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December 21, 2015

Merry Christmas from the Telco 2.0 News Review

Apple’s new COO, Hardware SVP, displays lab; BlackBerry Q3; Qualcomm not splitting; Amazon Jet

Apple has appointed a new COO, Jeff Williams. Having been the head of worldwide procurement and vice president for operations before taking over the supply chain from Tim Cook, he’s evidently a product of the Cookian industrial strategy. So is Johnny Srouji, who is promoted to SVP of hardware technologies after having led the in-house chip design team since the beginning in 2008. Meanwhile, Phil Schiller, who heads developer relations and product marketing, also gets the responsibility for the App Store.

Perhaps more interestingly, they have created a new R&D lab in Taiwan to work on display technologies, yet another element of the Apple product line going in-house. The site previously belonged to Qualcomm during the development of their Mirasol displays. Apple is hiring optronics engineers in the country.

In a TV interview, Tim Cook says Apple wasn’t attracted to investing in China by cheap labour but rather by the range of industrial suppliers available. The Register is snarky about this, but even if it’s true that Apple doesn’t employ many tool and die makers, it’s also true that the proportion of their costs made up by final assembly labour is small.

TalkingPointz, for what it’s worth, thinks Apple needs a low-end option, but isn’t that just the iPhone before last?

Meanwhile, Ericsson and Apple have settled a patent dispute regarding 4G modems for an undisclosed sum.

A surprisingly high percentage of Indian iPhone users are blocking ads.

BlackBerry’s Q3 results announcement begins “BlackBerry Reports 43 Percent Year-over-Year Organic Growth in Software License Revenue for the Fiscal 2016 Third Quarter”, which should tell you that they’re still losing money, either $15m or $89m depending on whether you believe their non-GAAP numbers. That said, revenue is growing and free cash flow is positive.

Qualcomm has decided against splitting the company in two.

Toshiba is cutting 7,000 jobs and concentrating on just two lines of business - chips, and nuclear power - after its accounting scandal.

Jolla is funded again.

Google is having more meetings with European officials than any other company as it fights European anti-trust charges.

And we started this segment with a story about a tech company increasingly defined by its base of hard industrial assets. Amazon, for its part, is leasing Boeing 767-300ER jet freighters to move more of its own cargo.

IBM takes over AT&T data centres; MS vs AWS; Google AMP; huge Switch project

IBM has taken over AT&T’s managed hosting operation. The two companies have an increasingly close relationship in enterprise services - IBM resells AT&T NetBond VPNs and AT&T resells IBM SoftLayer managed hosting - and this move basically consolidates most of AT&T’s data centres into IBM, which has much more scale in this business.

Enterprises are increasingly adopting a strategy with a common hardware setup in the data centre, and a pair of clouds - one VMWare-based and mostly used as a virtualisation layer for legacy apps, one OpenStack-based and mostly used for development and cloud-native work. In parallel, a lot of enterprises are still moving back to the private cloud after hitting a bill shock in the public cloud.

Microsoft Azure sees this slightly differently. Rather than public/private, they see a mixture of public cloud and on-premises, physical setups, bridged by a common software layer, which sets them apart from either Amazon Web Services’ cloud fundamentalist view or Google, which seems to be waiting to see how it turns out.

The UK Government Digital Service has picked Cloud Foundry as its preferred PAAS.

An interesting interview about Google’s AMP project is over at High Scalability.

James Hamilton’s blog announces the Amazon Web Services NAT gateway. Yahoo! open-sources Data Sketches, a tool for getting estimated results from very large data sets quickly.

Switch is building a huge data centre in Michigan, starting by converting a pyramid-shaped office block.

Glasgow city council’s cloud explodes.

NEC, Intel working on Cloud RAN; another 1Gbps demo; ITU puts open-source into 5G; 300k more CMCC sites

Another day, another vendor effort to push mobile edge computing and virtualised networks - this time, NEC is developing a “Cloud RAN” system using Intel chips.

Now we’ve had the first gigabit wireless announcement, expect them to come thick and fast. Netcom - i.e. TeliaSonera’s Norwegian OpCo - claims it’s demonstrated 1Gbps LTE with Huawei. Sorry. That should of course be “4.5G LTE-Advanced Pro”.

ITU’s focus group on the network aspects of 5G has been extended into the New Year, and its charter has been altered to have it take note of open-source projects. In practice this is going to be OPNFV, OpenNFV, OpenFlow, and other stuff with “Open” in the name.

China Mobile has provided an update on its 4G rollout. 1m eNode-Bs will have been installed by the time the clock strikes, and they hope to put in another 300,000 next year as they aim for 500m 4G subscribers. A lot of those will come from Nokia under the supercontract, and Nokia also this week announced it’s doing Indosat’s LTE-A.

The GSMA is pleased about a 3GPP decision to take forward its favourite IoT technology in LTE R13. Actually, 3GPP fudged - Narrowband IoT, aka LTE-M, gets in, but so does the LTE Machine Type profile and even the revived GSM for machines, EC-GPRS.

British small cells maker Quortus is getting into MEC and has joined the ETSI working group.

Google Fi is no longer dependent on WiFi.

Vivendi gets 4 directors at TI, Niel says it’s a consolidator; BT Mobile SACs (Subscriber Acquisition Chocolate)

Vivendi got its way at the Telecom Italia board meeting, or at least some of its way. The meeting voted to let them appoint four new directors, but refused to let them change the share structure and dilute the current shareholders. Given the numbers, this implies that at least some existing shareholders agree that Vivendi should have more influence over the company.

Existing shareholders…like Xavier Niel? Niel said this week that he sees TI as a potential consolidator, not a target, although he also says it needs more financial capacity to invest in 4G and FTTH.

Does this interview with Smartfren CEO Paul Hodges, formerly of CSL in Hong Kong, suggest a vaguely Niel-like disruption strategy for Indonesia’s 5th (5th!) 4G operator? A rival is already trying that.

Vimpelcom and MTS are extending their spectrum sharing agreement so as to let them deploy more carrier aggregation.

Vimpelcom, of course, operates outside Russia as Wind, or at least it did - having started the process of selling Wind Italia to Hutchison, they’re now selling Wind Mobile in Canada to Shaw, yet another mobile/cable merger.

Christmas madness in the US - Sprint is offering a free 32” Samsung TV to anyone who takes a Samsung flagship, while T-Mobile will give you $100 service credit plus a year’s Netflix subscription if you do the same. One presumes the fabled Sammy marketing budget is taking the strain. Sprint also sent Christmas offers to T-Mobile retail employees, in a stunt that was somewhat less amusing when you remember they just sacked quite a few of their own retail employees. Ho, ho, ho!

Charter is trying to spread some (regulatory) Christmas cheer with a $14.99/mo, 4Mbps up/30 down offer for low-income families. On a similar topic, if you take BT 4G over Christmas they will give you chocolate.

No amount of chocolate will convince Benoit Felten that BT shouldn’t be broken up. Adrian “RevK” Kennard doesn’t believe it would help.

All year US carriers have been racing to push out gigabit fibre, and here comes Windstream digging up the roads in Kentucky.

Netflix has started streaming animation at lower bitrates in order to reduce the volume of its streams by 20%.

AT&T updates U-Verse pricing, and astonishingly enough, it’s going up. Notably, basic standing fees like voice, “non-DVR TV receivers”, and broadcast TV get hiked.

The Green Dragon Inn, Cowley, is Britain’s fastest pub now Gigaclear has trenched down its street.

MTN Nigeria, not surprisingly, is going to court over that huge fine.

Apple CarPlay rips into connected car; AT&T, however, adds 1m of them; £20 bounty for exploding chargers

Car dealers say Apple’s CarPlay is helping them move more cars, in a piece full of depressing quotes for both car manufacturers, whose dreadful software is being shown up by Apple’s product, and telcos who were counting on lots of reasonably high ARPU connected cars.

That said, AT&T added a million connected cars in Q3, out of a total of 1.6m M2M net-adds, after a year in which they signed up Jaguar-Land Rover, Subaru, Audi, and a ZTE retrofit product.

Amazon Web Services IoT has gone into general availability in time to ruin Christmas for the IoT platform startups.

What could be more fun than lightbulbs connected to the Internet? Ones with DRM in the controller that gets remotely updated to stop you using cheaper ones. Philips just lost a lot of customers.

EE is recalling all the Power Bar booster chargers it gave away, and offering £20 as a bonus to turn them in. Why? They keep bursting into flames.

JunOS routers hacked; Fireeyes hacked; Brazil vs. WhatsApp; Chen on encryption

Juniper Networks is in trouble after two backdoors were discovered in the operating system used on its routers. The software is partly developed in China, but post-Snowden, there’s no reason to think the Chinese are any more likely to spy on your traffic than the Americans, the British, or indeed pretty much anyone else. It could allow an attacker to steal passwords, change the router configuration, and decrypt VPN traffic. And there are at least two known cases of someone using the exploit. Some hackers think the GCHQ attack on Belgacom’s GRX hub was one, too.

Meanwhile, Google’s Project Zero security research team discovers a terrifying bug in Fireeye network taps that could let someone get root access to a device that by design sees all the traffic on your network, just by sending a crafted e-mail.

British telecoms operators won’t pay for the so-called Internet Connection Record.

On average, about 10 per cent of British subscribers want porn filtering.

The Brazilian government wants WhatsApp to give them a backdoor, so they made them shut down for 48 hours.

John Chen, BlackBerry CEO, issues a blog post rejecting backdoors or a ban on encryption, but also arguing that tech companies should assist law enforcement.

And the UK phone-hacking investigation closes down.

Twilio video, HD audio is here; what number does a VoIP spammer dial? building Simwood Mobile

Twilio has launched in-app video chat, and also HD audio. There’s much more detail in this interview, and this blog post.

VoIP frauds attacking Simwood always dial one number.

And here’s Part One of Simwood’s How to build a mobile service.

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December 16, 2015

How leading operators are building sustainable advertising businesses - Lessons learned from Sprint

There has never been a better time for telcos to establish a profitable role as a market enabler in the mobile advertising ecosystem. In the recent report: ‘Connecting Brands with Customers: How leading operators are building sustainable advertising businesses’, STL Partners analyses how 3 telcos - Sprint, Turkcell and SingTel - lead the way in leveraging permission-based subscriber data. Today’s mobile marketing ecosystem is dynamic and complex. In this report, STL Partners is leveraging First Partner’s ecosystem mapping to examine the strategic approach of three telcos, all of which have successfully grasped the mobile advertising opportunity, illustrating both differences and similarities and identifying lessons learnt along the way.

Here we are giving you a glimpse into one of our case studies, Sprint:

Reasons for Sprint’s success

With a track record for innovation, Sprint has concentrated on making data matter, setting up a separate company Pinsight Media+ to analyse the telco’s first party customer data and to establish a business relationship with the digital marketing industry. The following ten factors are considered to be instrumental in the success of Sprint’s venture:

1. Outsourcing the development and management of task-specific platform

2. Technical capability to build highly scalable infrastructure

3. Recruitment of quality personnel (with telco and/or advertising experience)

4. Acquisition of small companies to accelerate growth

5. Understanding how to work with large scale operators

6. Building trust within ecosystem - both buy-side and sell-side

7. Positioning in ecosystem (value of first party authenticated data)

8. Integration and enhancement of mobile subscriber data with third party data sets

9. Understanding of services model within advertising & marketing industries

10. Incentivised value exchange with subscribers

A track record in innovation

Sprint was an early innovator in the provision of advertising content to its own subscriber base, defining and developing the on-deck proposition, offering brands the opportunity to place targeted ads displayed at the top and bottom of Sprint-branded mobile Web pages. In 2010, the company was awarded Frost & Sullivan’s 2010 North American Customer Value Enhancement of the Year Award in On-deck Mobile Advertising, in recognition of the strategic advantages of Sprint’s mobile advertising service:

  • Customer relevancy and privacy
  • Open approach
  • Strategic roadmap

Encouraged by this early success, the company’s strategic objective was to extend this data-driven approach from on-device inventory to the broader mobile advertising marketplace, extending the data targeting options to enhance advertising audience selection in mobile internet, mobile apps and beyond. To achieve this objective and to fully realise the value of subscriber data, Sprint reconfigured its mobile advertising offering to control and enable the flow of data within the ecosystem.

In late 2012, Sprint launched Pinsight Media+, a new mobile advertising platform (incorporating a DMP and an ad exchange) enabling brands to target advertising campaigns based on opted-in subscribers’ preferences and behaviours. This venture enabled the telco’s subscribers to see usage-based ads delivered according to their personal interests across third-party properties for the first time, in addition to operator-owned properties like the Sprint Web on-deck portal and Sprint Zone account management app.

Making data matter & Enabling the advertising ecosystem

Sprint’s approach to mobile advertising is multi-facetted. The telco identified different roles within the ecosystem to provide enabling services, acting variously as publisher, audience profiler, data broker, data analyst and platform provider as a route to “democratizing” the data (see mapping of core capability / resources and focus of attention on Figure 8). 

Sample Image from the Case Study (Figure 8):

First Partner Ecosystem.png

Source: First Partner, STL Partners Analysis

Want to know more? Download our report from our Foundation 2.0 service here.

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

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December 14, 2015

BRICS, 5G, Cloud, Net Neutrality, IoT: Telco 2.0 News Review

Brazilian spectrum; Vodafone joins Indian 4G rush; 2G phones fade in India; “Xiaomi clone”; exit Firefox OS

Brazil is auctioning off more spectrum, in the 1.8, 1.9, and 2.5GHz bands. Everyone you’d expect has registered to bid for the first two, while the high band is reserved for “small and medium operators licensed by municipalities”. You wonder how long it will take for someone to try a version of the DISH caper with a straw buyer, that is, if anyone feels that excited by the 2.5GHz.

The local ISP association, probably the people most concerned by the small operator concession, is complaining that there wasn’t enough time to prepare.

In India, after Bharti Airtel announced its “Project Leap” network build, Vodafone has jumped in with what it calls the world’s largest 4G network. Kerala will be the first area to go live, probably because Idea is meant to be launching 4G there within the next 30 days. Taking a lesson from some of the world’s most successful 4G deployments, Vodafone will be rolling out in the 1.8GHz 2G/4G band first.

Bharti, Vodafone, and Idea are responding to Reliance Jio’s ultra-ambitious 4G plans. Those, of course, have been sliding right again and launch won’t be until April, if they don’t miss the deadline again. But Reliance is not in the least bit daunted, and is talking about consolidation and looking for acquisitions, arguing that there ought to be maybe four operators in India.

Both Samsung and local vendor Micromax want to stop making 2G devices for the Indian market. Not only are 3G/4G chipsets getting cheap, demand for 2G phones has collapsed since the 4G rollout - they are down to 9% of total sales and the 3G premium is now about $4. As a result, we’re into the groundrush phase - retailers and distributors don’t want to restock them, and the supply chain will therefore shut down pretty damn quick.

South Africa, meanwhile, wants to shut down analogue TV by February and start refarming the low-band spectrum.

Turk Telekom has done its own low-cost Android, underscoring the way that ultra-low cost ODMs are sucking the value out of the market. Hardware, after all, is the new app - pretty much anyone can do their own Android device and most of them have.

Here’s Xiaomi’s Hugo Barra, singing a happy tune about bringing cheap smartphones to Africa. The detail that sticks out is that 50% of mobile shipments in Kenya are now smartphones, suggesting that the smartphones got to Africa before he did.

OnePlus is essentially a Xiaomi clone, right down to online-only, invitation-first direct-to-consumer sales. Unfortunately it didn’t raise a vast stash of venture capital when that was easy, so it’s now desperately trying to sell more gadgets in the US before it runs out of runway. Also, it seems to have missed the memo about Apple being a manufacturer:

“People were willing to pay a premium for something that is designed in California, even if it’s made in China,” he said. “That’s starting to change.”

Compare this ZDNet story, based on a Consumer Reports survey. There’s no correlation between price and reliability for laptops, unless you buy Apple. Then there is.

For example, HP’s top-end Envy lappies were near the bottom with a 20% three-year catastrophic failure rate, but the cheap Pavilions were better, or at least less bad, with 16%. The Macbooks were at 10%. This was especially impressive as the Macs were used more heavily, about 15% more uptime on average, implying that the mean time between failures was dramatically greater.  Also, a PC that fails once is more likely than not to fail again (55% multiple failures vs 42%). And the Macs didn’t show the classic bathtub curve - they fail at a steady 3% rate throughout their lives, which suggests that both that they last and that Apple doesn’t let many lemons out of the factory.

ZDNet points out that this is probably why Microsoft is turning into a hardware company - they’re tired of the OEMs’ flaky quality control making their software look bad.

Barra mentions that Xiaomi might do a VR device. Here’s your weekly dose of unicorn-slaughtering realism - the VR market is nowhere near big enough for the participants’ plans to be realised at anything like their breakeven prices, and Samsung is likely to win what business there is.

Mozilla is giving up on Firefox OS because, not to put too fine a point on it, nobody cares.

VZW wants 5G by 2017; AT&T CEO says 4G is 40% cheaper, small cells more expensive; ALU makes Chinese core routers

Well, that escalated quickly. Verizon Wireless wants to deploy 5G in 2017 and to start a commercial trial network around its headquarters within weeks. Unless someone else, probably Korean, comes up with a coup de theatre, that will make them the first. Lowell McAdam provided a couple of details - they’re targeting 1Gbps, pricing similar to current levels on 4G, and focusing on “video and point-to-point solutions”. Does he mean peer-to-peer, or point-to-point as in fixed-wireless? Those of us who were paying attention to the 3GPP RAN meeting will not be surprised to see the “early 5G” alliance between (Alcatel-) Nokia, Ericsson, and Qualcomm raise its head again.

Nokia and SKT have been demoing again, this time pushing for the 20Gbps mark the ITU set as part of the definition of 5G. Using 256QAM, 8x8 MIMO, and “just” 400MHz of spectrum, they reached 19.1Gbps. Close, but no cigar! Interestingly, they refer to “cmWave” by analogy to “mmWave”, the first time we’ve seen this buzzword. They also checked out 3x carrier aggregation for TD-LTE.

An interesting quote from AT&T CEO Randall Stephenson:

Also, LTE; we’re now at the place where the LTE conversion is done and so we’re adding capacity. LTE capacity runs about 30% to 40% cheaper than traditional UMTS capacity, downward bias on capital requirements. Rather than laying up T1s, DS1s and so forth, we’re laying up Ethernet. The capital requirements of Ethernet versus a T1, about 40% lower, okay.

Small-cell booster Marc Ganzi of ExeNet Systems is convinced VZW and AT&T are going to roll out 100,000 of the little fellas next year. In the previous item, Randall Stephenson said:

We have chosen to invest aggressively in the spectrum portfolio, which requires a much less dense cell site grid. It also says that we have less urgency to move to a small cell structure because of the spectrum portfolio we have pieced together.Will we push small cell technology? Of course, we will particularly in urban areas. I think it’s going to be a very important technology over time and it will scale over time. It is not by any stretch of the imagination the most cost efficient way of getting bandwidth to the market. In fact, small cells, bandwidth, the backhaul required to the small cell, the licensing and so forth on poles, it is a very expensive way to get bandwidth into the marketplace.

Maybe not, then.

The Aussie NBN is upgrading its fixed-wireless offering to 50Mbps down/20 up, which might actually be better than the fixed offering in the areas where it uses the Telstra copper.

Meanwhile, Alcatel-Lucent announced two more big Chinese contracts, both for its 7950-series IP routers, with China Mobile and China Unicom. Not only is this a case of Nokia/Alcatel’s continuing success in winning business in Huawei’s home market, it’s also a case of Alcatel creeping up on the router market. They have been doing well for some time against Cisco’s ASR middleweight product line, now they’re getting into the top-of-the-range.

Here’s some more detail about the OpenFastPath initiative. A major element of it is a new TCP/IP stack with user-space networking, optimised for network devices in 5G.

Google Edge Compute? Wave of MEC-ish announcements; smart DNS in AWS; more exits at Centurylink

Google has started selling CDN capacity on the Google Global Cache network, but is it going further and developing an edge cloud? The idea would be simple enough - pods of servers would be co-located where the existing GCC nodes are, and Google Compute Engine users could pay a premium to enjoy the low latency and geographical distribution. Having dramatically cut its prices, signed up interconnect between GCE and Akamai, and hired ex-VMWare CEO Diane Greene, Google certainly seems to be trying to get more attention in the cloud.

New STL research out now: Telcos’ Last Chance in Cloud? New $18bn Sovereign Cloud Opportunity

There’s a bit of this about. Huawei is talking about its “Application-Driven Network” or ADN. Wind River has launched a reference design for a standard enterprise virtual-CPE. AT&T is trying to get its NetBond VPN into more sites via a deal with data centre company Digital Realty. Here’s a software application for processing IoT sensor data at the edge.

HPE has launched a web portal for OpenNFV telco functions, with VNFs from 60 partners, notably Metaswitch. Telefonica and ZTE have been testing virtualised IMS and SBC applications.

AWS, meanwhile, has opened up some of its job-routing and global load-balancing technology to customers. Traffic Flow extends Route 53, their cloud service for DNS, so you can have the DNS respond with different IP addresses depending on complex rules you define. For example, you can link the DNS record to a server health check to provide automatic failover, create a split-horizon DNS that routes traffic depending on its geographic source, or even create an anycast-like setup based on server latency. At $50/name/month, it’s not cheap, but it’s probably cheaper than downtime.

Another cloud exec quits Centurylink. Level(3) isn’t giving its data centres up. Making a startup with no servers.

This Microsoft Research engineer’s award is an insight into the deep research behind the cloud.

Sender-pays, again; video, doomed or saved? VZ in for Y!; Google Fi review; Cogent vs DTAG

It looks like we’re in for another go-round of the sponsored data debate. After T-Mobile USA’s Binge On was cleared by the FCC, Verizon Wireless seems emboldened to have another go at sponsored/sender-pays/whatever, while AT&T has a product that’s been “in testing”, aka on the mantelpiece, for years just in case.

The distinction, of course, is that Binge On streams aren’t actually sponsored or paid for by the sender - the sender and receiver, essentially, volunteer to restrain themselves from blowing the doors off by keeping it down to 480p and using a cacheable variable-rate format. Nothing stops you from providing HD or even 4K video as an option for those users who care enough to burn data. An interesting twist here is that the parallel audio product, Music Freedom, works because T-Mobile is already willing to give away unlimited data at 128Kbps - that’s the rate you get capped down to if you blow through your data allowance, and also the rate that applies to their free tier of international roaming.

So there’s an emerging distinction between data at the margin, where it is likely to trigger upgrade thresholds or push other users under the implicit minimum service, and data usage that’s far enough from that level that it’s not actually worth billing for it. It’s argued here that T-Mobile is risking getting overwhelmed by a flood of video, but CDN operator Ooyala reports that the growth rate of mobile video is actually slowing down.

Part of the backstory to all this is carrier investment in content. AT&T may be planning its own streaming product in parallel to VZW’s Go90, while Verizon might buy Yahoo!. The VZW sponsored-data story suggests that they’re planning to make theirs ad-funded. In this context, T-Mo’s move looks like a clever way to avoid investing in an inevitably awful carrier media product and instead cozy up to streaming providers who actually have customers.

Meanwhile, the US FTTH surge continues. AT&T announced 38 more rollouts, while Google Fiber says its next deployments will be Chicago and LA. No biggy, then. Centurylink is hoping that more GPON fibre will stop it leaking subscribers. Comcast reckons 30% of its customers will have the X1 STB by the end of the year.

Here’s a positive review of Google Fi, their super-MVNO that roams between T-Mobile and Sprint. The main downside seems to be that it roams between T-Mobile and Sprint, but fortunately there’s a magic USSD code (*#*#34866#*#*) to force it back onto T-Mobile. Also, latency seems to be very, very good (25-80ms with an average of 40).

And Cogent is suing Deutsche Telekom because, it says, they won’t upgrade a congested port. Time was they’d just de-peer Germany.

Orange/Bouygues, Vivendi/TI rumours; rapid 4G rollout; UK blue-light network; Spanish spectrum; EU vs. Qualcomm

Chatter continues about some sort of Orange acquisition. Both Orange and Bouygues have denied that they might merge - given that a merged company would have 55% of the market, it would be very difficult to justify from a regulatory point of view. But did they deny it hard enough? The government minister in question says he’s not religious about 4 operators, but then he banned Altice-Bouygues as being too big to fail and that wasn’t as big as Orange-Bouygues.

On the other front, where the rumours centre on Telecom Italia and Vivendi, Vivendi is trying to block TI’s management from converting a class of so-called savings shares into ordinary shares. That would dilute both Vivendi and Xavier Niel’s stakes from about 35% of the company to 24%. The move needs a two-thirds majority of all shareholders, and Vivendi intends to abstain.

Back in France, Bouygues is suing the government for €2.3bn in damages. Their case is that they don’t want Free Mobile to exist…or more precisely that there was something dodgy about the Free-Orange roaming agreement, or even more precisely that a lower court was wrong to refuse to hear their case against it.

ARCEP’s annual report says that the 4G rollout has been much faster than either the 2G or 3G deployment was, and among other things, confirms that Free has overtaken Numericable-SFR for coverage and sites by a distance.

The European Commission has issued a questionnaire to UK mobile actors on four key areas of the 3UK-O2 deal: retail competition, sales channels, infrastructure and wholesale services provision. They seem to be especially concerned about the impact on Carphone Warehouse.

The UK government, meanwhile, has given the emergency services’ joint radio network contract to EE. Just one problem: the proposed service is provided by EE’s public, mainline 4G network, and therefore it doesn’t cover the London Underground. Back in 2005, when terrorists attacked London, everyone was horrified because the then-new (but already obsolete) Airwave network didn’t work in the tube. They fixed that. Ten years on, we’ve unfixed it.

CityFibre has bought up KCOM’s national metro-fibre network.

Spanish high-band spectrum is up for sale in January, including the 2.6GHz 2x10MHz block that Vodafone has to sell as a condition of buying Ono. Anyone want to be a Spanish MNO?

Euregulators accuse Qualcomm of directly paying off a “major tablet and smartphone manufacturer” in exchange for shutting out competitor Icera, later part of Nvidia and now shut down.

5.8m connected cars at AT&T; NB-IoT demo; dead IoT speakers

AT&T has issued some predictions for 2016 and not surprisingly they think the Internet of Things will be important. So far, so banal, but this story (and this one) does actually contain some useful data points - 23 million M2M/IoT SIMs, of which 5.8 million are connected cars, and AT&T added 1.6m more cars in Q3. They expect to reach 10m by 2017, implying a bit of a slowdown.

IBM’s new IoT division is now operational.

Huawei and Vodafone Spain claim they’ve successfully demonstrated NB-IoT, aka LTE-M.

And did you hear about the speakers that only work with Rdio, Niklas Zennström’s music streaming app? They’re now basically useless after Rdio bit the dust, part of an increasing problem of abandoned IoT systems.

VTech leak even worse; Dutch reseller leaks passwords; 70m jail phone calls leaked; DNS L-Root attacked

Last week’s data leak at VTech just gets worse. It now turns out that vast numbers of photos, audio recordings, and logged chat messages (190GB of photos from 2.3m users) also leaked. Several of VTech’s web sites have been shut down.

The Dutch version of The Phone House turns out to be a security vortex of epic proportions, with passwords for their dealer accounts with all the Dutch MNOs widely shared and reused, usually desperately weak, and left lying around in plain sight of the general public. Some companies responded well (KPN tightened up on its dealer portal and sent an “I hacked KPN” T-shirt); others less so (MediaMarkt threatened to sue).

A company that provides phone services to US prisons has leaked 70 million CDRs plus downloadable recordings of the calls. At least 14,000 and probably more are conversations between prisoners and their lawyers, and therefore recording them is a big legal no-no.

Root server DDOS attacks are back.

The Crown Prosecution Service closes the file on phone-hacking:

“The call data showed a regular pattern of two calls being placed to the same number (double tapping) and also a large number of calls placed to voicemail platform numbers,” the CPS statement said. “However, it is not possible to prove the fact that the ‘double taps’ and calls to voicemail platform numbers are definitely instances of phone hacking.

Something tougher than Tor, if very slow.

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December 10, 2015

Telcos’ Last Chance in Cloud? New $18bn Sovereign Cloud Opportunity

We’ve just published a new research paper ‘Telcos’ Last Chance in Cloud? New $18bn Sovereign Cloud Opportunity’. If telcos in certain markets act swiftly, there is a major new and addressable opportunity in cloud created by profound recent changes in data sovereignty and security requirements. We outline the market opportunities, specific customer needs, and market sizing in our latest research.

The report is part of the Cloud & Enterprise ICT 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:

Sovereign Cloud Figure 3.png

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December 7, 2015

Gigabit LTE, CAPEX, Orange, Ads, Seals: Telco 2.0 News Review

LG U+ bursts through 1Gbps; TEF, TIM Brasil, Vodafone CAPEX plans; new street lights for more small cells

We were wondering how long it would be before someone announced gigabit mobile. Turns out it was a week. LG U+ announced that they reached 1.2Gbps in a trial using a combination of 256QAM modulation, 4x4 MIMO, and 4-band carrier aggregation. Obviously enough, they won’t be offering this to customers until some devices show up with support for the new modulation scheme and the extra antennas for the MIMO, and they also need to add more spectrum - they needed 60MHz over 4 carriers.

Meanwhile, ZTE and China Mobile reckon they’ve got the 3D MIMO antennas they want to use in “pre-5G” working in a “pre-commercial trial” - this is important for the beamforming/beamsteering features of the technology. They claim it is interoperable with existing 4G devices. The base station uses no fewer than 128 antennas.

CTIA, the US cellular industry lobby, is pushing back against the cablecos over the whole LTE-U issue. The cablecos, plus Google and some WiFi companies, filed a brief with the FCC via NCTA arguing that the agency should have to approve anything of that sort that gets deployed into the unlicensed bands. CTIA argues that this isn’t fair, it’s impossible that LTE-U could do any harm, and reviews wouldn’t do any good.

Here’s some more information about Bharti Airtel’s $9bn “Project Leap” CAPEX plan. Interesting detail: the roll-out is frontloaded, with 70,000 of the total 160,000 eNodeBs being deployed in year one, FY15-16, before the run-rate slackens to 45k/year. The coverage targets include 500,000 villages, with half of those to be covered by Q2 2016. The fixed network is expanding by 550,000 route kilometres of fibre, and adding vectoring to some DSL lines. Part of the project will be consolidating the 2G/3G/4G networks into a single RAN (and quite possibly, a Huawei SingleRAN).

Another carrier investment plan comes from Telefonica, which is celebrating its return to growth by clicking over into investment mode. A figure of 17% CAPEX/revenue is given. This means that all the so-called E-5 major MNOs have now announced some sort of substantial CAPEX plan. Also, Cesar Alierta tells us that Telefonica aims to be an “Onlife Telco”, connecting people to infinite possibilities under the slogan “We Choose It All”. Glad that’s cleared up.

More mundanely, they’re starting the integration of the Telefonica O2 and E-Plus networks in Germany in January 2016. They’re keeping the O2 GSM net and the E-Plus 3G net, while building the 4G in parallel. Apparently the E-Plus 3G was the best in Germany, although that certainly wasn’t what we found in this report.

Cox brings the gigabit cable race to Washington.TIM Brasil has signed a major contract with Nokia for 3G/4G infrastructure, although there are no details yet.

Vodafone has started rolling out 1Gbps FTTH in Portugal, Spain, and Ireland. In Ireland, they’re deploying using the electricity grid’s civil works, while in Portugal, they’re adding to their existing network. In Spain, they’re in a joint venture with Orange. Also, they’ve got the long-standing proposal of a joint national FTTH build in Italy out of the freezer, this time with the involvement of their power company, Enel. At this stage the budget is €600m CAPEX to pass an additional 2.05m homes, if we assume Orange and Vodafone each do half the Spanish deployment. That’s a cost-to-pass of $440/home, which looks lowish… but then, Verizon FiOS was at $700 in 2009 declining at 14% annually, so in fact it’s pretty conservative.

In the UK, meanwhile, Vodafone’s ISP operation is boasting that its new home router is “future proof”. It’s certainly feature-y, with 802.11ac Wave 2 beamforming WiFi, four gigabit Ethernet ports, two USB ports, 3x3 MIMO for the 5GHz radio…and a Gigabit Ethernet port on the WAN side of the router as well as the usual DSL RJ-11 jack. Is there something they’re trying to tell us?

Here’s something interesting - according to OFCOM data, Vodafone and O2 are closing the 4G coverage gap on EE, SMS volumes are falling steadily, and recent smartphones’ 2G radio performance sucks, to be blunt about it. So much so that operators are seriously wondering whether to invest in the 2G, or to push the transition to VoLTE forwards faster. Also, the UK is adding both femtocells and WiFi hotspots very fast.

New York City wants to buy new street lights specifically in order to install more small cells on them. They expect to charge as much as $650/mo for some of the choicest specimens of street furnishing, and intend to use a neutral host model where multiple small cells or RRUs share a common antenna.

The first of the 4G builds under Verizon Wireless’ LTE for Rural America spectrum-sharing scheme is done.

Orange appoints 2 “CEOs-delegate”; Vodafone.gh launches M-PESA; is US pricing about to tick up?

Orange has had another management shakeup - it now has two more “CEOs-delegate” to go with the existing post held by Gervais Pellissier. The successful candidates are Ramon Fernandez, the current deputy CEO for strategy and finance, and Pierre Louette, the deputy CEO for the general secretariat, Orange Wholesale France, group sourcing, and the supply chain. Imagine the size of his business card. This follows up the creation of deputy CEOs for Customer Experience & Mobile Financial, and for Middle East & Africa.

Speaking of mobile financial services, Vodafone Ghana has launched M-PESA under the name “Vodafone Cash”. This makes Ghana the 11th country to get the service.

Cote d’Ivoire’s regulator wants to get 4G started within the next three months, as a quid pro quo for the carriers paying a substantial fee to renew their licences.

Roshan Wireless is expecting consolidation in the Afghan mobile market as foreign troops and their money depart. They reckon that this has reduced the value of the market by 30-40%, meaning that it doesn’t make sense to have six MNOs any more (does it ever?). Roshan, though, is staying on, hoping to be the consolidator, and preparing for the future by sharing cell sites and improving their interconnection with Afghan Telecom.

Vivendi denies, again, any interest in buying Telecom Italia. So does Orange.

And are we seeing the turn in US wireless pricing? Although the great subscriber acquisition giveaway is still roaring on, and Sprint was promising a sensational announcement today, T-Mo, Sprint, Verizon Wireless, and AT&T have all now upped their prices on unlimited data plans.

New Telco 2.0 research out now: Connecting Brands with Customers

Philipp Humm, former Vodafone Europe CEO, has joined the board of Shine Technologies, the company linked with proposals by EE and O2 UK to start filtering ads at a network-wide level. Meanwhile, it turns out that using iOS 9 and Safari, adblocking reduces the battery drain from 2 hours of web browsing by 50%. No wonder the ad market is in crisis. If you’re wrestling with this issue, why not try our new Connecting Brands with Customers report?

Music streaming, a terrible business; more on Binge On; Amazon is a TV channel; exiting Flash

Music streaming services are giving up the ghost worldwide. Rdio, the one Skype founder Niklas Zennstrom ran, just filed for bankruptcy. Essentially all the others are lossmakers. The problem is pretty simple - on one side they face the big three rightsholders. As “a music app with only two-thirds of the music” is a pretty unimpressive proposition, they have no choice but to deal with all of them, so the rightsholders are an effective monopoly. On the other side of the business, they face the structural deflation of the consumer Internet. And, of course, content delivery and customer acquisition are nontrivial costs. That doesn’t leave much or even any margin. And then Apple joined in.

T-Mobile USA, meanwhile, zero-rated another 11 music services. An interesting question here is whether it works in a similar way to Binge On! where any provider complying with some technical parameters can ask to be included, thus preserving net neutrality. Speaking of which, here’s an interesting piece about T-Mo that makes the point that some of the video people assumed the carrier would want them to stream the highest resolutions in order to drive up data overage charges and make more money, whether or not the user’s device would actually show it at that resolution.

Also interesting is the detail that the compression/caching/whatever happens at the PGW, i.e. where T-Mobile’s core network joins the Internet, so they’re saving on backhaul as well as in the RAN.

Amazon wants to add third-party TV channels to Amazon Prime streaming.

Comcast is using IFTTT recipes to link social media apps to its X1 STB, so you can get the snarky Twitter reaction directly on the TV.

Starting in January, DirecTV is going to rebrand as AT&T Entertainment.

Adobe has released a new version of its animation tools that produces HTML5, not Flash, and it’s going to do an HTML5-based video player. There’s a lot more technical detail here, but it’s pretty clear that even Adobe is sick of Flash.

3UK/O2 - what happens in Brussels stays there; DISH battles Charter/TWC; the case for breaking up BT

The British antitrust regulator asked for the 3UK/O2 deal back from the European Commission, but the European Commission said no. Specifically, the Commission argues that it has more relevant experience having investigated numerous other big mobile mergers in recent years. The parties to the deal would probably add “…and vetoed them”.

As a result, the planned 2.3 and 3.4GHz auction has been postponed to see which way the Euro-cat jumps.

Meanwhile, French regulators may be about to fine Orange as much as €500m over the behaviour of its enterprise and wholesale divisions.

In the MTN Nigeria case, the Nigerian NCC wrote to the carrier offering to reduce the famous $5bn fine by 35%, and then changed its mind and offered 25%.

DISH is constantly filing arguments against the Charter/TWC/Bright House merger. Charter responds, pointing out that the combined company would be “smaller than Comcast and only slightly bigger than AT&T”. Some would say being the size of AT&T was precisely the problem. However, it’s very telling that Comcast and the enlarged Charter would have 90% of US high-speed broadband connections between them - the cablecos have really pushed ahead with speed.

Verizon, meanwhile, is in trouble with the New Jersey state regulator about its copper, which it is accused of neglecting in order to get out of irksome public service commitments.

Harold Feld summarises the arguments in the latest lawsuit against Title II reclassification. He thinks the FCC is going to win.

Sky’s chief economist argues in favour of demerging Openreach, in an interview with ISPReview. He seems to hint that Sky - and perhaps others? - would be willing to invest in such a company’s national FTTH rollout.

OpenFastPath; ONOS includes new telco use cases; server sales up; Amazon buys…trucks

Nokia has launched a new open-source foundation, OpenFastPath, working with ARM among others to develop SDN technology. The name refers to the distinction between forwarding packets in software, via the CPU (the slow path), and forwarding them in the data plane, using hardware acceleration (the fast path). They intend to create an improved TCP/IP stack and a faster control protocol. The project uses FreeBSD Unix as the OS and the ODP (Open Data Plane) hardware API.

Nokia also has an interesting-sounding deal with Telecom Italia to jointly look for interesting startups in NFV, SDN, SON, and RAN technologies.

The ONOS project has pushed another major version out, the fifth major release of their software this year. Some interesting changes include the arrival of IP multicast support, integration with OpenStack and OPNFV, and the inclusion of AT&T’s “Central Office Rearchitected as a Datacentre”. Even more interestingly, SK Telecom was explicitly thanked for extending CORD to cover mobile use cases.

Here’s a lot more detail on exactly what HPE will be doing for Microsoft Azure - basically it’s a hardware line that lets you build your own Azure in a private cloud.

What with all this cloud, it’s no surprise that server sales are up 7.5% by value and 9.2% by volume per Gartner. HP, or rather HPE, is still No.1.

Cisco reckons only 5% of networks are at all automated. Smaller data centres are often running too cold and wasting power. Google is buying huge amounts of solar power.

Centurylink seems to be having doubts about its investments in cloud. The two execs most concerned are both off, one of them to head Ericsson’s cloud product lines. The company denies this is a sacking or that they might want out.

Here’s an interesting talk about EBay’s architecture.

And Amazon may talk drones, but it’s buying a fleet of trucks.

Smartphone growth dragged down by Windows; Samsung Mobile chief out; Sony PS4 a hit?

IDC reckons the world smartphone market will grow 9.8% this year - the first-ever year of single digit growth. Interestingly, most of the difference is down to their revised estimate for Windows Phones. Nobody, essentially, wants them. Similarly, it looks like the various alternative platforms are going nowhere fast.

singledigit.PNGIt also looks like the share of new iOS users converting from Android is going up, as many as 30%. In that light, perhaps it’s not surprising that Samsung has replaced the head of Samsung Mobile, JK Shin. It might be more surprising that he’s been replaced by the head of R&D responsible for Knox, Tizen, and Samsung Pay; even if the G6 phones didn’t sell as well as they hoped, they’re vastly better products than any of those three.

Perhaps the insider-trading investigation had something to do with it. Meanwhile, Sammy has agreed to pay up the $548m fine in the Apple vs Samsung patent suit by the 18th, although it retains the right to appeal all the way to the US Supreme Court.

Sony is confident that the PlayStation 4 is going to be a huge hit, on the scale of the PS 2. The PlayStation VR is also doing good business, partly thanks to the gloriously-named game, 100ft Robot Golf.

TSMC is building a new chip fab…in China, where Qualcomm has managed to get Xiaomi to license its patents.

BlackBerry is closing its BBM Meetings service because nobody uses it, and withdrawing from Pakistan because the government insists on reading the encrypted traffic.

US classrooms are full of Chromebooks because they’re cheap and easy to lock down.

Plantronics has some really interesting APIs that tell you when someone walks away from the phone.

You can buy an Android phone for $10 but you probably shouldn’t.

UK smart meters slide right; HPE edge computing for the IoT; Internet of Seals

The UK smart metering programme has been delayed yet again. Nick Hunn has an absolutely scathing blog post about this fiasco and how the government is massaging its numbers to conceal this. Interesting detail: most of the “savings” included in the business case are accounted for by the assumption that putting people on smart meters will take them off the expensive pre-pay tariff.

HPE has just announced a new line of “edge gateways”, devices for processing IoT sensor data at the network edge, in a ruggedised form factor.

Verizon Wireless is offering IoT devices with Cat 1 LTE, i.e. rolling back to the very earliest flavour of the technology, as a substitute for LTE-M or whatever. Cute.

Strategy Analytics reckons privacy and security are a major barrier to the IoT.

The Internet of Seals. The University of St Andrews’ Sea Mammal Research Unit is going to use Vodafone’s M2M service to track seals. They’re using the global data SIM product to avoid roaming charges.

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December 4, 2015

Connecting Brands with Customers: How leading operators are building sustainable advertising businesses

We’ve just published a new research paper ‘Connecting Brands with Customers: How leading operators are building sustainable advertising businesses’. There has never been a better time for telcos to establish a profitable role as a market enabler in the mobile advertising ecosystem. STL Partners analyses how 3 telcos - Sprint, Turkcell and SingTel - lead the way in leveraging permission-based subscriber data and highlights the role that each has chosen to perform. The report assesses each company’s strategy and execution, outlines the core reasons for their success, and identifies 6 ways in which telcos can accelerate time to market with advertising and marketing solutions.

The report is part of the Foundation 2.0 service, Executive Briefing Service, Dealing with Disruption Stream and Telco 2.0 Transformation 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:

connecting brands fig 1.png

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

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