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October 30, 2014

Telco Transformation: Preliminary research results show large variation in strategy and progress

It is a couple of weeks since we started a piece of research focused on the transformation of Communications Service Providers (CSPs).  We thought it might entice more CSP executives to respond to our survey if we gave you a peak at some of the results.  A full analysis will be made available to survey respondents that fully complete the survey.

The survey itself is available here and will take 10 minutes to complete.

It covers:

  • CSP aspirations for digital services
  • Optimal investment levels for digital services and how close CSPs are to this at present
  • Key success factors for implementation of digital services and progress in addressing these

Initial research results

Turning to this last point around implementation key success factors, below is a chart summarising the results of the first 30 or so respondents with two factors revealed (we don’t show more lest we prejudice you before you complete the survey):

CSP transformation, summary chart.png

Source: CEP Transformation Survey, Preliminary research results only

It is clear that, on average:

  • 8 out of 9 of the key success factors are rated as close to or above ‘Important’
  • 2 factors are rated as being particularly important - ‘Senior management support’ being one of these. 
  • All of the factors will take more than 2 years to ‘resolve’ with several close to averaging over two years (including ‘Prioritising digital services’). 


So, in summary, there is a lot of important stuff to get right if CSPs are to transform themselves and successfully adopt new business models and services and it is going to take a while to get there.


Digging a bit deeper shows wide variation

As any statistician will tell you, averages are awfully misleading.  In this case, what they fail to show is the variance from respondents in the two factors we have revealed - ‘Senior management support’ and ‘Prioritising digital services’.  The charts below show the distribution of responses among all participants (with the bubble size representing the proportion of respondents) for both factors.

CSP transformation, more details.png

Source: CEP Transformation Survey, Preliminary research results only

What these show is that:

  • While there is consistency among respondents about the importance of senior management support for CSP transformation, there is huge variability over progress.

o   Worryingly, few respondents feel they yet have the support of senior management - Only 14% rated it as ‘Competed, In hand’

o   Perhaps even more worrying is that 25% are unclear on how to progress winning over their senior management team

  • For ‘Prioritising digital services’ things are even more varied:

o   Wide scope of responses on both importance to change and organisation progress

o   Around 28% feel it is ‘Irrelevant’ or of ‘Limited Importance’ and most of these, unsurprisingly feel it will take more than 2 years to resolve or are unclear how to resolve (but presumably don’t care much about this) - the 5 bubbles in the bottom right

o   Conversely, 46% feel it is either ‘Important’ or ‘Critical’ and are equally sceptical about their organisation’s ability to resolve - the 4 bubbles in the top right

 

Once we have sufficient responses, we will share the detailed results with respondents and give insight about differences by region and, potentially, by individual CSP.   Will also explore how big CSPs think new digital services could become for them over time (in revenue terms) and how much they should be investing (as a proportion of their opex and capex budgets).

The survey itself is available here and will take 10 minutes to complete

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October 27, 2014

Telco Q3s: VZ, AT&T, Orange, China Unicom, EE, MTN - 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.

Telco Q3s: VZ, AT&T, Orange, China Unicom, EE, MTN

It’s time for the telco Q3s. The dynamic duo go first, with TelecomTV pointing out that Verizon is on $3.8bn of net income and AT&T is on $3bn, and most of the rest of their numbers are roughly similar.

That said, the main story at AT&T is wireless net-adds, with 2.4m year-to-date and 785k in the quarter, while service revenue is flat and operating-level profits falling.

The explanation of this is that equipment sales are going up as a percentage of revenue, as the operator matches T-Mobile’s giveaways, and this means paying Apple and Samsung’s danegeld. Meanwhile, in the wireline world, net income was down quite sharply, 17.2% year on year. AT&T blames, in part, the cost of buying TV rights for U-Verse - tellingly, unlike Verizon, they don’t give any detail of the broadband speeds their customers are taking.

So, it’s a picture of resold content and hardware making up for weaker mobile service revenue, hit by the price war, and weaker broadband, hit by the lack of a good broadband product. On the other side of the hill at Verizon, wireless reported both a huge net-adds quarter, 1.5m more subscribers, and 4.8% year-on-year growth in service revenue. Like AT&T, though, margins have slipped a little, although a margin on service revenue of 49.5% is nothing to complain about. In the wireline world, VZ’s revenues from consumers were up 4.5% and their ARPU was up 10.3%, and 57% of customers are now taking more than 50Mbps. VZ’s operating margins in wireline are substantially worse, which may be explained by the fact they are still migrating more customers to FTTH - 91k in Q3, targeting “high maintenance” sections of the copper network.

In the enterprise, AT&T Business Solutions has been releasing a lot of new products this year, especially in the cloud, and we note that their “strategic business services” segment grew its revenues by 14.3% year-on-year. Verizon’s was up 1%. This is anything but an audited metric, and there is a lot of scope for playing games with definitions, but Verizon Business’s cloud offering is very much “generic VMWare reseller” and AT&T may well have an advantage here. Verizon Wireless, by the way, provides a sighting of that very rare bird, an M2M revenue number: $150m in Q3 and $400m year-to-date. Unlike AT&T, though, they don’t report anything like a count of M2M devices.

Meanwhile, VZW has been spotted adding its own unique identifier to HTTP requests in order to facilitate third-party ad targeting. And speaking of the US price war, Sprint has doubled the data bundle on its cheapest shared data package.

America Movil saw a nasty hit to net profits in Q3, blaming the arrival of regulation in Mexico. The good news was that service revenue was up 3.4% in Brazil.

China Unicom’s results for the first 9 months are out. Revenue was down 2 per cent, but profits up 26%. The explanation is that underlying service revenue is up 5.5%, and the carrier has dramatically reduced its handset subsidies, apparently because the Chinese government wanted this across all the operators.

Orange saw slightly weaker revenue, but has kept ahead of it with cost reductions and held its margins steady. Interestingly, it’s beginning to open up the investment tap a bit.

Their UK joint venture with DTAG, EE, claims 5.6m 4G subscribers, the most of any European operator, but says nothing at all about margin. They seem to be becoming a bigger and bigger MVNO platform, as well as cutting 350 jobs.

Three months after turning up 3G, Mobilink Pakistan has a million subscribers on it. And MTN saw subscriber growth of 2%, and claims data revenue was great but won’t say what it was.

VZW CapEx peaks: Ericsson APAC sales strong but Nokia in the frame; Mobile CDN

Verizon’s Q3s included guidance that wireless CapEx this year would be flat at last year’s $17bn, which strongly suggests that their LTE build is complete, and suggests that infrastructure vendors are going to see much less demand from North America in the near future. For example, Verizon may have been as much as 14% of Alcatel-Lucent’s sales in Q2, something less than 10% of Ericsson’s, and by far Juniper Networks’ biggest customer.

For the time being, Ericsson’s sales are still rising, quite strongly, with sales in the Network division up 13% in Q3. They did notice a fall of 3% in the US, but did well in the Middle East, India, China, and Russia. Interestingly, Global Services did less well, growing 2%.

Nokia Networks reported sales up 13.5% year-on-year and operating margins up from 8.4% to 13%. However, they also said most of this was coming from either “Greater China” or “North America”. The company is paying a special dividend, although if US infrastructure spending stops sharply that might not last.

Starhub has trialled delivering HD video from CDN nodes built into its base stations, using Nokia Networks’ Liquid Applications technology.

The 3G, 4G, 4.5G, and 5G Wireless Blog has an interesting whitepaper on LTE carrier aggregation. It’s complicated.

QualcommCAComplexity.png

Zayo, the dark-fibre company and backbone ISP formerly known as Above.net, got its IPO away at $19/share, a bit lower than expected. It also snagged a contract to build a national fibre network for O2 UK, which wants to own and operate its own fibre. This is backbone or transmission, not backhaul, as the network will link 19 aggregation or core sites.

Fibre backhaul has played a key role in how Europe’s best-performing operators broke away from the competition into the top-right sector of this chart. Find out more with our Differentiated Mobile Data Executive Briefing

Screenshot from 2014-10-27 14:58:54.png

DTAG partner program spreads IoT apps around; Telefonica’s IoT kit; smart meters found stupid

Deutsche Telekom is starting a new European partner programme that aims to identify Internet of Things applications that work in one European market, and promote them on a pan-European basis. There are 34 apps from 15 vendors in Poland, the Netherlands, Slovakia, the Czech Republic, and Hungary at launch, and as you’d expect from DTAG, it’s all very, very industrial.

Telefonica, meanwhile, has a new product line based on the popular Arduino IoT development board. “Thinking Things” is a set of modular sensors and gadgets you can stick together to make simple IoT projects based on their 2G network.

Spanish hackers have discovered that they could do anything, really, with the whole country’s smart meters by attacking from the power-line communications interface and exploiting the rather poor encryption standard used.

Huawei, ZTE smartphone Q3s; Google battles the rebel droids; LG resumes chipmaking

Huawei’s consumer business shipped 32 million devices, including 16.8m smartphones, up 26% year-on-year in Q3. The proportion of mid- and high-end phones was up 162%, and the regional results were really dramatic: shipments were up 98% in Asia-Pacific and 322% in the Middle East and Africa. ZTE, meanwhile, said its net profits were up 191% in Q3, on revenues up 24%, after its handset shipments rose 40% in the year. However, it also said that revenue from wireless “terminals” was “largely unchanged”, which implies its average selling price must have slid quite impressively, and that its infrastructure sales were up 13%. So perhaps they’re being pushed further downmarket in terminals, but making real money in infrastructure?

Here’s a review of the Lumia 530, priced at $69, aiming for a gap between the Motorola E and that $35 Firefox OS gadget. Whether the gap exists or not, Ars Technica argues that the older 520 is actually superior.

Google reckons that some of the most important developing markets have as many as 30% of their Android phones running non-Google “forkdroid” or alternative ROMs based on the open-source version of the OS. They don’t make any money like that, so they’re trying to make it easier for those vendors to sign up for the Open Handset Alliance.

Did you know Google bought a British startup that does multi-persona device management, for $120m?

LG has bounced back somewhat via its flagship Androids. Now it’s trying to replicate some of the Apple/Samsung, hardware-intensive strategy by going into the chip business. LG has designed an eight core system-on-a-chip using ARM’s big.LITTLE architecture to fit in four Cortex A15s and four Cortex A7s. They’re going to have them fabbed by Taiwanese manufacturer TSMC.

Roku may try an IPO.

Apple: AT&T grabs the SIMs, drugstores opt out of Pay, salvaging sapphire, search privacy

So Apple made the big jump and launched its own multi-IMSI SIM. And AT&T said no. Or rather, once you pick AT&T on the device, that’s it, you’re locked to their network. Unless, of course, you pull out the SIM and substitute in another one. Which is the point of having a physical and user-replaceable SIM in the first place.

John Legere of T-Mobile was predictably snarky, saying that AT&T’s move was “typical”, that Verizon Wireless had chosen not to play ball, and that T-Mobile and Sprint had “embraced” it. He also said a lot more about the process of enabling devices that come with multi-IMSI SIMs.

Meanwhile, a British startup is using a similar approach to provide once-only or local numbers.

Two US drugstore chains have turned off Apple Pay, apparently to support their membership in the rival MCX (Merchants’ Customer Exchange) payments and data-gathering initiative. Here is a case that MCX serves merchants much better and they are the key actor in the ecosystem.

There have also been some problems with Bank of America customers being double-billed.

Apple is trying to salvage something from the GT Advanced Technologies wreck. Apple says it’s willing to buy sapphire crystals but not “materials” from the company, and will work with it on scaling up to produce bigger “boules” of the stuff per batch.

Mac OS X Yosemite, rather like Ubuntu Linux since 12.04, has an integrated search feature that combines desktop search with various kinds of web search. As with Ubuntu’s feature, this has been criticised from a privacy point of view, but Apple has gone to some lengths to mitigate the issue. For example, search requests are identified by an arbitrary key that is changed every 15 minutes. And of course you could just turn it off.

Google acquires Firebase; $14bn OTT menace

Juniper Research thinks operators might lose as much as $14bn in revenue (basically voice and SMS) this coming year to OTT competitors. Interestingly, over six years, that’s about as much as our November 2013 Future Value of Voice & Messaging Strategy Report predicted would be at stake.

On that theme, Google just acquired Firebase, a popular cloud-based messaging platform often used as the signalling layer for WebRTC apps. When we say popular, we mean 100,000 active developers popular. Google will presumably integrate this in Cloud Platform, pouring more fuel on the WebRTC fire.

Here’s an argument that WebRTC services should concentrate more on the JavaScript API than the underlying network one.

Simwood discusses responses to toll fraud.

Vodacom Tanzania is rolling out voice biometrics for authentication.

Amazon Q3s on Fire; HP OpenStack launch; IBM Q3s; scaling with Xiaomi and Facebook

Amazon’s Q3s are out, and they are disappointing. Amazon lost more money than it expected, and warned that it would probably lose money in Q4, when retailers usually coin it, and the revenue growth, usually promising, missed expectations too. North American media sales, the core business, was especially poor, while a marketing survey of its customers couldn’t find even one Fire Phone user.

A marketing survey of 500 Amazon customers could not find any who reported owning a Fire. A great many of the reviews on Amazon’s own site give the Fire the lowest possible rating.

A $200 price cut last month briefly pushed the phone up on Amazon’s list of top-selling electronic products, but it quickly fell off again. Thousands of employees spent years developing the phone. It is a rare case of Amazon completely misjudging the appeal of a new product.

Mr. Szkutak said Amazon had $83 million worth of inventory of the phone at the end of the quarter. That should last until the sun goes dim.

Elsewhere in the cloud, Hewlett-Packard released its version of OpenStack as a community edition, as well as a development platform running in their own cloud for applications developers to check out their work.

IBM’s Q3s were not good, with net income off 18% and margins suffering badly. The good news was that cloud revenue was up more than 50% year-to-date and mobile doubled.

Yahoo! reported material revenue from mobile for the first time.

Xiaomi is moving its international users’ data out of data centres in Beijing and into Amazon Web Services’ cloud and Akamai’s CDN. Obviously this provides a big performance boost, but it also shifts their stuff outside the reach of Chinese censors.

Schneider Electric argues that data centres aren’t getting more power-dense, and in fact, it’s not worth it, as this chart shows.

Screen-Shot-2014-10-20-at-1.05.42-PM-e1413843586883.png

Facebook has dramatically improved the performance of its mobile app by dropping a typical web approach with JSON and HTTPS in favour of the lightweight MQTT push protocol.

The FCC is releasing all the submissions to the Open Internet Order consultation on net neutrality:

In the interest of ensuring that the public has open access to the nearly 2.5 million reply comments that were filed during the official reply comment period (July 19-September 15), we are today releasing those reply comments in one zipped XML file. This file includes 725,169 comments the FCC received through ECFS and CSV file uploads and another 1,719,503 comments received via the email address, for a total of 2,444,672 comments received during that time period.
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October 23, 2014

CSPs/Telcos: How big is digital going to be?


If you work on behalf of a Communications Service Provider (CSP), we would like to ask you to participate in a research programme we are undertaking on transformation. We have already collected some fascinating results and, through your participation, you can have access to these too.

Most Communications Services Providers (CSPs) around the world have embarked on the journey to new (Telco 2.0) business models via the development of ‘digital services’.

As part of STL’s support to CSPs on this journey, we would like to ask you to contribute to a questionnaire on transformation. It will take only 10 minutes and focuses on 3 big issues:

  • How important should digital services be for CSPs?
  • What is the optimal level of investment in digital services and how close are CSPs to this at present?
  • What are the biggest barriers to successful implementation of digital services and how effective are CSPs at overcoming these barriers?

- Access the survey here -

Please note:

  1. The survey will take only 10 minutes to complete.
  2. Your individual answers will not be revealed to anyone, ever.
  3. A summary of the valuable results will be shared with you.

You can contact us here if you have any questions about the survey. We will also be covering CSPs’ digital transformation at Digital Asia 2014, 2-4 December, Bali, and at OnFuture brainstorms in Arabia, Europe and the Americas.

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October 20, 2014

Internet of Things special: 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.

Cisco “fog computing” release 2; GSMA spec for IoT devs; IoT makes GM a net neutrality player

Cisco announced this week the second release of its Internet of Things products, the IOx Fog Computing line, including a new applications management module and some new vertical apps for railways and video surveillance, as well as support for the software in 16 more routers. They are also boasting of some major deployments - General Electric and WindRiver, manufacturer of real-time operating systems for IoT devices, stand out.

As everyone from ARM to Cisco converges on this space, the GSMA is doing its best to mark out a claim for the telcos, hence this new specification that is meant to help developers work with cellular networks in the IoT context. Unfortunately it also highlights some of the strange things network operators still do; developers are warned if they aren’t sure how often they should poll, they should set the interval to 29 minutes because a lot of operators expire network-address translation (NAT) assignments after 30 minutes of idle. Not only is this hardly cutting-edge, it also defeats the point of NAT, which is to rotate addresses among devices and therefore save on scarce addresses. That said, there’s a good story in it about the 59 wind turbines whose monitoring modules were left with the default passwords, leading to a €150,000 phone bill.

Matt Asay at ReadWrite argues that only open-source will scale well enough to serve a highly diverse and diffuse developer community and points out that huge connected-car player Bosch is making its plans on precisely this basis.

bosch-m2m.png

Meanwhile, M2M MVNO Aeris has launched a new, cloud-inspired platform, Neo, quite impressive even though “order SIMs through our Web API” still means “go and swap them out, all 50,000 of them”.

OFCOM reckons whitespace spectrum will be available next year for IoT applications.

And you can see just how important manufacturing companies are becoming in telecoms via the IoT space from this story: General Motors files a comment with the FCC arguing that mobile operators should be excluded from net neutrality.

EU/China dispute over; FCC’s big move on deployment; PSTN shutdown; missing operators of the Caribbean

In regulatory news, the telecoms equipment trade dispute between the EU and China has been settled, and the EU has withdrawn its threat to impose a punitive tariff in exchange for a new “mechanism” to address its concerns.

The FCC has issued a draft regulation on the 600MHz auction, which strengthens the rules intended to help small “designated entities” acquire spectrum, while also permitting them to lease any spectrum they acquire to major operators. Meanwhile, two of the commissioners have been re-appointed for another term.

In another FCC announcement, the regulator has moved to make infrastructure roll-outs easier. If nobody objects within 60 days of an application for permission to deploy a cell site, it will be automatically granted, reduced from 90 days before. Further, the FCC carves out wireless infrastructure from various local-level reviews and reserves it for federal oversight.

Sprint and Comcast’s quad-play partnership has ended up with Sprint paying Comcast $7.5m to settle a dispute about patents relating to a unified-comms product.

Long-time customer activist Bruce Kushnick marks up a Time Warner Cable bill to point out how many fixed fees are left out of the prices on their adverts.

Benoit Felten blogs that Belgacom is using its trial deployment of vectoring DSL to switch off the PSTN, and wonders why neither the Australian or New Zealand NBNs tackled the issue.

Indian regulators want to refarm the 800MHz band for GSM. Not surprisingly, the remaining CDMA operators aren’t happy.

And here’s something interesting. Back in 2008, when the wheels finally began turning to let Free Mobile be the fourth French operator, licences were also issued in three French overseas territories, Guyane, Guadeloupe, and Martinique. Somehow, none of the licensees have managed to roll out any coverage at all. ARCEP is now investigating. All the licences went to Curacao’s incumbent telco, which also seems to be in a spot of trouble at home.

Apple plays the soft-SIM card; more shenanigans at GT Advanced

We wouldn’t be surprised if the regulators end up being involved in this story. Apple’s iPad Air 2 has finally done it, and gone soft-SIM. The secure element is hardwired into the device, and the software layer decides which network it connects to. In theory, at least, this means that users can just pick a network. However, this also means they can pick a network, but only on Apple and the networks’ terms - you have to rely on some Apple API and the networks’ provisioning systems, rather than just being able to physically swap the SIM, and you’re done as Amazon would put it. Experience in the CDMA world doesn’t really suggest that getting rid of hard SIMs means free portability.

The obvious use-case is roaming; clearly the carriers (AT&T, T-Mo USA, Sprint, and EE) who are taking part would rather sell iPads and pick up inbound roamers than pull in outbound data roaming charges. After all, iPads are data-centric devices and international travellers are likely to either rely on WiFi or grab a local SIM, as the phone number is a very secondary issue - espcially when FaceTime and Messenger are available.

A pro-Apple take is here; TechCrunch coverage is here; TelecomTV has some more here.

A sceptical take is here:

What worries me is that we are taking something which is very much in the control of the user (e.g. moving a card from one device to another) and moving it into the cloud of carrier internal processes and systems.

As I mentioned before, people like to bitch about their carriers. But, for all the gripes about their network and signal people have most of the real painful issues arise when trying to deal with their Business Systems. The stuff that provides the pipes (generally) works and when it doesn’t its either down to underinvestment/overselling or its a fault (which happens), however the billing, provisioning and customer management systems cause users real pain

Of course, if Apple had its own MNC it could do its own OTA provisioning.

Meanwhile, another GT Advanced exec sold a boatload of stock before telling anyone that the artificial sapphire had been rejected by Apple. What a mess.

ALU: real infrastructure has towers; what on earth is “4.5G”? VZW dark fibre backhaul; 24GHz

Marcus Weldon, the current Alcatel-Lucent CTO, is pouring cold water on Internet drone/balloon/whatever proposals, saying:

“Real infrastructure is essentially deployed on base stations, towers and small cells, which are attached to real backhaul and real power,” said Weldon. “[Technology] has to have permanent characteristics to be legitimate infrastructure as opposed to niche infrastructure.”

He also says that the real disruption is coming from hetnet and SDN, and that’s where he’s pointed Bell Labs’ efforts since he’s added the storied title of President, Bell Labs to the CTO job.

His opposite-number at Huawei, meanwhile, is talking about “4.5G”, which will apparently be with us in 2016-2020, although another Huawei exec says:

There is no definition of 4.5G

Fortunately there’s the 3G, 4G, 4.5G, and 5G Wireless Blog to clear this stuff up. Zahid argues LTE-A is really 4G, previous LTE releases were 3.9G at best, and 4.5G might be virtualised radio networks and WLAN integration. Here’s a chart from Alcatel.

4.5G_ALU_Huddle.png

As he points out, there is a lot of WLAN spectrum up in the 5GHz band. This is a point we got at in our recent Winning Strategies: Differentiated Mobile Data EB with regard to Free Mobile - their spectrum position looks utterly different if you include the vast 5GHz resource.

Screenshot from 2014-10-20 14:18:05.png

On a theme from that EB, here’s a good FierceWireless story about Verizon Wireless’ huge and increasing investment in dark fibre to its base stations and the strategic dilemma it presents for some of the carriers they buy from. One carrier that doesn’t mind at all is Centurylink, which is making a speciality out of fibre-to-the-tower. This week, they requested FCC clearance to turn off their ATM and frame relay networks. Apparently they can’t get the parts any more.

We also pointed out just how much Vodafone UK needs carrier-aggregation to catch up with the network leaders, EE and 3UK. Here it comes; the LTE-A upgrade begins rolling out in Birmingham, Manchester, and London.

Dave Burstein tends to be very bullish on fancy DSL technologies (vectoring, bonding etc), but he has harsh words for BT and Huawei’s supposed gigabit DSL trial. It’s not actually G.fast, and it’s not a gigabit either, and BT can’t deploy it due to interference with their VDSL network. Oy.

The FCC is interested in 24GHz cellular, according to a notice. Ars Technica points out that indoor coverage will be really challenging, but of course you could always use it for backhaul in something like this.

OpenBTS has 3G. Qualcomm spends big to buy Cambridge Silicon Radio, $2.5bn worth.

And here’s a detailed presentation on that full duplex radio technology we covered a little while back.

Free-T no deal; VZW edges back from Edge; Vodacom 14% up for sale; ugly China Mobile provisionals

Iliad has dropped its bid for T-Mobile USA after the increased bid didn’t see any increased interest from DTAG. In the end they went up to 67% of the company and $36 a share, but it wasn’t enough.

Last week saw Sprint and AT&T hike their data bundles massively, essentially slashing prices without saying so. Verizon Wireless followed, but they’re still keeping out of the price war - they matched the move with changes to their Edge quick-update plan, requiring customers to pay off 75% of the device price before they get any more shiny gadgets, and extending the payoff period to 18 months from 12 in order to keep the monthly bill roughly constant.

Telecom Italia’s CEO doesn’t think TIM Brasil is in any hurry to make a deal, arguing that it can hold its market share for up to five years while playing hard-to-get. Meanwhile, GVT, which is in the process of being sold to Telefonica, is planning to spend $400m on fibre-to-the-home rollouts in 2015 and has cancelled further VDSL rollout, and Oi has been adding to its backbone network between Sao Paulo and Fortaleza.

The government of South Africa is thinking about selling its $2.3bn, 14% stake in Vodacom, apparently to spend it on their electricity utility.

Ouch. China Mobile’s net profit for the first 9 months of 2014 was down 9.7%, apparently due to stronger competition from both carriers and OTT providers.

Telenor has closed on the deal to take full ownership of its Indian opco. Meanwhile, TeliaSonera’s Q3 was rather poor as the writedowns in central Asia bit.

Orange and DTAG are thinking about an IPO of EE again. A value of £12bn is mentioned. Mobistar gained subscribers for the first time in ages. Sky is in talks with EE, O2, and Vodafone about being an MVNO.

Google: shaky Q3s, Android 5.0, new media box, $1bn ContentID

Google has Q3 results out, and its net profits were down 5.4% year-on-year at $2.81bn, although revenue was up 20%. Clearly margins are a problem; clicks were up 17% but cost-per-click was down 2%. At the same time, non-advertising businesses’ revenues were up 50% - but Google won’t say if they’re profitable or not.

Business Insider, meanwhile, reckons the Android Silver initiative, an effort to get vendors and carriers to put stock Android in the foreground of their offerings, isn’t working out.

It’s not as if they’re idling, though. Android 5.0 is out, along with the latest Nexus phone and tablet, deploying more of the new Material Design UX, new APIs, and power saving improvements. The tablet is coming from HTC, while the phone is from Motorola.

There’s also a totally new Nexus product class - the Nexus Player, an Android streaming box comparable to a Roku or Apple TV that also acts as a games console, powered by an Intel Atom CPU. The pricing ($99) is sharp, and the feature set considerably bigger than the Chromecast’s. It’s the first device to run Android TV, and is being manufactured by Asus.

And the ContentID program, which identifies copyrighted material on YouTube and places ads next to it, so the rightsholder can earn revenue share, has paid out $1bn to content owners so far.

Twitter is integrating the Soundcloud player into tweets, presumably to let sponsored music be distributed in the stream.

The French government is trying to get Alibaba to set up in France.

Mobile edge computing; too fast OpenStack; IBM exits chips

ETSI has a new working group, which aims to standardise “mobile edge computing”, aka building CDN nodes and application servers into the radio access network. Vodafone, NTT DoCoMo, Intel, IBM, Huawei, and Nokia Networks are on board. It’s probably worth noting that Intel’s “smart cell” work, as well as Nokia’s “liquid apps”, fit in well here.

Dan Rayburn does a rundown of how app-acceleration services work for SaaS vendors. However, now almost everything is built as a distributed system, you might well wonder about bringing the nodes and datastore shards closer to the user.

The latest version of OpenStack, codename Juno, is out, but some customers are concerned that the pace of releases is too fast and they’ve only just finished productising one release when the next drops.

OVH is building a specialised big data cloud using OpenStack and IBM Power8 servers. IBM, meanwhile, is finally getting out of the chip-making business.

How do you tell a mega data centre from a massive one?

A fascinating case study in AWS scaling.

Telefonica puts WebRTC video into Firefox

Mozilla Firefox will have a built-in video chat feature in the next beta, thanks to support from Telefonica, who are contributing the Tokbox WebRTC engine they acquired and presumably hosting servers as well.

Here’s a WebRTC peer-to-peer CDN app specifically for mapping.

The BBC has started a dedicated Ebola channel on Whatsapp.

And Whisper, the anonymous social network? Turns out it couldn’t be less anonymous.

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October 15, 2014

Enterprise Mobility: Digital Asia 2014


In the age of the smart device, organisations are adopting Enterprise Mobility to transform how they support and engage employees, customers and business partners.

STL Partners’ recent research, has revealed that MNOs are well placed to support their business customers’ Enterprise Mobility ambitions. MNOs have a “credibility advantage”: enterprises expect Telco’s to be able to support them. However, most operators are a long way from seizing this opportunity.

We’ll be exploring this topic further as a focused session at Digital Asia 2014 (2-4 December, Bali), the session aims to enable Enterprise Mobility strategists, planners and practitioners to brainstorm and share best practice. The session will include presentations and break-out groups focusing on:

  • What strategy and roadmap should MNOs be putting in place?
  • Which resources and organisational changes will be required?
  • What should the product portfolio look like?
  • When and how should an operator build / Buy / Partner?

    This focused Enterprise Mobility session includes Monty Hamilton (Director Digital Innovations, Telstra), presenting on how Telstra have adopted enterprise mobility solutions within Telstra to turn their operations into a more efficient organisation, leveraging digital channels and touch-points with customers.

    To register your interest for the focused session ‘Enterprise Mobility’ at Digital Asia 2014 (2-4 December, Bali) please click here. To find out more on the event please visit www.onfuture.com/Digital_Asia2014.

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  • CSPs/Telcos: Is your organisation transforming quickly enough?


    If you work on behalf of a Communications Service Provider (CSP), we would like to ask you to participate in a research programme we are undertaking on transformation.

    Most Communications Services Providers (CSPs) around the world have embarked on the journey to new (Telco 2.0) business models via the development of ‘digital services’.

    As part of STL’s support to CSPs on this journey, we would like to ask you to contribute to a questionnaire on transformation. It will take only 10 minutes and focuses on 3 big issues:

    • How important should digital services be for CSPs?
    • What is the optimal level of investment in digital services and how close are CSPs to this at present?
    • What are the biggest barriers to successful implementation of digital services and how effective are CSPs at overcoming these barriers?

    - Access the survey here -

    Please note:

    1. The survey will take only 10 minutes to complete.
    2. Your individual answers will not be revealed to anyone, ever.
    3. A summary of the valuable results will be shared with you.

    You can contact us here if you have any questions about the survey. We will also be covering CSPs’ digital transformation at Digital Asia 2014, 2-4 December, Bali, and at OnFuture brainstorms in Arabia, Europe and the Americas.

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    October 14, 2014

    Cloud Services: New Telco 2.0 Research stream iniatated; plus Cloud Services at Digital Asia 2014 speakers include; CEO Telkom Sigma, COO Telstra & Head of Cloud APAC Google


    Cloud is both disrupting and generating opportunities for Enterprise and Telco businesses. With the goal of accelerating the adoption of cloud services by telecoms operators whilst building on several years of ground-breaking Telco 2.0 research, we are initiating the Cloud 2.0 Programme, a set of activities that bring together leading thinking, practice and senior practitioners from telecoms operators, technology companies, and other industry facilitators.

    The programme acts as means to transform and develop operational agility and to provide external enterprise cloud propositions. Led by Bob Brace, Senior Analyst, STL Partners/Telco 2.0 (formerly Head of Cloud at Vodafone), the programme will comprise a stream of dedicated research reports, sessions at our executive brainstorms, and other networking and information sharing activities.

    Future reports in this stream include

  • The role of telcos in the cloud in 2015
  • NFV: Will it live up to the hype?
  • Telstra: a telco cloud case study

    The first session at our executive brainstorm (with networking opportunities) will be held at Digital Asia 2014 (2-4 December, Bali) covering how Cloud is shifting IT from playing a supporting role to being a core driver of business success. Senior Telco and industry Cloud specialists will explain how they are using cloud to differentiate in their markets, drive operational success and agility, and how cloud computing is now disrupting the networking and security markets.

    Key themes covered in the session include:

  • How Cloud has disrupted the Enterprise
  • Virtualisation affected computing first and now the network - what this means for Enterprises and Telco’s
  • How can Telco’s differentiate with cloud?

    Stimulus speakers and panellists include:

  • Bob Brace, Senior Analyst, STL Partners
  • Judi Achmadi, CEO, Telkom Sigma
  • Nathan Bell, COO, Telstra/Telkom JV
  • Cory Franzmeier, Head of Cloud APAC, Google

    To register your interest for the focused session ‘Cloud Services’ at Digital Asia 2014 (2-4 December, Bali) please click here.

    We are also initiating coverage of a new research programme on Cloud, and we’d really appreciate your input here. here


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  • October 13, 2014

    Nokia vs. Ericsson; Akamai in China; BRIC special - 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.

    Google’s first billion in India; Xiaomi hires Googler; spectrum rush; Reliance on your children

    Google says it expects to make $1bn of revenue in India in FY 2015. This money is coming basically entirely from advertising and e-commerce services, where Google seems to have broken through really well. It’s probably no accident that India is the priority for their Android One low-cost stock-Android devices.

    Chinese ODM Xiaomi has, meanwhile, poached an ex-Googler to run its Indian business. Jai Mani worked on Google Play and Analytics before being recruited by Xiaomi’s Hugo Barra, himself an old Googler.

    Vodafone India, having bought a boatload of spectrum earlier this year, has asked the Department of Telecoms to release it quicker, and now so has Airtel.

    And Mukesh Ambani, chairman of Reliance and India’s richest man, has found the ideal candidates to join the boards of Reliance Jio Infocomm, their mobile operator, and Reliance Retail Ventures, their retailing holding company - two of his children.

    Ericsson vs. Nokia Broadband Fight!!; LTE R13; O2 SON; Gigabit Cable

    Between Ericsson, Qualcomm, and SingTel, they reckon they’ve demonstrated the first LTE carrier aggregation between FDD (frequency-division duplex) and TDD (time-division duplex) spectrum, making it possible to use cheap unpaired or even free unlicensed spectrum in parallel with the licensed sort. Specifically, they’re keen on using low-band FDD uplink spectrum in tandem with a big block of TDD. The trial, which used a Snapdragon 810, is claimed to have achieved 260Mbps of throughput.

    But wait. First, you say?

    Nokia Networks’ official blog denies it, claiming that Nokia demonstrated the technology first, in September, during a trial with China Telecom. Fight! Fight! Anyway, Nokia has a €760 million contract with China Mobile this time, for TD-LTE and GSM radios, applications, OSS, and Enhanced Packet Core kit.

    China Mobile will also be cooperating with DTAG on connected cars. Specifically, it looks like China Mobile will provide service to DTAG’s connected car platform and also distribute it in China.

    Qualcomm seems to be increasingly keen on the device-to-device functionality in recent LTE releases, known as LTE Direct, as a localised ads/beacon solution. They seem to have brought Facebook on board, too.

    Speaking of LTE standards, 3GPP has published the working group roadmap for Release 13, and they are adding a lot of new features, notably M2M enhancements and WiFi-like LAN integration, as well as more device-to-device and public-safety functionality. The 3G & 4G Wireless Blog has a cautionary note, though: more antennas may not always improve your signal-to-noise ratio.

    ImpactOfMIMOinLTEcommercialNetwork_SRG.png

    In the UK, the government wanted a “quick fix” for rural coverage after the prime minister had a dropped call. So far, the £150m budget has bought exactly two new cell sites. And a survey shows that surprisingly few (8.1%) British consumers take fixed and mobile service from the same provider.

    Meanwhile, O2 UK is deploying Cellwize, a centralised self-organising network (SON) solution, to help it manage its Cornerstone infrastructure-sharing project with Vodafone. A big issue here is backhaul, which as it happens is also what Telenor’s CTO says is the biggest problem they face in deploying small cells, in the following video.

    In the fixed domain, BT and Huawei claim to have achieved a record level of spectral efficiency on a fibre-optic link, operating at speeds of 3Tbps. More practically, Cox Communications has started rolling out gigabit connectivity for $69.99/mo, making it the first gigabit cableco. To begin with, they are pulling fibre from their distribution network until DOCSIS 3.1 becomes available later this year.

    Telia is planning to spend $1.25bn on FTTH in Sweden over the next three years, pushing population coverage to 42% and also providing much more mobile backhaul.

    This is critical, because our latest Telco 2.0 Executive Briefing note identified Telia as a carrier that has fallen behind its main competitor, Telenor, after Telenor invested heavily in fibre-optic backhaul.

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    Elsewhere, giga-ISP Hyperoptic has added Newcastle, Birmingham, Nottingham, and Sheffield to its deployment plans, and started offering its service as an upgrade in some London hotels, perhaps a smart way to sign up new customers.

    And Belkin home routers stopped working, after a server they contact to check if they’re online failed. Without it, the devices automatically route all Internet connections to their configuration page so the user can “fix” it.

    Akamai deploying with China Telecom; AWS supports containers; Ubuntu for Telcos

    China Telecom’s cloud division, CT Cloud, has announced a strategic partnership with Akamai, to deploy Akamai’s CDN and Edge Computing into their data centres within China (and therefore inside the great firewall).

    Everyone loves containers these days, since Docker broke through as the leading DevOps solution for managing servers. Amazon Web Services is unsurprisingly keen to point out that EC2 supports containers and Docker quite deeply.

    Meanwhile, here’s an explainer about CoreOS, the Linux distribution specifically designed to be the substrate for Docker containers.

    HP (or rather, Hewlett Packard, because HP is now officially the printer company) experts talk about their NFV strategy.

    Canonical has a whitepaper out on OpenStack and Ubuntu for carrier NFV projects.

    And German SIP provider Sipgate has a rather impressive cloud-MVNO offering with strong Voice 2.0 features.

    Oi! You! Resign! Bava out; TI doubles down on Brazil; Slim to sell more in Mexico as Huawei piles in

    Oi’s CEO Zeinal Bava has resigned as the merger with Portugal Telecom becomes increasingly entangled with Europe’s economic crisis on one hand, and the coming realignment of Latin American telecoms on the other. First there was the one where PTel lost almost a billion euros of the companies’ joint treasury in the failure of Banco Espirito Santo. Then, the Brazilian market got stirred up and Oi looks like either a consolidator or perhaps a target back home. Now, Altice Group is sniffing around with a bid for PTel alone, valued at about €7bn. There’s even a rumour about Vodafone getting involved, probably for PTel’s extensive fibre network.

    In Brazil, last week, TIM hired bankers to prepare a bid for Oi. Now, Telecom Italia has announced that it’s going to invest an additional $950m in TIM. It will be interesting to see whether this really does get spent on CAPEX or whether they are putting financing in place for something.

    Last week we learned that Mexico’s new regulator is forcing Carlos Slim to sell his mobile assets on Mexico’s east coast. This week, Slim told Bloomberg that he might go further and sell much more.

    Three different operators - Nextel, Telefonica’s opco, and Slim’s Telcel - are all hiring Huawei to deploy LTE around Guadalajara and Merida, a total of 10,000 sites.

    Orange may be considering floating its African operations on the stock market and re-investing the money in its European networks. However, it also says it won’t go higher than €3.4bn for Jazztel.

    FCC - back to PSTN transition; a heavy docket ahead; no more Euregulation on PSTN; virtual LLU OKd

    The FCC is pivoting back to the issue of how the US PSTN is going to transition to an alll-IP system. Harold Feld writes that Chairman Wheeler seems keen to write the principles in the so-called network compact into regulation, although the remaining ILECs want to be exempted from essentially all of it even before the transition happens.

    Sprint and T-Mobile, meanwhile, want the FCC to look into AT&T’s string of small 700MHz spectrum purchases, and to say how much spectrum at a time is enough to trigger an FCC review. Here’s a rundown of open issues on the FCC docket before the 600MHz auction can go ahead, and a summary of the most recent FCC roundtable.

    And AT&T has been fined $105m for letting dodgy third party ringtone services bill its customers.

    AT&T also announced it was doubling the data allowances for business users, which pushes some of the bundles up to 400GB of shared data. Sprint matched it up to 200GB.

    The European Commission has withdrawn from regulating fixed telephony on the grounds that volumes are dropping and it’s not that important any more. They also announced that virtual unbundling is considered as good as the real thing. ThinkBroadband discusses this, pointing out that independent ISPs invested heavily in hardware for local loop unbundling, which has now lost much of its value.

    ARCEP has published details of its pricing consultation on access to FTTH in the so-called very high density zones.

    OFCOM, meanwhile, provides details of UK whitespace trials. We especially like the one that streams meerkats. They also fined 3UK £250,000 for failing to handle complaints.

    Apple’s $578m sapphire investment goes nowhere; iPhones and WebRTC; HTC selfiephone; Samsung stock, dross or gold?

    So remember when Apple pre-funded a huge factory in Arizona that was going to make artificial sapphire screens for its smartphones, with $578m of its cash? Sure you do. GT Advanced Technologies filed for bankruptcy this week, after the sapphire was nowhere to be seen in the new iPhones. In the filings, they want to void the contract with Apple and shut down the factory.

    Apple is saying nothing, but it seems that the GT plant could produce enough for 100 million phones a year plus 20-30 million watches, but for some reason Apple backed out of the deal, perhaps because of problems machining the sapphire to shape further along the line or perhaps because of quality issues at GT, and withheld the last tranche of the payment. It also looks like the GT CEO sold a block of shares in the company the day before the announcement.

    Meanwhile, the new iPhone is going to give another twist to the debate about audio codecs in WebRTC, as it ships with H.265 installed for FaceTime, just when Google-championed VP9 looked to be winning. And here’s a look at Apple’s engagement with the fashion industry ahead of the watch launch.

    HTC has a new smartphone with the main camera pointing at the user. They also have a rather nice action camera with an ultra-wide lens.

    Samsung’s Q3 guidance was pretty lacklustre. This has triggered an interesting debate. Asymco Horace reckons there are a lot of small companies that used to be big companies and this is the beginning. Barrons points out that Samsung’s cash and investments alone make up 40% of the company’s market value and the memory chip business on its own might make $10bn in profits next year, and therefore Samsung shares are a huge recovery play.

    EE free-hee tee-vee; Netflix slaps a premium rate on 4K video; iPad mag publisher gives up

    EE is offering a TV product free if you take their broadband, like they do in France. The device is from French manufacturer Netgem, and includes four broadcast tuners and 1TB of storage. You get 70 TV channels and a range of video-on-demand services pre-installed.

    Netflix is offering 4K ultra-high definition versions of some of its content, but only if you pay a premium price. So far there isn’t much.

    Money transfer, by tweet.

    And a top iPad publisher quits and explains why.

    T-Mobile UK’s lawful-intercept tool is called Police Liaison Onscreen Database or PLOD. Was the rash of “stingray” IMSI catcher stories mostly publicity for a hardened phone maker? Cyanogenmod uses buggy sample code from Oracle. Analysing networks data to monitor Ebola.

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    October 8, 2014

    Digital Disruption, Innovation and Transformation: Digital Asia 2014


    For several years the telecoms industry has enjoyed the benefits of broadband growth. Now, just as this is slowing, alternate communications solutions threaten to disrupt the industry’s core voice and messaging services.

    However, it is not all bad news: there are opportunities for operators to develop new sources of value and many are embarking on this route. We’ll be exploring this topic further at Digital Asia 2014, (2-4 December, Bali) and are initiating coverage of a new research programme on Internet-Driven Disruption, focusing on what changes need to be made by the industry to deliver a new business model including:

  • New strategies for creating and dealing with ‘digital disruption’
  • Key digital innovations and trends
  • New operational models and metrics - learning from the internet disruptors

    Stimulus speakers and panellists at the focused Digital Asia 2014 session include:

  • Chris Barraclough, MD & Chief Strategist, STL Partners/Telco 2.0 Initiative
  • Indra Utoyo, Director of Innovation & Strategic Portfolio, Telkom Indonesia
  • Gil Genio, COO Business & International Markets & CSO, Globe Telecom
  • Giles Corbett, Head of Libon, Orange

    To register your interest for the focused session ‘Digital Disruption, Innovation and Transformation’ at Digital Asia 2014 (2-4 December, Bali) please click here.

    We are also initiating coverage of a new research programme on Internet-Driven Disruption, and we’d really appreciate your input here. here

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  • October 6, 2014

    FCC, Euroregulators, BT, TIM, Altice, ARM, HP: 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.

    FCC action on 600MHz, whitespaces; Comcast-TWC on hold; Kroes lambasts carriers; GSMALeak

    The FCC has issued a new draft-NPRM on the future licensing basis for cellular spectrum, suggesting that it should be more geographically based. It also proposed changes to the Part 15 rules that govern radio interference, in order to let unlicensed operators use spectrum in the 600MHz band that had originally been assigned as guard bands. Harold Feld at Public Knowledge seems keen. Speaking of him, here’s a detailed post from his personal blog on how the FCC can solve some of the problems associated with Title II regulation by “forbearing” from implementing parts of it.

    And it announced that it had “stopped the clock” on its consideration of the Comcast-TWC merger.

    Under the usual timetable, the decision was expected by January 6th, but it turns out that FCC staffers found that some of the filings from Comcast and TWC were “incomplete”, and a new 850-page submission from Comcast needs looking at before anything goes further. Also, DISH has put in an official petition for a delay.

    DISH is taking part in the AWS-3 spectrum auction, as part of a joint bid with two investors, as are all the major carriers and a clutch of rural operators (Snake River Cellular, anyone?). The two investors are interesting - one of them (SNR) is owned by private-equity fund BlackRock, while the other is actually the Satellite Cowboy himself, Charlie Ergen, a financial investor called Catalyst, and an “Alaska native corporation”. Seems legit, as they say.

    After being criticised by FCC Chair Tom Wheeler, Verizon Wireless has changed its mind about throttling LTE users at the 95th percentile. And, just to round off a busy week for the regulators, Marriott has been fined $600,000 for jamming WLANs around one of its hotels. The point was to make people who would otherwise use a 4G hotspot or smartphone tethering fork out for the hotel WiFi.

    Neelie Kroes is standing down as the EU’s Regulator Number One, and she marked the event with a speech to ETNO in which she took issue with most things about that organisation.

    And when you ask me about competition from over-the-top players: yes, a changing market impels us to examine our framework. But I am also clear: the current situation of European telcos is not the ‘fault’ of those OTTs.

    Today, all EU homes have broadband coverage; 76% have a connection; almost half can access it on their mobile. They are demanding greater and greater bandwidth, faster and faster speeds, and are prepared to pay for it. But how many of them would do that, if there were no over the top services? If there were no Facebook, no YouTube, no Netflix, no Spotify?

    In fact: OTT players are the ones driving digital demand — demand for your services!

    It goes on in much the same vein. But you can see how the lobbyists would get on your nerves after a while. The GSMA’s strategy to campaign against European net neutrality regulation has been leaked and it’s priceless:

    “Vodafone in particular wanted to pressure MEPs and national leaders into believing that net neutrality laws would stop action against paedophiles”

    Elsewhere, France has set a date for the 700MHz auction - November 2015, sticking a target of €3bn on the wall. Ukraine has decided on the terms of its 3G auction, but the only specific condition available is that you mustn’t be Russian.

    Adrian “Revk” Kennard has won his complaint against Virgin Media for describing their cable service as “fibre optic”. Ironically, OFCOM reports that UK cable subscribers are getting better speeds than “fibre”, which implies that OFCOM is describing even BT’s DSL product as “fibre” because there’s fibre in there somewhere.

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    If this RF technology works, though, it won’t matter because the cableguys will be able to do symmetrical speeds and the mobile operators will have double their existing spectrum.

    BT’s Free Mobile clone delayed again; Free in for more T-Mo shares; price war

    BT, now the proud possessor of a chunk of 2.6GHz spectrum, has been promising to launch a mobile network in it for some time. What they’re planning seems to be a clone of Free Mobile, with much of the traffic carried on their WLAN hotspots, including the home-routers (which are already shared under the BT-FON deal), more of it carried on home-based femtocells, and a fall-back to wholesale MVNO service.

    This week, we learned that they are having trouble making their preferred solution work, specifically hand-off between their 4G cells, the WLAN home hotspots that are expected to do the bulk of the work, and EE’s 4G network, which is providing the fall-back overlay MVNO. Also, they’re having trouble with inter-cell interference between femtocells. They might launch as a MVNO-plus rather than a true carrier, but the more traffic has to be offloaded to EE, the worse the economics become. So, the project is sliding right towards next financial year…

    Speaking of Free, they may be making one more attempt to close a deal for T-Mobile USA before the self-imposed mid-October deadline runs out. It looks like their roadshow succeeded in signing up KKR to put in about $5bn of new money, and rather than upping the offer, they’re going to use it to buy more shares, leaving DTAG with more cash and less exposure to the combined company.

    AT&T, meanwhile, has doubled the data allowances it offers to new customers and customers who renew. That is of course equivalent to cutting the price of data by 50%, jumping into the price-war with a vengeance. It didn’t escape notice that AT&T has been throttling speeds for customers who have managed to keep their unlimited data plans, in the name of reducing “congestion”, but this congestion doesn’t seem to be a problem for new customers who sign up for as much as 100GB a month.

    Verizon Wireless immediately added more data to all bundles over 12GB, which might be handy, as it turns out that VoLTE video is charged for as a call and also billed as data. Sprint offered even bigger boosts to the bundle, and booked $160m in costs ahead of another round of job losses.

    Brazil: 700MHz auction fails, TIM bid for Oi, Altice bid for PTel

    Brazil’s 700MHz auction was a bit of a flop this week. Officials had been hoping for around $3.3bn, but got $2.3bn after Oi decided to sit this one out and the other three mobile operators only just pushed their bids above the minimum. Because one licence didn’t sell, the regulator will have to refund the carriers some $340m into the bargain.

    It’s perhaps no surprise that the bidding didn’t take off, given the turmoil in the Brazilian mobile market. TIM Brasil has retained Brazilian investment bank Bradesco to look into the possibility of a bid for Oi, while Oi is looking at buying TIM.

    Oi, of course, is partly integrated with Portugal Telecom. This week, Altice Group, the parent of Numericable and now SFR, was rumoured to be putting together a bid for PTel and/or Oi.

    TIM Brasil is, of course, the prize in the whole story around Telecom Italia. This week, the TI chairman said that Sol Trujillo “does not exist” for TI, after the ex-Telstra CEO was reported to be bidding for the carrier.

    Something similar happened after TI was reported to be buying into Metroweb, an independent fibre deployer jointly owned by Fastweb and the Italian state bank CDP. Both Fastweb and CDP denied any knowledge.

    Telefonica, meanwhile, having sold out of TI, reported that it has lost mobile subscribers for the 39th straight month, and that Orange has overtaken Vodafone.es for the first time since they launched in 2005.

    Vodafone has bought Qatar’s national fibre network. And Etisalat is selling its Tanzanian network.

    Orange gets a digital-home solution; TeliaSonera ups CAPEX, in IoT among others; ARM’s IoT kit

    Orange’s CEO, Stéphane Richard, has announced a “connected era of digital services”. More concretely, Orange joins Telefonica in launching a new connected home product, “Homelive”, charged at €9.99/mo, which supports the usual range of sensors. They also mentioned their mobile payments offerings, and Afrimarket, a remittance app that lets you buy stuff for someone in the old country.

    TeliaSonera is going to substantially add to its CAPEX, specifically in M2M, more fibre in Sweden, and more mobile data capacity in its Eurasian networks. The data share of revenue in the Eurasian markets is half what it is in Sweden. They expect M2M revenue to quadruple by 2018, reaching a billion Swedish kroner (that’s about £86m).

    ARM Holdings is going to release a free OS for Internet of Things devices in Q4. The operating system runs on their Cortex M7 chip, a microcontroller that approaches the power of a “proper” processor. The release also includes a new device-management server.

    The FT discusses the fight for the IoT market.

    HP splits up; Samsung’s $14bn super-fab; smartphone patents considered pointless

    Hewlett-Packard is going to split into two companies, although sadly they won’t be called “H” and “P”. The plan is to spin off the division that makes PCs, plus the one that makes printers, into a new entity, while servers, software, and enterprise services stay in the existing company. Meg Whitman would be chair of the new company, and CEO of the old one, while Patricia Russo (ex-Lucent CEO) will be chair of the old company, and the current boss of the PC business will be CEO of the new company. This is of course the plan Leo Apotheker put forward in 2011.

    Meanwhile, their first ARM-based machine in the Moonshot microserver product line is out, and among other things they’re offering it as a platform for telecoms NFV applications.

    Ahead of Samsung’s Q3 results, expectations are pretty dire, with many analysts expecting the end of their huge smartphone earnings. That said, after several years of brutal price war in the semiconductor industry, we’re down to three major suppliers of DRAM and prices are stabilising. Samsung is determined to take full advantage, building an absolutely enormous chip fab in Korea at an expense of $14.7bn in CAPEX.

    Quietly, HTC is doing better, edging into profit for the second quarter in succession.

    FOSS Patents reviews 222 patent disputes in mobile and concludes they are essentially all pointless, with only 9% of the total coming to any particular decision and not many of those yielding significant money.

    Here’s a review of Amazon’s Fire Phone. It is not encouraging.

    Ultimately, the Amazon Fire Phone is a deeply frustrating and woefully misconceived handset. Apart from being a cynical money-making machine for Amazon, its clunky OS is difficult to use and offers no benefit over Android or iOS. The Dynamic Perspective display is a needless gimmick and its Firefly camera isn’t good enough to rival services elsewhere. It’s also expensive, even if you do get a free year of Amazon Prime thrown in as a vague sweetener. It’s not broken per se, but you should avoid this at all costs.

    And Google Chromebooks now get the streaming version of Photoshop.

    AT&T offers VPN in AWS’s cloud; BT, NTT join Cisco’s “intercloud”; chaos monkey vs. Xen bug

    AT&T is offering its Netbond VPN product as an option for Amazon Web Services EC2, in the same way as it does with IBM’s cloud products.

    Cisco, meanwhile, has some more signups for its “intercloud” interoperability project. BT, DTAG, NTT, and Equinix have joined.

    IBM, having sold the x86 server business to Lenovo, is investing more in its Power8 chips.

    Netflix reports back on the Xen virtualisation bug, the big Amazon EC2 mass reboot last week it caused, and the role of their “chaos monkey” exercises in recovering from it.

    James Hamilton discusses what could be done with the waste heat from big data centres.

    Ericsson open-sources Bowser; Tuenti is an MVNO; new financial IM network

    Ericsson has released both its WebRTC browser and the whole of its WebRTC implementation as open-source software.

    Chris Kranky thinks Microsoft is backing away from its own alternative to WebRTC and concentrating on getting its native implementation right.

    Tuenti, the Telefonica-backed social network, is launching in Peru as an MVNO. There’s a bit more detail on the transition to an MVNO here.

    Symphony is a finance-focused instant messaging platform that aims to compete with the systems built into things like Bloomberg and Reuters. It’s got 500,000 pre-signups, and $66m in venture capital.

    NoJitter argues that Talko is right to avoid assuming that video is always better than voice. There’s some more comment here.

    Yahoo! buys $20m of Snapchat; YouTube execodus; Google clickthroughs; Redbox Instant, the end

    Yahoo! is buying a chunk of Snapchat, which will apparently “value it at $10bn”. This is going some - Yahoo! plans to put $20m or so into Snapchat’s next funding round.

    YouTube’s VP of content, Tom Pickett, is off. He’s the latest in a string of YouTube execs who have either left Google or moved over to Google Fibre, in all, about 12 have gone.

    Here’s some data about clickthroughs from the Google search page. It’s still very, very important to be on page one, but it looks like being top-2 is less crucial than it used to be.

    Verizon’s Redbox Instant video streaming service shuts down. Amazon adds more video streaming features to Elastic Transcoder. And this Quora answer is interesting on why and how IP multicast didn’t take off.

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    October 1, 2014

    Dealing with Disruption: Effective Strategies


    Disruption is now widely spread and relatively well recognised throughout the global economy, but dealing with it is another matter. This challenge is central to the agenda of strategists and decision makers in every industry, particularly among Telecoms, Media, Technology, Retail, Finance, and Consumer Brands. What are the key factors, lessons and strategies for success in the increasingly dynamic and complex digital ecosystem?

    We’re developing a major new research stream on ‘Dealing with Disruption’ to help strategists and decision-makers develop successful new approaches to defending, evolving and growing their businesses, and would very much like your input via the short online survey here to help us shape the agenda. We’re also exploring disruption in Telecoms, Cloud, Big Data, Commerce, Content and Enterprise Mobility at Digital Asia 2014, Bali, 2-4 December. To find out more, or if you’d like to join us, please email contact@telco2.net.

    Playing ‘The Great Game’

    Back in 2011, when we published Dealing with the ‘Disruptors’: Google, Apple, Facebook, Microsoft/Skype and Amazon, the key driver was the desire for telcos to a) recognise the threat from, b) understand the drivers of, and ultimately c) develop strategies to deal with the wave of impending disruption from so-called ‘Over The Top’ (OTT) and Internet-based services. One output of the report was the outline of ‘The Great Game’ - the battle for key areas of the digital economy, and how the players were using disruptive strategies to build defensible platforms of their own.

    the great game 4 Nov 2011 v7 (Final) summary.png

    To some extent, the industry has started to get to grips with this emerging landscape. For example, we found major differences in the effectiveness of different telco strategies to pricing threatened services, as illustrated in the following chart from The Future Value of Voice and Messaging (November 2013).

    text price vs use of whatsapp dec 2013.png

    The chart shows a vastly higher penetration of OTT apps in Spain, a weakened European economy where each text cost an appreciable amount (c.$0.15) and many times what it would cost in the much stronger US economy, where the effective price was at that time already less than one Cent ($0.01). [NB Text usage and spending is also much higher in the US and much lower in Spain]. We think the lesson from this is that ‘free’ is not necessarily the issue in all cases of disruption - it is the perception of an inconsequential cost of usage that is key to consumer behaviour in this respect.

    Also, the then-disruptors now face disruption themselves. For example, in Google’s Big, Big Data Battle we recently highlighted how Google’s core business is under increasing pressure, and we will soon publish further analysis of the struggle between Apple and Samsung. Facebook is continually under scrutiny for signs of the impact of the ‘next big thing in social networking’, the latest of which being Ello, which bases its disruptive strength on attacking Facebook’s advertising revenue stream by promising a private and ad-free service.

    So while the market has developed, it is constantly changing and fast moving. It can be a challenge to stay abreast of it, yet alone develop effective strategies to succeed in it.

    How to play better?

    The general factors that we believe are necessary to develop effective disruptive strategies and responses are:

    • The development of individual and corporate ‘digital mind sets’ that enable efficient decision making and aligned actions;
    • Increased awareness of and alertness to the possibilities and the speed of change;
    • Better understanding of cross-industry perspectives on lessons, issues, threats and opportunities;
    • The development and adoption of approaches, capabilities and technologies that enable sufficient speed and effectiveness in action.
    To this end we intend to bring the best of our knowledge and experience to bear together with some of the best practitioners in the field through our research and events in the coming year.

    As part of this, our next public event will bring together c.250 senior execs at our Digital Asia 2014 event in Bali to brainstorm:

    • Findings from the Telco 2.0 Transformation Index and how to transform the telecoms technology stack (detailed agenda and speakers here);
    • The latest disruptive developments and strategies that telcos can bring to Cloud and Enterprise Mobility, and how these technologies can themselves transform businesses (detailed agenda and speakers here);
    • The role of Big Data for both commercial ends in telcos and other industries, and for governments and not-for-profit organisations aiming to solve major challenges relating to poverty and the spread of disease (detailed agenda and speakers here);
    • How the Digital Entertainment market is being reshaped by content providers, brands, and other players looking to create new service and distribution models (detailed agenda and speakers here);
    • How Digital Commerce is going mobile, and how players in different sectors can profit in this major disruption (detailed agenda and speakers here).
    To join us, please email contact@telco2.net. And don’t forget: we’d very much like your input to our research programme here. To share this article easily, please click:

    Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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