here, and here is Lothberg talking us through it.

Read our Cloud 2.0: Securing Trust to Survive the ‘One-In-Five’ CSP Shake-Out and Are Telefonica, AT&T, Ooredoo, SingTel, and Verizon aiming for the right goals? Executive Briefings for more on telcos and the cloud

Why Google doesn’t have a Paris office; Netflix peering war is over; regulators want VoIP interconnect; FiOS; Optus ads

Remember when YouTube and Free had a peering war? Sure you do. A key point that arose in the dispute was that Google provides ample capacity for direct peering with YouTube in London, Manchester, Amsterdam, Frankfurt, and elsewhere in Europe, but hardly at all in France. It was argued that Google was concerned that it might have to pay tax if it colocated equipment there, rather than just having a so-called “representative office”. But here’s an interesting sidelight on the affair.

Like a substantial number of other major tech companies, Google is in trouble over an agreement they had to refrain from poaching each others’ engineers. They’re being sued on the grounds that this constitutes a buyers’ cartel designed to hold down wages. This week, it turns out that Google abandoned a plan to set up an engineering group in Paris, in order to accommodate a team of ex-Apple engineers, because Steve Jobs invoked the no-poaching agreement. So, no Apple exiles, no Paris group, and it seems no Google presence in France.

Cogent was deeply involved in the French YouTube ruckus. Last week, their CEO came out with his hands up and accepted that it was congestion on their network that led to the great Netflix/Comcast row. Like so:

However, Cogent said this move does not mean it is offering to enter into paid peering agreements with these providers or other players. Instead, Cogent maintains it will pay associated costs to augment its interconnections with these networks to address traffic congestion to deliver online video services, including those offered by its customer Netflix

So they’re not signing paid peering, which implies instead that they are sticking with settlement-free peering and accepting that they need to add capacity. So, it was just another peering war in the end.

In a related issue, Michigan’s state-level regulator has ordered AT&T to offer Sprint an interconnection agreement. The news here is that the agreement covers bulk VoIP interconnect, meaning that the regulator asserts power over voice interconnection however it is carried.

Verizon is again in tense negotiations with the state of New Jersey. Under agreements going back as far as 1991, VZ was permitted to raise its rates in exchange for a commitment to deliver 45Mbps broadband to (roughly) everyone. No-one will be surprised to learn that it didn’t happen like that. VZ doesn’t want to roll out any more FiOS, and does want to trim its copper network, and as a result, they would like the regulator to accept that DSL is almost like fibre.

Aussie operator Optus has been ordered to apologise for suggesting that it had 98% geographical coverage, rather than population coverage. Ironically, although Telstra filed the complaint, the Optus advert in question suggested that the ex-incumbent had even more, 99.3%, geographical coverage.

Samurai Son battles the giant robots; US regionals, Sprin-T to share spectrum; more AT&T SDN

It was CCA this week, the meetup for “competitive” carriers in the US. Masayoshi Son took the opportunity to denounce the “duopoly taking over America”, pointing out that between AT&T Mobility and Verizon Wireless, they have 73% of postpaid users and 84% of EBITDA. Five years ago, the numbers were 56% and 67% respectively.

We think it might look a bit like this (from Genevieve Bell’s twitter feed):

robot.jpg

The CCA’s response is to encourage roaming and spectrum sharing between the rural operators on one hand, and Sprint, T-Mobile, and the remaining regionals on the other via something called a Data Hub.

Sprint, for its part, is getting ready for this by adding the 700MHz band to its phones. Sprint doesn’t own any 700MHz spectrum but its potential partners do. The CCA effort is also looking at similar models to Verizon Wireless’ LTE for Rural America project, under which Sprint and T-Mo would lease unused spectrum to rural operators, who would in exchange agree to national roaming.

AT&T, meanwhile, gets more fascinated by software-defined networks every day. Here’s their technology chief, John Donovan, speaking at the Open Networking Foundation’s event earlier this month.

Our new Software-Defined Operator Executive Briefing and the AT&T In Depth section from the Telco 2.0 Transformation Index cover these issues

Snowden puts us off the cloud - survey; Turkey goes censorious; dodgy app from EE; MS Office horrorbug

Another survey suggests that substantial numbers of businesses are rethinking their use of cloud computing in the light of the Snowden revelations. It is probably worth pointing out that NTT Europe, which paid for the survey, isn’t exactly a disinterested party here.

Snowden, for his part, produced another document from his capacious hat. 122 chiefs of state are listed in a handy database, while GCHQ specifically targeted two German companies who provide satellite broadband to oil rigs, army bases, and the like, plus a security shop.

In Turkey, it turns out the prime minister wasn’t joking when he announced that Twitter was “the scourge of humanity” a while ago. After sensational revelations about corruption and a plan to invade Syria, the Turkish government has started chopping bits off the Internet, like Twitter, Facebook, and YouTube. To begin with, rebels spray-painted the Google DNS server addresses on walls, but now, TTnet has started intercepting traffic to well-known DNS providers and forcing it to their own name servers.

Interestingly, Microsoft reckons that malware is five times more common in the Middle East than the world average.

EE, meanwhile, has deployed a “free games” app that gets bundled with Android updates and which asks you to turn off some of your security settings. It then runs in background and refuses to be uninstalled.

Turn off previewing RTF e-mail in Microsoft Office. No, really, do it.

Huawei “maintained calm” over NSA - the 34% surge in net profits helped

Last week’s Snowden revelation was of course that the NSA hacked Huawei. Huawei’s acting CEO, Eric Xu, says the company “maintained calm” and operated “business as usual” after the news.

They might well have done. Revenues for 2013 were up 8.5% at $38.5bn and net profits were up 34% at $3.3bn. The core of the business, the carrier division, was the slowest growing, but 4% growth in sales is still nothing to be scorned. Enterprise, though, grew 32% and consumer 18%.

The European Commission, meanwhile, has dropped its anti-dumping investigation into Huawei and ZTE.

As if on cue, China Mobile ordered €750 million worth of Alcatel-Lucent gear, adding more optical and IP networking equipment to the existing deal for small cells and EPC.

Meanwhile, data traffic in India is growing at 87% a year, with 3G users growing at 146%. In the cities, usage is beginning to push 1GB/user/month.

Telenor, meanwhile, has turned up the first independent Internet link into Myanmar.

Vodafone launches M-PESA in Romania, its first European deployment. Ironically, the Financial Times thought this was an argument for cuts to UK international aid - M-PESA was originally a DFID project.

Samsung Mobile boss earns more than Tim Cook; SKT jumps the Galaxy S5 gun; more lawsuits, BlackBerry results in “not totally awful” shock; Office on your iPad

The boss of Samsung Mobile, J. K. Shin, was paid $5.8m this year - substantially more than Apple CEO Tim Cook, on a paltry $4.25m. Interestingly, out of Sammy’s three joint CEOs, Shin was paid the least - the biggest earner was Kwon Oh-hyun, who runs the components business.

Shin also had an embarrassing moment this week, when SK Telecom jumped the gun and launched the Galaxy S5 early. SKT has to sit out a time-out imposed by the regulator later this month, so they were afraid that their rivals would steal a march in the meantime unless they went first. Not surprisingly, once SKT ripped open the big Christmas box, the other kids did too.

Samsung now has to make a decision whether or not to punish SKT by restricting their supply of S5s. Clearly, SKT finds Samsung less scary than the regulators, and Samsung likes to control the marketing of its products closely, as after all it mostly pays for it. But SKT is also one of Samsung’s biggest customers worldwide. Many galaxy. Such awkward.

Meanwhile, the next round of patent litigation between Apple and Samsung is due to kick off today with jury selection, always assuming that a peace agreement isn’t reached at the last minute.

BlackBerry’s results are in. The big news is that the quarterly losses are down to $423m, although quarterly revenue is under $1bn, while the company’s business model has become dramatically more services-focused and it has drastically cut its costs, as the following chart shows, from the new Bare Figures site:

Created with Highcharts 3.0.7$ in billionsCost and operating expensesImpairment of long-lived assetsCost of salesResearch and developmentSelling, marketing and administrationAmortizationQ1/05Q2/05Q3/05Q4/05Q1/06Q2/06Q3/06Q4/06Q1/07Q2/07Q3/07Q4/07Q1/08Q2/08Q3/08Q4/08Q1/09Q2/09Q3/09Q4/09Q1/10Q2/10Q3/10Q4/10Q1/11Q2/11Q3/11Q4/11Q1/12Q2/12Q3/12Q4/12Q1/13Q2/13Q3/13Q4/13Q1/14Q2/14Q3/14Q4/1402468

CEO John Chen says that the next lot of phones will be “very keyboard centric” and will bring back the command keys, starting with the Q20. The company will be focusing intensely on the enterprise market.

Microsoft, meanwhile, has launched the Office apps for the iPad, and they are getting rave reviews.

European DSL typically 63% of advertised speed; Altice, Bouygues warned over SFR; BT in the magic quadrant; churches, the new public WiFi hubs

SamKnows reckons that European broadband subscribers face prices that vary up to 400% within comparable categories, and on average get 63% of the advertised speed if they’re on DSL. It’s a bit better (89%) on cable.

The French financial markets regulator has warned the parties to the SFR deal that they need to be more honest with the stock exchange and the wider public.

BT, a leader in the global magic quadrant or a monopoly that doesn’t do tech any more? It depends which bit you’re talking to. This ISP is in the habit of setting up dial tone on all its lines, including the broadband-only ones, to stop BT staff accidentally installing their own service on them.

In Norfolk, meanwhile, village churches are becoming the hubs for a new community WISP, which places its antennas on the spires.

Sprint: VoWLAN > VoLTE; Telenor WebRTC; Sigfox M2M; banking apps double in a year; OpenBTS 4.0

Sprint isn’t doing VoLTE for some time yet, its VP of technology says. He argues that there is little gain in terms of spectral efficiency over their existing CDMA network, and they are more interested in VoWLAN for extra capacity.

Telenor has an WebRTC conferencing app that uses Chrome’s browser notifications.

SigFox’s specialised low-power M2M network has scored another €15m of investment.

British banks say the usage of their mobile apps has doubled in a year, and they are already observing a reduction in footfall in their branches.

The shareholders in YouView have agreed to fund it for another 5 years, although much more funding is now coming from BT and TalkTalk as opposed to the broadcasters.

Range Networks has released OpenBTS 4.0, including better encryption, many bug fixes, and a JSON API for the configuration and management aspects.

The original Shoreditch start-up, Last.fm, is closing its subscription radio service.

Facebook buys Oculus Rift, thanks to its dual-class shares; sleep deprivation; acoustic permissions; social network for dogs

Facebook has acquired Oculus Rift, the Kickstarter-funded project to create a virtual reality helmet that wasn’t awful. The bill is $2bn, of which $1.6bn is in Facebook shares (what else).

The point is made over here that Facebook’s two-class share structure is ideal for this sort of thing. Mark Zuckerberg and a few others hold class B shares, which carry ten times as many votes as the class As that are on offer to the public. As a result, although he owns about 20% of the company, he still gets to control it and the A-shareholders just have to suck up the dilution when he issues a few billion more As to buy something shiny.

Sleep deprivation, the secret sauce of failure in the Valley.

Why does a London Tube map app want to record audio? Perhaps because real-time acoustics for machine learning is cool?

Google Bus is less unpopular than sometimes suggested.

Google Coder is a tiny web development kit for the RaspberryPi.

Whistle is a quantified self social network for dogs.

And finally, an unnamed bidder wants 800MHz spectrum on the island of Svalbard, halfway from Norway to the North Pole. It’s got to be either Santa or a James Bond villain.

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March 28, 2014

Facing Up to the Software-Defined Operator


We’ve just published a new research paper ‘Facing Up to the Software-Defined Operator’ In this report we see five major trends leading towards the overall picture of the ‘software defined operator’ - an operator whose boundaries and structure can be set and controlled through software. This presents threats as well as opportunities for industry players selling and wanting to sell to telcos.

You can read an excerpt of the report here We’ll also be exploring the implications at the OnFuture EMEA Brainstorm, 11-12 June in London. Email contact@telco2.net or call +44 207 247 5003 to find out more.

Extract Chart from Report
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March 24, 2014

China Mobile, welcome to voice & messaging disruption! Telco 2.0 News Review

China Mobile profits fall; 1800 band key in LTE, says GSA; 45% of mobile traffic offloaded to WLAN; US spectrum

China Mobile’s annual profits have fallen for the first time in 14 years. It’s the familiar story of the mix shifting from voice and messaging to data as disruptive OTT apps hit the traditional services - messaging revenue is off 6.5% and voice off 3.4% while data revenue is up 24%.

Events like this are precisely why we created ourThe Future Value of Voice & Messaging strategy report. Check it out!

Another problem is that China Unicom, which got the world standard UMTS network in the shakeup of the Chinese industry, has been able to offer better 3G coverage and speeds and therefore to win subscribers off China Mobile. By definition, those customers tended to be heavy data users and therefore unusually valuable, so China Mobile’s 2G/3G mix also suffered.

China Mobile’s response is to press ahead with 4G deployment and to push iPhones. So far, most of the first 1.34m 4G users are iPhone users. They intend to increase capital spending on LTE by $12.1billion this year, with the main roll-out peaking this year and next.

The Global Suppliers Association says there are now 742 LTE devices on the market, and much more interestingly, that the 1800MHz band is emerging as the most important one for 4G. We mentioned this last week, pointing out that it provides for 2G/3G/4G working. 589 out of those 742 gadgets have Band 3. It’s still relatively fragmented, though, as 1800MHz represents only 43% of deployed networks.

Cisco reckons that 45% of global mobile Internet traffic was offloaded to a wireless LAN in 2013, and it will soon surpass the volume of traffic carried on the cellular networks. Very interestingly, data from SK Telecom, which has a very advanced public WLAN, suggests that users aren’t substituting WLAN for cellular - rather, heavier WLAN users are also heavier cellular users.

The Samsung Galaxy S5 expresses this trend in the most direct way possible. The “Download Booster” app it ships with implements multi-stream carrier aggregation, that is, it uses the cellular and WLAN radios concurrently for the same data stream. As with a lot of advanced features, while this is planned for the future in LTE-A and 5G, it’s being delivered today in WLAN.

T-Mobile USA is offering the gadget for pitched into a debate about how the next major US spectrum auction should be structured.

AT&T wants the AWS-3 auction, covering 50MHz of 1.7 and 2.1GHz, to be organised in big geographical chunks, so-called Economic Areas (EAs). T-Mo, on the contrary, would like it to be broken up into smaller chunks, so-called Cellular Market Areas (CMAs). AT&T would also like to keep the spectrum in big blocks in terms of bandwidth, fitting at least a pair of 10MHz LTE channels in each. T-Mo would rather split it up. The basic issue here is whether AT&T actually needs another huge block of spectrum, or whether they’re trying to tie it up so smaller operators (like T-Mobile, of course) can’t get at it.

It is, of course, possible to take competition too far: Uganda welcomes its 7th mobile operator. Fortunately, eight major emerging market operators have agreed to cooperate on infrastructure sharing.

Sprint, meanwhile, has come dead last in a customer satisfaction survey, and is responding in the time-honoured way, by sacking 1,550 customer service staff. Tellingly, two MVNOs that use their network did dramatically better.

French Revolution: Bouygues strikes back, with political support

In France, although Vivendi has plumped for Numericable’s offer for SFR, it’s far from over. Bouygues has come back with a new offer including more cash. Altice, the Numericable parent company, says it won’t up its own bid, but we’ll see how long that lasts, as they also say they want to close the deal this week.

The new bid contains €1.4bn of additional cash, but perhaps more importantly it also contains a large quantity of political support, including not just the industry minister Arnaud Montebourg but also the president. With the political support comes the support of the public bank, CDC, and two of the major shareholders in Bouygues, JC Decaux and the wealthy Pinault family.

Montebourg’s role has been a little ambiguous. Last week, he publicly broke the news that Vivendi was going to plump for Altice before the market opened, as if he was trying to bounce someone into accepting it. Since then, though, he’s expressed increasingly public and strident opposition to the deal, denouncing the owner of Altice as a tax-evader. And he followed through, as well: the Finance Ministry has opened an inquiry into his tax affairs, while pressure is exerted to get him to move his money back into France.

It’s suggested come what may, some sort of deal between Bouygues and Free is now a certainty. Bouygues, meanwhile, alleges that its offer has been treated unfairly.

Apple, Comcast in streaming talks; L(3) leaps into the neutrality debate; future regulation; we have met the enemy and he is us

Apple is reportedly in talks with Comcast about a streaming service for Apple TV users. The source frames the story as a net neutrality issue, but we would point out that as a cable operator, Comcast has the option of delivering video over the cable TV path. Virgin Media, for example, makes the BBC iPlayer available in this manner. One way to implement this would be for the Apple TV to take over as the set-top box.

If anyone understands the core Internet, it ought to be Level(3), the massive backbone operator. Their general counsel, Michael Mooney, this week took to the company blog to explain their view on the Netflix/Comcast/Verizon affair. L(3) sees it as a classic Internet peering war, and argues that the US telcos are trying to exploit it to reinforce their monopoly position:

And none of this is new. These last mile ISPs know full well the consequences of what they are doing. We wrote AT&T about it in February 2011. We have written to other ISPs about it since then. In each of these cases, we offered to sit with the ISP to hammer out a fair, equitable, scalable and resilient network architecture, but to no avail. We have also advised the FCC of the issue on more than one occasion, beginning in 2013 and as recently as three weeks ago.

Public Knowledge has filed comments with the FCC on Section 706 and the Open Internet Order, arguing that traditional PSTN regulatory principles are the best basis for Internet policy and that Title II reclassification is vital.

Here is a genuinely epic Twitter row on QoS hawks vs. neutralitarians. Note Benoit Felten arguing that “not being a member of ETNO” should be a value-added feature.

With all the arguing about “OTTers using all the bandwidth”, it’s perhaps worth pointing out that operators could do more to be efficient. This post at the 3G, 4G, and 5G Wireless Blog is ostensibly about security, containing a monster presentation on that subject, but just check out that graphic! The multiple layers of protocol encapsulation typical of cellular networks are contributing a truly absurd amount of overhead. This may seem obscure, but if someone offered to reduce the traffic on your most congested link by 18% at no cost, you’d take it.

MTUSize.png

It’s even worse when you remember that some fixed networks will handle frames as big as 9000 bytes - so the potential waste compared to the best available solution is truly enormous.

Skype rebuilds around push notifications; Google Voice migrates into Hangouts; can Twilio be the AWS of voice? “Legacy SIP”

Skype has rebuilt its Android app in order to make drastic reductions in its power draw on standby. A big part of this seems to be using server-side notifications, and therefore another step away from the original P2P concept.

Google, meanwhile, is said to be planning to shut down Google Voice and add some of its features to Hangouts. That would include their PSTN interconnection and numbering, which would mean that Hangouts users could use Google for all their voice services.

Is Twilio good enough to be the “Amazon Web Services for Comms”? The point is made that the combination of SIP, Asterisk, and AWS EC2 might not be ideal, with the protocol arguably aging, Asterisk itself not being designed for huge scale, and AWS not providing the insight and control into their internal network that you need for really good voice.

Twilio, for its part, launches a major new feature, its Global Low Latency architecture. This is intended to serve calls from the nearest Twilio site to the client, thus improving setup times and voice quality. They also announced improvements to their call recording functionality, and made the following interesting statement that partly answers the last story:

Twilio Client enables VoIP calling to browser-based and mobile applications, leveraging WebRTC for real-time communications and connecting to legacy SIP and PSTN networks

“Legacy SIP and PSTN”? Meanwhile, Tropo’s chief scientist has released a new edition of his book on WebRTC, updating it to match recent changes in the RFCs and to include captures of actual WebRTC sessions.

Which WebRTC TURN hosts get through all the port blocking options?

Here’s a tool to check if the network is breaking WebRTC and WebSockets applications.

Unlimited SMS permits this man in Bristol to text the complete works of Shakespeare to his enemy.

Snowden: the NSA hacked Huawei; it’s not just the metadata any more; Android security disaster

Now here’s a Snowden story for you. The NSA apparently launched a major effort to penetrate Huawei’s internal network, intercepting e-mail and reading source code. As a result, they also succeeded in getting access to major Chinese mobile networks and spying on key politicians. A document shows, interestingly, that Kenya was a major target.

At the same time, it emerged that the NSA was also recording calls as well as collecting metadata, and in fact it had scooped up all the telephone traffic for a month in one unnamed country.

Here’s a new and scary Android security exploit - it’s possible for an unsigned app to acquire any new capabilities that are added by a software update, thus providing a slow privilege-escalation attack.

Should we be afraid of the Internet of Things? Turkey is trying to ban Twitter, without notable success. Microsoft searched a Hotmail user’s e-mail in order to pursue a lawsuit.

Retailers turn off their NFC readers - is this the finish for ISIS?

A group of US retailers is planning to launch its own mobile payments/coupons/hyper-local marketing platform, the Merchant Customer Exchange (MCX), which will be based on QR codes scanned by smartphones. Very interestingly, the carriers’ payments JV, ISIS, is alleging that the MCX members have turned off the NFC readers installed in their tills, thus cutting ISIS out of the game. Apparently, the retailers are also displeased by the fees the banks charge to service NFC transactions.

We created the Digital Commerce strategy report to cover precisely these issues - and now there’s an Executive Briefing on the technology battle between NFC, Bluetooth Low Energy, SIMs, the cloud, and QR.

Instagram has grown an internal economy, in which brands pay photographers whose work attracts followers.

A story about negotiating with Steve Jobs.

And a band has discovered a fascinating way to make money from Spotify: they have released an album of recorded silence. Fans can stream it from all their devices, morning, noon, and night, thus running up the audience metrics and triggering royalty payouts.

Serving Whatsapp; Telstra hands Cisco the keys to the cloud; Adobe streaming from AWS

Renesys has an excellent post contrasting Facebook and Whatsapp’s global hosting strategies, making the excellent point that Whatsapp (entirely hosted on dedicated machines in SoftLayer data centres on the US East Coast) was well suited to its initial rollout but much less to scaling up globally, while Facebook uses Akamai’s vast CDN presence. This would have been much more of a problem with the introduction of latency-sensitive voice.

Telstra is deploying Cisco’s cloud services platform. This quote explains why we are wary of putting your cloud strategy quite so much in the hands of the vendors:

The move could be the start of a trend that sees Cisco become more entrenched in operators’ business, moving out of its core role of providing routers, servers and switches, to both selling and handling the management of the infrastructure - something more akin to how companies like Ericsson operate in the telco space.

The Adobe Media Server is now available in the Amazon marketplace; watch CDN margins for everyone except Akamai get ground down further.

BT Wholesale runs out of Internets; UK telecoms CAPEX falling since 1997; £10m good ideas fund

BT Wholesale is turning away new orders for its WBC backhaul product because it’s run out. Seriously; some exchanges are out of port capacity and others of bandwidth. Thinkbroadband points out that BTw predicted in 2013 that traffic would increase fivefold from there to 2018, so they can hardly claim it came as a surprise.

Broken Telephone points out that telecoms CAPEX has been gently falling in the UK for years, which might have something to do with it.

uk-comms-capex-1997-2012.png

Fortunately, there’s a £10m fund for innovative ideas going. Apply here before 30th April.

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March 17, 2014

“Massive price war”; NumeriSFR; “building greatness”: Telco 2.0 News Review

Son threatens “massive price war”; T-CFO says consolidation inevitable, walks it back; AT&Leap closes, at last

Masayoshi Son has relaunched his campaign to acquire T-Mobile USA, making an appearance on TV in which he threatened, or promised depending on your point of view, to launch a “massive price war” if he got his way. The big issue is that T-Mobile has done a pretty decent job of price competition by itself, and the FCC might not see it that way.

T-Mobile USA’s CFO, meanwhile, seemed to say that a merger was inevitable, although a closer reading of his comments suggests that he means further consolidation is inevitable if the regulator didn’t change its spectrum policy:

“The government can’t have their cake and eat it too. If they think there really needs to be four players in this market on a nationwide basis, they are going to have to put some structural protections to ensure an adequate distribution of spectrum,” he said.

CEO John Legere, meanwhile, picked a fight with Sprint on twitter. Sprint, for its part, announced some new PAYG offers that represent a further price cut.

AT&T’s acquisition of Leap Wireless has finally closed. As a result, AT&T will be moving subscribers from its Cricket brand over to their LTE network and shutting down Leap’s CDMA2000, while also folding their own Aio Wireless low-cost brand into Cricket. They will also be taking over a substantial quantity of spectrum, covering 41 million people, that is apparently hardly used. It includes both PCS (i.e. 1900MHz) and AWS (i.e 1700MHz and 2.1GHz) bands.

A campaign is starting to make the 10GHz band available for broadband, specifically WLAN. Australian company Transit Wireless, which grew out of Brisbane’s suburban rail network, is installing both public and private WLAN in the New York subway. Help a fallen tower climber.

French revolution: Numericable wins auction for SFR; open SIM is coming; the practicals of being your own MNO

The shakeup of the French mobile market shook out this week. Vivendi accepted Altice, parent of cableco Numericable, and its offer for SFR, after industry minister Arnaud Montebourg bounced everyone by announcing the deal himself, before it had actually been agreed. Montebourg was keen on this option, and he presumably wanted to force the negotiators’ hands. Altice pays €11.45bn in cash and 32% of the combined company’s shares.

As a result, SFR gets a DOCSIS network as its broadband option, Altice gets a major mobile operator, and Bouygues is left without a credible fixed network and looking underscale in mobile next to the twin giants SFR and Orange, and looking slow and pricey next to the disruptor, Free.

Xavier Niel gave a rare interview in which he claims that the deal is a disaster because, he argues, SFR will no longer invest in fibre or take part in his proposed joint fibre deployment and the combined company will be hugely in debt (most of the €11bn is bank-financed).

He is also suspicious of the combination of the cable operator with the SFR-Bouygues network-sharing pact, and points out that the spectrum position has become even more concentrated now that the parallel Free-Bouygues deal isn’t happening. Like the AT&T/Leap story, and the EE experience, it looks like the old PCS 1800/1900MHz bands are getting unusually important because they provide for both 2G and 4G.

French MVNOs, meanwhile, were keen on an SFR-Bouygues deal, not least because of their disappointment in Xavier Niel.

Meanwhile, the Dutch regulator has given the go-ahead to Telco 2.0 ally Rudolf van der Berg’s radical plan to let major mobile customers acquire their own Mobile Network Code (MNC) and issue SIMs that would roam nationally and be provisioned dynamically. This is especially useful for M2M applications, as it gets rid of the problems of having to truck-roll hundreds of thousands of devices if you want to change provider and of what happens if a device is out of network coverage on one operator but not another, without having to get foreign SIMs and pay roaming rates.

Here’s Rudolf’s OECD presentation on the plan.

RevK blogs through some of the steps you currently have to go to if you want to be your own mobile operator.

Vodafone buys ONO, sees “signs” of upturn in Spain; spat over network quality; LTE roaming

Vodafone has sealed the deal to buy not-very-profitable Spanish cableco Ono for some €7.2bn. VF thinks it can find €2bn in one-off savings and €1bn of additional recurring revenue, over the first four years.

It may make more sense in the light of Vittorio Colao’s belief that there are “signs” that Spanish consumer confidence is returning.

In the UK, RootMetrics thinks VF has the worst network quality of any operator except 3UK. Vodafone UK is not happy, and argues that there is something wrong with the methodology (they don’t say what); EE, meanwhile, who came first, is very happy and thinks it’s fine.

EE has also signed LTE roaming agreements this week, with Orange in France and Spain.

And EU regulators are tackling the scourge of incompatible chargers, at long last.

Indonesia “building greatness” with FTTH; Mexican regulators make a start; amazing mess in Uzbekistan

Telkom Indonesia’s infrastructure arm has announced that 2014 is the year it will build greatness. Greatness here is apparently defined as a big FTTH deployment. It’s a really big one - 20 million homes passed, with a target of 7 million by the end of 2015 - and the speed targets are ambitious, 10Gbps down and 2.5Gbps uplink. Alcatel-Lucent’s XGPON technology is tapped.

Whether this will work is an open question. We deal with the problems of the Internet for economic development in a new Executive Briefing on lessons from Brazil, Mexico, and Iran, here. Whether it is a serious plan is another question…

Mexico’s new telecoms regulator has taken its first steps against the country’s telecoms duopoly. America Movil and Televisa will have to permit competitors to rent their infrastructure, including DTT towers, and telephony prices will come under regulation.

There’s an incredible mess in Uzbekistan, where Russian operator MTS has been shut down, having its spectrum licence withdrawn. The story defies summary, but here’s a quote:

. In February last year, MTS announced that its Uzbek operation Uzdunrobita had filed a petition to declare bankruptcy in the Tashkent Commercial Court as criminal charges were brought against four of its employees in relation to tax evasion charges. Then in June, the operator announced that it had become aware of an auction planned for July 1st 2013 of assets owned by Uzdunrobita.

“In the Company’s opinion, the claims of Uzbekistan authorities that resulted in the initiation of bankruptcy proceedings and the forthcoming auction sale of Uzdunrobita assets have no legal and factual basis,” the operator said at the time.

In 2012 MTS had already accused the Uzbek government authorities of “blatant harassment” with the “thinly-veiled purpose of destroying the business and expropriating its assets” since June 2012.

At the same time, TeliaSonera, which owns one of the other Uzbek operators, is facing a US Department of Justice investigation into how it came by an Uzbek 3G licence in the first place. This will go nicely with the Swedish police inquiry they’ve already got. It is alleged that they overpaid hugely for the licence, with the spare money going to the president’s daughter as a bribe. The daughter also used to own Uzdunrobita before it was sold to MTS and then shut down.

That leaves one operator, also a Russian company, Vimpelcom, whose revenues were up 5% year-on-year; they say it’s because the crisis in Uzbekistan has left them with an effective monopoly.

UK leads Europe in “superfast”, for slow values of fast; Gigaclear shows how it’s done; “Digital Britain” without “broadband”?

OFCOM claims that the UK “leads the EU5” for the availability of “superfast broadband”. Broken Telephone provides a critical review of this claim here - we like the detail that the average DSL line length is a secret, although Analysys Mason estimates it at a suspiciously precise 1.704km. If they’re right, at least half the DSL subscriber base can’t possibly be getting more than 15Mbps. Also, in comments, someone points out that BDUK has started to talk about “up to 24Mbps”, which is of course just good old ADSL2+.

It also looks like BT has managed to bill the government for the whole of its FTTC upgrade. Customers are struggling to escape the wreck of South Yorkshire Digital Region.

Meanwhile, independent FTTH deployer Gigaclear fibres-up a rural business park with 100Mbps symmetric or 1Gbps if you pay extra.

ES Technology, a manufacturer of bespoke laser equipment, is another company based at the park benefiting from the network. The firm’s operations director, Tim Millard comments, “Thanks to Gigaclear, we’re operating much more efficiently as a business. For example, we’re now able to download CAD drawings from our suppliers instantaneously. Previously complex drawings could have taken up to 30 minutes to download which left our designers killing time while they waited to access the files. Our parent company, based in Northamptonshire, is so impressed with how quickly we can transfer information, it is pushing for fibre optic at their own premises.”

And Virgin Media threw a sale; you still have 36 hours to buy.

The Labour Party has announced a new Digital Britain 2015 policy, or rather, the project to draw one up. The terms of reference don’t mention broadband.

AT&T SDN; open optical networking; 8 years of AWS S3; YateBTS 2.0

AT&T’s SVP of technology and network operations, John Donovan, is very bullish about software-defined networking. After they announced deals with Metaswitch and Tail-F at MWC, he said:

“Our strategy is more than just a network design change,” Donovan said, according to TechTarget. “It’s a change in how we do business with suppliers [and] with how we manage platforms, systems and software. It changes our people. We have to take advantage of cultural change at our company. … There is no army that can hold back an economic principle whose time has come.”

The project may affect as much as half AT&T’s CAPEX budget. Meanwhile, open this, open that, now it’s open optical networking: here’s one effort, concentrating on WDM technology and here’s another.

It’s been eight years since Amazon Web Services launched S3, the Simple Storage Service, and probably the first cloud product. The blog post is good, and so is this talk from Airbnb about their use of the AWS cloud:

See also, this High Scalability post on building a music recommendations engine in AWS.

Matt Asay asks just how cheap public cloud might get. He notes that some providers are trying to rework their tiers of service in order to get higher effective pricing - it sounds quite familiar from telco bundling.

David Burgess blogs that YateBTS 2.0 is ready, adding authentication, USSD, and a web-based configuration interface. Instructions are over here. Light Reading discusses unlicensed spectrum LTE, a MWC minor theme.

HTML5Rocks.com has a good tutorial on how to avoid ending up on WTFMobileWeb. Tropo discusses a hackathon project to build a complex multiplayer game using their WebRTC support. XirSys provides basic, stateless, cloud-based relay servers for WebRTC apps.

A great discussion of carrier-grade NAT and why you shouldn’t do it at APRICOT. And here’s a really impressive laptop, for which you pay through the nose.

Can Facebook up online advertising rates? Google costs; Alibaba.com IPO?; the end of malls

A new Telco 2.0 Executive Briefing on Mobile Marketing and Commerce: the technology battle between NFC, BLE, SIM, & Cloud is out now, dealing with the issues in this section. You will also be interested in the Digital Commerce 2.0 Strategy Report.

An interesting point: the Motley Fool reckons that the big difference between Facebook and Google is that Facebook has some pricing power in advertising while Google is committed to volume. We are sceptical of the explanation offered - it was the brand-building Pages business that a lot of Facebook advertisers dumped, after all - but the point is a good one. Facebook is rolling out new advertising products and Google isn’t so much.

Horace notes that Google has grown since 2005 at the same rate as the Internet user base outside China. This has been a good business. However, as this chart shows, the costs of doing it seem to be rising:

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Meanwhile, Google has started offering a $15/seat referral bonus for anyone who brings in new customers for Google Apps for Business, up to a maximum of 100.

Google is also reviewing the controversial decision to stop letting websites see referring Google searches in their logs.

An interesting point: Google tries to pick algorithms that improve with more data where possible.

Alibaba.com, the enormous Chinese B2B marketplace, may be standing by to IPO in the US.

Are shopping malls dead? If so, it means bad things for a lot of projects built on small cells, footfall tracking, digital signage, and the like.

Americans ready to hand over the DNS keys; more Snowden; DNS queries routed to Venezuela

Surprise! NTIA says the US is willing to hand over control of the DNS root, the last remaining institutional link with the Internet’s US military-academic past. ICANN president Fadi Chehadé says that:

“The US will not hand their role to a government, a group of governments, or an inter government group… they are not saying that they’d exclude governments—governments are welcome, all governments are welcome as equal partners with all the other members of our community.”

That seems to rule out ITU taking over, but it leaves all other questions very much open. The Americans deny it has anything to do with Snowden revelations, but won’t say what motivated this sudden move. A good discussion is here.

An experiment at Stanford University with 546 volunteers’ phone bills demonstrates clearly why metadata is such a sensitive surveillance tool.

More Snowden disclosures. The developers of Replicant, a free-software clone of Android, discover an apparent backdoor in some Samsung Galaxy devices.

Nokia opens a Mobile Broadband Security Centre in Berlin.

Bizarre: some Google Public DNS users in the UK found that their queries were being diverted to a BT Latin America netblock in Venezuela.

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March 13, 2014

Telefonica’s digital re-structure - summary and review of analyst webinar held 12th March 2014

Eduardo Navarro, until recently Group Chief Strategy & Alliances Officer at Telefonica and since March this year its new ‘Chief Commercial Digital Officer’, held a webinar for analysts yesterday (12th March) to describe the reasons for the re-structure of Telefonica’s digital activities and the closing of Telefonica Digital (TEF Digital) as a separate Business Unit. Eduardo led the establishment of TEF Digital two and half years ago. Below is a summary of what he said and our initial analysis.

Have the lights gone out?The “light bulb” at TEF Digital; have the lights gone out?

He said that “nothing had changed in terms of the vision and strategy”. The reason for the change was to “remove the barriers to moving fast”.

In particular he said that a year ago he decided that the company needed to bring ‘digital’ activities much closer to the Operating Businesses (Europe, LATAM, Spain) and now they have implemented that plan.

He said that TEF Digital had been a success in terms of growing revenues, increasing value to the company and helping to create a ‘digital DNA’ across the company. However, now is the time to embed this more deeply in the main organisation.

In practice it means the following:

  • There is a re-structure of the whole Telefonica organisation. Eduardo will be in charge of revenue growth. A new Chief Global Resources Officer will be in charge of cost efficiencies, global platforms and procurement (with an objective to create 1.5 bn Euros of savings).
  • The previous activities of Telefónica Digital, Telefónica Europe and Telefónica Latam will move into the Global Corporate Centre with global leaders for Consumer, Enterprise and New Digital business.
  • Video will move into the Consumer group led by Michael Duncan, M2M/Cloud/Security will move into Enterprise (to give them more powerful go-to-market support), and all other digital activities (advertising, health, home, financial service etc) will stay in a New Digital group run by Stephen Shurrock.
  • A bigger focus on:
    • ‘Big Data’ and business intelligence/customer data, TEF acting as a custodian of personal data for its consumers and applying the principles [espoused by the World Economic Forum] in terms of enabling trust, transparency, value and control for the consumer.
    • IP Communications: a ‘key battleground for telcos’, important to ‘protect the core’. TEF will leverage the skills and experience developed by TuGo, Topbox, Jajah etc.
  • No offices will be closed - the digital activity will ‘align close to where the customers are and where the talent is’. Product ‘Centres of Excellence’ will be based around the world.

Measurement will change: since many digital products will be bundled with the core products, ‘digital’ will be measured against its impact to the overall company’s revenues rather than always on an individual product basis.

The operating model will change: TEF will try to execute on the model of ‘Discover, Disrupt, Deliver’ - applying a different operating model to projects and products that fit into different categories (eg. M2M in the ‘deliver’ category, since it is s closer to core telco; Big data in the ‘discover’ category; IP Comms in the ‘disrupt’ bucket).

Eduardo started the analyst webinar by saying that there was a huge opportunity for telcos to win in the next phase of the ‘digital revolution’, especially as it moves beyond apps, games social media and search to more ‘vital’ services related to security and trust (healthcare, financial services, etc).

Our Initial Analysis of this announcement

  • It is a clear attempt to bring the ‘Digital’ activities closer to the Spanish power base and, implicitly, an indication that that the Telefonica Digital business unit was not performing as well as management would have liked.
  • It is also an indication that Telefonica Digital’s ‘smorgasbord’ approach to service development and delivery was not working. The business unit covered everything from core Telco services such as hosting, cloud and enterprise communications to non-Telco digital activities such as OTT communications, financial services, health, advertising, OTT content etc. Everything in the middle - security, IPTV, customer data etc. was also part of Telefonica Digital’s remit. The result, STL believes, was:
    • A lack of focus. Too much going on, too many priorities.
    • A culture clash. The core telco services require traditional infrastructure skills, partnerships, metrics whereas the digital services require new software and marketing skills, new partners and opex- rather than capex-based metrics. Putting the two areas together in Telefonica Digital meant that the business unit was not, quite frankly, digital enough.

By spinning off more traditional telco services into the operating businesses (both consumer and enterprise), Telefonica has reduced the Digital unit’s scope and, despite management’s protestations that this is about integrating digital into the rest of Telefonica, it is clear that the true digital services are being ring-fenced within Eduardo Navarro’s organisation under Stephen Shurrock. This will give them what they need and what they lacked before: protection from the Telco 1.0 culture.

NOTE: A full report, How SingTel and Telefonica are making their ‘Digital Business Units’ more digital (and innovative) will be published next week on the Telco 2.0 Research site. This will cover the shortcomings of existing ‘Digital Business Units’ together with an appraisal of how SingTel, and now, Telefonica are addressing these issues with recent moves. Contact us for more information.

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March 10, 2014

Telco 2.0 News Review: French Revolution

French revolution: Free hits results out of the ground again, Bouygues/SFR and Bouygues/Free deals; future RANs

All eyes this week are on France, where the disruption initiated by Free Mobile is working itself out. Everything is in flux, and the personalities of France Telecom CEO Stéphane Richard, Bouygues owner Martin Bouygues, and Free founder Xavier Niel play an unusually important role, as a good story in Le Monde makes clear.

Vivendi faces two possible buyers, Bouygues, which is offering €10.5bn in cash and a 46% stake in the combined company, and Altice, the parent company of French cableco Numericable.

Altice’s terms haven’t been disclosed publicly. Bouygues and SFR operate a shared network over much of France (everywhere except the top 32 urban areas, for about 57% population coverage); going with Bouygues would represent doubling down on pure play mobile, while Altice would add a credible fixed broadband network.

Free’s results, which dropped in the midst of all this, were superb. Market share in mobile hit 12%, revenue was up 19% at €3.7bn, and net profits were up 42% at €265m. Their good day continued when Bouygues announced that they would be willing to sell much of their own network to Free as a concession to buy regulatory approval of a deal with SFR, for a relative snip of €1.8bn.

It’s obviously more than a little ironic that France, having gained a fourth operator so recently, is now looking at going down to three MNOs. The minister of industry, Arnaud Montebourg, sounds sympathetic, although it’s worth remembering that he’s the guy who thinks there is an operator cartel to hold down prices. The minister of telecoms sounds less keen.

Another very important question is which bit of the network Bouygues wants to sell - the rural and exurban zone shared with SFR, or the non-shared urban zone? If it’s the first, SFR is turning into a towerco hosting three radio networks. If it’s the second, we’re seeing the French market turning into a fight between macrocell and small cell RAN strategies, with Free concentrating on the urban and suburban zones and placing femtocells in villages, and SFR/Bouygues and Orange grabbing hilltops for their macrocells.

Orange, meanwhile, had decent results, although a lot of this was just the effect of goodwill charges dropping out.

Meanwhile, Telecom Italia announced a “trend reversal” in its results, which turns out to mean that revenue in Italy fell only 7.7% in Q3 compared to 10.5% in Q1. Tellingly, mobile voice revenue from consumers was down by €693 million during 2013. The GSMA, for its part, wrote to Neelie Kroes asking for less regulation.

FCC edges towards action on no-muni laws; Verizon edges towards non-neutrality; Sprint network execs zapped

The FCC is looking at whether state laws can stop cities deploying their own FTTH. This has been a sore point in the US in recent years, where 20 state-level jurisdictions have passed measures to make municipal broadband illegal, usually with a lot of help from the cable operators. Now, the FCC is considering whether this is entirely legal. The most recent case, in Kansas, would have ruled out Google Fiber, and clearly you don’t say no to the Google.

Public Knowledge, meanwhile, publishes a paper on lessons from the attempted shutdown of Verizon’s network on Fire Island. Recommended.

Verizon CEO Lowell McAdam made a gesture towards net non-neutrality in a conference presentation. AT&T, for its part, turned up LTE carrier aggregation in Chicago, linking its 700MHz and AWS bands. To begin with, the only device that can use it is their mobile hotspot product.

AT&T also cut prices further on its Mobile Share plans and promised it would be “disruptive” with the Cricket low-cost MVNO brand once its acquisition of Leap closed. T-Mobile changed details of its tariff, overall in the direction of a price cut although individual plans vary.

More thuds and screams were heard from inside Sprint this week. President of network operations, Steve Elfman, and SVP of networks, Bob Azzi are both out. John Saw, former CTO of Clearwire and Sprint SVP of network architecture, is promoted to a new job as Chief Network Officer, but some of Azzi’s old team are being carved out to report to the Sprint CTO, Stephen Bye. FierceWireless points out that Elfman was the architect of the Network Vision strategy (Sprint mainline LTE with Clearwire as an offload) which is now being dumped in favour of Spark (tri-band LTE across the whole spectrum portfolio). You’ve got to wonder about the structure, though - there’s a Chief Network Officer and a CTO?

DISH has collected the whole of the H-block of spectrum for some $1.5bn.

Consumerist hails the publication of the US National Broadband Map.

Google Fiber: is GPON; the awe-inspiring power of Korean WLAN; Vodafone upgrades

Google Fiber, unexpectedly, turns out to be a GPON system rather than a home-run Ethernet one. Current Analysis’s Network Matter blog discusses the implications.

EE says (again) that it’s deploying LTE-Advanced carrier aggregation within London, and that will be the world’s fastest mobile service. If you don’t count either South Korea’s mobile operators, that is, or their gigabit-class WLAN. Via the 3G, 4G, and 5G Wireless Blog, here’s a quick rundown of the Carrier Wi-Fi sessions at MWC - check out the SKT and KT presentations. 1.4Gbps at 300 metres’ range on 802.11ac.

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The prime minister announced a collaboration with Surrey University to work on 5G. If this sounds like you heard it before, it’s because you did - the news is that a German university has joined it. It would not be too harsh to say that EE and the PM are both re-announcing their news a lot.

Virgin Media, meanwhile, is monitoring the BDUK projects to see if BT is using taxpayers’ money to overbuild their DOCSIS 3 network. Given how well BDUK has gone so far, expect lawsuits.

The House of Commons’s business, innovation, and skills committee wants to review the basis on which British businesses are charged property taxes. Famously, this applies to BT and its rivals on a radically different basis - BT only pays a higher rate when new fibre is actually lit, only in arrears, and only if it makes a profit, while its ISP competitors pay in advance and as soon as it is installed, and Virgin Media pays on the basis of homes passed.

Vodafone is buying Huawei’s SingleRAN for 15 countries under Project Spring, and starting its German network upgrade in Hamburg. VF plans to spend €4bn in Germany; this particular deployment includes dual-carrier HSPA+ and better voice quality.

Vodafone New Zealand, meanwhile, suggested that the government might just leave its national fibre network and use wholesale access to their cable assets. The government disagreed.

Swantee: don’t treat voice as a commodity (but don’t do VoLTE yet); Simwood building a new platform; Amazon Mayday=WebRTC

In the interview we linked to above, EE’s CEO, Olaf Swantee, also said that:

“Network differentiation is not possible without voice, do not treat voice as a commodity”

EE also said that they weren’t in a hurry to deploy VoLTE because the fallback time from 4G to 2G was less than two seconds, because they are operating both in the 1800MHz band. And, as we have seen, voice is also an investment priority for Vodafone.de.

Simwood, the British wholesale VoIP provider, has a tantalising blog post suggesting that they’re building some sort of cloud-based voice platform to replace their Asterisk servers and potentially yours too. There’s also a job for a developer with strong Redis, node.js, and PHP skills.

Amazon Mayday is indeed WebRTC, says WebRTC Hacks after examining traffic with Wireshark. However, as with a lot of WebRTC, it’s mostly a frontend to a very traditional call-centre infrastructure with session border controllers and all.

Opera has added WebRTC support.

Skype’s plugin for Outlook.com is now available, and providing HD video calls where both parties’ hardware supports it and the network will take it.

Nimbuzz is partnering with 3 Indian MNOs. Chris Kranky says that “WebRTC market size” is as meaningful as “HTML market size”.

UK banks go for mobile payments; small MNOs and M2M; LTE Radar at DTAG

Here’s a case that MWC reflects operators’ widening interests in the enterprise rather than becoming bloated and unfocused.

9 UK banks are launching a joint mobile payments project, backed by the organisation that runs the UK interbank clearing system. You have to sign up to receive them, but anyone with a British current account can send them.

How should smaller MNOs approach M2M? Here’s an argument that they should focus on existing enterprise customers, and specialise in one or two key verticals.

QR codes will appear on energy bills, supposedly to make it easier to change provider.

Google promises an Android SDK for wearable devices.

Deutsche Telekom is interested in the Device to Device features of LTE as a basis for location- or proximity-based services. They are talking about a developer API, which would also be very useful for peer-to-peer distribution or communication apps.

LTERadar.jpg

And Pocketlint reviews the quality of pre-MWC rumours.

Volkswagen CEO: Fight the Data Monster!; FaceApp WhatsBook sued; KT spills 12 million records

Everyone loves the connected car. Here’s AT&T, working on a video-streaming platform for cars, AT&T Drive Studio, after last week’s announcement from Apple. Apparently:

its solution includes a configurable, customisable client application, support for adaptive streaming, content protection with DRM solutions, dynamic advertising, banner ad support, multi-language support and featured content.

But then, the CEO of Volkswagen, Martin Winterkorn, stood up at CeBIT and said that we must all “fight the data monster”.

“I clearly say yes to Big Data, yes to greater security and convenience, but no to paternalism and Big Brother. At this point, the entire industry is called upon. We need a voluntary commitment by the automobile industry,” he said

…Modern vehicles have become mobile computers, with 1.5km of cables, more than 50 control units and the computing power of 20 advanced personal computers, Mr Winterkorn noted. “The car must not become a data monster,” he said.

Volkswagen produces more cars than anyone else, so this is serious stuff.

Speaking of data monsters, a group of privacy campaigners have filed suit with the FTC to block the Facebook acquisition of WhatsApp if Facebook doesn’t maintain WhatsApp’s commitment to not selling user data.

KT may have epic Wi-Fi, but its data security is as shocking as everyone else’s; about 12 million subscribers’ addresses, national identity numbers, and bank account details have been lost to hackers, three of whom have been arrested.

As many as 95% of cash points are running Windows XP and are therefore out of support at the end of the month.

Last week saw Apple confess to a terrible bug in its SSL support. This week, it was Linux that had a similar problem.

Apple iPhone 5s may keep collecting accelerometer data even when the battery is apparently flat.

Serious malware on the Google Play store.

A solution for password-cracking?

Facebook’s flatpack data centre; the fate of Silly Roundabout; IPv6 at T-Mobile USA

Facebook has chosen a novel prefabrication system for its new data centre in Sweden, Lulea 2.

15 telcos are building the latest SEA-ME-WE cable.

Details of IBM’s cloud portfolio.

Do you really need an app? Jeff Atwood thinks not. See also, WTF Mobile Web.

Is the property boom killing Silicon Roundabout?

Spotify buys a huge database of songs.

A really great presentation at APRICOT on deploying IPv6 in mobile, from Cameron Byrne of T-Mobile USA. It’s especially impressive when you think he was the unwilling star of this 2011 NANOG thread, in which it turned out T-Mo had 34 million subscribers in someone else’s IP address block.

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March 3, 2014

Telco 2.0 News Review: Post-MWC News Binge

Comcast-Netflix peering deal; FCC points Section 706 at neutrality; Telefonica Digital is no more

Before we dive into the Mobile World Congress news pile, there was serious regulatory action and important news on the Comcast-Netflix dispute last week. After weeks of arguing, the giant cableco and the monster video-cannon signed a peering agreement under which they will set up direct interconnection between their networks in exchange for a side-payment from Netflix. Cue much shouting about net neutrality.

In a must-read post, CDN expert Dan Rayburn provides a detailed explanation of the dispute and the detail, with financials and insight into the technology.

The shorter version is that, yes, it’s fundamentally an Internet peering war, and as with most of those, IP transit price-leader Cogent is involved. The telling detail is that Apple TV users aren’t affected - unlike mainstream Netflix users, who are served by their home-grown CDN via Cogent, they are served by Limelight Networks via Level(3):

In a little known, but public fact, anyone who is on Comcast and using Apple TV to stream Netflix wasn’t having quality problems. The reason for this is that Netflix is using Level 3 and Limelight to stream their content specifically to the Apple TV device..

Dan’s list of peering disputes should probably also include the Free.fr/YouTube imbroglio from early 2013, as Cogent was involved in that too (see Telco 2.0 news for January 2013). It’s also true that there’s nothing secret about Comcast paid peering: they advertise it on their Web site.

Meanwhile, something similar may be happening with regard to Verizon. Netflix’s deployment of additional HD content may have been a triggering factor here, driving up the traffic levels crossing Cogent’s network bound for the eyeball ISPs. That said, we’ve also heard it said that Verizon, especially, should pay Netflix for encouraging its customers to sign up for higher FiOS service tiers…

The VZW deal has closed, and Verizon reckons it will increasing earnings per share about 10%.

The FCC, meanwhile, says it intends to pursue net neutrality using its new Section 706 powers and also keep Title II reclassification “on the table”. There will be a public consultation on the issue. Of course, the FCC isn’t the only regulator in the US. The Justice Department anti-trust division is not happy about consolidation in TV, and it is putting pressure on the FCC to do something about it. All in all, it sounds likely that the FCC will impose conditions on the Comcast-Time Warner Cable deal - you can read more about that here.

Fared Alib, Sprint’s SVP of product development and operations, is quitting. T-Mobile USA announced revenues up 39% year on year and a loss of $20m for Q4. Telecom Italia denies that it’s going to sell TIM Brasil.

Whatever they eventually decide, Latin American telecoms is going to look a little different in future. During MWC, Telefonica announced a major reorganisation that closes down the Telefonica Digital innovations operation in London, and that also gets rid of the two regional HQs, that is to say the old O2 Europe and Telefonica Latinoamerica in Sao Paulo. In the future, everything will report directly to Madrid, as in the age of Philip II’s galleons on the Spanish Main…or something.

The official explanation for all this is that they’re:

Strengthening our leadership in the digital ecosystem, by driving a new public positioning enabling the hypersector to re-establish balance in the value chain

A simpler one is that Europe chief and M&A boss Eva Castillo has fallen out of favour, losing her operational responsibilities in favour of a new and vague post as “advisor to the president”, and TEF’s politics are adjusting to this new reality.

FaceApp Whatsbook - $19bn worth, really, even with voice? Tropo rolls out with Huawei, China Telecom

So Facebook’s bought WhatsApp, for a mere $19bn. The number should be qualified by the fact that it’s mostly stock, and $3bn is deferred stock at that - only $4bn in cash is changing hands - but either way it’s a lot of money for a company with 55 employees and “nominal” revenues. That $4bn is 35% of Facebook’s cash on hand. Dan York makes the bull case, arguing that this represents Facebook acquiring a bigger share of hundreds of millions of users’ social media usage, and that it represents a major threat to telcos’ SMS revenues, as if we needed another.

That said, it’s not as if Facebook is likely to capture revenue from the operators so much as destroy it by driving SMS pricing down towards zero. A lot of operators already bundle SMS, and the next price-disruption target is probably international (I paid 8.1p/text or 37p/MMS in Barcelona, for example, which is why I used Google Hangouts as much as possible).

Danah Boyd sums up the bear case, which is quite simply that it’s too much money for any conceivable monetisation. Also, WhatsApp’s USP is that it’s a pure IM app with ultra-minimal look and feel, no advertising, and robust privacy - pretty much the anti-Facebook. How can they possibly integrate? And did you notice that one major VC fund, Sequoia Capital, is a major shareholder in both companies and stands to make $3.4bn on the deal?

Another justification is “data”, but the problem here is that if ads linked to what you discussed on IM start following you around the Web, you might just ditch WhatsApp. Because it uses phone numbers as user IDs, your address book can follow you to another app very easily, and in fact we’re seeing this happening: encrypted messaging apps Threema and Telegram have both reported a huge surge in signups. Rather like all those people who moved from Instagram to Flickr last year after Facebook bought it.

Facebook CEO Mark Zuckerberg used his MWC keynote to defend the deal - he said it was going to be a huge business although he didn’t really say why - and to spruik his Internet.org initiative to get free “basic service” into developing countries. This is controversial with the mobile operators because another way of saying “free basic service” is “operators subsidise it”. As well as things like Wikipedia, weather, and agricultural prices (remember Nokia Life Tools?), the basic service apparently includes…Facebook, so you can see why a certain scepticism as to the Zuck’s motives might prevail.

High Scalability, meanwhile, has a post on WhatsApp’s architecture. Google, meanwhile, denies bidding for the company.

WhatsApp did have something up its sleeve, though: it’s going to start providing voice. Nice, although the point about destroying rather than capturing revenue is very much true about voice as well.

There was quite a bit of voice news at MWC. AT&T’s network chief Kris Rinne has ‘fessed up that the launch of VoLTE is sliding right again. In 2010, it was meant to go live in 2013; in 2013, it was meant to launch this year. This year, well, they aren’t giving a date.

Tropo, the original voice developer company, has a major new deployment and a major new partner. We mean it; the partner is Huawei and the deployment is China Telecom.

Sprint is offering voice over WLAN, using Kineto Wireless’s technology. The choice of Kineto suggests they’re planning to integrate the new service in a VoLTE core network. The main objective is to fill in blackspots and improve in-building coverage, but they’re also beginning to roll out HD voice and selling Harman-Kardon fancy speakers, which they’re interestingly framing as part of an overall audio strategy.

This post on NoJitter makes a strong argument for the value of audio. At MWC, we saw Joe Barton of Plantronics making a similar argument - “video is just video, but better audio can make you feel like you’re really there” - and some impressive technology from Fraunhofer and Qualcomm among others.

More voice APIs are coming: Voxox is a virtual PBX in the cloud, aimed at SMBs, Nexmo is more developer-oriented and plans to compete with Twilio and Tropo.

Acision announced Fuze, a new client application for real-time comms that isn’t necessarily bound to RCS. Orange R&D’s Libon has a new feature, which is interoperability - rather, if you message someone who isn’t a user, they get a link to a Web page which contains the HTML5 client for the service. A quote of note:

“I would argue that we’re out in front of the telco OTTs,” Giles told me. Although it’s compatible with Joyn (the ‘advanced’ telco messaging standard) Libon is in no way tied to Orange. “It’s open to any carrier who wants to use it,” Giles tells me.

NoJitter reports on the use cases that are being included in the WebRTC standard, which is up for discussion on Tuesday at the London IETF meeting. (And we’re going!) Chris Kranky, meanwhile, outlines some of the problems the technology faces, notably carrier-level NAT and port-blocking - a specific Internet-draft on this will be discussed on Tuesday.

A terse code review message announces an important step - the Chrome web browser now supports WebRTC in webview mode, so HTML5 apps (or any app that wants to display a web page) can embed WebRTC functions.

Here’s an argument that WebRTC developers should rely on the cloud for signalling rather than trying to develop their own protocols. A list of systems that support the Opus audio codec. Skype CEO Tony Bates exits Microsoft.

Software-defined networks dominate vendors’ MWC; AT&T taps Tail-F & Metaswitch

A huge MWC theme was software and virtualisation. Whether you call it SDN or NFV, there was a lot of it about. And it seems to be moving into an implementation phase. AT&T is redesigning its core network to make use of the technology, and it’s tapped a range of new vendors as suppliers. Metaswitch Networks, Tail-F Systems, and Affirmed Networks are the lucky winners in the first round.

Alcatel-Lucent claims to have 20 trials of its CloudBand products, mostly EPC.

Cisco announced its Evolved Services Platform, which has two application modules at launch, a cloud-based DVR and a sponsored-data solution. This is only the tiniest element of their commitment to SDN, though. In CEO John Chambers’ keynote at MWC, he specifically named Deutsche Telekom as having the best architecture with their Terastream SDN initiative.

DTAG is building its system on the OpenStack platform, and so is Kontron, which has among other things a virtualised M2M solution for telcos.

Telefonica is planning a major virtualised network rollout, called Unica. It should go live this year and cover 30% of their services by 2016:

Here’s a good rumour: Nokia to buy Juniper Networks and get some deeper IP routing knowledge?

Ericsson, of course, did just that with Redback a few years ago. There were also NFV announcements from Intel, Dell, and HP. And NEC demonstrated a virtualised MVNO platform, aka a virtual mobile virtual network operator.

MWC paranoia; Blackphone, Boeing, Samsung security devices, OpenID

Another theme at MWC was security, or paranoia. The show was bookended by the discovery that Apple iOS’s SSL support just doesn’t check SSL certificates at all and the disclosure that GCHQ was in the habit of intercepting Yahoo! video chat just in order to experiment with face detection algorithms, and 11 per cent of the streams contained what the spooks rather ungallantly called “undesirable nudity”.

As a response to this, security-optimised smartphones are proliferating. Blackphone is the icon of this trend, what with Phil “PGP” Zimmermann being involved and the gadget coming with a completely new fork of Android. With it, you get strong encryption for your storage, minimised OS logging, secure clients for voice and messaging, and a VPN for your data traffic, plus a two-year support contract. KPN will be offering it in Germany, Holland, and Belgium.

But the enterprise folk aren’t idle. Of all companies, Boeing is now producing a smartphone, the Boeing Black, a security-optimised Android device.

Samsung already has its Knox solution, which encrypts the data on your phone and provides for remote device management to wipe it if it goes missing, but the Snowden disclosures demonstrate that this is far from sufficient - you need to worry about the network as well. As a result, they showed a new client that provides encrypted voice, instant messaging, and file transfers. Unfortunately they also left the two Galaxy Note 3s used for the demo just lying around, switched on, with SIMs, unprotected by passwords or keyguards, where we found them:

Secure. It’s a good job we’re the good guys.

The OpenID foundation, along with a line-up of major Web 2.0 companies, announced the latest version of their protocol at MWC, including a special extension for mobile two-factor authentication.

The Columbia Journalism Review rounds up harder alternatives to Skype for journalists who need to talk to their sources.

Brian Krebs reports that there is a special problem associated with the Target credit card breach: so many cards are affected that the card industry can’t make them fast enough to replace them quickly.

Lauren Weinstein is not happy about a proposal in the HTTP 2.0 standardisation to let “trusted” parties read SSL connections so as to do network optimisation. We were at the IETF89 privacy workshop on Sunday and this is about as far from “rough consensus” as it’s possible to get (let alone “running code”).

Bruce Schneier blogs three NSA spying projects: one, two, three. The first seems to include a neat integrated small cell/network in a box solution. He also links to a new denial of service attack on the HLR.

And here’s a visit to the DNS root key-signing ceremony.

Gadget watch: Galaxy S5, Nokia Androids, BlackBerry, Firefox OS, Ubuntu, YotaPhone

It wouldn’t be MWC without shiny gadgets. Samsung launched the Galaxy S5 and Sony the Xperia X2. If the brands gave you the impression that this was mostly about incremental improvement, you’d be right. Some would even say they were a bit dull.

However, there was some device news that was very far from dull: Nokia announced two rather impressive Android-based phones, the Nokia X and X1. The phones are intended for the entry-level smartphone market. Nokia is using the base AOSP package, plus its own look-and-feel, and replacing the Google apps with its own package (so Bing search, HERE mapping etc). Because the apps are Google’s control point in Android, there’s nothing Google can do about it - although you wonder what the Windows Phone group within Microsoft thinks.

Nokia also had a guy dressed up as a zombie shambling around their stand; a brave choice in their position.

BlackBerry played up the security theme, announced the new BlackBerry Enterprise Server, suggested it might launch vertical-specific phones, and announced a couple of new shinies. CEO John Chen is now hoping to break-even this year.

The BlackBerry division that owns the QNX OS could offer some good news - Ford has dropped Microsoft in favour of QNX for its connected car projects.

Here’s an interesting suggestion: BlackBerry should sell the Q10 keyboard as a peripheral for iPhones.

Mozilla’s Firefox OS is rolling out with more phones. To some extent this reflects them turning away from the low-end of the market, but to some extent it represents the fact that the low end is disappearing as smartphones get cheaper. Some of the Firefox OS devices now come with a mid-range Qualcomm Snapdragon chip, i.e. the absolute state of the art 18 months ago or thereabouts.

The Galaxy S5 is built on the Snapdragon 801, which gives it more speed but more importantly, better hardware acceleration for imaging and an LTE baseband integrated in the SoC for better battery life. We’ll probably also see some of them with the latest of Samsung’s own Exynos chips.

Jolla showed off the Other Half hardware extensions, and promised a universal installer app for its Sailfish OS later this year; Ubuntu showed two phones produced by a Chinese OEM. But the most interesting gadget was probably the new YotaPhone, which is covered on the whole of one side with an ultra-low power e-ink screen for e-books, text, homescreen notifications, and the like. On the other side there’s a more conventional touchscreen for high-visual applications.

yota-9.jpg

Low-power displays might be a good tip for 2014; there are a lot of wearable devices with very constrained battery space and size around, and of course the best way to get better battery life in general is to reduce the power draw. Qualcomm’s Mirrorcell technology looks cool.

Far from MWC, Apple announced CarPlay, the equivalent of AirPlay in the connected car. It uses Siri for the voice-based interface, Apple Maps (so watch out), and either iTunes, Spotify, iHeart Radio, or some other app for music. Ferrari, Mercedes-Benz, and Volvo have already integrated it in cars and 13 other manufacturers are interested.

US LTE slowing down, or filling up? China adds 750k eNodeBs this year; small cells; Project Spring goes to Ericsson

Is the US slowing down? OpenSignal, the project to crowdsource network data, shows a startling decline in observed speeds on US LTE networks. The average was 6.5Mbps, down from 9.6 the year before. The world leader was Australia at 24.5Mbps. The best performing network in the US was T-Mobile at 11Mbps.

The fact that the best performing network was also the one with the least coverage points strongly to a possible explanation: the easiest cells are deployed first, and the earlier it is in the network’s life, the fewer users are contending for bandwidth.

China, meanwhile, is deploying 4G at a ferocious rate. It already accounts for 60% of the market for LTE infrastructure, and a second wave of China Mobile contracts is expected later this year, ordering as many as 500,000 eNodeBs. Add to that 250,000 for China Telecom, and you can see how ZTE finance director Wei Zaisheng reckons China will have a million of them by the end of the year. The GSMA reckons they’ll have 900 million users by 2020.

The first network to really plunge on LTE was Verizon Wireless, of course. Not long ago, 70% of all LTE CAPEX was in the US. (Noticed how Europe doesn’t really come into this?) VZW spoke to a major trend at MWC, signing up Samsung to provide its LTE small cells. This is the first time that they sell VZW infrastructure as opposed to gadgets. Meanwhile, TIM Brasil is buying Alcatel-Lucent small cells to add more 3G before the World Cup.

The Small Cells Forum announced its Release 3, which deals with the deployment of small cells in the urban context. Cloudberry, meanwhile, offers a solution for multi-operator hosting of “small cells as a service”.

Bouygues says it’s deploying LTE-Advanced this year. All sorts of people are claiming this; the vendors are all very keen to announce amazing theoretical maximum speeds for their carrier aggregation features. We notice that increasingly, carrier aggregation includes pulling unlicensed spectrum into the cellular network.

It looks like most of the £7bn Vodafone CAPEX under “Project Spring” will end up at Ericsson.

And it looks like OpenBTS is getting productised.

OFCOM tries to speed Hyperoptic deployment; UK.gov finds another £250m for rural broadband, hopes it won’t lose it again

OFCOM is keen to get Hyperoptic the code powers it needs to lay more of its gigabit fibre around the UK. The change makes it easier for them to get permission to dig up the road.

BT, meanwhile, claims that OFCOM makes it sell partially and wholly unbundled lines at different prices, which harms “smaller ISPs”, apparently. This interest in smaller ISPs is new. Perhaps it’s in the same way that RevK is accused of “bullying” BT?

The UK government is about to release another £250 million for rural broadband, and Broken Telephone points to a meeting of local communities to discuss how to get better value from it. It seems that even central government is now a little worried about BT getting literally all the money all the time.

No wonder, really. Remember the NHS National Programme for IT? You might be surprised by the next item. BT has earned another £1.3bn in fees on it despite the fact that it’s been cancelled.

It’s no better in Scotland, either.

And frustration boils over for an Aussie NBN advocate.

EE unwires Wembley; iPads in banks; Comcast ads, Bitcoin disaster

EverythingEverywhere is Wembley Stadium’s official mobile network partner for the next six years. This includes branding, obviously, but also things like digital signage, apps, WiFi, and possibly also LTE Broadcast infrastructure. Increasingly, big retail sites and stadia are turning into environments elaborately wired with mobile infrastructure.

BT’s blog discusses how banks use iPads in their branches - Barclays does well, NatWest and Halifax much worse.

Comcast acquires an ad platform for $320m.

And the main Bitcoin exchange, Mt Gox, has gone bust, after a fraud worth some $350m or 5% of the total stock of bitcoin in circulation was discovered.

A comparison of South African Internet exchanges. Craving salad at MWC. “Google, please solve death!” - oddly polite transhumanist protestors storm Mountain View.

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