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Apple CDN; Netflix; Google 2.0; Nextel PTT rides again - Telco 2.0 News Review

‘Digital Asia 2014’ Executive Brainstorm and Innovation Forum, run by STL Partners in collaboration with Telkom Indonesia, is designed to equip 250 specially-invited business leaders from across the region’s telecoms, enterprise and technology sectors with new, breakthrough ideas, methods and tools on how to grow significant new revenues in the next 12-18 months leveraging Mobile, Cloud and Big Data.

Apple iOS 8, a global tournament of CDN performance; Netflix comes to Germany; has Media 1.0 found the money in the Internet?

This week saw a major challenge in terms of Internet content delivery. It was of course the Apple iOS 8 update, a download of more than a gigabyte to vast numbers of devices. Apple, per Dan Rayburn, seems to have chosen to use its own home-built CDN for most of the downloads, although outside the US, they also made use of Akamai and Limelight capacity, enough of it that latency on Limelight’s network went up across the board.

As the ramp-up began, some ISPs were 50% above normal by 4pm Pacific time. Apple was the biggest traffic source in France, overtaking YouTube, and second only to Netflix in the US. Traffic peaked at 3Tbps on a sample of North American residential ISPs.


Not surprisingly, some people experienced delays. Apple’s CDN reached Verizon residential customers via Level(3) and Cogent, and as usual interconnection between VZ and Cogent seems to be a bit fraught. One operator found they could do quite a bit better by null-routing one of the prefixes involved and forcing the traffic to Akamai instead.

In the UK, TalkTalk alone claims to have peaked at 1.25Tbps.

Netflix is coming to Germany, meanwhile. The streaming site has a distribution agreement for STBs with Deutsche Telekom and one for mobile apps with Vodafone Germany.

Sky TV’s Now TV on-demand service put off a major price rise earlier this year, but now it’s going ahead.

Have the content giants worked out what to do about the Internet? Ernst & Young says yes:

We are seeing that digital is very much driving profits now, instead of disrupting it. Companies are figuring out how to monetize the migration of consumers to a variety of digital platforms, and this insatiable demand for content is fueling growth throughout the industry.”

The British music industry lobby says it managed to grow 9% in 2013, although this was more about the continuing trend for more revenue from live performance than any big change in digital.

Apple suppliers struggle with 5.5” displays; Sony in trouble; “Google 2.0”; Amazon gadgets; Microsoft strategy

We’ve said it before: Apple’s killer app turned out to be manufacturing. This time, it seems to be a problem. Foxconn is having trouble with quality control, and only between 50 and 60% of the 5.5” displays for the new iPhone are passing tests. As a result, they’re having difficulties keeping the supply chain topped up with shiny gadgets, as 10 million of the phones have already sold in three days of availability.

Bloomberg Businessweek thinks the Android One phones are very bad news for Samsung’s sales in India, and compares this with the situation at Sony. Sony’s Mobile Comms unit had a terrible Q1 and has gone from promising growth to cutting 15% of the workforce, while it hopes to introduce more low-cost smartphones using MediaTek chips.

Google, meanwhile, has picked a reviving HTC for its next Nexus device, a 9” tablet, as it continues to rotate flagship device projects between vendors.

Larry Page has a new vision, “Google 2.0”, that apparently involves a “model airport and city”. It really is the world’s biggest train set…

Amazon, meanwhile, updated its hardware line. There are new Kindles, a refreshed Fire HDX that can run Windows 8 in a cloud-based virtual machine, and two new sub-$100 Fires based on a Mediatek SoC.

Grameenphone is offering a Firefox OS device, manufactured locally for $60 a go, with 20MB of extra data for anyone who visits their app store.

Ericsson is shutting down its modems business after the current product ships. The point seems to be that nobody is much interested in thin modems rather than integrated SoCs any more. The staff are being transferred to small cells R&D.

Microsoft CEO Satya Nadella says he’s more interested in getting Microsoft apps and cloud services onto more devices than he is in getting more Windows devices. He also says you’re fired.

Telefonica/GVT is a deal; wave of Latin American mergers

It’s a deal: Telefonica is taking GVT off Vivendi’s hands for €7.2bn, including assumption of debt and handing over the Telefonica stake in Telecom Italia.

This seems to have triggered a wave of change through the Latin American mobile industry. First of all, there’s TI, actively looking at a bid for Oi, just after Oi merged with Portugal Telecom.

Then there’s America Movil, which wants to sell a large chunk of its operation in Mexico and perhaps also spin off its towers. Softbank, China Mobile, AT&T, and Bell Canada have been approached.

AT&T’s chief strategy officer, John Stankey, has confirmed that they’re interested.

If the sale happens, it is reported, America Movil might take its money and look to buy assets in Brazil. This story is getting complicated; America Movil might, apparently, try a joint bid with Oi for TIM Brasil.

Vendors, meanwhile, are queueing up to bid for the right to build a new wholesale-only national network in Mexico. The project is meant to rule out another monopoly ever again, by creating a publicly owned shared infrastructure. With $10bn of contracts up for grabs, it’s no surprise ALU, Ericsson, and Huawei are all after it.

NII Holdings, owner of the Nextel businesses in Latin America, which has filed Chapter 11 bankruptcy, says it’s determined to keep its Brazilian operator, which is down to 1.5% market share as the iDEN technology is no longer very attractive.

Nextel PTT, back from the dead; US voice minutes surge; AT&T bags huge Shell UC contract

Speaking of iDEN and Nextel, look at this. Sprint has sold the last of its 900MHz spectrum to a group of old Nextel execs, who want to launch a national PTT network in the 2x6MHz block. They say they will use “an unspecified Motorola Solutions’ digital radio technology - not iDEN as Nextel used”, but as they’re targeting small and medium businesses and critical infrastructure, it sounds like a pure Nextel clone. How will that do against AT&T’s LTE Push-to-Talk net?

Perhaps better than you might think; it seems that mobile voice usage is rising in the US, surprisingly strongly. One would think the price war probably had something to do with this.

AT&T, meanwhile, has a truly enormous hosted unified communications contract, with Shell, coveirng 150,000 seats for the next 5 years.

Verizon Wireless is rolling out VoLTE, starting with HD voice, 6-way conferencing, and video calls that switch to WLAN automatically.

Zendesk has a new Enterprise subscription plan, with new pricing, higher levels of customer support, and more Avaya telephony integration.

And Twilio has MMS support.

Iliad: better bid by mid-October or no deal; VZW may sell towers; AT&T improves SMB products; tidal wave of FCC objections

Iliad has declared a self-imposed deadline of mid-October to improve its bid for T-Mobile USA. An informative Reuters piece says the company is in talks with several US banks and private-equity funds, looking for more investment. CFO Thomas Reynaud wants another $5-6.5bn in order to get the leverage ratio down to 4.5x EBITDA (it’s over 7 at the moment - see our Executive Briefing for in-depth coverage), as Xavier Niel is unwilling to issue more than €2bn in new Iliad stock. KKR is named as a potential buyer.

However, DTAG is also said to want a buyer who brings customers and spectrum to the table in the US, although this may be a negotiating tactic. They are also sceptical about Iliad’s claims of huge operational savings, especially as Iliad has yet to get any due diligence on the company.

Verizon CFO Fran Shammo, meanwhile, said that the company would consider selling its towers, and would launch LTE multicast in the fourth quarter. They also added 22 markets with additional 1700MHz LTE spectrum.

AT&T is beginning to offer a symmetric fibre access product for businesses in a small number of cities, as well as an API for resellers.

Here’s the highly critical document a group of affiliate networks handed into the FCC against the AT&T-DirecTV merger. And the FCC provides some data regarding the rate of comments coming in about net neutrality.


Orange buys Jazztel; Hyperoptic moves on to Glasgow; MTS faces Putin

Orange has offered €3.4bn in cash for Spanish ISP Jazztel, as the race to buy fibre and cable assets heats up.

In the UK, Hyperoptic has announced that its gigabit FTTH builds will move on to Glasgow, after the first installs lit up in Cardiff. Meanwhile, Virgin Media has started a small trial FTTH build using mini-trenching and RFoG (Radio Frequency over Glass) for the TV element.

EE, Vodafone, and Dixons/Carphone Warehouse have all bought part of Phones4U.

In South Africa, Vodacom has announced a SMB fibre-to-the-building deployment with 100Mbps GPON.

In Namibia, Telecom Namibia is deploying 40/120Mbps fibre, after the new WACS submarine cable landed.

A French public-private fibre deployment partnership has failed.

It looks like Foxconn, Lenovo, Xiaomi, Hainan Airlines, and Haier (a white-goods manufacturer) are the next wave of Chinese MVNOs.

And it seems that MTS, Russia’s biggest mobile operator, is likely to end up renationalised…one way or the other.

Larry Ellison steps down…but not very far

Oracle has missed estimates in five of the last seven quarters. In fairness, their cloud results were pretty decent, but it wasn’t enough, and Larry Ellison is stepping down as CEO. He’s not going far though - he’s staying as CTO, while two other execs will job-share as co-CEOs.

IBM is making its Watson analytics system available as a “freemium” app, and extending its alliance with AT&T to sell AT&T NetBond VPNs to Softlayer hosting clients.

They’ve also built a huge new disaster-recovery data centre in North Carolina.

Facebook, meanwhile, turned off a whole data centre to test their disaster recovery and load-balancing plans.

Rackspace isn’t for sale.

Alibaba.com is world’s No.2 Internet company; AT&T, Orange M2M; Telefonica m-banking

The AliBaba.com IPO was a roaring success, raising a record $21.8bn after the shares were placed at $68, and rising 38% on the day. That values the company at more than Amazon and EBay added up, and makes Jack Ma China’s richest man. That said, nobody was taking any chances - half the shares in the IPO were allocated to a group of 25 underwriters and strategic investors.

This means that four of the top 10 Internet companies are Chinese and Alibaba is No.2 to Google.

AT&T has a new M2M SIM product that supports multiple profiles on the physical SIM and over-the-air provisioning.

Orange Business Services has an API for real-time location of its M2M modules.

Apple has delayed the release of Healthkit over bugs.

And Telefonica has an m-payments app in Spain, in partnership with Caixabank and Santander.

Finally, who is operating dozens of IMSI catchers around Washington DC?

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