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5G, Vodafone, Comcast Q4s, APAC: Telco 2.0 News Review

5G - AT&T goes next; LTE-U trials get the go; Nokia, Ericsson pre-MWCs; VF Turkey just misses the gig

The race to get 5G into the field is picking up, with the 2020 deadline moving forward to 2018 and perhaps even sooner. We knew the Korean carriers were shooting for 2018, but now TeliaSonera has joined them, Verizon Wireless is promising a trial this year, and now AT&T has applied for a licence to test 5G technology around Austin, Texas during the next three years. The operator wants to use four frequency bands ranging from 3.4GHz to 27.5GHz and to test both fixed and mobile stations. The motivation seems to be that they want to have some testing data in hand to inform the standards process. You can download the document here.

It wasn’t that long ago that AT&T’s Glenn Lurie rubbished the VZW project at last year’s CTIA. Now they’re getting up off the wall.

Meanwhile, the FCC has granted permission for VZW to test LTE-U at two locations between now and the 30th of July. VZW will use a mixture of macrocells and residential femtos, and the 5GHz unlicensed element will be downlink-only. This has brought about a predictable salvo of regulatory letters from the WiFi industry, which is still deeply suspicious of LTE-U.

FCC CTO Julius Knapp blogs that any further tests would still require a further, case-by-case authorisation from the FCC and that any devices put on the market will need to pass FCC lab tests. Interestingly, his blog post mentions a draft testing plan prepared by the FCC and the WiFi Alliance to settle the question of whether LTE-U will coexist with WiFi - perhaps the test campaign is connected? Another possibility would be running the subtly different LTE-LAA technology favoured in Europe. Qualcomm says it trialled LTE-LAA with Deutsche Telekom. Again, the source document is available here.

Nokia Networks has given details of its planned MWC feature dump for LTE Advanced and Advanced-Pro, although we’re aware of a major announcement they’re saving up for the night. Ericsson has similarly been briefing out its planned announcements, again promising more speed.

According to OpenSignal, the United States has some of the best levels of LTE coverage in the world, but “only” speeds of around 10Mbps, compared to 37Mbps in Singapore. That said, the 3G/4G transition is usually a 10x improvement in latency, so 81% coverage of the whole United States is quite an achievement even at 10Mbps. Also according to OpenSignal, T-Mobile is the pick of the US carriers, not least because it’s not neglecting the 3G network while building out the 4G. VZW won for coverage, Sprint (surprisingly) for latency, and T-Mobile for outright speed.

Here’s a bit of detail on VZW’s investment in 4G capacity around the Super Bowl site - 16 new macrocells, 75 small cells, a distributed antenna system inside the stadium itself, 14 cells on wheels, and 37 sites getting an additional carrier. That apparently cost $70m.

Goodbye, Sprint/Clearwire WiMAX.

A report reckons 100m gigabit homes by 2020. At this rate you might wonder whether the mobile industry might manage to shift that.  Vodafone Turkey, for example, just hit 942.5Mbps in a trial with four aggregated frequency bands, 800/1800/2100/2600MHz. As VF has those pretty much throughout its European footprint, you can see the potential to move quickly.

They must be kicking themselves about the missing 81.5Mbps (or 57.5 if we stretch a point and let them use marketer’s maths) though. We’re not angry with you; we’re disappointed, as all our scariest schoolteachers used to say. Perhaps you just didn’t want it enough.

Vodafone Q4s; Liberty Global talks back on; KPN Q4s; US price war moves into prepaid

Vodafone, meanwhile, announced its Q4 results. The headline is that service revenue was, kinda sorta, on an organic basis, normalised for currency movements, if you screw your eyes up funny…up. Specifically, up 1.4% year-on-year at £9.2bn, the sixth successive quarter of improvement. Or down, 6.3%, on a reported basis. Revenue from the African, Middle Eastern, and Asia-Pacific segment was up 6.5%, while Europe was still down but only by a hair, 0.6%, compared to 1% in the previous quarter. Project Spring is apparently 92% complete, although we note they’ve stopped giving a number for fibre backhaul.

Meanwhile, the talks are back on with Liberty Global, which might be interested in creating a joint venture in the Netherlands, where Liberty Global owns the No.1 cable operator and Vodafone has a mobile network. This will of course re-open the mothballed Vodafone/Virgin rumour mill. As a knock-on effect, T-Mobile.nl is now likely to go to a financial investor.

The Euregulators have cleared Liberty’s acquisition of BASE in Belgium.

KPN managed to push its net profits up in 2015, while revenues and operating-level profits slid quite ominously. Revenue was off 5.2%. The problem can be summed up by the fact mobile revenue was up 3.9% and EBITDA 42%, while the business services division’s revenue was down 8.9%.

Orange CEO Stéphane Richard says he expects talks with Bouygues to continue until March.

Verizon Wireless doesn’t usually care much about prepaid, but now they’re having a crack - the $45/mo bundle goes from 1 to 2GB and the $60 from 3 to 5. Still relatively pricey; Sprint/Virgin Mobile USA will sell you 4GB for $40 and 6GB for $60, and throw in their music streaming product, after last quarter saw them lose 491k prepaid customers.

T-Mobile, however, is still determined to be the price leader. If you can find three other people to club together, you can get unlimited data (well, 23GB/mo before they apply a speed restriction) for $150/mo, or $37.50 each. On the conservative assumption that the 23GB limit applies per account, not per line, that’s considerably cheaper than Sprint and vastly cheaper than VZW. If it’s per line, there’s no comparison.

Virgin Media CEO: 3UK/O2 is great. 3UK vs OFCOM. Openreach, meet the builders.

Here’s a surprise. Virgin Media CEO Tom Mockridge comes out in favour of the 3UK/O2 deal. This is being read as meaning he might be interested in assets the combined company would have to hive off to get regulatory clearance, perhaps upgrading VMED’s mobile product from an MVNO on EE’s network (that is to say, BT’s, which is to say, Virgin’s biggest competitor) to a light MNO.

3UK, or rather, Hutchison responded to OFCOM director Sharon White’s open letter this week, with an open letter from MD Canning Fok. In the letter, Fok complains about White supposedly going public without giving them an opportunity to complain earlier, and goes on to make three commitments - not to raise prices for five years, to invest £5bn CAPEX over 5 years, and to sell “fractional shared ownership in its network capacity”.

The first is simple enough, but as Vodafone CEO Vittorio Colao rather dryly pointed out, prices are falling, so granting yourself a price freeze isn’t much of a concession. The obvious question about the second is whether that’s over and above 3UK and O2’s existing joint CAPEX spend. £5bn is a big number, but it would be fairer to describe it as £1bn/year for five years. 3UK spent £141m in the 6 months to July 2015, so the increment is significant.

And the third sounds designed to pre-empt any move by the Euregulators to make them disgorge spectrum or infrastructure to a new 4th MNO, by offering rivals a minority interest instead.  Meanwhile, 3UK has scrapped its £15 unlimited One Plan, and many of the customers who’ve still got one will see their bills double. That’ll do the ARPU some good, but you can see why they’d be annoyed.

The British business lobby, specifically the manufacturers’ lobby EEF, is not happy with BT Openreach.

The government, meanwhile, has a deal with Openreach and the House Builders’ Federation that should make sure new construction gets “superfast broadband” installed during construction, while it’s easy. ThinkBroadband discusses it in some detail. The (not particularly informative) release is here.

Britain does not come out of the OpenSignal numbers at all well.

Vodafone India 4G; 2nd biggest smartphone base; Free Basics banned; Jas Mobile might miss the kickoff

Vodafone India has set dates for its 4G launch in Mumbai and Bangalore - Wednesday and Thursday respectively, after they switched on service in New Delhi last week.

India now has the second-biggest installed base of smartphones, with 220 million in use, just barely more than the US. That puts penetration at 30%, solidly in the mass adoption phase. Not surprisingly, this is an attractive prospect, and there are now 150 distinct brands of device on the market. Samsung is the market leader, with Indian manufacturers Intex and Lava in 2nd and 3rd place. 

Here’s a profile of Intex CEO Narendra Balsal, who started off delivering cordless phones and later started selling Ethernet NICs and computer peripherals like keyboards. Interestingly, he reduced his reliance on distributors for the phone business; you tend to think they are crucial in places like India.

The controversy over Facebook’s Free Basics (Internet.org as was) zero-rating scheme has come to a head, and the Indian regulator TRAI has simply banned it.

Google’s Project Loon, meanwhile, has a new partner - the government of Sri Lanka, which just bought a 25% stake in the element that covers the country. Google and the state are forming a joint venture, and they intend to sell 10% of the shares to local MNOs.

Jas Mobile, the green field 4G network in Thailand, is apparently struggling to make the down payment on the 900MHz block it won at their auction last month. The bill is $2.1bn. Jas must pay a first instalment, and provide proof of funds over the rest, by the 21st March or hand back the licence. The plan was to borrow from Bangkok Bank, but the bank’s CEO says they still haven’t decided whether or not to release the money. Their competitor, True Corp, hasn’t found this a problem - Siam Commercial Bank has agreed to front the first instalment, and they are preparing to raise the rest as equity from a rights issue.

In Australia, the three MNOs plus enterprise telco TPG have acquired 1800MHz spectrum in an auction that raised $396m for the state. Optus (aka Singtel) was the biggest spender.

Japan Display is struggling, as Apple trimmed its orders and Samsung’s AMOLED technology competes. Lenovo had a poorish Q4 although at least the PC business, which you might think was vulnerable to a slowdown, was steady.

And Singtel is planning a 10Gbps FTTH service with XG-PON technology. It’s not cheap.

Comcast Q4: DOCSIS 3.1 is go for launch, Business Svcs up 19%, even TV is net-adding

Comcast will be rolling DOCSIS 3.1 out during the rest of the year. The operator already has 18 million homes passed with 2Gbps fibre, but look for explosive growth in coverage as the cable network gets upgraded. Atlanta and Nashville go first, followed by Chicago, Detroit, and Miami.

Meanwhile, the Business Services division continued its run of success. Revenue was up 19% in Q4 at $1.3bn, and the new large enterprise subsegment has already gained 20 customers. And the TV segment, which has been gradually shrinking for years, actually gained 89k net-adds in the quarter.

Comcast management attribute this to better segmentation and targeting, although another reason might be that US unemployment is under 5% and wages are rising at last. Industry-wide, pay-TV subscriptions are up even though FiOS TV gains at Verizon ground to a halt and DirecTV gains are barely enough to make up for mass desertion from AT&T U-Verse.

Overall, Comcast reported Q4 revenue up 8.3% and operating cashflow up 7.7%. Out of that, cable revenue was up 5.9% and ARPU was up 3.5% at $145/mo, with margins about 40.4%. In this light, it’s no surprise that AT&T is rolling out more fibre, again. 21 communities in and around Chicago, Dallas, Atlanta, and Miami will be added to the existing deployment target.

Bell Canada says it hopes to have 3 million homes on 1Gbps service by the year-end, and to drop FTTN for FTTH as far as possible to strip out OPEX. What with all this investment, it’s no surprise Adtran is growing.

Here come three more Google Fiber markets, and something new: Google Fiber Voice.

Google Q4s - $3.6bn of trainsets, profits up 29%; Yahoo! up for sale; Cisco buys Jasper; Imagination CEO out

Google, sorry, Alphabet results dropped too late to get into last week’s review, so here goes. Absolutely no surprise that basically all the money came from ads, perhaps some surprise there was so much - Google revenues were up 18% year-on-year for Q4, and operating profit was up 29% at $6.7bn, or 13% and 23.3% respectively for the full year. This influx of money then gets spent; all the other stuff, aka Other Bets, lost $3.6bn in the full year, compared to $1.9bn the year before. Other Bets has some revenue of its own, $448m of it, so the total call on Google’s profits was closer to $3.2bn or about half.

Google Fiber is getting through a fair bit of CAPEX, $869m in 2015, as it rolls out its network. However, it also contributes most of Other Bets’ revenue. Meanwhile, Google itself spent $8.85bn on CAPEX in the full year - that’s a lot of data centres, and CFO Ruth Porat also pointed out that by no means all Google’s R&D has been transferred into Other Bets. An example: Seesaw is a Linux-based load balancer for hyperscale applications, which Google just released as open-source software.

LinkedIn, meanwhile, has started manufacturing its own data centre switches.

Yahoo! is up for sale again.

Cisco acquires Jasper Wireless, the long-standing M2M platform currently deployed with 27 MNOs, for $1.4bn. They intend to roll their existing M2M/IoT activities into it. Something that’s not at all clear is how this will affect the Cisco/Ericsson partnership - Cisco just became a very serious competitor to its partner’s IoT business, while between them, the two vendors have just become a much more dominant force in the IoT.

Bouygues has created a new subsidiary, Obgenious, to market its LoRA network.

After a profit warning and a dreadful Q4, Imagination Technologies says goodbye to the CEO, Sir Hossein Yassaie.

Mozilla is shutting down Firefox OS and “concentrating on the Internet of Things”, which sounds like they’ve been knocked out of the FA Cup.

GoPro told the markets to expect a horrible Q4, and it turned out even worse.

Reaction to Facebook’s closure of Parse, from High Scalability.

WhatsApp breaks one billion users. Twitter wants to move to an algorithmically-curated feed and nobody else does.

Publisher Usborne has released its iconic 1980s coding books for kids as free downloads. I had the Introduction to Computer Programming one. That said, we were raised tough in those days: Machine Code for Beginners, anyone?

The Internet Archive’s project to preserve old software in a JavaScript emulator has been highly praised, but this is even cooler. They’ve created a museum of the viruses they found infecting the old websites.

Anti-trust may start watching the concentration ratio of data

This is interesting. If two companies who both own a huge quantity of data merge, is that a move towards monopoly even if they don’t sell the data? The head of Germany’s anti-trust agency thinks it is, and importantly, it looks like European commissioner Margarethe Vestager does too. One to watch.

The EU and the US have signed a provisional agreement on the transfer of personal data, replacing the previous Safe Harbor deal that was struck down by the courts. The new one includes provisions for transparency and regular inspections, and requires the parties to review the agreement regularly.

Meanwhile, the US and Britain are negotiating about the terms under which British cops could access US telecoms data. The Americans seem a little surprised just how authoritarian we can be.

Euregulators want to hand the whole 700MHz band to mobile.

T-Mobile USA is complaining that the FCC should “tread lightly” in investigating Binge On!, after various people filed papers arguing that it’s not net-neutral. The horse, meanwhile, is out of the stable and galloping off down the road - Verizon Wireless just zero-rated its go90 video app, and did so as part of its FreeBee sponsored data program, just for extra controversy.

It looks like T-Mo’s 464XLAT technology, which helps IPv4-only apps work on their IPv6 network, is buggy. T-Mobile recently pushed out an update deploying it to Apple iProducts, and now apps that use UDP streaming, notably Facetime, don’t work although they do over a VPN. Alternatively, maybe the Binge On! proxy is misbehaving? That doesn’t do UDP either.

Narendra Bansal
Narendra Bansal
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