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Sprint price war; GVT; NII bust; China Mobile results; Apple tooling up for something - Telco 2.0 News Review

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DISH creeps towards Sprint; Sprint CEO declares more price war; FCC net neutrality consultation nears record

After Sprint pulled out of its bid for T-Mobile, the Satellite Cowboy, Charlie Ergen of DISH, has re-emerged as a player in the story. Bloomberg argues that a DISH-T deal would be palatable to the regulator and would bring more spectrum to the table. It might also be more deliverable than the Free-T option, although it would still leave T-Mobile as the only national operator with no fixed-line assets. Even Sprint, which doesn’t have an fixed access territory, is a major provider of Internet backbone and metro-fibre. Meanwhile, T-Mo acquired some 700MHz spectrum.

Sprint’s new CEO, meanwhile, announced that his first priority is lower prices, and also said that “Apple will become a crucial part of Sprint”. You might think it would be the other way around. It also sounds like job cuts are coming, although RCR Wireless thinks the network upgrade will march on. Softbank, for its part, announced it will raise $3.9bn in bonds, without saying what it needs the capital for.

Verizon is trying to get more customers to take fibre, even if they don’t take FiOS broadband or TV but just PSTN service over glass. The explanation is that once the copper goes, many regulatory requirements go with it. Customers who value the requirement that the PSTN must stay up even if the power is out for days are not happy.

Inevitably, this is going to end up at the FCC. The deadline for comments on net neutrality and the Open Internet Order has been extended to the 15th of September after a volume of comments and responses to comments that was only surpassed when:

The record holder similarly grabbed the US public’s attention for somewhat different reasons - the FCC received 1.4 million complaints following Janet Jackson’s so-called ‘wardrobe malfunction’ during the 2004 SuperBowl.

And Warren Buffett’s company, Berkshire Hathaway, announced that it has taken a $366 million stake in cable operator Charter while selling out of DirecTV entirely.

Meanwhile, a New York state politician wanted so badly to back Comcast’s bid for TWC he plagiarised their own talking points in their entirety.

TI confirms bid for Brazilian GVT, puts off Argentine exit; Nextel bust; Reliance, China Mobile results

Telecom Italia has confirmed it might merge TIM Brasil into GVT, the fixed operator Telefonica is looking to buy from Vivendi, in a deal that would swap Vivendi’s stake in GVT for TI shares. That would mean TI keeps control of TIM and eases out Telefonica, thus making the Brazilian regulators who don’t like the fact Telefonica owns one MNO and indirectly influences another happy once more. There’s more detail here.

At the same time, TI’s sale of its stake in Telecom Argentina has been put on hold. Is that connected? Is TI hoping the buyers for TA would come in on the deal for GVT, perhaps?

NII Holdings, which operates as Nextel in Latin America, is sinking fast, losing money, with ARPU falling, and soaring debts. 123,000 3G customers churned away in Mexico in the last quarter. The company expects to declare Chapter 11 bankruptcy very soon.

Mexico is about to get its first MVNO.

Reliance Comms, India’s fourth-biggest MNO, says its net profits were up 21% in its Q1, although they were down 16 per cent sequentially. Voice pricing has gone up as the price war seems to have eased a tad. However, they also lost 2 million churners.

China Mobile’s full-year results are in, and its subscriber base was up 6.8% at 790 million with service revenue up 4.7%. However, its profitability has suffered, with EBITDA down 4.4% at a still-impressive margin of 36.7%. So far they have 14 million 4G subscribers. Data volumes are up 91% year-on-year and revenues up 51.8%, i.e. the effective price of data has halved or thereabouts.

Qualcomm hires a Chinese economist to write a brief in their defence against a Chinese regulatory inquiry. He also works for a Chinese anti-trust agency. Chinese agency fires him.

Ooredoo has launched 3G in Burma, and some dealers have sold a month’s allocation of SIMs in two days.

And Zain has launched its mobile financial services in Sudan.

The mass adoption phase of smartphones; Apple tools up, so does Google; Microsoft dumps Ashas, immediately relaunches

IDC reckons 300 million smartphones shipped in Q2, mass adoption with a vengeance. Out of those, 96% were either Apple or Android. Although Apple’s shipments were up 12.7%, this wasn’t enough to avoid their market share falling, as the Android ecosystem managed to increase its shipments by 33%.

That said, it’s unlikely Apple worries over much about this, given their huge share of the profit pool. Also, Horace has been looking at Apple CAPEX numbers, and he reckons that we’re heading for the biggest quarter ever for Apple capital investment by some distance. It’s literally off the chart.


Apple is tooling up for something big. So, it seems, is Google, whose capital investment is approaching the level of Intel’s, while Apple’s splurge might take it briefly to the levels Samsung regularly achieves.


In comments, someone points out that the mystery at Google might be more telecoms investment.

It looks like Apple is going with China Telecom for data centre space in China, which it needs to support the growing Chinese iPhone fleet.

That IDC forecast doesn’t leave much for Windows Phone. Microsoft recently decided to kill off the Nokia Asha line and the brief Nokia X Androids, in the hope of pushing their customers to adopt WP. However, they have just announced a new €19 gadget that looks very, very like an Asha.

In other post-Nokia news, Jolla’s Sailfish OS gadget is getting a launch with 3 Hong Kong, where £222 will get you one. Some tariffs will provide one free.

IBM Research reckons containers always beat virtual machines for performance.

And have you wondered why Silicon Valley valuations are so high? Perhaps it’s because more and more major tech companies are doing without investment banking advice.

DTAG might buy cable, wants more subsidy; enduring failure of BDUK; Vodafone comes out last in UK call completion; Telekom Austria’s grim H1

Deutsche Telekom is considering buying cablecos, says Reuters quoting the head of T-Germany. They’re also trying to put down a marker about the future of their VDSL build-out, saying they need another €10bn of government money to make it to 90% population coverage.

OFCOM, meanwhile, has issued its annual Communications Market Report. The big news is that although coverage with “NGA broadband” has grown impressively, basically all the growth in either speeds or “superfast” broadband is down to Virgin Media doubling downlink speeds on its cable network. Also, the independent ISPs have done far better than BT in getting subscribers to take the new FTTC service although it’s the same access network. Broken Telephone points out that the UK’s £1.7bn of government money has gone entirely to BT and has been so well spent that the HMRC has allowed firms in ‘remote locations’ to submit their VAT returns by paper rather than online.

OFCOM also has some interesting results on mobile voice, here. There’s not much difference between operators in urban call completion, but the challenge of rural (i.e. cell edge) coverage shows them up.


It looks like EE’s £300m investment in the 2G network worked, doesn’t it? It’s also interesting, to say the least, that Vodafone is so far behind O2 despite the fact they share their towers under Project Cornerstone. Meanwhile, EE has introduced a new source of two-sided revenue by offering its customers the chance to pay 50p to skip the call-centre queue. We predict a row, if not a riot.

Orange may be about to sell its towers in Spain, for around €1.1bn.

German ISP United Internet, better known for its 1&1 low-cost web hosting, is buying a stake in Rocket Internet, the Berlin-based VC fund famous for copycat startups.

Telekom Austria’s had an ugly H1, with a net loss of €317m. Some of this is down to a €400m writeoff on the value of Mobiltel in Bulgaria, after the banking crisis and recession there, but revenue slid 7.3% group-wide, suggesting the problems are more fundamental.

And Russian mobile operators have been told that they aren’t getting any 700MHz spectrum unless the broadcasters specifically allow it.

GigaPower moves on to a gigabit; Brazilian cable to 500Mbps; Telstra buys a CDN; postmortem on 512k route outages

AT&T’s GigaPower FTTH service, currently available only in Austin, Texas, sounds like it should be delivering a gigabit. Well, at launch, it didn’t, making it to 330Mbps but not all the way. Now, it’s getting an upgrade that will reach the magic number. They also say they will double the number of homes passed in the area after the take-rate beat expectations.

Net Servicos in Brazil is offering 500Mbps service where it has FTTH, but it’s also now trialling those speeds on its cable network, having acquired equipment capable in theory of 640Mbps.

Some people in a new housing estate in the UK are angry that BT’s FTTC infrastructure isn’t present. The killer detail: an independent FTTH deployer is offering 300Mbps speeds. Perhaps the deployer could spring for them to try BT’s service?

Telstra is buying Ooyala, a CDN, for $270m at a very reasonable valuation of 5x revenue. It’s the first deal for their new Global Applications & Platforms division, a sort of Telco 2.0 unit:

This is the first investment for Global Applications and Platforms (GAP). GAP’s strategy is to create long-term global growth in markets that are adjacent to Telstra’s core business, where software disrupts traditional business models.

Elsewhere, SingTel is adding a new WLAN to its 4G network, with integrated tariffs.

In theory, LTE networks should be able to assign radio resources dynamically, out of 12 subcarriers in each 150KHz channel, so you could create a virtual radio network for a customer on demand. Nobody’s done it in practice yet, but now Softbank is trying it out, using an Ericsson policy controller to drive the Mobile Management Entity.

On Wednesday, the Internet routing table passed the mark of 512,000 routes, which caused trouble for networks using the very common combination of the Cisco 6500 router and the Super 720 expansion card, as they have a hard limit at 512k routes. This can be changed, but it requires both chops and a reboot. BGPMon rounds up the damage. One of the biggest victims was the popular password manager, LastPass, which lost a third-party data centre provider when the routing limit was hit.

Cisco is cutting jobs. OpenIX is trying to spread neutral Internet exchanges in North America. And a lot of Western embassies in North Korea run an open guest WLAN, which has caused a housing boom around them.

And the Village Telco team’s mesh-WiFi software has had a major upgrade, adding a SIP-based voice solution and a Jabber instant-messaging server.

Samsung buys M2M startup; 9% growth in UK M2M; Ericsson reads Landis+Gyr’s smart meters

Samsung has bought into the Internet of Things, acquiring a US developer, SmartThings, for $200m. That gives them a connected-home control platform, based on an Android/iOS app, that began two years ago as a Kickstarter project and that sells for $99, plus a $200 developer kit.

The business will move to Sammy’s Palo Alto innovations centre. So far, it claims to have 8000 apps. See our recently published research “Connected Home: Telcos vs Google (Nest, Apple, Samsung, +…)” for more on the connected home.

In the UK, OFCOM reckons there are now 5.6 million M2M devices, growing at a 9% annual rate.

Vodafone, meanwhile, has issued a very optimistic statement about M2M revenue, but if TelecomTV’s reading of it is reliable, it doesn’t actually mention a revenue number. STL research shows it looks like M2M markets tend to mature and slow down as penetration increases, but in fairness, Vodafone and China Mobile, two of the three biggest operators, are managing to beat the trend.

MNO M2M Connections Map.png

M2M doesn’t necessarily mean “telco”, though. Landis + Gyr has signed up for an M2M service to read its smart meters in Finland, and the service comes from Ericsson.

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