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October 28, 2015

Amazon, Apple, Facebook, Google, Netflix: Whose digital content is king?

We’ve just published a new research paper ‘Amazon, Apple, Facebook, Google, Netflix: Whose digital content is king?’. Online entertainment is increasingly dominated by 5 big platforms but 6 forces are likely to shape the market going forward and could have profound effects on the dominant platforms. We analyse the relative strengths and weaknesses of each player and explore the potential opportunities for telcos to compete and collaborate. 

The report is part of the Executive Briefing Service and the Dealing with Disruption 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.

Extract chart from the report:

content king - fig 2.png

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October 26, 2015

Q3 Results Watch: Telco 2.0 News Review

Monsters of Cloud win Q3; Microsoft Linux; HP, Windstream out of cloud, DTAG, Huawei in

Google, Microsoft, and Amazon have all reported impressive Q3 numbers driven by the cloud. As we point out in this blog post, our 2012 Cloud 2.0: Telco Strategies in the Cloud report forecast 2015 as the year the cloud market would take off into mass adoption. Taking it company by company, AWS revenues are up 78% year-on-year, and the 8% of Amazon’s revenue that comes from AWS represents 52% of Amazon’s operating profit. Amazon’s operating margin in North America is 3.5%. In AWS, it’s 26%.

Read/Write points out here that AWS would be worth an insane amount of money if it had a typical tech sector valuation. It also points out that VMWare president Carl Eschenbach doesn’t look so smart any more for saying that he couldn’t believe he wouldn’t be able to beat a company that sells books.

Microsoft, meanwhile, beat its estimates handily, but as Julie Bort at Business Insider tells us, it gave itself a big helping hand by re-organising its reporting segments. Under the old reporting scheme, only two segments would actually have grown - and those are the two that contain the consumer and enterprise cloud businesses respectively. The Register notes that the mix of Lumia phones seems to have skewed sharply cheap, trashing margins but still not getting enough volume to matter. Evidently, if the Windows licensing and hardware lines suck, the cloud must be doing superbly well for the company to show top-line growth.

Mark Russinovitch, the MS Azure CTO, went to a Linux conference and encouraged developers there to apply for jobs at MS - they are currently advertising 498 posts that mention “Linux” somewhere in the description.

Google, meanwhile, is still keeping ahead of the plummeting price of online ads. The average cost-per-click was down 16%, but volume was up 23%, and OPEX rose “only” 14% in Q3. By Google’s opulent standards that’s a pretty lean quarter, especially as CAPEX was lower than usual, so the result was net income of $3.98bn, compared to $2.72bn a year ago. The new CFO, Ruth Porat, seems to be setting a slightly different tone since the Alphabet re-org - not only is the free pizza bill being reined in, the company is going to buy back $5bn worth of shares.

Data Center Knowledge notes that MS spent $1.5bn on cloud CAPEX in Q3, Google some $2.4bn (again, Google’s idea of saving is pretty relative), and AWS won’t say although we know they lease a lot of data centre space. Either way, Big Cloud is still a dear, dear do in terms of capital.

Perhaps that’s why HP is shutting down the public cloud element of Helion. They’re still going to be contributing to OpenStack, providing private cloud, and managing other people’s data centres, but the front-line public cloud element shuts down on the 31st of January, 2016. Windstream is also getting out of the game, selling its data centre portfolio for $575m and concentrating on fibre.

DTAG, however, is getting in. They plan to launch the Open Telekom Cloud at CeBIT next year as part of a collaboration with Huawei.

Here’s an interesting piece about BT, which apparently doesn’t like OpenStack much, in part because it can’t fit all its enterprise vCPE customers on one controller - but as a comment points out, why would you do that in the first place?

And here’s an exercise benchmarking different hypervisors on Ubuntu 15.10. It’s harder than you might think to get valid results, but the short answer is that there’s not much to choose between Xen or KVM, and either is better than VirtualBox.

Verizon, AT&T Q3s - wireless margins tick up. Is Comcast WiMVNO coming soon?

Hi diddly dee, United States Q3s. Verizon is up first, with groupwide revenues up 5% year-on-year and net income up 9% on the same basis. $23bn out of $33bn total revenue came from VZW, which saw a 4.3% increase in subscribers with 82.5% smartphone penetration and 89% of its data traffic on the 4G network. In the quarter, they scored 1.2m net adds.

CAPEX is up 8.4% year-on-year and may go higher next year, with the emphasis on wireless, suggesting that the US CAPEX cycle will start to lift again in H2. VZW might be spending more on small cells or DAS, too, as it confronts 75% growth in data traffic. That said, Fran Shammo didn’t say what period the 75% growth was over.

In wireline, Shammo said they were committed to the East Coast FiOS footprint, where they claim to have passed over 70% of homes with fibre. Another way of saying that would be that they aren’t so committed to wireline outside the FiOS footprint. That said, it was a decent wireline quarter as well. Consumer revenue was up 2.8%, and FiOS revenue up 7.5%, while 79% of the total revenue came from fibre. They claimed 114k net adds on fibre broadband, plus 42k video. Two-thirds took over 50Mbps, with 25% of subscribers on the 75Mbps tier.

Margins were strong, too, with wireless operating margin up from 31.% to 33.9% and service EBITDA margin up from 49.5% to 56.4%, wireline EBITDA of 23%, and even wireline operating margin, where the capital cost of FiOS makes itself felt, going from 2.3% to 6.2% in a year.

Enterprise, however, was horrible, with revenue declining 4.9% in Global Enterprise and 5.8% in Wholesale. Quote of note:

“On the enterprise piece, I guess what I would say is we’re seeing more or less the same and there’s been no change,” Shammo said. “There’s a lot of competition and there’s a lot of price compression continuing in the IP space.” Shammo added that it has made gains on the strategic side around security and data centers, “but even in data centers there’s an awful lot of competition happening with price compression.”

If it’s Verizon’s results, it must also be AT&T’s. Wireless revenues were broadly flat year-on-year, but service margin was up sharply to 49%. They put this down to “operational efficiencies” and quick-upgrade plans, but if it’s happened at VZW as well, perhaps the US price war is beginning to ease? ARPU is up 5% counting device instalments, and service ARPU is still down on a year-on-year basis, but basically all the drop happened in H2 2014, so perhaps it’s true.

T also claimed a huge net-adds quarter, 2.5m, but this was rather less than it looked. That includes 1.6m M2M devices, 622k tablets and the like, and 466k prepaid users, for a postpaid score of 289k. By contrast, VZW reported 430k net postpaid adds. On the other hand, 1 million of the M2M devices are connected cars, and the ARPU for a prepaid smartphone user was a very decent $42. They now have a million prepaid smartphones on Cricket, so this wants taking seriously.

Glenn Lurie, the head of AT&T Mobility, recently offered us the connected bike and said he wanted to connect everything to everything else. Less fluffily, he also mentioned they’ve won Jaguar-Land Rover’s connected car business.

Resi wireline was a mixed bag. On one hand you’ve got 192k “IP broadband” net-adds, but on the other, there were 278k net losses from DSL. By comparison, VZ lost about 400k DSL subs during the last 12 months or 100k/quarter. They also net-added 26k satellite subscribers on DirecTV, but net-lost 92k U-Verse subscribers. Randall Stephenson blamed this on “shifting focus to DirecTV”, but surely you’d want the net-adds on DirecTV to be equal or more than the losses?

As usual, strategic business services were doing well, growing 12.6% year-on-year. That wasn’t enough to outweigh the slippage in the legacy business wireline sector, though, and business wireline overall was off 2.5%. A lot of wireless has been reclassified into Business Solutions, so overall the segment was up 1.2%. Overall, AT&T’s consolidated margin was 20.3%.

Back when Verizon bought the cablecos’ chunk of spectrum in 2012, they agreed to provide them with MVNO service should they want it. It’s now being suggested that Comcast is about to turn the key, but this piece argues they won’t deploy a WiFi-plus-MVNO, although the original source at Bloomberg Businessweek thinks they will.

Centurylink reckons it’s deployed SDN to 36 locations, and it intends to get to 40% of its network by the end of this year and 100% by 2018. Services are the usual ones (firewalls, virtual routers, vCPE) and the kit comes from Ciena.

Level(3) is offering a new wireless backup connectivity product. Interestingly, which mobile operator it uses will be determined at install after an engineer surveys the site.

Charter is taking over TWC’s concession in Louisville and will do 1Gbps.

FCC wants >24GHz in WRC15, NGMN emphatically doesn’t

The FCC is asking for comments on how to use spectrum above 24GHz for mobile broadband, with a view to what proposals they might take to WRC15. It’s pretty blue-skies at the moment - a wide variety of platforms, licensing setups, and technologies are included - but it’s worth watching precisely because it’s going to inform the US position in WRC15 next month.

Here’s even more from Harold Feld on the legalities of LTE-LAA, plus a Halloween-themed take.

The NGMN is also packing for WRC15, and they’ve issued a briefing paper setting out what the carriers’ lobby would like. The short answer is: More! The slightly longer answer is: More spectrum under 6GHz, now, and between 6 and 20GHz, at WRC19 or even earlier, but 20+ is only nice-to-have.

OFCOM has set final arrangements for the UK 2.3 and 3.4GHz auctions.

Vodafone claims it would like to pull fibre to 1000 more cell sites around London, but the councils won’t let them. Funny, it worked for 3UK and EE. Maybe it was because they used Virgin Media’s gigabit Ethernet? Meanwhile, Tom Mockridge, VMED CEO, says there should be no more BDUK money, and the carrier is offering its small business customers 300Mbps over cable.

And Level(3) and Charter are negotiating a peering agreement via the FCC.

T-Mobile.nl up for sale? EE goes majority 4G; Orange, TeliaSonera back to growth

DTAG is considering selling off T-Mobile Netherlands, for about €5bn. The cash might go to reducing debt, or alternatively to paying for T-Mobile USA to go spectrum shopping. The most likely buyer is Liberty Global, which is also after Cable & Wireless Communications (i.e. the Caribbean island MNO, not the enterprise ISP) in another €5bn-er.

FierceWireless argues that DTAG is getting out of pure-play mobile, at least in Europe.

Another operator it’s selling, EE, reported that in Q3 it went majority-4G, and as far as its postpaid subscribers go, two-thirds 4G. The first UK MNO to be over 50% 4G, 3UK, has meanwhile added another 5MHz carrier in the 1800 band for more speed.

Orange is the latest Eurocarrier to return to year-on-year growth, albeit only 0.5%. Their CAPEX/revenue ratio is currently 15.2%, roughly where it’s been since 2010; will we soon see them join Vodafone, Telefonica, and DTAG in moving into an investment phase?

Austria denies it’s selling the government stake in Telekom Austria. TeliaSonera reckons 5 out of 7 of its European OpCos are seeing EBITDA growth, but beyond that their 9-month report is a bit pale.

And Tele2’s big bundle strategy seems to be paying off.

China Unicom suffers in Q3; RCom/Aircel/Sistema; MTN, Millicom, America Movil Q3s

China Unicom seems to be suffering - it’s losing subscribers, 3.3% year-on-year, to both its rivals. This has knocked back service revenue by 8% and net income by 23% for the first 9 months of 2015. Margin will be going down further, too, as the company will let users carry over unused data allowances as of next month. All Chinese operators will be doing that, so don’t expect this effective price cut to help with share.

That said, their M2M platform partner, Jasper Wireless, seems optimistic.

In India, a merger between Reliance Comms, Aircel, and Sistema is being discussed. India has so many operators that such a thing would only be the third-biggest. Apparently, RCom isn’t too keen on the merger but would be open to a spectrum trade, while Aircel is losing money and wants out.

MTN’s net adds for Q3 were, as they say, impacted by Nigeria’s effort to have SIM cards registered. About 5.1m users were shut off, and so far 3.4m of them are back. That said, data revenue is rising over 100% annually, and ARPU in South Africa is up 8.8%, so it can’t be all that bad.

Millicom is being battered by foreign exchange movements, but down at the bottom, revenue on an organic basis was up 2.9% before counting the recently acquired cableco. Oh, and they had to report themselves to US and Swedish police over improper payments in Guatemala.

America Movil is also blaming the forex, but in their case, service revenue actually fell by 1%, notably because Mexico is becoming competitive. Selling shiny gadgets compensated enough to get to 1.2% growth.

Both carriers in the Philippines have begun offering 1Gbps FTTH. M1, again, had a reasonable quarter, largely because of device (hell, iPhone) sales.

Iliad seems to be snapping up networks in the French overseas territories.

Huawei vs Xiaomi; Ericsson Q3, 5G projects; EE’s balloon; Internet.org struggles

Huawei and Xiaomi are locked in a desperate struggle for all the Chinese smartphones that aren’t made by Apple. So far Huawei has the upper hand. The problem, though, is that only Samsung has really managed to make something of being the alternative to the iPhone, without seeing its margins crushed. And that’s because Samsung is a huge silicon vendor. Huawei, meanwhile, is spending $1bn on developer support.

Telco 2.0 has new research on Huawei out now.

BlackBerry - remember when they were the “third ecosystem”? - has briefly leaked its Priv Android phone and it’s startlingly dear at $749.

Here’s an interesting discussion of whether or not Intel might try to get into the iPhone by developing an LTE modem.

Ericsson Q3 results are out, and they’re pretty thin. Net sales, in constant currency, were down 9% - like they were last quarter - and the worst of it is that the Networks segment did poorly, as it has the best margins of the three reporting segments. The US CAPEX pause hasn’t been kind to Ericsson, and it’s Nokia who’s getting most of the China business. However, profitability was rather better, chiefly because the Network Rollout consulting business managed to break even - it’s been bleeding money for some time.

To go with that, they’ve been testing “network slicing” for 5G with SK Telecom. There’s a bit more about the baffling announcement that they would be testing 5G in Brazil next year, here - it’s yet another “partnership” on various research projects.

Juniper has sold its SDN controller, Contrail, to AT&T.

Bouygues Telecom suggests that LoRa will eventually overtake SigFox.

EE’s head of radio wants to test a cell on a balloon somewhere in the Scottish Highlands.

Facebook’s Internet.org isn’t going down well in India, because the users would rather have the real thing if they can, or else not bother. Also, they don’t seem to have convinced the airtime agents, the key channel to market.

InnovateUK is offering £1m for exciting 5G ideas.

And Russian ships have been spotted acting suspiciously near major submarine cables. The Americans are not happy, which is rich from a country that owns a special, dedicated cable-fiddling submarine.

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October 23, 2015

The Cloud Kicks Into Mass Adoption in 2015: We Told You So!

There’s a smug feeling in Telco 2.0 Towers right now. Back in 2012 we predicted mass adoption of cloud by 2015, and it looks like that’s happened.

Bloomberg has declared a cloud boom after Amazon Web Services announced revenue up 78% year-on-year, Microsoft Azure doubled its sales, helping the company to beat its earnings estimates, and Google crushed the quarter too, despite the plummeting price of online ads.

amznq3.PNGTaking a view from 50,000 feet, you might think the cloud market had passed some sort of key inflection point. Back in 2012, we published the Cloud 2.0: Telco Strategies in the Cloud Strategy Report, a deep (140pp/35k word) dive into the cloud infrastructure market and how telcos were trying to address it, and within it our thinking on the likely growth of cloud. 

In our stab at sizing the market, our mid-point forecast was that eventually the cloud might be 30% of total IT spending.

cloudforecast.pngBack then, we reasoned based on our research in the market that the transition from innovators to early-adopters occurred in 2010 in advanced markets, and that the early-adopter phase would last until 2015, when the take-off into explosive growth would occur as mass adoption kicked in. The surge would continue until 2022, when mass adoption would be tapped out and we would be into the laggards. This looks like a good call, although the conversion from % of the addressable market to a dollar amount depends on what happens to growth in baseline IT spending.

Bloomberg cites Amazon and Microsoft as major beneficiaries of the shift:

“You are seeing the cloud shift everyone was talking about, and Microsoft and Amazon are benefiting from it,” said Sid Parakh, a portfolio manager at Becker Capital Management, which has about $3 billion under management. “Oracle, IBM, even VMware are reporting very weak numbers and really no momentum in cloud.”

And indeed, our recent analysis shows just how AWS and Microsoft are benefiting, for example we recently published Amazon Web Services: Colossal, but Invincible? on Amazon Web Services profitability:

awsmargin.png

And in Microsoft: Pivoting to a Communications-Centric Business, we showed how cloud-based collaboration is increasingly crucial to Microsoft’s new business model:ms-cloudd&c.PNGAnd in Telstra: Battling Disruption and Growing Enterprise Cloud, we explored how the Australian carrier survived the arrival of AWS in town:

telstra cloud aug 2015 figure 5.pngFinally, in How 5G is Disrupting Cloud & Network Strategy Today we looked at exactly what the cloud in the era of mass adoption might look like, and why mobile operators might get a second chance in a world of increasingly distributed cloud computing:

5gcloud.PNG

We see cloud as integral to telcos’ future prospects, but not necessarily in the way you’ve heard from everyone else, and there’s more on the way on that from us too. So why not take a moment to subscribe to our strategic intelligence reports, or maybe our in-depth cloud programme, or hire us for your consulting project? Email us at contact@stlpartners.com. We’ll try not to be too smug.

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October 22, 2015

Huawei’s choice: 5G visionary, price warrior or customer champion?

We’ve just published a new research paper ‘Huawei’s choice: 5G visionary, price warrior or customer champion?’. Huawei’s business performance in recent years has been impressive, based on sticking closely to what their customers wanted and making the results easy to buy. But fierce price competition will challenge near-term profit ambitions, and Huawei’s 5G vision is ahead of the market. So could things be about to change?

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.

Extract chart from the report:

huawei 5yr review.png

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October 19, 2015

Vodafone India, China Tower, AT&T, ARM, IAB, Nokia: Telco 2.0 News Review

New Telco 2.0 research out now: in partnership with app analytics specialist Crittercism, we study app-level latency across European MNOs and discover the startling truth.

Vodafone.in IPO; Singapore spectrum row; China Tower is go; EU Digital VP draws line at 4 MNOs; Polish 4G

Vodafone is flirting with an IPO of the Indian opco again, now that a Bombay court has ruled in their favour over their tax dispute. Vittorio Colao says he’s “positively inclined” to the idea, but won’t say anything about timing. We do know that Vodafone picked Rothschilds as financial advisors on the deal and they’ve stuck a $4bn price tag on it.

Meanwhile, the MD of Reliance Jio has quit to join Analysys Mason of all companies, as their 2.3GHz 4G build-out gets later and later.

Telenor is having a board reshuffle to give the Asian opcos more representation in the groupwide leadership. Vivek Sood leaves Telenor India to be group EVP and CMO, with Sharad Mehrotra moving over from Telenor Myanmar to be the India CEO. There are a string of other moves, including adding the DTac, Grameenphone, and DiGi CEOs to the management committee. Details are at the link.

Here’s a good row in Singapore. The three incumbent networks, Singtel, M1, and Starhub, have filed regulatory challenges against a plan to reserve some 900MHz spectrum for the new fourth operator. When the band gets refarmed for 4G in 2016, one-third of it will be available for a new entrant at a substantial discount. That new entrant is almost certainly Xavier Niel’s MyRepublic. The incumbents point out, fairly obviously, that they’re being asked to give up some of their spectrum for a competitor, and claim that the service will suffer.

Malcolm Rodrigues, the MyRepublic CEO, is being almost as abrasive as M. Niel in response:

MyRepublic’s outspoken CEO Malcolm Rodrigues e-mailed The Straits Times to point out that in his opinion the incumbents ‘waste spectrum’ on old technologies and are trying to ‘minimise spectrum availability to new players’. Rodrigues believes that the setting up of a fourth telco is the best way to ensure that precious frequency resources are used efficiently for 4G rollouts. ‘There is grossly insufficient mobile data capacity to meet the rising demand for mobile data,’


In China, the sale of the carriers’ towers to the new China Tower holding company is a deal. CT is paying the three carriers in shares, with China Mobile getting 38% of its capital, Unicom 28.1%, and Telecom 27.9%.

Viettel launches service in Tanzania, where they will be the sixth operator.

The European Commission’s Digital VP, Andrus Ansip, has come out in support of Competition Commissioner Vestager’s decision on the TeliaSonera-Telenor merger. This shouldn’t be that much of a surprise; as readers will remember, Ansip pushed back against Günther Oettinger’s tilt to the €-5 carriers this spring. Ansip, interestingly, says he sees carrier investment rising without consolidation.

ARCEP, meanwhile, names the day - the French 700MHz auction opens on the 16th of November. Stéphane Richard is on record as saying consolidation might be relaunched after the auction, but this seems a lot less likely in the light of Vestager and Ansip’s remarks.

The Polish 4G auction is in, and it’s been spendy. The carriers are in for $2.5bn in fees, six times as much as the regulator pencilled in. Full details aren’t yet public, but it seems that 4th operator P4 got at least one 800MHz block and four 2.6GHz.

Telecom Italia has been talking about selling Telecom Argentina for some time but there’s never been any hurry. Now, the Argentine regulator has an objection, on the grounds it doesn’t believe the buyer has the chops to run a telco.

The US incentive auction is here. FCC has published the official documentation, including the guide prices, and much more. Sellers - i.e. broadcasters - must file by 6pm on 18th December, and buyers - operators - by 28th January.

Verizon Wireless says all 21 operators in its LTE for Rural America program have turned up service in the upper 700MHz band it leases to them.

An AT&T quad-play customer writes to the CEO with a suggestion and gets a response from the carrier’s lawyers. T-Mobile, inevitably, jumps in to make fun of them. Meanwhile, a reseller that provides wireless broadband to schools and libraries is suing Sprint over the planned shutdown of the WiMAX network, and Sprint’s SVP of strategy resigns.

After gigabit cable comes cableco SDN; $22bn for Chinese rural broadband; WiFi pavements; UK USO revised?

Cox Communications’ head of network architecture says traffic is growing at a 53% clip, and the answer is SDN, while Bright House’s SVP of engineering says they’re already using scripting to automate their processes although it’s only “pre-SDN”. Meanwhile, Comcast’s VP of access, Jorge Salinger, says the emergence of Google Fiber and other alternative overbuilders is what’s driving the wave of DOCSIS 3.1 upgrades. He also confirmed that the main rollout would be done by 2018.

Another gigabit cable upgrade.

Meet BSOD - not Blue Screen of Death, but Business Services over DOCSIS. It’s the cable industry standard for virtualised CPE, VPNs, Layer 2 Ethernet over cable, and the like, and therefore, the primary competitor for your SDN strategy. Bright House is keen.

Verizon is moving more markets over from copper to fibre. Chattanooga’s city fibre operator, having led the way with gigabit FTTH, is now offering 10Gbps.

Here comes $22bn in Chinese government funding for rural broadband, being paid out from here to 2020. The aim is to improve service to 30 million households, with 50,000 villages being hooked up for the first time.

The Aussie NBN’s targets have been revised up, with 7.5m more connections over the next 3 years.

Sky re-iterates its push for Openreach divestment. Hyperoptic turns up service in Birmingham.

Virgin Media has launched its first community WiFi deployment, using access points under the pavement and multiple, bonded cable links for the backhaul. The House of Commons broadband debate suggests that the universal service target might rise above 5Mbps.

Football remains a great customer acquisition tool.

And Relish/UK Broadband is losing money hand over fist

AT&T goes cloud-focused; ARM servers about to break through? Equinix, SingTel datacentre builds

AT&T is re-organising - the focus is increasingly on the SDN- and cloud-heavy Business Solutions, which takes over wireless products for businesses and becomes the biggest line of business by revenue. The others are Consumer Mobility, i.e. AT&T Mobility less the customers it’s shedding to Business Solutions, Entertainment & Internet Services, i.e Home Solutions plus DirecTV, and International, containing the assets in Mexico and elsewhere.

Meanwhile, here’s a case that AT&T’s SDN transition will mean job losses. Verizon, for its part, is offering something called Secure Cloud Interconnect, which is “SDN powered”. It seems to be an inter-datacentre managed WAN connection.

Amazon infrastructure chief James Hamilton argues that ARM servers are about to break through, thanks to the mobile sector’s investment in fabs at Samsung and TSMC and in design at ARM itself and Qualcomm.

Peter Eavis takes a deep look into the EMC-Dell deal and finds that EMC isn’t making anywhere near as much money as it ought to be.

Here’s an interesting business model: a dark fibre ring specifically for inter-datacentre peering around Equinix Ashburn. Equinix itself, meanwhile, is building a new 1m sq ft site in Ashburn, at an estimated cost of $1bn and a very round $1000/sq ft.

SingTel is building a new data centre in Jurong, offering 570,000 sq ft for $285m or half the cost of the Equinix project.

Red Hat buys a cloud automation company.

Apple surge in South Korea; Microsoft apps huge boost for the iPhone; Nexus reviews

Apple is gaining serious market share in South Korea, surely dreadful news for Samsung. Since the iPhone 6 Plus launched, they’ve gone from trivial levels of share to 14%. A knock-on effect is hitting LG - as Samsung cuts prices to defend share, LG and Pantech customers trade up, so LG loses out.

The version of the iPhone sold with an AT&T SIM, but unlocked, turns out to have the widest range of band support. Ask for model A1633.

The iPhone 6S Plus is now “the perfect enterprise smartphone” - thanks to Microsoft apps. So ironic.

Here’s a review of the new Nexus phones.

87% of Androids have unpatched bugs; 13 Flash vulns; giving up on the crypto ban, again

Android security problems don’t seem to be getting any better. A study shows that 87 per cent of Androids have at least one critical vulnerability. Terribly, some of the bugs have been in the wild for the last five years. The problem is quite simply that the patches aren’t getting out there. And the killer detail? Google paid for the study.

Many VoLTE implementations are buggy.

Microsoft releases a critical patch for literally every version of Windows.

Thirteen more Adobe Flash vulnerabilities.

A map of insecure connected kettles.

If you use OK Google, here’s how to erase the recordings of your voice.

Bad crypto implementations let the NSA slurp up reams of stuff. In comments, it turns out that the same methodology is in reach of a hacker willing to spend big on AWS instances or use a large botnet.

And the US government has given up on the latest go-round of trying to require backdoors.

IAB says sorry for the ads, proposes LEAN standard; 1,083 GETs of advertising; Netflix earnings miss; WeWork slides

The Interactive Advertising Bureau is sorry, it says, for all the ads. It’s trying to get advertisers to sign up for something called LEAN, for Light, Encrypted, Ad Choice supported, Non-invasive ads, a standard that’s meant to address the reasons why everyone is using an adblocker. Among other things, they want to restrict how many levels of re-targeting you can be put through and guarantee that you won’t be re-targeted for a product after you’ve bought it.

Interestingly, the IAB also takes some responsibility for Flash ads draining phone batteries, perhaps because Google made them pause by default in Chrome.

More and more people are experimenting with finding out just how much ad-tech they’re exposed to. This blogger found that opening a story on the Forbes homepage, scrolling to the bottom, and back to the top triggered 1,083 URI requests to 197 domains for a total of 18.3MB.

Well-known Silicon Valley sceptic and Pinboard founder Maciej Ceglowski notes that the Web site for the latest version of Mac OS X is more than the total RAM in the original iMac.

Netflix announces a seriously disappointing quarter - earnings per share were 7 cents, compared to a consensus forecast of 12 cents, US net adds were 880k vs 1.25m, and free cash flow was $252m negative, down from $229m negative the quarter before. The shares fell 11 per cent. CFO David Walls blamed the miss on the deployment of chip cards in the US.

Here’s the deck WeWork used to snare a massive financing round. It’s…bullish.

2G is the new 3G; Sigfox to Dubai; LPWAN bull and bear cases; Amazon vs Cisco IoT

Meet the new technology that’s driving the M2M market: GSM, according to Berg Insight. They argue it’s just cheaper at the moment, and won’t give way to LTE-M until 2019. Meanwhile, that doesn’t leave much of a role for 3G.

Don’t expect the LPWAN crowd to give up, though. In fact, Berg hedges a bit, saying they are likely to have “some” success. Sigfox is opening an office in Dubai in preparation for its roll-out in the Middle East, while a new research report argues the market will fragment into a high-bandwidth 4G/5G sector and a low-bandwidth, ultra-low cost LPWAN sector. That might give them as much as 345 million devices by 2020.

Hypercat, which is developing a standard for IoT data discovery, has linked up with the UK government’s Future Cities Catapult to run an “accelerator” for the technology in and around Park Royal.

Comcast expects “ageing Boomers” to drive demand for IoT services.

Here’s an interesting blog post comparing Amazon and Cisco’s Internet of Things products, arguing that AWS IoT is aligned with consumer/developer products and Cisco with industrial ones.

Nokia, the “western alternative to Huawei” in more ways than one; 5G test in Brazil next year?

Nokia, apparently, is the “western alternative to Huawei”, says CEO Rajeev Suri. He means that after the Alcatel-Lucent acquisition, it will have a full, end-to-end product portfolio. He also, interestingly enough, says he wants to get into cloud providers’ business and would be willing to trade margin for access.

But Nokia is increasingly the western alternative to Huawei in another way: it’s the low bidder on enormous Chinese 4G contracts. To be specific, China Mobile wants to deploy a million TD-LTE base stations, and they’re all coming from Nokia under a new übercontract. Apparently this makes Nokia CM’s “biggest non-Chinese vendor”, but if they’re delivering a million eNode-Bs, can they possibly not be their biggest vendor, full stop?

Elsewhere, they snagged a long-term framework agreement covering basically all Ooredoo’s business for the next five years.

Ericsson says it’s going to bring the first 5G test network to Brazil, with Claro, in 2016. That’s early.

MTN Benin is deploying an ultra-low cost, solar powered network with Ericsson.

The Open Networking Foundation and the Linux Foundation are collaborating on ONOS. WiFi Alliance has formed a task force on coexistence with LTE-U.

And here’s a fundamental advance in fibre optics.

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October 15, 2015

Mobile app latency in Europe: French operators lead; Italian & Spanish lag

We’ve just published a new research paper ‘Mobile app latency in Europe: French operators lead; Italian & Spanish lag’. Our latest analysis shows staggering differences in ‘app-lag’ (the time it takes for an app to get a response over the Internet) across France, Germany, Italy, Spain and the UK, and twenty mobile operators. This has significant consequences for customer data experiences, and potentially operator market performance too. Operators in France, particularly Bouygues and Free, are delivering a superior customer app experience while 3 in Italy and Movistar in Spain are European laggards. (October 2015, Foundation 2.0, Executive Briefing Service.)

  • To download this report in full for free, you first need to become a member of our Foundation 2.0 service. To do this, you need to create a personal user-id and password by entering the promotional code FOUNDATION2 in the box at the bottom of the sign-up page here. Your user-id will allow you to log-in and download the report using the button and links on the rest of this page.
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October 12, 2015

Openreach, Microsoft, Chips, AT&T, Ads, AWS M2M: Telco 2.0 News Review

Lobbies battle over Openreach; OFCOM boss comes out for 4 MNOs; Xavier Niel was right (again); Google vs. Russia

The lobbying war around the OFCOM Communications Market Review is peaking as we reach the deadline for submissions. Here’s a useful roundup that makes clear that BT’s line, as ever, is that it will deploy what’s now called “ultrafast” broadband real soon now if the regulators give it what it wants, the other operators’ line is that they can’t stand another minute of working with Openreach, and the Government minister is leaning towards BT’s position, apparently because the Government gave it so much money under the BDUK program. Isn’t the sunk-cost fallacy meant to be, well, a fallacy?

Speaking of BDUK, the House of Commons will be debating the programme at 3pm BST today, and BT has brought fibre-on-demand back, but only if you’re Welsh, because the Welsh regional government insisted.

That said, the minister isn’t the key actor here. That’s OFCOM director Sharon White, former second permanent secretary to the Treasury (for non-Brits, imagine the scariest super-bureaucrat you can think of and square them). She has come right out against going down to three operators. Therefore, 3UK-O2 is in trouble, and she was pretty critical of BT-EE too. Drawing a line at four operators also puts her in step with EU Commissioner Vestager, who’s recently blocked TeliaSonera/Telenor in Denmark and called in Liberty Global’s bid for BASE.

Meanwhile, BT’s final submission is in. So is Sky’s, and Vodafone’s. Not surprisingly, Sky and Vodafone both want Openreach separating out of BT. Amusingly, Sky and BT both cite New Zealand’s UFB programme, but BT says it’s a disaster while Sky thinks it’s cracking; this week, the Kiwis upped the targets to 50Mbps for 99% of the population by 2025, with 5Mbps for the remaining 1%.

We remember Xavier Niel saying that SFR would probably neglect their FTTH rollout if they merged with Numericable, falling back on the cheaper option of the existing cable network. The French competition regulator is now investigating Numericable-SFR for doing just that. It’s their business because SFR is deploying FTTH jointly with Bouygues, and the regulator made it a condition of the merger that Numericable-SFR respects the agreement with Bouygues.

When SFR and Bouygues were both pureplay mobile operators, this wasn’t a problem; now Bouygues’ use of the fibre is in competition with Numericable’s cable offering. Bouygues alleges that SFR is doing the “horizontal” rollout, which it needs to feed cable head-ends and for wireless backhaul, but going slow on the “vertical” installations into buildings so Bouygues can’t deliver them to its customers.

Harold Feld explains in great detail how LTE-LAA could accidentally-on-purpose make the 5GHz band useless for WiFi. If you accept the logic of his argument, the FCC should really have no choice but to nix it without really sweeping concessions by the carriers and, especially, Qualcomm. 

Cogent seems positively transformed by net neutrality; it’s settled another peering dispute, this time with Time Warner Cable. Can it be that just the possibility that the FCC might impose its own terms is a nudge, encouraging operators to do this the nice way?

Russia is not happy with the terms under which Google apps and the Play Store are made available to handset manufacturers, after a complaint from local searchco Yandex, which has a forkdroid product.

And local-loop unbundling is coming to Mexico.

Microsoft makes a laptop; Qualcomm inside; Apple A9s in two flavours; 5m BlackBerrys or we’re done

Microsoft gets to be less and less “soft” these days. Their latest launch event saw two new phones, a fitness gadget, a refresh of the Surface Pro to compete with the iPad Pro (they claim it’s “50% more powerful” than a MacBook Air), and a laptop, dammit. The Surface Book is a high-end device that looks more than a bit like a recent MacBook, but the screen can be unshipped for use as a tablet, at the cost of leaving the GPU behind with the keyboard. At $2,500 a go it’s only Apple users who can afford them.

Most Windows 10 devices that have a cellular radio will be getting it from Qualcomm, which announced that the ones manufactured by Dell, HP, Lenovo, and Panasonic will use the X5, X7, or X12 LTE modem. The X12 is the one that keeps cropping up in LTE carrier aggregation demos.

Here’s a strong case that Apple’s success since 2010 is built on its command of manufacturing and especially of chip design. We said as much in this Executive Briefing.

The context is this fascinating blog post. It turns out that Apple’s A9 chips are manufactured both by Samsung and by TSMC, in subtly different versions. Samsung’s is made at 14nm, TSMC’s at 16nm, and some users claim to have measured differences in battery life between apparently identical iPhones, by as much as 2 hours. Is this why? Apple says there should be no more than 2-3% variance between them. Anandtech points out that the so-called silicon lottery - the inherent statistical noise in the manufacturing process - may be enough to explain the variation.

Some useful rules-of-thumb for mobile energy optimisation.

Samsung says its profits will rise in Q3, but it’s basically all down to the chips in all those iPhone 6+ gadgets.

BlackBerry CEO John Chen says they’re out of the hardware market if they don’t shift 5 million gadgets a year.

Nokia has given some details of how Nokia-Alcatel will work and who’s going to be in charge. Federico Guillén, the current president of fixed networks at ALU, will take over the complete fixed business. Basil Alwan, currently the head of IP routing and transport for ALU, will run a new unit rolling up the ALU IP router, optical, and video businesses with the Nokia Packet Core group, plus Alcatel’s Nuage SDN group.

The wider company will consist of four divisions, for mobile, fixed, applications, and IP & Optical, although the Nokia Technologies licensing unit will be carved out for reporting purposes. At the top, it’s all Nokia - the CEO and CFO stay in place, the Nokia Networks Chief Business Officer becomes the groupwide Chief Customer Operations Officer, and the Nokia Networks EVP of mobile broadband is promoted to be Chief Innovation & Operating Officer.

Sharp has developed a smartphone that’s a robot, or perhaps vice versa. Detail: you can make phone calls by picking up the robot and putting it to your ear. Of course.


What happens when it gets hacked? It seems that 87% of Android devices aren’t getting security updates in a timely manner, if at all.

AT&T CORD moves to field trials; Facebook, Yahoo!, Switch all building again; Amazon Live?

AT&T’s transition to cloud continues to make progress. The CORD (Central Office Re-architected as a Data centre) concept they demonstrated earlier this year is going into field trials, as part of their GigaPower FTTH rollout. In the FTTH context, it’s going to include a virtualised OLT (Optical Line Terminal, the fibre equivalent of a DSLAM). Meanwhile, they’re up to 170 markets where the Network-on-Demand switched Ethernet product is available, and 200 enterprises are now live.

Here’s quite a bit more detail on HP’s open-source OS for virtual switches.

Facebook just announced the third phase of its Forest City data centre campus, where they currently have two major data centres plus a so-called cold storage site for rarely accessed data. A figure of $200m CAPEX is given,although they don’t say how big the site or what the power draw might be. The facility will use ambient cooling and Open Compute Project hardware.

Yahoo! is also building, adding 300,000 sq ft in Quincy, Washington. The facility will use their Computing Coop air-cooled design.

Switch & Data, the company known for its string of ultra-huge wholesale data centres around Las Vegas, is coming to Europe with a 450,000 sq ft build just outside Milan. The site is built to Uptime Institute Level IV, with a 40MW power capacity, and a budget of €300m.

Amazon may be considering adding live streaming to Amazon Prime video. Dan Rayburn points out that this might explain why they paid so much (5x revenue) for cloud video ingestion company Elemental Technologies.

And all this agile talk might be overrated; Zappos’s website has been frozen for two whole years while they port the whole operation into Amazon EC2, and they’re still in business.

Dell goes $53bn in the hole for EMC; $400m of Chinese money seeks unicorns; massive ad fraud; Twitter layoffs

Well, here’s a deal for you. Dell - having gone private - is buying EMC, the storage company currently best known for owning 81 per cent of VMWare. The price is $65bn, to be paid mostly in cash ($53bn of it) and partly in a curious sort of pseudo-equity linked to the price of the 20% of VMWare that’s publicly traded.  It’s pretty rare for a privately-held company to do a deal like this, and with good reason - if you can’t tap the stock market, you need to load up with debt. That’s precisely what Dell and its private-equity backer Silver Lake Partners intend to do.

Meanwhile, a Chinese investment fund with $400m to spend is going on a Silicon Valley unicorn hunt. Interestingly, they’ve been sold on the idea by AngelList, a company which tries to match angel investors with early-stage startups. AngelList CEO Naval Ravikant says:

“It’s up to us to make sure it doesn’t create a bubble,” he said of the new Chinese investment vehicle. The fund could have topped $1bn but was capped to limit its impact on the seed market, Mr Ravikant added.

Hmmm. The top site for video ad inventory on AdX, with $1.5m weekly revenue at the going rate, turns out to be a vacuous content farm with no actual video ads. Twitter is about to make substantial layoffs - that’s what they brought Jack Dorsey back for, it turns out. And capital investment just dived in India. We might be wanting a bubble created pretty soon.

Google is pushing a new, cut-down page format without third-party content to publishers, who see it as an answer to adblockers.

Of course, we could also just double-down. Verizon’s notorious “supercookie”, a unique identifier tied to their CRM that they add to your Web traffic, is being integrated with AOL’s ad-tracking, so even more ad-targeting data can follow you around the Web. The worst of it is possibly that the cookie is sent in the clear, so literally any dog on the Internet can read it.

Swisscom plans for GSM shutdown; No-cells trial at DTAG: Telenor exits Russia; Sprint wants robots

Swisscom says it’s going to turn GSM off by Q4 2020 in order to make room for more mobile broadband. They argue that 0.5% of the traffic is now carried over GSM, but it uses about 30% of their antenna capacity. (You might ask how much of the value is carried over GSM, but that’s another question.) Also, only 2% of their customers are now left on 2G. They plan to make them a “generous” offer. They intend to launch 5G at the same time as 2G shuts down, with more LTE-A being progressively deployed in the meantime.

Interesting detail: Swisscom wants to install small cells under manhole covers where they have fibre runs. Mobile to the Manhole.

DTAG and Samsung claim they’ve successfully trialled Inter-Sector MIMO. This technology comes up in a lot of 5G plans under different names (e.g. CoMP, User-Centric Networking, or No Cells) but the idea is the same - rather than mobile devices being attached to one base station at a time, they could attach to multiple stations, spreading the signal among them in the same way a MIMO device does between multiple antennas. The advantage is that in theory, it would eliminate cell-edge conditions and inter-cell interference.

After TeliaSonera, Telenor sells up and leaves Russia in order to focus on other markets.

Facebook announces some contracts for Internet.org. One is a “partnership” with Eutelsat for Ka-band backhaul, another is with Engava, a startup that makes a solar-powered GSM-in-a-box device. The idea is apparently that local micro-entrepreneurs set one of these up and collect money. How they sort out numbering and spectrum seems just to have been blithely ignored:

However, CEO Kurtis Heimerl defended Endaga’s approach. He told Fast Company “as a research group and an individual, I’m not a cross-the-T’s and dot-the-I’s kind of person. In these areas we ducked under the bureaucracy. We just didn’t do the friction. If you really want to be innovative, you’re going to have to push on these regulations. Our network is demonstration of that.”

I wonder what the Kenyans, after all the effort they put into building Safaricom, would make of a bunch of Americans distributing what are basically jammers or even IMSI catchers from their point of view? Google Loon, meanwhile, is going commercial real soon now, but at least it’s talking to the operators.

Verizon Wireless is really determined to get rid of its unlimited data customers - they’ve just put the price up by $20/line/mo. The amusing thing at this point is that the holdouts have by definition been with VZW since Q2 2011 at the latest, possibly much longer, and also by definition, they are some of their most satisfied customers…you’d think VZW could think of a way either to turn it to advantage, or to make nice with them. That said, the new rate is $50/mo for open slather LTE, and that’s still a great price.

And Sprint is considering deploying robots in its shops. The ‘bots in question were developed by Softbank and would apparently greet customers. Here’s a video interview with someone from Sprint about it.

AWS gives IoT startups hell with new platform; Comcast X1 moves into smart home; Italian Sigfox

Amazon Web Services launches its Internet of Things platform and it looks impressive, providing a simple, cloud-based way to register and deregister devices and process events they send and receive according to rules. A lot of IoT startups are probably shuddering with fear right now, and a lot of telcos probably should be.

HERE is trialling a connected-car/traffic information/vehicle-to-vehicle set up on three Finnish motorways.

Comcast’s X1 set-top box platform is beginning to add IoT apps from third parties. They’re also going to be providing technical support and adding voice control.

Here’s a rundown of US carriers’ IoT efforts.

Italy is the latest market for a Sigfox LPWAN. This one’s going to be called NETROTTER - presumably that’s meant to be NeTROTTER, not Net Rotter? you never know. Sigfox is now in 10 countries.

There’s been a little row about how much data from the CanBUS system Android Auto wants.

And now you can talk to your light bulbs, or rather, you can talk to them and they will listen.

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October 7, 2015

Fast-Tracking Operator Plans to Win in the $5bn Location Insights Market

We’ve just published a new research paper ‘Fast-Tracking Operator Plans to Win in the $5bn Location Insights Market’. Drawing insight from the experience of early adopters (including Telefonica, Singtel and DTAG) and exploring the technology options available to operators, we show how operators can best use their distinct advantage over other players in the $5bn location insights marketplace. (October 2015, Foundation 2.0, Executive Briefing Service.)

  • To download this report in full for free, you first need to become a member of our Foundation 2.0 service. To do this, you need to create a personal user-id and password by entering the promotional code FOUNDATION2 in the box at the bottom of the sign-up page here. Your user-id will allow you to log-in and download the report using the button and links on the rest of this page.
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October 5, 2015

Ad Crisis, Apple, Google, Free: Telco 2.0 News Review

Amazon nixes Google, Apple TV; Apple Pay’s terrible numbers; welcome to the ads crash?

Amazon has fallen out with Google and Apple - if you want a Chromecast, an Apple TV, or a Nexus Player, you won’t be able to find it on Amazon.com after the 29th, and they’ve stopped accepting new listings from sellers. The beef is apparently because the Amazon Prime streaming video service isn’t available natively in either Apple or Google’s TV products. One of the two companies told Dan Rayburn that they weren’t “blocking” it, presumably meaning that users who wanted it could configure it.

Amazon’s explanation is that they want to avoid “customer confusion”, but as Rayburn points out, this is an example of their ambition to expand the streaming media business coming into conflict with their core strategy in retail, which is to always increase “selection”.

It seems unlikely anyone who wants a Chromecast, still less an Apple TV, will be prevented from buying one because they can’t find it on Amazon.

Here’s a breathtakingly awful set of numbers for Apple Pay - one survey of iUsers, covering 70 banks and 140 million cards, has them making about 0.34 transactions a month, aka one transaction per registered card every three months, even though bank adoption of the technology has gone from 13% to 84% since January 2014. A US credit union with 4500 iPhone users reports slightly better news - 8% of them have used it at least once - but it’s still hardly impressive stuff.

The Apple Music free trials are about to expire, so we’re going to start seeing evidence of how many people are willing to pay for it. Ahead of this checkpoint, Apple is playing down its importance.

Meanwhile, London taxis are going to be fitted with Bluetooth Low Energy beacons.

Are we watching an online advertising bubble bursting? The Wall Street Journal points out that quite a few ad-tech stocks are now 50% off their highs and still plummeting, as they struggle with falling ad rates, massive click-fraud, and the public’s loss of patience with cruft, interruptions, and security breaches.

adcrunch.jpgFrom the telecoms side of the fence, Digicel has started filtering ads in the network, using an Israeli company’s DPI system. They’re presenting it as part of the trend towards ad blockers, but their subscribers can expect the ads to be back just as soon as Facebook sends some cash:

Digicel says that it is looking to companies like Google, Yahoo and Facebook to “enter into revenue sharing agreements with it so that this money in turn can be reinvested in network deployment”.

“Currently, these companies do not pay to make use of the network and the services they provide on it suck up bandwidth to make money for themselves through advertising while putting no money in,”

If it didn’t work for the E-5 carriers or AT&T, it’s probably not going to work for Digicel, but nice try.

Of course, it’s not true that mobile operators don’t make money from advertising. Subscribers pay to download the ads, one way or another, and in a sense it’s astonishing that they’ve put up with this for so long. The New York Times counts up how much data advertising and editorial take up for a variety of media Web sites, and finds that if you visit Boston.com daily, you’re spending $9.50/mo on mobile data just to move the 389 files and 12.8MB of advertising that adorns its 3.5MB content payload.

Screenshot from 2015-10-05 15:09:18.pngPerhaps the NYT should have disclosed what the figures are for its own Web site, but this is a quibble. The really interesting point here is that the editors of Boston.com would probably kill their grandmothers if it meant they could get daily users of their Web site to sign up for a $9.50/mo subscription. It’s not true that people don’t pay for the content - they just do so in incredibly inefficient and non-transparent ways. Also, just look at how much of the advertising bulk is executable, and hence dangerous, code.

TiVo’s new gadget, the Bolt DVR, is out and a key feature is much better ad-skipping. Rather oddly, they say you can watch series “30 per cent faster while maintaining perfect audio”. The idea of technology that helps you watch TV faster is strange indeed, but the point is that it cuts out the adverts.

As a result of all this, are we heading for the TIME OF THE DEAD UNICORNS? There’s been a sharp drop-off in technology IPOs this year, and the ones that have happened haven’t done well. A backlog of VC-funded startups is building up where the investors’ exit has been baulked. And pretty much all of them have an ad-funded business model….winter is coming?

This looks interesting: Conviva has opened up its video metrics dashboard to the public.

iWeekends keep getting bigger, new Nexus & Pixel, Nest Weave, Google/MS patents settled

Apple Pay may be a disappointment, and we’re waiting for the moment of truth on Apple Music. It’s unlikely this worries Apple much, though. The early iPhone 6S numbers are in, and predictably enough, they killed.

Screen-Shot-2015-09-29-at-6.55.09-AM.pngUnlike everything else, and even the iPads, the iPhone launch weekends keep getting bigger. Presumably there’s an inflection point somewhere, and it does look like the nice half of a diffusion S-curve, but where is it?

Meanwhile, Google launched the latest round of Nexus devices with the new Marshmallow version of Android, and a new vendor partner: Huawei. They both get Project Fi. There’s also a new Pixel device, but this one is a high-end Android tablet comparable to the iPad Pro rather than a Chromebook.

If you bought a 2015 Moto E, no Marshmallow for you - Motorola has stopped providing updates to the gadget’s OS after 219 days.

Here’s a good blog post on the relative insignificance of Nexus phones in terms of sales. The point, of course, is to set expectations for the other vendors.

Google and Microsoft have settled their patent lawsuits (so 2012!), and the terms are interesting - they agree among other things to cooperate on a new open-source video codec and to combat patent trolls in Europe (apparently US patent trolls are OK?).

Nest’s Weave low-latency, low-energy mesh networking protocol is open for those who want to hack on IoT devices.

TSMC is tooling up for something.

Google buys an RCS company; Comcast mVoIP lands; Apple buys a voice startup

Here’s a surprise: RCS is alive and living at Google. Specifically, Google has acquired Jibe Mobile, a company that does RCS clients, perhaps as the nucleus of an Android-equivalent to iMessage. But they already had that, in their own XMPP infrastructure, and isn’t iMessage something similar? There’s more discussion here and a bit more detail on their own web site.

We’ve known for some time that Comcast has been developing a mobile voice app. Now it’s landed, and interestingly, it’s targeted on the enterprise, rather than consumers like Cablevision’s Freewheel. It provides a single fixed/mobile number and quite a rich variety of IP-PBX features, and it’s available for iOS and Android. The release doesn’t say whether it works over their WiFi.

Cloud-based core networking with VoLTE and VoWiFi is now in Europe. Expect funky MVNOs.

Talky has an API to do conference calls between Chrome, Firefox, and MS Edge.

Here’s a sympathetic but unconvinced review of Cisco Spark.

Dan York is keynoting Astricon.

Apple buys a voice recognition startup.

More AT&T products into the cloud; Comcast data cap; Sprint layoffs; how T-Mo’s network works

AT&T’s drive towards full SDN adoption continues - their Managed Internet Service product is the latest to move over into the Network on Demand cloud platform. They claim this means they no longer need separate router hardware at customer locations, and the process of signing up a customer and activating service is 95% faster.

Meanwhile, the switched Ethernet service that was the first to move over is getting new features. It now supports a full set of network topologies, and offers an automated testing tool to check whether the service can be delivered at a given location. The time to deliver is now under 10 days.

Over in wireless, they’re briefing that they hope to beat T-Mobile for net adds in Q3. That would be an impressive achievement, seeing as T-Mo will probably score another 2m quarter, but you do wonder if they’re not chasing the speed gun a bit. How’s the subscriber acquisition cost looking? Also, AT&T GigaPower FTTH costs $40/less if Google Fiber is in the area.

Comcast is trialling a data cap in some of its markets. If you go over “300Mbps a month” - sic - you’ll get stung another $10, or else $30 to go “unlimited”. It’s not clear what the cap actually is, but it’s a decent guess it won’t be popular.

Sprint may claim its decision to sit out the 600MHz auction is because it has plenty of spectrum, but when you’ve frozen all hiring and imposed C-level approval for expenditure ahead of a plan to cut costs by $2.5bn, that rings a bit hollow. Layoffs are coming. Meanwhile, their “unlimited” data plan is going up by $10/mo.

Here’s some insight into how T-Mobile did it: rather than using small cells, or spending big on low-band spectrum, they concentrated on building a denser macrocell network in the mid-band (i.e. 1.7 to 2.1GHz in the US) and pulling fibre to the cell. It’s a similar recipe to the European carriers in this Telco 2.0 Executive Briefing - plenty of 1800MHz, and fibre backhaul.

And MVNO Boost Mobile is offering its users a whack of free minutes and data if they pay their bills on time, which seems a bit…desperate?

Orange reorg; Free passes SFR for 4G rollout, looks at Singapore mobile; Iran gets a root server; reducing data with DTAG

Orange is reorganising, creating a pair of Deputy CEOs. One of these is responsible for “Customer Experience and Mobile Financial Services”, and the other is in charge of “Operations, Middle East & Africa”. The current head of MEA business development takes the first, the current head of human resources takes the second. The current deputy CEO for mobile banking moves over to be CEO of Orange Spain, letting the incumbent become COO of MEA as No.2 to the deputy CEO. Meanwhile, they’re in “final negotiations” for the sale of their 70% stake in Telkom Kenya.

The executive director for Europe, Gervais Pellissier, meanwhile says he thinks French consolidation is off the table until the 700MHz auction is over. He also complains about European regulators - of course he does! - and claims Orange has overtaken Vodafone for fixed-mobile convergence in Europe. Meanwhile, ARCEP releases data on the fleet of LTE base stations in France, which is up to 18,600 and there’s a big surprise:


authorisations-vs-deployments.jpg

Yes: Free Mobile has got more 4G in service than SFR. In fact it’s got more 4G in service than SFR will have once its currently authorised deployments come on line. And when Free’s authorised deployments come on line, it’s going to catch Bouygues.

Meanwhile, cable upgrades are coming to the UK - Virgin Media is pushing up to 200Mbps starting this week. EE wants to trial a 1Gbps mobile product with tri-band carrier aggregation. And Vodafone UK is putting small cells in pubs. O2 UK scores Lycamobile’s MVNO business. Rootmetrics reckons Vodafone is challenging 3UK for “reliability” in London.

Etisalat has been trialling virtual CPE. Iran’s installed its very own instance of K-root, which caused some interesting ructions as the Internet adjusted. 27,400 Indian towers will get energy from fuel cells. Axiata has gone from 2nd to 4th operator in Indonesia, but now they’ll hope their new Ericsson 4G network might help with that.

Xavier Niel’s new venture, MyRepublic in Singapore, is seeking investors for a small-cell heavy 4G rollout. That sounds familiar, and pretty grim for Starhub, M1, and Singtel. The satellite element of the Aussie NBN is in orbit.

Telefonica and China Unicom have an interconnect agreement for their data centres.

Deutsche Telekom is investing in a startup that promises to throw away irrelevant data from IoT sensor networks. This sort of edge-processing is an important use case in 5G.

5G mmWave tests begin; EU denies 4-operator limit; 3UK-O2 called in; DISH disgorges the spectrum

The French regulator has given the go-ahead to start experimenting with millimetre-wave spectrum for 5G. A key work-item for 3GPP, no matter how the standardisation pans out, is to prepare the channel model for mmWave so the other working groups can use it, so there’s some pressure on. Orange is organising the tests, around Belfort, with the 5G-PPP and a cast of thousands. Meanwhile, DTAG has been trialling Kumu Networks’ full-duplex radios around Prague.

The EU has agreed to cooperate with China on 5G research, but perhaps don’t expect too much - one of the points in the agreement is to work out what 5G is. Meanwhile, Margrethe Vestager denies the Commission has a policy of sticking at 4 operators.

The FCC issues a draft NPRM for its submission to WRC-15.

After the WiFi industry’s pushback against LTE-LAA, Qualcomm and a group of carriers are forming a group to support it.

The UK competition regulator calls in 3UK-O2.

Satellite Cowboy kowtows to Lawman Wheeler and hands over the disputed spectrum.

Cogent says its peerings with AT&T and Verizon are “nearly” congestion-free and, interestingly, gives the credit to net neutrality.

Stagefright, 2.0; Experian loses 15m T-Records; Google.com forgets to renew; world’s most wholemeal laptop

Stagefright was only the beginning; a new bug in Android media processing permits arbitrary code execution on previewing a crafted video or audio file, and it affects 1 billion devices.

Experian, the credit-scoring company, has spilled personal data on 15 million T-Mobile USA customers. The database was encrypted: they said. In fact the encryption was botched and offers no protection.

It happens to us all: Google.com briefly became available and a Google employee owned it for a minute.

Some spammers go as far as filing phoney Internet routes with RIPE.

A deep look at the 2006 Vodafone Greece hack, which seems to be an NSA operation that went wrong.

And if you really care about open source, here’s the most stringent free-software laptop on the market.

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October 1, 2015

How BT beat Apple and Google over 5 years


We’ve just published a new research paper ‘How BT beat Apple and Google over 5 years’. Over 5 years, BT Group’s share price has more than tripled, outperforming Apple’s and Google’s, while its revenues have shrunk. Why, and what can other telcos learn from its success?

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.

Extract chart from the report:

BT Group Revenue and EBITDA 2010/11 - 2014/15.png

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