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June 29, 2015

Gigabit Race; Sprint CTO; EU Regulators; Alexa Fund - Telco 2.0 News Review

The Gigabit Race: AT&T, Google, Centurylink, Bell, TalkTalk.

AT&T’s GigaPower FTTH rollout has expanded again, with the suburbs of Dallas and Fort Worth targeted with gigabit fibre. The exchange-side Optical Network Terminals (ONTs) are being provided as virtualised functions from their SDN deployment.

Meanwhile, Google has begun deploying fibre in Salt Lake City and Nashville, using the existing power poles. They’ve also started rolling out in Raleigh, North Carolina, this week.

Fierce reckons that the gigabit fibre race means that access to ducts and poles will be an increasingly fraught regulatory issue.

Verizon is accused of deliberately obstructing competitors’ access to ducts in New York City, and also of falling behind in its FiOS roll-out commitments - this by its own employees, who are negotiating with the company over the pay settlement for the next three years. At the same time, the old BellSouth bits of AT&T are also in talks with the CWA.

Centurylink is now offering both 1Gbps fibre and its own IPTV in Minneapolis, where Comcast has had a monopoly up until now. In Toronto, meanwhile, Bell Canada is promising to deliver “the world’s fastest Internet service”, which turns out to be 2Gbps fibre.

In the light of all these roll-outs, it’s not surprising that Ovum reckons the market for FTTH optics will break $1bn this year. However, they point out that one of the biggest drivers isn’t a US telco - it’s China Mobile, frantically building more wireline networks. And while CAPEX continues to rise, so does executive pay, it seems.

In-depth coverage of the new wireline investment cycle is available in this new Telco 2.0 Executive Briefing

Speaking of cable, Cablecom in Switzerland is the latest cableco to raise the bar on speed. Its top two tiers now hit 500Mbps, as well as including WiFi and video on demand.

In the UK, OFCOM data has been released that shows what speeds customers actually get as opposed to the “up to” numbers in ISPs’ advertising. The results are heartening for the cable world. They’re also deeply depressing in the light of all the government money flowing into BT via regional “superfast” projects.


That’s right: the largest single group of BT DSL subscribers are getting less than ADSL2+ speeds. Bizarrely, Plusnet’s performance is somewhat less bad although it’s actually part of BT. And cableco Virgin Media is alone in being able to say it delivers just what it promises.

TalkTalk’s performance is pretty shocking, but perhaps they’re concentrating on their FTTH build. Pricing has been announced for the network they’re building around York with Sky and CityFibre, and the premium over their copper network is zero. A gigabit comes at £21.75/mo, with their TV included, and SMB-class service is £25.

They’re calling it Ultra Fast Optical because BT won a court case letting them call their VDSL “superfast fibre broadband”, quite hilariously in the light of the chart above. And, of course, because the acronym is UFO. As for the pricing, new STL research argues this is just what we should expect.

However, part of the picture may be that the OPEX savings are good enough that TalkTalk wants to drive uptake more than anything. Italy’s national broadband plan is held up due to discussions about just this point, as it’s proposed to offer customers vouchers to get them to sign up and it’s not clear who’s paying for that.

Meanwhile, here’s a fundamental advance in fibre-optic capacity.

Bye, Sprint CTO; 10Gbps wireless; technical fixes to LTE-LAA row; DoCoMo 5G plans

Sprint’s CTO Stephen Bye is resigning, effective July 24th. Bye was behind the $5bn Network Vision project, having joined from Cox when they backed out of their WiMAX plans and sold Sprint the spectrum. Sprint also had a SVP of networks, a president of network operations, and a VP of network technology development at the time - they have all gone, and now it’s time to say good-Bye.

Sprint has since gained a Technical COO, Junichi Miyakawa, parachuted in from Softbank Japan, and it looks like the responsibility for fixing their network is now up to him. That said they also have a Chief Network Officer, John Saw…anyway, there’s also a new strategy, based on more small cells. 800 of the little chaps are going to be deployed in Miami, plus some rather un-small 150 foot high monopoles. They’re also going to close the last remnants of their consumer wireline business.

All these small cells need backhaul, of course, and sometimes even fronthaul - Lumos is hoping to provide it, in the form of dark fibre. They claim they’ve got rid of all but 3% of their TDM-based tower links.

We’ll need it; Huawei claims it’s done 10Gbps over a wireless link using its candidate air interface for 5G, F-OFDM, and a mere 200MHz of spectrum. They’re promising field trial results later this year. Ericsson, meanwhile, has ruled out an acquisition and is making 1,700 job cuts.

Qualcomm and ALU are trying to engineer around the whole LTE-LAA row. Rather than doing LTE in WiFi spectrum, their proposed solution sends part of the LTE data stream over a WiFi link, so the usual WiFi spectrum sharing mechanisms can work.

NTT DoCoMo has let slip some details of its 5G plans. Its target date is 2020, but it doesn’t expect to be able to use spectrum above 6GHz then. Hence we have the inevitable “5G+”, planned for 2023 or thereabouts. In China, meanwhile, we’re up to 200 million 4G users and the 3G user base is declining.

Cambridge Wireless members vote on whether we need 5G, and say “no”.

T-Mobile USA announces yet another quick-upgrade giveaway, sorry, plan, and the MetroPCS network shuts down.

Euregulators turn against consolidation; potential digital market deal; Charter wants to be “more neutral”

While everyone is focused on Greece, has the European Union called the turn on consolidation? Competition Commissioner Margerethe Vestager has issued an official statement of objections to TeliaSonera and Telenor’s planned merger of their Danish opcos. Vestager is specifically opposed to the Danish market going down from 4 to 3 operators. A final decision is needed by 2 September.

Perhaps as a result, when Bouygues rejected Altice’s €10bn bid this week, they referred to “significant execution and political risk”. Altice responded by claiming it had some sort of unspecified side-deal with Free, that the original Altice-SFR deal hadn’t had any social consequences, and that €9bn of their offer was in cash.

They possibly didn’t help their case by choosing the same week to reverse the French holding company into a subsidiary based in the Netherlands, obviously the ideal location for a company whose main assets are located in France, Portugal, and the US. Whether it is an effort to reduce their tax liabilities or not, it certainly looks like an arcane and suspicious financial manoeuvre.

French regulators are re-reviewing the Free Mobile-Orange national roaming contract, although there is now only 18 months to go before it runs out.

The EU itself seems to be close to a deal on the so-called telecoms package. The European Council of Ministers’ latest draft would end roaming charges in June 2017 after a while under a transitional regime. It would allow operators to recover the costs via their wholesale prices. It would also permit “special services” so long as they didn’t affect public Internet access in a “material” way - this is of course Eurospeak for net neutrality. The Parliament agrees about the June 2017 deadline, but doesn’t want the transitional phase, cost recovery, or the word “material”.

The draft, however, is much closer to the Parliamentary position than anyone expected, and especially than people like Günther Oettinger would have wanted, after heavy pressure from Digital Single Market VP Andrus Ansip. (We called this in December 2014.)

BT, meanwhile, wants OFCOM to let it shut down the PSTN and to commingle data belonging to BT Retail and Openreach customers. Meanwhile, TalkTalk says it’s fine with deregulation so long as Openreach is carved out of BT. Sky, meanwhile, wants a full competition inquiry into Openreach.

In the US, Centurylink is the latest operator asking for permission to turn off its TDM services where “alternatives exist”. They count cellular or Vonage as alternatives for voice. Interestingly, they also want to turn off their T-carrier data services, and they propose various Ethernet options over DSL as a stopgap.

Charter has hired a leading net neutrality campaigner to draft its commitments, claiming that they want to be the most neutral net going.

The FCC, meanwhile, has given the brushoff to T-Mobile and others’ calls for more 600MHz spectrum to be reserved for smaller operators. They’re staying at 30MHz.

Harold Feld discusses the first net neutrality complaint and argues that it is without merit.

South Korea is taking applications for a fourth MNO licence, with a deadline in August.

And the Aussie regulator signs off the NBN migration plan.

Amazon’s $100m Voice 2.0 fund; BT does wholesale LTE roaming; LTE-M; AT&T “all in on SDN”

Amazon has announced a $100m VC fund, plus a developer SDK, for startups working with the Alexa voice-based user interface they developed for the Amazon Echo. The backend (the AVS or Alexa Voice Service) is now generally available, and the ASK (Alexa Skills Kit) is an SDK to integrate new web services with the Echo.

Tropo, of course, already has transcription, but here’s how to use it with Voicebase if you need more options.

BT Global Service is offering wholesale LTE and VoLTE roaming services under an agreement with Syniverse.

Nick Hunn’s campaign to delay the 2.3GHz auction in order to protect Internet of Things apps using the 2.4GHz band rolls on.

Here’s the official line - Huawei’s proposals for LTE-M, i.e. 4G in 1.4MHz subchannels for the IoT.

Vodafone UK has signed up Digitalk, an MVNE with a platform called “Mobile Cloud”, to support its MVNOs.

AT&T is all in on SDN and NFV, says its head of IT.

Apple cuts a deal with indies; BlackBerry Q1s; New ThinkPad; obnoxious self-driving car

After last week’s Taylor Swift incident, Apple has settled with thousands of indie labels, who will now be paid for music streamed as free trials of their music service. That clears up the remaining barriers to launch the service - or nearly, as there is still an outstanding issue about songwriters’ copyrights.

You can use Facebook Messenger with a phone number, rather like WhatsApp.

BlackBerry’s Q1 results showed its software revenue was up 150% year on year, 21% of the total, compared to 40% for hardware. They shipped 1.1m smartphones, compared to 1.3m in their Q4 (i.e. Q1), nothing impressive although ASP was up from $211 to $240. The company is making money, though, a net profit of $68m on $658m of revenue.

Lenovo has issued a concept for a new laptop based on the classic ThinkPad industrial design.

Creating VR content is agonisingly expensive.

Google is back in the code-hosting game.

Iraq turns the Internet off supposedly to stop students cheating on an exam and then does it again.

Is the cloud what the mainframe was in 1975?

A self-driving car aggressively cuts up another self-driving car. There’s no confirmation that the second car took it out in a pointless argument with Siri later in the day.

And guns and hexacopters go together as well as you might think.

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June 24, 2015

Mobile Authentication: Telcos’ Key to the Digital World?

We’ve just published a new research paper ‘Mobile Authentication: Telcos’ Key to the Digital World?’. Mobile Authentication could be Telcos’ key asset in the digital economy, but they are in danger of losing out through insufficient action. There are good case studies and an excellent blueprint in the GSMA’s Mobile Connect initiative for how to monetise their assets and stay relevant. So why aren’t they getting on with it?

The report is part of the Executive Briefing Service and Dealing with Disruption stream, and you can read an excerpt of the report here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

Extract chart from the report:

Digital Identity Ecosystem.png

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June 22, 2015

GigaTWC, first neutrality complaint, Altice, Nokia, Spark, Apple: Telco 2.0 News Review

Backing out of the price war? Sprint upgrade forever delayed; Comcas-T denied; TWC gigabit cable; 5G timeline

Last week, T-Mobile stopped offering its $100/mo share plans. This week, Sprint CEO Marcelo Claure suggested that their next move on pricing might be upwards, at least for their unlimited plan. Is this evidence that US carriers are looking for an exit from the price wars? Perhaps. T-Mobile added 2GB of tethering data to its unlimited plan this week, making the plan marginally more generous at the same price point and demonstrating just how flexible the term “unlimited” is.

Sprint is also boasting that it tied with Verizon Wireless for No.1 spot in Kansas City and promising that it will soon have “the best network”. FierceWireless rounds up all the times Sprint managers have promised that their 2.5GHz spectrum was about to kick in and give them the best network over the last 10 years.

Is there going to be another twist about T-Mobile? DTAG CEO Timotheus Höttges has previously said he would prefer a cableco deal to one with DISH. It makes sense, too, as we pointed out in this Telco 2.0 Executive Briefing. This week, Höttges seemed to suggest one with Comcast was on the table - but Comcast has since denied it.

Back at the ranch, Comcast pushed on this week with its FTTH rollout. 1.5m homes are planned to get 2Gbps service in Michigan.

Last week, we noted the city of LA’s RFP for a gigabit muni-network. This week, Time Warner Cable was the first to answer the call. Interestingly, they propose to deliver it with DOCSIS 3.1 cable rather than fibre, building on last year’s upgrade that took their speeds in the city to 300Mbps. We think that would be the first production gigabit cable network, and the first cable-based municipal broadband network too.

In-depth Telco 2.0 coverage is here

Another way of looking at Verizon Wireless’s sale of its towers: it was worth two weeks of their revenue or one year’s interest on their debt.

With two days to go, 190,000 customers were still active on the old MetroPCS CDMA network T-Mobile was shutting down this weekend.

T-Mobile spokesman Martin McBride told FierceWireless that T-Mobile expects the 190,000 figure to fall dramatically once the actual migration starts and customers lose CDMA service

I guess you could say that. It’s about time; this week, in San Diego, ITU-R finalised the timetable for the 5G standardisation. The preliminary studies report into WRC-15 this October, and the key Technical Performance Requirements work stream is planned to take up 2016 and report in Q1 2017, with the final decision in 2020.


Week one of net neutrality: mostly about peering. AT&T stung $100m. LTE-LAA spectrum arguments.

The first official net neutrality complaint has been filed, and it’s against Time Warner Cable. Commercial Network Services, a company that hosts webcams, feels itself disadvantaged by the fact TWC doesn’t peer with it and therefore it needs to buy transit, and it apparently reads Title II reclassification to mean that it has a right to peering anywhere it wants.

Sprint might have managed to beat that, but they chose to stop throttling down unlimited data users during peak hours, just before the rules came into force. AT&T Mobility, meanwhile, has been fined $100m for misleading customers.

In fact, the early impact has been on peering rather than end-user issues. It looks like there’s been a rush to settle some of the Internet’s longest-running peering disputes. The notoriously aggressive IP transit price leader, Cogent, has signed agreements with AT&T and Verizon, while Level(3) has created or renewed peering deals with Verizon, AT&T, Telefonica Wholesale, and Comcast. There might also be a Cogent-Comcast agreement in the works, too.

This moves Cogent substantially closer to Tier-1 status, if anyone still cares, and improves its margins (and reputation) quite a bit, while L(3) benefits a bit and the Internet in general should be more stable.

Last week saw another John Legere rant against AT&T. This week saw AT&T pushing back, claiming it didn’t have that much low-band spectrum after all and therefore there was no need to reserve any 600MHz for smaller carriers.

Nick Hunn argues that opening up the guard bands and the 2.3GHz threatens to encroach on the 2.4GHz ISM band and wreck a lot of IoT applications. It’s not as if there isn’t already so much pollution in there…

So far, 36 organisations have responded to the FCC’s consultation on LTE-LAA. Unsurprisingly, AT&T thinks it’s basically OK, Nokia Networks thinks it’s really bad but their latest technology can fix it, and Google doesn’t like it at all.

New York City has audited commitments made by Verizon when it got its licence to deploy FiOS, and finds them lacking. VZ blames the unions. Meanwhile, Cablevision is suing VZ, after they fell out about a Cablevision ad that claims FiOS isn’t really fibre. It’s the “Virgin Media is totally fibre!” story upside down.

Altice with another megabid; Euregulators say no; German spectrum raises €5bn; new boss for Vodafone.de

Patrick Drahi’s Altice has thrown another merger, back in France this time, making an €10bn offer for Bouygues Telecom. This would of course mean taking the French market back down from 4 to 3 operators. Bouygues would apparently like more money, but the gap is only €1bn and bankers seem to love lending to Altice.

The real obstacle will be regulatory. The French government’s minister of economic affairs, Gabriel Macron, says outright that he rejects consolidation or a competition/investment tradeoff, and the European competition commissioner Margerethe Vestager said something similar last week.

11 major telcos wrote to the European Council asking for “urgent reforms to remove regulatory barriers to more investment in digital infrastructure” this week, but Macron and Vestager’s comments show quite clearly that this is far from an uncontroversial position.

France’s 700MHz auction is going ahead, with applications to be filed by the end of Q3 for an auction in Q4 2015. The reserve price is €2.5bn and the blocks are expected to become available from April 2016-2019. Spectrum will be sold in 2.5MHz blocks, with a maximum of 3 for any one operator and a cap of 2x30MHz per operator across the 700, 800, and 900 bands. A similar coverage obligation will apply as for the 800MHz.

The French have no doubt been encouraged by the German mega-auction, which raised €5bn after 181 rounds. Vodafone was the biggest spender at €2.1bn for 2x40MHz paired and 20MHz unpaired. That included 2x10MHz of 700MHz, but perhaps more interestingly, also included no less than 2x25MHz of 1800MHz spectrum, the key 2G/4G band.

Last week, we were all wondering if Vodafone might swap the German operation with Liberty Global to get their hands on Virgin Media. This week, Vodafone has appointed a new CEO for the division, and they went relatively heavyweight, picking Hannes Amesreitner, the former CEO of Telekom Austria Group.

Huawei seems very keen to get closer to German industry, DTAG, and European regulators under its Industry 4.0 strategy.

We analyse some of the issues involved in this Telco 2.0 Executive Briefing

Vivendi apparently wants Telecom Italia to sell up its stake in TIM Brasil and go home. First, it’s going to load up on more TI stock.

Actility, a startup based on the LoRa IoT network technology, has raised €22m from investors including Orange, Swisscom, KPN, and Foxconn.

And Facebook Moments, the feature that uses face recognition to surface interesting photos you’d forgotten about, won’t be available in Europe for regulatory reasons. As in, there’s no off switch.

BT+EE = “digital champion”; VMED’s new rollout rolls; cable upgrades hit in Q4?

BT and EE made their pitch for regulatory clearance this week, arguing that consolidation means investment (ask the French, or the Eurocrats above?) and that it would create a “digital champion”. Olaf Swantee, interestingly, tips his hand a bit by saying he expects 5G “in the market” by 2018. “Backhaul” doesn’t get a mention.

Meanwhile, Virgin Media’s £3bn expansion build takes a step forward.It begins in Manchester, with 150,000 more premises passed with 150Mbps cable. Construction begins this week on the first 20,000. When the project is complete, VMED will have population coverage of about two-thirds of the UK.

In case you’re wondering, a 300Mbps tier is coming soon and DOCSIS 3.1 trials are expected to begin in Q4.

After EE’s Harrier low-cost 4G smartphone, now Vodafone UK has one.

It looks like half the FTTH that eventually gets deployed by BT under the BDUK program will be in Cornwall, with 85,000 homes passed with fibre. The reason is that Cornwall has a lot of homes on long exchange-only lines and FTTC is out of the question.

And here’s a faint chance to have your dinner on top of the BT Tower, which will briefly re-open for 1,400 guests on the occasion of its 50th birthday. SIgn up at the link to get into the ballot.

Nokia back into the devices business? Automakers preferred for HERE or maybe not. Elop’s exit from MSFT

Nokia CEO Rajeev Suri is quoted by a German magazine(Manager) saying they want back into the devices business as soon as the noncompete agreement with Microsoft runs out in H2 2016.

Exactly what Suri meant isn’t quite clear - he seems to say Nokia would licence the brand, but also that they would design the devices, which sounds more like being a vendor with outsourced manufacturing than just licensing a name. Also, he says this in the context of Microsoft. It would be good to know if he spoke in German, and if not, what his original words in English were.

He also said that anyone who would stick with the HERE maps business for the long run would be a good buyer. Manager took this to mean he didn’t have any preference for the German automakers’ bid for the division.

However, later in the week, Bloomberg said Nokia certainly did, and some other bidders had pulled out because of this. Bloomberg also quoted Suri as saying they might not sell HERE at all in the end.

Stephen Elop, meanwhile, the architect of Nokia’s exit from the smartphone business and Microsoft’s entry to it, has departed Microsoft after a major reorganisation that put the Devices group under the Windows one.

Horace argues that the growth of PCs plus iPads has stalled and smartphones - really, the iPhone 6 - are cannibalising the iPad. What will Apple do?

Google x Tesco Clubcard, SDN; IBM, AWS get into Spark; AT&T releases NFV designs

Google is a bidder for Dunnhumby, the storied data-analytics firm spun out of Tesco responsible for their famous Clubcard promotions. There’s a deal based on valuable data that actually makes sense!

Up in the cloud, meanwhile, Google provided some detail of its data-centre networks and the underlying virtualisation technology.

Here’s an interesting piece on DuckDuckGo’s startling growth.


IBM is making a huge commitment to the open-source Apache Spark data analytics/machine learning engine. They’re contributing their own SystemML technology as open-source software, retasking 3,500 engineers to work on the project, and offering Spark as a service in their Bluemix cloud.

Spark is also coming to Amazon Web Services. The blog post announcing it gives a pretty good explanation of why it matters.

And AT&T is releasing the NFV setup for its GigaPower FTTH under the Open Compute Project licence.

Apple Music gets told; Microsoft WiFi; Facebook rising in video ads?

Apple was planning not to bother paying musicians for anything its customers listened to during their three months’ free trial of Apple Music. Now, Apple has backed down after being called out on Tumblr by Taylor Swift.

A British court has decided, after all these years, that you shouldn’t rip CDs.

The record industry has been trying to get at file sharers by suing CDNs, DNS operators, and similar infrastructure. CloudFlare turns to the EFF for support.

Microsoft has let slip it’s planning a major expansion of Skype WiFi.

Facebook seems to be catching up with Google for video ads, although this is still soft data.

Google Trends is now available in near real-time.

Terrible Samsung bug. Terrible Apple bug. Hacked drug pump. Don’t have nightmares

Basically all Samsung Android devices are at risk from the manufacturer’s keyboard app. It runs as the system user, and therefore has almost unlimited privileges and can’t be uninstalled without rooting the device. And it gets updates over clear text HTTP, so anyone with a WiFi access point could feed it malicious code. Oy.

Meanwhile, there’s a zero-day exploit threatening the Apple Keychain, with multiple possible attacks on OS X and one against iOS.

If you connect a drug pump to the Internet you better be very confident of its security. Or very complacent. Guess which one it was.

Level(3) reckons the US has more botnet control servers than anywhere else.

The UK’s federated, privacy-positive ID system is potentially incredibly insecure.

An in-depth look into the disaster at the US Federal Office of Personnel Management.

Heinz failed to renew the domain some QR codes pointed at. Embarrassment ensued.

And Let’s Encrypt launches on the 14th of September.

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June 17, 2015

Repremiumization: The dangerous self-deception at work in European Telcos

We’ve just published a new research paper ‘Repremiumization: The dangerous self-deception at work in European Telcos’. As several operators in Europe downsize their Telco 2.0 Digital Services activity, some are seeking to reframe the Piper strategy as a premium-priced differentiation play based on network quality. This report argues this is deluded and dangerous - a Piper strategy is viable but only by developing cost-leadership in a commodity market.

The report is part of the Executive Briefing Service, and you can read an excerpt of the report here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

We see repremiumization as a self-deception strategy…

FIgure 1.jpg

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June 16, 2015

WWDC, Gigabit Mobile, LA munifibre, Title II, double the cloud: Telco 2.0 News Review

WWDC - a substantial range of incremental change

Apple’s WWDC was mostly about incremental change, but that doesn’t mean it wasn’t significant. The new version of iOS, for example, seems to make it much more business-focused and may be setting the stage for an “iPad Pro”. A summary of the changes is here. There are also some new apps - Apple is introducing a new push-driven search app called Proactive that is essentially a clone of Google Now, and there’s a news aggregator that is meant to learn from your history, rather like Samsung’s beloved Flipboard.

The deep plumbing got quite a lot of attention. Apple has essentially deprecated unencrypted HTTP for iOS apps, and developers are being strongly encouraged to use only HTTPS. In a further effort to improve security, two-factor authentication is now available throughout. And they’ve released the Swift programming language as open source software.

Actually, iOS networking is changing quite fundamentally, as this WWDC presentation shows - several advanced features that have been standardised through the IETF but haven’t been widely deployed will ship in iOS 9 and also in OS X 10.11. Those include the new TCP Fast Open extension, Explicit Congestion Notification (ECN), and the CoDEL queuing algorithm developed to combat the bufferbloat problem. Apple is also trying to encourage app developers to use IPv6, and has developed some compatibility tests. It’s a major step forward for the next generation of TCP - if the features ship in iOS, they will certainly be in use at scale.

What with Apple Music, vast quantities of iTunes content, and multi-gigabyte iOS patches (this one, at least, is relatively reasonable at “only” 1.8GB), it’s possibly no surprise that Apple is investing in its own CDN. If so, it’s likely that the huge iDatacenter of 2012 will be the high water mark for big data centres at Apple, as CDNs are inherently decentralised, a mark in favour of this new Telco 2.0 Executive Briefing’s core thesis.

Now Apple is a streaming music provider, as well as a TV manufacturer and a distributor of downloaded content, it’s increasingly in competition with the cable, broadcast, and IPTV industry. Stories like this one from Dan Rayburn, in which Verizon repeatedly tries to up prices while bombarding him with direct mail despite the fact he’s already a customer, suggest they won’t worry too much. Also, is this just posturing between AT&T and CBS, or is the carrier seriously considering dumping the TV element of U-Verse?

Apple Pay, meanwhile, is getting bigger and has taken over the Passbook app, which is being renamed Wallet. The service now works with a variety of store cards, and there’s a partnership with Square to get more SMBs on board - notably, the Square reader will be on sale in Apple stores. Also, it will launch in the UK, the first market outside the US, in July and you’ll be able to use it on the Tube.

That said, when Apple Pay launches in Britain, will Apple be able to hang on to the highly advantageous deal it got from the banks? Both Visa and Mastercard are offering their tokenising service to Google free, with the consequence that Google isn’t allowed to charge any transaction fee at all, while Apple gets 0.15%. The banks are now keen to use the Google precedent to bear down on this.

Proactive is likely to be a heavy user of geographic data and services, or in other words, maps. Horace has an interesting post checking up on the major map providers, basically Google, Apple, and Nokia, in terms of how much it costs to maintain the map per-user. Per-user is the right way to go about it, of course, because as with any digital product, the cost of replicating it is negligible. The upshot is that you need either heroic scale to spread out the costs (ie Google), or an anchor tenant who needs maps badly to pay for it (ie Apple), and that’s why HERE is up for sale.

Elsewhere in devices, HTC has revised down its Q2 revenue forecast by one-third after a terrible May, and BlackBerry might be doing an Android device.

KT launches gigabit mobile; cablecos battle the LAA menace; 60% offload; German spectrum hits €4bn

So how are we going to deploy those iOS patches? Well, KT has just become the first mobile operator to offer a gigabit-class cellular service. The imaginatively-named Giga LTE offers up to 1.17Gbps if you’ve got a Galaxy S6 or Edge, and it apparently works by “using both LTE and WiFi”.

That sounds like it’s doing multi-stream aggregation between their 4G network and their (impressive) public WiFi infrastructure, rather than LTE-LAA with the 5GHz WiFi spectrum. In turn, that will come as a relief to the cable lobbyists currently trying to get the FCC to regulate LAA before anyone tramples on their WiFi investments.

Juniper Networks reckons world MNOs will offload about 60% of their data traffic to WiFi in 2019.

Interestingly in the light of that KT story, Nokia, NTT DoCoMo, and EE executives have been vigourously making the point that there’s a lot of 4G to come before we get to 5G, as many of the radio improvements are likely to be added to 4G networks first. EE also argues strongly for the ETSI Mobile Edge Computing technology we discuss in this new Telco 2.0 Executive Briefing, but sounds a note of warning: “not all our network is Nokia”.

That said, for everyone who’s trying to be sensible, there’s someone who’s plunging into the hype. Du is joining the Koreans in the push to get something deployed by 2018, and here are some German academics who think it will be like the Internet but “cleverer”. Ahem.

While we’re in Germany, the new spectrum auction has pushed through €4bn. As usual in the last couple of years, the 1800MHz band has turned out to be the most sought-after.

Nokia Networks says small cells are taking off in 2015. The 3G, 4G, and 5G Wireless Blog reports that LTE-TDD and 8T8R antennas seem to go well together.

Here’s a survey of African countries’ interest in their own satellites. Facebook, meanwhile, has given up on theirs, but OneWeb, the project backed by Qualcomm and serial satellite-hugger Greg Wyler, is going ahead - it’s signed a contract with Airbus for the first lot of spaceships.

US FTTH race: a new hope. All the deployments this week. LA muni-fibre. Combes’ new job

The surge in US FTTH deployments goes on. In San Francisco, Comcast is bent on rolling out 2Gbps fibre into what was long a staple AT&T market. AT&T responded with a GigaPower build. Now Wave Broadband is pulling gigabit fibre into major apartment blocks in the city, offering a symmetrical gigabit service for $80/mo.

AT&T, meanwhile, turned up GigaPower service in Charlotte, North Carolina, and announced 75Mbps service in 9 new markets on the existing network, while new entrant Ting opened up at $89/mo for 1Gbps in Charlottesville, Virginia.

Over in the enterprise space, Windstream says it’s going to add more buildings to its fibre networks in 5 new markets this year.

The city of Los Angeles, meanwhile, has issued an RFP for a 1Gbps muni-fibre network plus a lot of public WiFi.

Elsewhere, KDG is extending its 200Mbps tier to reach three million homes, and highly acquisitive cableco Altice may be about to hire ALU CEO Michel Combes.

You’re reading this under Title II; DISH-T rumours; is the next price move in the US upwards?

Net neutrality: it’s here. Title II reclassification went into force this week, after a court refused to grant a stay of the measure while the lawsuits against it are fought out. Harold Feld has a very detailed writeup.

Interestingly, AT&T and Cogent hastened to sign an interconnection agreement and thus resolve their remaining peering issues before Title II came into effect and their customers could complain to the FCC.

This is complicated; everyone thought the DISH-T-Mobile thing was back on the table. Then Timotheus Höttges seemed to deny any interest and suggest he would prefer a deal with Sprint. And then his PR people rebutted the story and denied the denial. Meanwhile, DISH has been passing the hat round for financing.

OpenSignal apparently rates T-Mobile the fastest network in the US.

John Legere issues a sweary rant against Verizon and AT&T’s dominance of the AWS-3 auction. The Verizon official blog hits back.

But is the price war coming to an end? T-Mobile has just announced the end of its very popular family plans, which offer (for example) unlimited 4G data, voice, and texts for two people at $100/mo or 2.5GB for four at the same price. Have they just signalled that they’re getting out?

BT/EE fast-tracked. OFCOM may Openreach-ise BT dark fibre. Vodafone UK home broadband

The BT/EE merger has been fast-tracked by the UK antitrust regulator. The process moves straight to Stage 2, with the result that the decision will be some time in December or January, rather than Q2 2016 as previously thought. Everyone is spinning this as a win for their lot - BT because it’s happening quicker, everyone else because Stage 2 has to review the concerns from Stage 1, things like:

a substantial lessening of competition in relation to the supply of wholesale access and call origination services to mobile virtual network operators and fibre mobile backhaul services to mobile network operators in the UK

Of course, the Competition & Markets Authority is not the only regulator involved in the game of three-dimensional chess BT’s bid for EE started. There’s also OFCOM. The new boss over there, Sharon White, this week said that the regulator was moving towards action on the so-called very high speed dedicated line market. Specifically, BT would have to start offering dark fibre, and the pricing would have to be linked to their Gigabit Ethernet pricing, less an allowance for the cost of the electronics.

This is something independent ISPs and the mobile industry have wanted for years, but the interesting bit is how it interacts with the BT/EE deal. Is the idea that OFCOM forces BT to open up their fibre network, and then the backhaul issue is resolved and CMA can give BT the go-ahead? This, however, doesn’t do anything to address the point European Commissioner Margarethe Verstager makes here, which is that less competition doesn’t necessarily mean more investment.

In the meantime, BT seems to be pivoting on its football strategy. So far, they’ve been giving it away in pursuit of market share, but now they seem to be tightening up and trying to derive more revenue. And they’ve become the first to provide a 4K ultra-HD sports channel.

Vodafone’s promised fixed broadband service is coming, and it’s mostly a fairly standard BT Openreach FTTC ISP with speeds up to 76Mbps downlink. Pricing is very low, though - existing mobile customers can get it for £5 a month, plus the line rental.

EE is selling a GoPro-like ruggedised camera with 4G streaming. Meanwhile, O2 UK has dropped out of the bidding for the UK emergency services’ network, leaving only…you guessed it, EE (or BT).

Qualcomm wants out of its 1.4GHz UK spectrum block. And two of the B4RN team receive the MBE.

GSM.sg is over, Q2 2017; Weightless-N in London; ITU smart city standards; RPi considered harmful

Singapore is going to turn off the GSM networks in April, 2017. The regulator has approved requests from M1, Singtel, and Starhub, on condition that they ensure the remaining 250,000 2G-only customers transfer “smoothly” over to something more modern. Starting in September, new registrations of 2G-only devices will be rejected by the regulator, and some time after April 2017, the spectrum will be reallocated.

By comparison, AT&T plans to shut down by the end of 2017, Telstra by the end of 2016 (although they’re now down to 1% on 2G), and Verizon Wireless by 2021, while Telenor plans to keep 2G at least until 2025. The big question about closing 2G, of course, is what happens to the M2M devices.

Orange, Alcatel-Lucent, and Sequans, a chip maker, are offering a 4G developer kit for M2M applications. SKT has got one of its own based on the GSMA OneM2M standard.

Weightless-N deployment is here, with a test network operating in London under the auspices of the UK Government’s Digital Catapult centre.

ITU-T has opened a study group on smart city standards, headed by someone from the UAE regulator.

And are Arduinos and Raspberry Pis killing startups?

DTAG wants to double its cloud; 35 ISVs for Cisco; AT&T remakes COs with Open Networking Foundation tech

DTAG wants to double its cloud revenue by 2018, and as a result, its partnership with Huawei is getting extended and its T-Systems business unit saved from the chop. Although T-Systems has long been problematic, it has 2.6 million Microsoft Office 365 subscribers served from its German data centres and that’s got to be worth something. Achieving the target means 20% or more annual growth, which means:

Deutsche Telekom plans to pit itself more strongly against the Internet corporations Google and Amazon in future

Sounds exciting.

Meanwhile, Cisco announced no fewer than 35 software vendors as partners in its Intercloud strategy, and a lot more features, notably including the ability to import virtual machines from Amazon Web Services.

The Open Networking Foundation has shipped Atrium, its open-source SDN platform. So far, it consists of their operating system, ONOS, and the components needed for a BGP-speaking software router.

AT&T is using ONOS for their project to convert local central offices into small data centres, known as CORD for Central Office Re-architected as Datacentre. Interestingly, they’re using ONOS for the networking functions and OpenStack to manage the virtual machines and orchestrate the services.

AT&T has also shifted 2,000 engineers to work on SDN projects and started putting 130,000 other staff through devops training courses.

We’ve been talking a bit about small data centres. Schneider Electric has just launched a new line of prefabricated edge data centres.

An interesting checkpoint on HP’s research into memory-centric computing.

Comverse buys Acision - is it for the WebRTC? Talky is open source. Twitter CEO quits

Well, this is interesting. Comverse just acquired Acision, the former Logitech division that makes most SMS infrastructure. Comverse is paying for it by selling their BSS business, which is what most people know them for, to Amdocs. Losing the BSS leaves Comverse making a $27m loss, so clearly there’s a need for a new strategy here.

Tsahi Levent-Levi points out that Comverse already acquired RCS startup Solaimes, and Acision owns the well-regarded Crocodile WebRTC platform (they call it Forge), so it looks like a pivot towards new kinds of voice and messaging linked with Comverse’s “monetisation” speciality.

Talkdesk is a cloud-based call centre based on Twilio.

The Talky video chat platform is being released as open source software, or at least its core components are.

Four stages of voice evolution, and is the next one “client-free communication”?

Calendar interoperability: could do better.

Twitter CEO quits.

And some companies have abolished voicemail.

Telekom Malaysia, L(3) in mammoth BGP leak; LastPass hacked

On Friday, Telekom Malaysia accidentally announced 176,000 Internet prefixes to its transit provider, the old Global Crossing network now part of Level(3). Both GBLX and L(3) propagated the bad routes to their customers, spreading the mayhem across much of the Internet.


Ironically, Level(3) was a prominent signatory of the Routing Resilience Manifesto, which was meant to put a stop to all this.

The popular all-your-passwords-in-one-place app LastPass has had a security incident.

Twitter has deployed its own shared blacklist feature.

And is this the worst data leak yet? The US Federal Office of Personnel Management has lost all the security clearance forms, including some very personal data indeed.

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June 13, 2015

How 5G is Disrupting Cloud and Network Strategy Today

A primary benefit envisaged of ‘5G’ networks is that latency (i.e. delay times for users) will be massively reduced. This would deliver major benefits for many applications providing that the software for those cloud-based applications is located near enough to the users at the edge of the network. This is likely to drive a massive change in the architecture of the cloud and the network industries.

Our latest report outlines likely scenarios and identifies some early moves that are starting to play out now, such as the merger between Nokia and Alcatel.

There’s also some interesting analysis that suggests that cloud players are not all just building bigger and bigger data centres (see chart below, for example) which gives some further support to the idea that the cloud is already becoming more local - or at least, is not just moving even further away,

data centre size june 2015.png

The table of contents plus part of the introduction that outlines the importance of latency are below, and you can read more on our research portal here.

Report Contents:

  • Executive Summary
  • Introduction
  • 5G - a collection of related technologies
  • The mother of all stretch targets
  • Latency: the X factor [reproduced below]
  • Latency: the challenge of distance [reproduced below]
  • The economic value of snappier networks
  • Only Half The Application Latency Comes from the Network
  • Disrupt the cloud
  • The cloud is the data centre
  • Have the biggest data centres stopped getting bigger?
  • Mobile Edge Computing: moving the servers to the people
  • Conclusions and recommendations
  • Regulatory and political impact: the Opportunity and the Threat
  • Telco-Cloud or Multi-Cloud?
  • 5G vs C-RAN
  • Shaping the 5G backhaul network
  • Gigabit WiFi: the bear may blow first
  • Distributed systems: it’s everyone’s future
Latency: the ‘X factor’ for 5G

A big stretch, and perhaps the most controversial issue here, is the latency requirement. NGMN (the Next Generation Mobile Networks alliance) draws a clear distinction between what it calls end-to-end latency, aka the familiar round-trip time measurement from the Internet, and user-plane latency, defined thus:

“…measures the time it takes to transfer a small data packet from user terminal to the Layer 2 / Layer 3 interface of the 5G system destination node, plus the equivalent time needed to carry the response back.”

That is to say, the user-plane latency is a measurement of how long it takes the 5G network, strictly speaking, to respond to user requests, and how long it takes for packets to traverse it. NGMN points out that the two metrics are equivalent if the target server is located within the 5G network. NGMN defines both using small packets, and therefore negligible serialisation delay, and assuming zero processing delay at the target server. The target is 10ms end-to-end, 1ms for special use cases requiring low latency, or 50ms end-to-end for the “ultra-low cost broadband” use case. The low-latency use cases tend to be things like communication between connected cars, which will probably fall under the direct device-to-device (D2D) element of 5G, but nevertheless some vendors seem to think it refers to infrastructure as well as D2D. Therefore, this requirement should be read as one for which the 5G user plane latency is the relevant metric.

This last target is arguably the biggest stretch of all, but also perhaps the most valuable.

The lower bound on any measurement of latency is very simple - it’s the time it takes to physically reach the target server at the speed of light. Latency is therefore intimately connected with distance. Latency is also intimately connected with speed - protocols like TCP (Transmission Control Protocol) use it to determine how many bytes it can risk “in flight” before getting an acknowledgement, and hence how much useful throughput can be derived from a given theoretical bandwidth. Also, with faster data rates, more of the total time it takes to deliver something is taken up by latency rather than transfer.

And the way we build applications now tends to make latency, and especially the variance in latency known as jitter, more important. In order to handle the scale demanded by the global Internet, it is usually necessary to scale out by breaking up the load across many, many servers. In order to make this work, it is usually also necessary to disaggregate the application itself into numerous, specialised, and independent microservices. (We strongly recommend Mary Poppendieck’s presentation at the link.)

The result of this is that a popular app or Web page might involve calls to dozens to hundreds of different services. Google.com includes 31 HTTP (Hypertext Transfer Protocol) requests these days and Amazon.com 190. If the variation in latency is not carefully controlled, it becomes statistically more likely than not that a typical user will encounter at least one server’s 99th percentile performance. (EBay tries to identify users getting slow service and serve them a deliberately cut-down version of the site - see slide 17 here.)

Latency: the challenge of distance

It’s worth pointing out here that the 5G targets can literally be translated into kilometres. The rule of thumb for speed-of-light delay is 4.9 microseconds for each kilometre of fibre with a refractive index of 1.47. 1ms - 1000 microseconds - equals about 204km in a straight line, assuming no routing delay. A response back is needed too, so divide that distance in half. As a result, in order to be compliant with the NGMN 5G requirements, all the network functions required to process a data call must be physically located within 100km, i.e. 1ms, of the user. And if f the end-to-end requirement is taken seriously, the applications or content that they want must also be hosted within 1000km, i.e. 10ms, of the user. (In practice, there will be some delay contributed by serialisation, routing, and processing at the target server, so this would actually be somewhat more demanding.)

To achieve this, the architecture of 5G networks will need to change quite dramatically. Centralisation suddenly looks like the enemy, and middleboxes providing video optimisation, deep packet inspection, policy enforcement, and the like will have no place. At the same time, protocol designers will have to think seriously about localising traffic - this is where the content-centric networking concept comes in. Given the number of interested parties in the subject overall, it is likely that there will be a significant period of ‘horse-trading’ over the detail.

It will also need nothing more or less than a CDN and data-centre revolution. Content, apps, or commerce hosted within this 1000km contour will have a very substantial competitive advantage over those sites that don’t move their hosting strategy to take advantage of lower latency. Telecoms operators, by the same token, will have to radically decentralise their networks to get their systems within the 100km contour. Those content, apps, or commerce sites that move closer in still, to the 5ms/500km contour or further, will benefit further. The idea of centralising everything into shared services and global cloud platforms suddenly looks dated.

So might the enormous hyperscale data centres one day look like the IT equivalent of sprawling, gas-guzzling suburbia? And will mobile operators become a key actor in the data-centre economy?

See more on our research portal here.

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June 8, 2015

Nokia Edge Cloud, Vodafone-Liberty Global, Apple Streaming, Nielwatch: Telco 2.0 News Review

Nokia launches cloud servers for 5G; North America at 44% 4G; Telenor to drop 3G early; all-digital radio

Well, what have we here? Nokia Networks has launched a new product line, Airframe, consisting of Intel-based servers optimised for cloud services and specifically for the emerging Mobile Edge Computing space. This would roll cloud and hosting servers right into the fabric of 5G networks, bringing them close to the radio air interface to take advantage of the low latency targets. We knew since MWC that Nokia is very, very keen on this, and now here’s some backing with actual money. Here’s an interesting quote:

So you end up with a mix of distributed small datacenters and larger central ones as our model of how networks will evolve going forward

The release is here. Later this week, we’ll be publishing a new Executive Briefing in our Future of the Network stream that addresses the impact of 5G on the cloud and the data centre, so watch this space.

One of the points we cover is that the Nokia-Alcatel deal should be seen as positioning for a 5G cloud disruption, and as part of a Europe-wide industrial strategy - for good or ill. This week, a key committee within ALU signed off on the merger.

Elsewhere, here’s some speculation that Ericsson might respond by making a bid for Juniper Networks, giving it much more presence in IP routers and in North America. Then again, remember that time Ericsson bought an IP router company? Yup. The Redback acquisition wasn’t exactly transformative. Alternatives suggested are Ciena or maybe the Samsung networks division.

Here’s detail of the new Cisco management team.

Caroline Gabriel checkpoints the 5G standardisation process going into a key meeting of the ITU working group. It looks like two forces are at work - a drive to add more features and stretch the technical specifications, and a demand for more speed and delivery in 2017-2018, which don’t sound like they go well together.

Is 5G is a future European industrial strategy? We hope so, because Europe seems to be lagging these days - 4G Americas reports that 44 per cent of North American wireless subscribers are on LTE, compared to 16 per cent in Western Europe.

In Norway, though, Telenor is proud that it’s on track to finish deploying 4G into the far North by the end of 2016, having covered 42 out of 87 municipalities already. In part because of this, it wants to close down its 3G network soon, well before the 2G goes. The 2G has to stay both to support their M2M customers, and for the sake of 2G/4G interworking in the 1800MHz band.

The WiFi Forward coalition is lobbying US senators to get more 5GHz spectrum released for WiFi usage, specifically the 5.9GHz band. The text of the letter is here. Time Warner Cable has just turned up some more public WiFi networks, and signed a roaming agreement with Boingo, for a total of 400,000 hotspots available to their customers.

And Cambridge Consultants have demonstrated the first purely digital software radio.

Google: don’t aim for 100% uptime; OpenNFV ships; 10 million unused servers

Google’s SVP of technical infrastructure, Urs “The Data Centre as a Computer” Hölzle, speaks to Information Week about SDN, their software-defined wide area network, and why you shouldn’t try to achieve 100% uptime. Worth reading!

The OPNFV project has shipped code, specifically version 1.0 or “Arno” of its open-source NFV platform. That includes OpenDaylight, OpenStack, and Open vSwitch support, plus integration with a whole menagerie of developer tools. You can grab the code here.

A study suggests that the world’s data centres contain 10 million unused servers, $30bn worth of hardware.

Amazon Web Services, of course, is dedicated to the proposition that you could get rid of those and move to the cloud. They have a detailed blog post here arguing that moving to AWS is environmentally advisable, not least because their customers “consume fewer servers”. The only problem, of course, is that they also server who only stand and wait; reserved surge capacity is valuable, which is why people pay for it.

AWS’s James Hamilton reviews a paper on the performance of Flash SSDs in a megacloud infrastructure.

And this looks like an interesting project: the UK Government’s Science & Technology Facilities Council is getting a new supercomputer facility, based on IBM’s OpenPOWER chips, to run its Watson AI.

Vodafone-Liberty swap rumours; Altice x FiOS; Comcast 2Gbps delayed; fibre surge escapes from America

The Vodafone-Liberty Global story is bubbling up. The two companies confirmed that they were involved in talks, but supposedly only about an “asset swap”. One suggestion is that this would involve Vodafone handing over the German operation, including its newly acquired cable assets, and getting Virgin Media in return. That would respond to the BT-EE deal and plant the big red comma right on top of the UK fibre-to-the-cell network, but can Vodafone really be a European mobile operator without any presence in the biggest European economy? There’s some interesting discussion here - German regulators might not accept the implied merger of KDG and Liberty’s UnityMedia cable network, and it might all be a cover story for a real merger between the two operators.

Elsewhere, will Altice make an offer for Verizon’s whole resi wireline business? Apparently it might cost some $34bn. Meanwhile, they’ve appointed bankers to sell Cabovisao and Onitelecom in Portugal, probably to Vodafone.

Comcast’s announcement of 2Gbps service kicked off the US’s sudden race towards fibre, but now it seems the actual delivery is on hold. However, the delay is only until “later this month”; Ars Technica wonders if they are still uncertain how to price the service in the light of the competition hurrying to deploy gigabit speeds.

Interestingly, Centurylink says that since they started deploying 1Gbps fibre, there’s been a spike in demand for their higher speed tiers even where the fibre isn’t available.

The race has spread into Mexico, where America Movil is urgently deploying fibre to get into the game before AT&T launches a service, and Ireland, where Eircom has just added another 300,000 homes to its target, and even South Africa, where DFA is planning to build fibre to 20,000 businesses.

AT&T, meanwhile, says Apple iOS updates are now the biggest capacity events on the network, and they’re increasingly turning to their SDN-based Network on Demand Ethernet system to deal with them (presumably in the context of mobile backhaul). Frontier is doing something similar. But what happened to the 400,000 extra businesses in 30 UK cities that were meant to get fibre from BT?

And Altice’s Patrick Drahi wants to review the fibre-deployment partnership with Orange and go faster.

Niel buys Monaco Telecom; £500 MVNOs; De La Vega on Google Fi; Skype Web; m-payments, IoT news

What’s Xavier Niel up to now? Monaco Telecom is now 55% owned by a company he controls, and he’s just rebranded it and announced a “very marked shift in innovation”, with 70% of the company’s CAPEX going into new projects. Although a very, very small telco, the company has some interesting niche projects - it provides carrier services and the use of its +377 country code to Kosovo, has similar deals with various shipboard and airborne networks, and owns 36% of Roshan in Afghanistan.

An example might be something like Simwood Mobile in the UK. Here’s an interesting post about building the service, which makes the point that the minimum commit for an MVNO is now down to £500/mo in the UK.

AT&T’s Ralph de la Vega is being very careful what he says about Google Fi.

Everyone in the US or UK can now try Skype for Web, after Microsoft opened up the beta further.

NTT, meanwhile, launches Skyway, an SDK for WebRTC applications, while Telefonica and Mozilla have added screen-sharing to Firefox Hello.

De La Vega also had something to say about the failure of Softcard, the US operators’ m-payments joint venture. He thinks payments in general is more appropriate for the maker of the device OS. Verizon, though, turns out to be an investor in SimplyTapp, a company that does host card emulation software for tokenising payments systems. Visa, meanwhile, has started a developer program for its tokens.

Samsung is aiming for 15-20% penetration of their payments app. Retailers are a bit more sceptical about Apple Pay than Apple is.

Experimenting with LoRa and blogging it.

And Ericsson has backed away from its forecast of 50bn connected devices by 2020. They’ve shaded it down a tad - more precisely, they’ve cut it by a factor of two, to 26bn by 2020.

Orange might expand in Europe; horrible row over Israel brand licencing; DISH-T on again? Idea ups 4G pricing; Burma price war, 65% smartphones already

Orange is apparently “contemplating” more acquisitions in Europe, and expects more consolidation in France although it won’t be the first to move.

They also said they were keen to expand in North Africa and the Middle East. This led to trouble. Stéphane Richard said that Orange would ultimately like to get rid of its brand-licensing deal with Partner Communications in Israel, because they don’t own the network or indeed operate there and they would prefer to only use the brand on products they control. However, Richard had already said he would also like to get rid of it because it was politically sensitive and this had only taken so long because Partner might sue.

Immediately, pro-Palestinian campaigners declared victory for their boycott, while pro-Israeli ones demanded Orange must stay (although they weren’t really there in the first place). What a mess.

German WISP Airdata is suing to stop the Telefonica-EPlus merger.

Günther Oettinger has called a meeting of EU telecoms ministers and operators in an effort to settle a policy on roaming and net neutrality. As with all Oettinger-related stories, you need to ask what his boss, EU VP Andrus Ansip, is doing.

The DISH-T-Mobile story is coming around again. The FCC might make them cough up some spectrum if true. Meanwhile, T-Mobile wrote to Tom Wheeler arguing for more 600MHz to be carved out to make sure the dynamic duo don’t eat it all.

After the Indian 4G auction, Idea Cellular has put up its data pricing sharply in the New Delhi circle. It’ll be interesting to see how that works. In Burma, meanwhile, prices are plummeting as Telenor and Ooredoo battle for share. Apparently, 65% of the market is already on smartphones.

iTunes streaming is coming; Apple, Chromecast market share; ad blockers; Google pays Chinese vendors

Apple’s music streaming service has been confirmed by the CEO of Sony Music ahead of today’s WWDC. Slightly ironically, Apple has also had to recall the Beats Pill X1 speaker after some of them burst into flames.

Meanwhile, Dan Rayburn blogs that Apple’s TV is still in the lead in the streaming device market, at around 40% market share, but the Google Chromecast has raced up to 34% very quickly.

Apple may be considering giving app developers and content creators a bigger share of the iTunes Store pricing.

Larry Page thinks ad blockers are mostly a problem for advertisers, who need to be less annoying.

Google has been struggling to derive anything much from the vast growth of Android in China. Most of the devices are so-called forkdroids, based on the open-source Android codebase with the Google functionality stripped and replaced. Now, Google is offering Chinese vendors hard cash to ship the Google Play Store app.

Revisiting digital TV standards.

BT may be about to up the price of BT Sport.

And Yahoo! Pipes, we’ll miss you.

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June 4, 2015

Ericsson and STL Partners reveal Telco 2.0 Agility Challenge award winners: Telus, Zain Jordan & Telecom Italia Digital Solutions

STL Partners are pleased to announce the winners of the Telco 2.0 Agility Challenge, a competition that assesses how agile operators are across different areas of their business. The competition was independently conducted by STL Partners and sponsored by Ericsson, with operators worldwide openly invited to participate. STL and Ericsson presented the awards to the winners at TM Forum Live! in Nice.

‘Operator agility’ refers to the ability to move at faster speeds and to learn and adapt quickly to capitalize on new opportunities for improved business and operations management. The Telco 2.0 Agility Challenge winners embodied these principles, demonstrating industry-leading capabilities in core areas of competence.

The Winners
Organizational Agility: Telus

Telus are the winner in the Organizational Agility category. Telus have demonstrated that they embrace change and innovation, placing the customer at the forefront of their business. Telus adopted a Customer First initiative across the whole organization; this commitment to customers has led to both a significant increase in the ‘likelihood to recommend’ metric and a substantial reduction in customer complaints.

Organizational Agility: Establish a more agile culture and mindset, allowing you to move at faster speeds and to innovate more effectively.

Service Agility: Zain Jordan

Zain Jordan, the leading mobile operator in the Hashemite Kingdom of Jordan, is the winner in the Service Agility category. Zain Jordan prides itself on challenging existing approaches and methodologies in order to remain the leader in the competitive marketplace in which it operates. The company believes its receipt of the Service Agility Award comes as a reward for its continuous efforts to develop the capability to create products and services in a much more iterative manner, resulting in quicker launch of a much broader range of innovative products and services, with less investment and that better address customer needs.

Zain Jordan has achieved the speed and flexibility needed to differentiate itself in the marketplace through deployment of state-of-the-art, real time service enablement platforms and solutions. These are managed and operated by professional, specialized, and qualified teams, and are driving an increase in profitability and customer satisfaction. Zain Jordan’s highly skilled professionals deliver many innovative service designs each year to customers in the Kingdom. During both the product development stage and post-product launch, Zain Jordan regularly engages in testing and simulating and captures customer feedback to ensure that products better meet customer needs.

Zain Jordan seeks to constantly improve its products and services as well as shorten the length of time it takes to bring them to the market. The level of competition in Jordan is well documented, and in order to remain relevant and successful, adapting to market conditions and satisfying customers is a must. Put in a word, one has to be ‘agile’ in order to succeed and survive.

Service Agility: Develop the capability to create products and services in a much more iterative manner, resulting in products that are developed faster, with less investment and better serve customer needs.

Partnering Agility: Telecom Italia Digital Solutions

Telecom Italia Digital Solutions (TIDS) are the winner in the Partnering Agility category. TIDS have partnered effectively to deliver innovative digital services, including establishing and launching an IoT platform from scratch within 6 months. They are also developing and coordinating all the digital presence at the Expo Milan 2015. They have demonstrated that they can form beneficial partnerships in fast timescales both for TIDS and for Telecom Italia Group.

Partnering Agility: Become a more effective partner by developing the right skills to understand and assess potential partnerships and ensure that the right processes/technologies are in place to make partnering as easy as possible.

Operator Agility
The Telco 2.0 Agility Challenge follows STL Partners’ release of the “The ‘Agile Operator’: 5 Key Ways to Meet the Agility Challenge” study that was commissioned by Ericsson and based on interviews and discussions with around 30 U.S., European and Asian operator executives. The report provided insights and recommendations on key categories that define the agile operator.

Operators worldwide know that IT intelligence is essential in supporting real-time customer demands, especially as networks and systems become more complex,” said Pam Mallette, head of OSS/BSS marketing for Ericsson. “To this end, legacy systems simply cannot deliver the ‘weightless agility’ that is needed to deliver the instant gratification that subscribers crave. The winners of the Telco 2.0 Agility Challenge have demonstrated an intense focus on important agility-driven initiatives that will be key to their ongoing success. We congratulate them on this recognition.”

About the Awards
STL Partners ran the Telco 2.0 Agility Challenge during April-May 2015. The Challenge was an online benchmarking tool that allowed operators to score how ‘agile’ their organisation is across a number of key domains. The highest scoring operators within each domain were shortlisted and winners were selected based on follow-up evidencing calls.

The Telco 2.0 Agility Challenge awards are independent STL Partners awards, with the Challenge being sponsored by Ericsson. STL Partners would like to thank Ericsson for their support in this programme.

About STL Partners
STL Partners are a consulting and research firm, focusing on business model innovation in the TMT sector. STL Partners undertake consulting assignments for telecoms operators and technology companies around the globe and produce thought-leading research under the Telco 2.0 initiative.

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June 2, 2015

Digital Implementation: One Decision That Rules Them All

In digital, there is one decision that makes more difference than every other: what you choose to measure at a given time. It doesn’t sound very ‘sexy’, but if you get it right, your results will be. This post explains why, how to go about doing it, and some tools we’ve developed to help select the right metrics for the moment - including metrics for synergies, an important and complex type of measure for digital businesses operating within an existing core business.

Becoming ‘digital’ is a fundamental drive for all businesses today. It means embracing mobile and online ways of doing business, transforming existing businesses and building new ones. It sounds straightforward, but it’s a lot harder than it seems.

Some of the intrinsic and defining characteristics of digital business are:

  • Digital business models are often very different from their non-digital counterparts (if they exist at all)

  • You can change pretty much everything you do relatively swiftly

  • You can count pretty much everything all the time, real-time, if you want to

  • Where there is an existing businesses, some of the key metrics for new initiatives relate to ‘synergy’ - impacts on and within the core business

These characteristics mean that what you choose to measure, and thus what you base your decisions on, both defines what you see as success and impacts your ability to achieve it. OK, but so what, and how should you choose the right measures?

So what that the business models are different?

Digital businesses often employ very different ways of making money (aka ‘business models’) than non-digital businesses. The obvious differences can be comprehensive, including different propositions, different pricing models, different delivery mechanisms, etc.

However one of the biggest differences is that digital businesses models do not always start out making money - they need to achieve scale or credibility in some other factor first.

Google is a classic example of this: it initially needed to build significant scale in the number of people searching, and to drive that optimise the perceived quality of its search results, before it could become the massive and hugely effective paid search matchmaker it is today. Google’s success was not measured by income for many years after its launch.

So what that you can change everything quickly?

Digital businesses are, or at least should be, relatively agile. This is in theory a good thing - you can do new things and respond to new learnings quickly.

But it’s not necessarily good if you are doing the wrong new things or responding to misleading stimuli or learnings. So being able to change quickly can be an opportunity to jump off a cliff quickly too.

Now of course, in theory, you should be able to change back quickly too. But if you are measuring and hence watching the wrong things, you may not get the right signals. And a cliff is a cliff, after all.

So what that you can count pretty much everything?

It’s easy to get swamped with information in digital. Just a glance at Google Analytics shows visitors, page views, users, minutes, new users, existing users … you name it and with a bit of guile you can generally get to it, and that’s just a web analytics tool. Add to that financial reports, CRM, billing systems, big data… and in no time at all you can suffer information overload.

But what actually matters? A key concept in the LEAN approach, often used by innovative and start up business, is ‘One Measure that Matters’ (OMTM) - a single key metric used to measure success. There may be subordinate or supporting measures, but there should be one that is the lead indicator.

Right Moment Metrics

What we’ve added to this is the idea that the OMTM will change depending on the stage of evolution of the business. Our shorthand for getting the right measure at the right time is ‘Right Moment Metrics’.

To make this a bit more pragmatic, we’ve also established a database of 150 key metrics used in digital businesses, including a method for selecting what is the right metric for the moment for a different types of digital businesses.

Of course another related success factor is ensuring that your stakeholders understand and buy in to the metrics you choose. If they don’t, then however much you are on the right track won’t matter as the money usually follows the measures.

Synergy Metrics: A Double-Edged Sword?

The prospect of synergies created by new initiatives can be both an advantage and a problem. They are an advantage because they help to stack up additional benefits in the case for early stage activities. But synergies can also present a number of problems. For example:

  • ‘Double-bubble’ benefit counting. For example, churn can only be reduced by a certain amount and may be impacted by many different factors. It cannot be logical for every initiative to claim the benefit.
  • Complicating the decision-making process. When activities have potential knock-on effects with other parts of the business, or require support from existing resources, conflicts of interests and authorities can occur. This can mire the innovation in unproductive activities and unhelpful cultures, and thereby derail it.

We’ve looked at this in some depth in our analysis, and our database includes methodologies to help select the most useful Synergy Metrics.

Next steps

If you’d like to know more about our ‘Right Moment Metrics’ approach please email contact@stlpartners.com, and there’s more on our research portal in The Digital Dashboard: How new metrics drive success in telco digital initiatives.

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June 1, 2015

GigaCable, 5G, Google I/O, Twilio, Internet of Trucks: Telco 2.0 News Review

Altice: 5 small MSOs = 1 TWC; broadband is the triple play; Charter-TWC surges in the enterprise

Patrick Drahi’s Altice looked at bidding for TWC but backed out because they think Comcast and Charter/TWC are as big as the FCC will ever let them be, and it will be easier to pick off regional cablecos. Drahi says that if they were to buy five small US operators, they would be as big as TWC, which immediately turns the spotlight on Cox, Cablevision, and Co. It’s more evidence of the potential value in those cable networks as the gigabit disruption kicks in.

As Dealbook points out, the key element in the triple play (or quad play) is now undeniably the broadband and cablecos have become increasingly focused on it, while also enriching their product lineup with more SMB, enterprise, and carrier products. Fierce points out that the merged Charter-TWC has become a much more formidable force in enterprise and carrier services, with 88,800 buildings on their fibre network, 215,000 route miles of fibre, and Ethernet interconnection (NNI) with 130 other operators.

In-depth Telco 2.0 coverage is here, in our new Executive Briefing “Gigabit Cable Attacks This Year”

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In Australia, meanwhile, the NBN has morphed from a massive FTTH rollout to a mishmash of VDSL2, VDSL2 with a forward-deployed DSLAM, cable, and some FTTH. Now, its early adopters are discovering that their broadband speeds are being capped until the last ADSL2 operator finally turns off service on the so-called “FTTDp” networks. It’s an interoperability requirement, but just imagine how happy they will be.

Businesses in Westminster are lobbying BT, or indeed anyone really, to deploy more broadband in the centre of London. The good news is that prices are falling - sort of. Fuel Broadband is offering the first 6 months of its 16Mbps unlimited package free, but after that, the £5 monthly rate is actually up 20%.

More excitingly, independent FTTH deployer Hyperoptic has substantially cut its prices, in fact by almost as much in percentage terms as Fuel raised them. Their 1Gbps service has come down from £60/mo to £50/mo. And Zen has brought back the unlimited option.

5G = multiple networks, cellular billing? Sprint’s next big rollout; Equinix buys TeleCity

The European Union has signed an agreement to cooperate with Japan on 5G research, to go with the one it already has with South Korea. The budget, however, is a whole €12m over two years.

Here’s a really interesting interview from Inside 5G, with Mischa Dohler, King’s College London 5G researcher.

Dohler says that the WiFi ecosystem has historically always added capacity about one or two orders of magnitude as fast as the cellular one. Further, he says that the main way in which mobile networks add capacity is always cell subdivision, and therefore lots more small cells. But delivering this will be very difficult unless the core network radically changes - or disappears.

On the other hand, he argues that the real strength of cellular is that it alone has a reliable way to collect money from the network edge. Therefore, he says, perhaps cellular should give up on carrying user traffic and just act as a management network for anything that needs one of those, whether that be gigabit WiFi, mmWave, LoRa, or something else.

Inside 5G also interviews the UK Spectrum Policy Forum, which reckons we’ll need three distinct bands - <2GHz for coverage, 2-6GHz for capacity, >30GHz for real capacity.

The UK regulator also published its proposals to auction the 2.3 and 3.4GHz bands. 60 out of the 190MHz will be held back to stop BT-EE eating it all.

The Nokia Networks-Alcatel deal is of course all about 5G. This week, it’s been having some trouble, as the shareholders aren’t happy. Some of them worry about that time Nokia owned the world and lost it. Others would just like some more cash.

Both parties to the deal will be hoping to get something out of the next effort to fix Sprint’s network. Sprint is apparently about to name the preferred contractors for projects in 100 markets, which will include 6,000 new macro-cells and perhaps as many as 100,000 small cells. Basically everyone except Huawei seems to be in the frame. Sprint has asked them to quote both for prices including site acquisition, and without it. Their CEO claims they’ll be the best or the second-best by 2017.

Is Carlos Slim looking to acquire an Indian MNO?

The Argentine regulators have signed off, and Telefonica is out of Telecom Italia.

HP has acquired one of its partners in the OpenNFV and OpenDaylight projects, Contextream, the developer of an open-source SDN controller.

Equinix, operator of Internet exchange points and data centres, has acquired TeleCity in a $2.35bn deal, adding numerous sites in Europe and killing off the proposed TeleCity-Interxion deal.

Here’s a chronology of Amazon Web Services EC2 instance types:

Screenshot from 2015-06-01 13:52:44.png

And Vodafone UK tests a femtocell hidden in a bird box.

Telefonica’s wireless home security; Intel-Altera is back; Avago-Broadcom; Internet of Trucks; Google Brillo

Telefonica has announced its home security service, based on the SigFox M2M radio network, in Spain. They’re calling it part of a “quintuple play” bundle. The service costs €16/mo plus €9/mo of rental for the equipment. We remember that they licenced the software used in AT&T’s Digital Home a while back, so perhaps this is the product they’re getting from that. There’s a release here, which tells us that they partnered with Securitas.

Intel, meanwhile, is coming back for another go at Altera, the maker of specialist FPGA chips often found in embedded, mobile network, and Internet of Things devices. Earlier this year, Altera knocked back a $54 a share offer from Intel. Apparently the current offer is pitched at the same price, but something’s evidently changed…

That something seems to be Avago’s $37bn bid for Broadcom. This is the biggest semiconductor merger for a long time. Broadcom is familiar, of course, for their modems and RF technology. Avago, though, perhaps less so. The company originates with spinoffs from HP, LSI Logic, and AT&T Research, and it concentrates on sensors. In many ways, an IoT device is a sensor of some sort attached to a communications SoC, so you can see how that would make sense. Interestingly, though, Avago also manufactures the RF power amplifier in Apple phones.

Here’s a connected thing: a 44-tonne Volvo truck Ericsson is using to experiment with 5G M2M down a mine. Multi-point connectivity turns out to be important.

And Google’s previously trailed Project Brillo is a thing, having been announced at Google I/O. As expected, it’s a cut-down OS for M2M devices, but it also incorporates Weave, a new network protocol, and a certification process for third-party devices. An interesting detail is that future Nest products will be based on it.

Google I/O: Brillo M2M, Android M, Android Pay, Chromecast, Now on Tap, Fi waiting lists, Tango on sale, Photos

To go with your Google I/O, here’s an interview with Sundar Pichai, Google SVP and effective head of products. He underlines Google’s fascination with machine learning, and strongly suggests that Project Loon will end up being offered to carrier partners if it does anything.

As well as the Brillo IoT operating system, Google Now is getting some interesting new features. Now on Tap lets you access resources from other apps or websites in Now while you’re using some other app, across the contexts. This is rather like Android’s original decision to let basically any app integrate with any other, but it takes it a step further - not only is it voice-based, it’s recommendation-driven.

A developer preview of Android M is out, and Ars Technica reviews it.

Android Pay is here, and it’s basically like Google Wallet but with Apple-style tokenisation.

The Chromecast has gained more features, notably playlists and APIs for better multi-player gaming and remote display support.

The Project Tango 3D sensing developer kit is now generally available, at $512 a throw.

Google Fi, meanwhile, has started putting new users on a waiting list. Invitations will be issued depending on which US zip code you live in, because Google is trying to make sure it only adds users where it thinks there’s enough free WiFi (presumably the Google car knows).

And the new Google Photos app will upload all your photos by default. It’s free of course, but who knows what they will do with them.

Here’s a good list of reasons to be bearish about Google, very similar to this Executive Briefing.

IBM: I’m a Mac. BlackBerry share actually rises. Galaxy S6E review. Patriot Act expires

IBM employees are to get the choice between a PC, a MacBook Pro, or a MacBook Air. To begin with, that’s an additional 50k Macs a year for Apple. It’s also a hugely symbolic departure for the company that invented the PC architecture.

An unlikely sequence of Unicode characters in an SMS will crash iOS devices due to a segmentation fault in the CoreText library. It also works on OS X, but at least there it only kills the app that called it, not the whole machine.

Elsewhere, did you know 22% of smartphone users accessing the Web from the UK have BlackBerry devices? Perhaps more interestingly, Mobile Industry Review reckons that BlackBerry’s market share actually rose towards the end of last year for the first time since Q3 ‘09. It’s from the proverbial low base, but it’s better than the alternative.

Here’s a really positive review of the Samsung Galaxy S6 Edge:

To put it simply, Samsung killed it with the Galaxy S6 Edge. This is by far the company’s best effort.

Microsoft, meanwhile, has named the day. Windows 10 drops on the 29th of July for tablets and PCs. Here are details of who gets a free upgrade - basically anyone so long as they’re not running Windows in a VM or building their own PCs.

A demonstration targeted Facebook HQ over the weekend to protest about their efforts to enforce a real names policy and specifically about the fact there is a button to “report” anyone using a “false” name.

For the first time, surveillance powers in the Patriot Act have expired after the US Senate declined to re-authorise them.

And the GSMA is organising a hackathon dedicated to “sustainable fishing”. The problem statements are here.

700k Twilio developers, integration with Microsoft BI; 85% of UCaaS still to go; WebTorrent

Twilio has reached 700,000 registered developers and 1 billion minutes of voice. However, as Tsahi Levent-Levi points out, this is a soft metric - how many of those have any active apps? are they any good? how much do they spend? It’s still a big number, though.

Meanwhile, Microsoft Power Business Intelligence can now plug into your Twilio account and pull data into your BI dashboards. And which video codecs will Microsoft Edge support in WebRTC?

Vonage reckons the Unified Comms as a Service market is around 15% penetrated.

Fring is keen to sign up more carriers to its Fring Alliance, a WebRTC-based effort to protect you from OTT competition.

LG U+, meanwhile, has VoLTE roaming set up with KDDI, using Syniverse’s IPX.

Why doesn’t SIP verify two-way media before it decides the connection is ready?

Here’s a great example of the possibilities of WebRTC: BitTorrent over WebRTC for peer-to-peer content delivery. On a similar theme, here’s an effort to use BitTorrent and Bitcoin together to decentralise software version control.

69% of peak hour traffic is streaming; the “NCC”; Comcast in trouble; new carrier OTA video ideas

Sandvine reckons that US peak-hour Internet traffic is 69% video streaming in the downlink, and the biggest single category of that is Netflix, with 36.5%, followed by YouTube on 15.6%. Interestingly, though, 18.9% of the uplink traffic is also described as streaming video.

No surprise, then, that Netflix seems to have become an increasingly formidable lobby and its competitors complain that the FCC has become the “NCC”. Netflix says it’s because their arguments are just common sense. Right. A more convincing argument is that nobody likes having their TV interrupted when there’s a peering row.

Or, you know, it could just be lobbying.

Comcast may be the subject of an investigation into whether it has complied with the commitments it made when it bought NBC Universal in 2011.

Frontier, meanwhile, is working on a new over-the-air video proposition in partnership with TiVo.

And BBC Research tested out LTE Broadcast at the Cup Final, with Ericsson, Huawei, and some “invited industry guests”.

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