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Open Compute, Fibre, Iliad, Softbank: Telco 2.0 News Review

TI’s €7bn for innovations; Equinix brings Open Compute to telecoms; Microsoft’s Linux-based switches; wave of NFV contracts

The long-running saga of TIM’s investment in Telecom Argentina is at an end, with regulatory approval in. The sale, to a financial investor, brings in $1bn. The interesting bit, though, is what TIM plans to do with the money. Over the next three years, TI plans €12bn of CAPEX. Out of this, €1.2bn is going into additional 4G capacity, €3.6bn into FTTH builds, €400m into the TI Sparkle submarine cable division…and a whole €7bn into “innovation initiatives” such as IoT, NFV, and cloud. CEO Marco Patuano says this is

“the transition from a traditional telco to a digital telco & platform company enabler of the country’s digital life”

Very Telco 2.0?

Elsewhere, Facebook’s VP of Infrastructure Jason Taylor, who is also the chairman of the Open Compute Project, released some more details of the Telecom Infra Project, the open-source hardware initiative’s extension into telecoms. It’s focusing on wireless access and backhaul to begin with, and AT&T, Deutsche Telekom, EE, SK Telecom, and Verizon have signed up. If you’ve been reading this or buying our research you won’t be surprised to see AT&T on that list, nor will you be surprised to see SVP of Architecture & Design Andre Fuetsch involved.

Although the TIP is supposedly focusing on wireless, its first production deployment is very un-wireless - Internet exchange operator Equinix will be using Facebook’s Wedge high-density Ethernet switch design. That’s about as deep in the Internet core as you can get. It’s also a significant vote of confidence.

Google has joined the project, and this week it contributed its first design, a server rack with 48VDC power. Infrastructure boss Urs Hölzle says it represents a 30% saving of energy over a 12V system.

In the How 5G is Disrupting Cloud and Network Strategy report, we noted that the size of the biggest data centres had stopped climbing, and their power density, a key scaling metric, had also stopped growing. A lot of people expected the next move in power density to be upwards as data centre builders packed more, bigger, hotter servers into the available space. But it didn’t happen like that, and Facebook gives us some insight into how.

Microsoft, meanwhile, has released a modular platform for network switches through the OCP, and it turns out to be based on Linux, in the same week their SQL Server database appeared for Linux. This certainly isn’t your father’s Microsoft. Interestingly, HPE’s new machine learning API is hosted in Microsoft Azure.

NTT DoCoMo says it’s deployed a virtualised EPC from NEC. Vodafone.nl says it’s deployed virtualised IMS, EPC, and VoLTE from Ericsson. It’s probably time to get used to lots of boring contract announcements in the NFV space. Even Intelsat’s latest is apparently virtualised, so you can have a cloud above the clouds.

And AT&T’s John Stephens is selling their SDN capability vigorously.

“Holistic” fibre; the battle for US SMBs; cablecos won broadband in 2015; content co-op; Go90 could go a bit faster

Stephens also had some interesting things to say about their fibre roll-out. He makes the important point that once the residential broadband/video-focused build is done, the metro-fibre network can also provide business broadband, large enterprise/special access, and wireless backhaul services. Also, whenever the carrier does a business fibre install, they survey the building to determine whether or not to install a distributed-antenna system for the mobile network. Stephens expects Business Solutions topline revenue to start growing again once strategic services reach 40 per cent of the total.

In Louisville, where AT&T is trying to hold up Google Fiber deployment by legal action over access to ducts and poles, the carrier has started its own 1Gbps fibre build. Meanwhile, Google has succeeded in getting a deal with two electricity companies in Oregon to deploy fibre on their civil works. That said, three other providers (Comcast, Frontier, and Centurylink) are already deploying fibre in Portland, Oregon, having beaten Google to the punch.

Where they already have fibre, AT&T and Centurylink are pushing Gigabit Ethernet service aggressively into the SMB market. This is a response to the cablecos’ continuing success in business services - Comcast Business is growing 20% year-on-year and Time Warner Cable, 14%. A non-trivial share of that is mobile backhaul, a segment the market leader Level(3) mostly sat out. L(3)’s CFO Sunit Patel now wants back in as C-RAN fronthaul creates an increasing demand for dark fibre from mobile operators.

The need for more fibre is clear from this story. US cablecos net-added 3.3m broadband customers in 2015, 1m in Q4 alone. By comparison, the telco sector net-lost 188k wireline broadband customers during the year. The major cable operators also roughly held the line on pay-TV, with net-adds of 18k customers during the year for the top three. However, the regional cable operators did much worse in pay-TV, some of them deliberately as they de-emphasise content they have to buy in compared to broadband they produce in-house. That was enough, along with hard times for DISH and AT&T U-Verse, to lose the pay-TV sector 385k net subscribers in 2015.

A group of small cablecos are lobbying the FCC to make support for a content-buyers’ cooperative a condition of the Charter-TWC-Bright House merger (yes, that’s still going on).

Verizon’s Go90 video app is the 300th most downloaded on the App Store.

U-Verse is in a retransmission dispute with Univision, and AT&T’s chief lobbyist Jim Cicconi is getting all worked up.

Iliad FY2015; duelling performance reports; EU push on 700MHz; UK broadband; DTAG may spin off towers

It’s that time again. Iliad, the holding company for Xavier Niel’s Free.fr and Free Mobile, has full-year results. Revenue was €4.4bn, up 5.9% year-on-year, while EBITDA was up 16% at €1.5bn and net profits 20% at €335m. Free Mobile’s service revenue was up 20% and it net-added another 1.6m subscribers in the year, reaching a market share of 17%. 3.7m of the 12m mobile subscribers are now on 4G. They also net-added 270k fixed subscribers at an ARPU of €34.5/mo.

4G transition is important to Free, as the national roaming agreement with Orange only covers 3G. Moving subscribers to 4G therefore reduces the bill they pay to Orange, but of course demands that Free find the coverage independently. By the end of 2015, it had 3,500 4G sites in service for 63% population coverage, and it aims to deploy another 1,500 this year for 75% coverage. Meanwhile, it is also adding 3G sites at a rate of 1,600/year. This sets it back between €1.25-1.3bn a year in CAPEX.

Our new Innovation Leaders - A Disruptive Operator Tackles the Cloud report covers Iliad’s emerging cloud strategy, while the 4G Roll-Out Analysis report covers its network design and much more.

Another day, another mobile network performance report. This one claims 4G is now faster than WiFi, and both are faster in the United States than in Europe. That’s the precise opposite of the results from, say, OpenSignal’s data collection - they have 4G being faster in Europe than the USA. Interestingly, they reckon the difference in page load times diminishes with the size of the download, suggesting that it’s our old friend, latency, doing the damage. The bigger the download, the more time is taken up by data transfer rather than latency.

That makes sense, if it wasn’t for our own latency measurements suggesting the contrary.

Back at MWC, Ericsson CTO Ulf Ewaldsson was full of praise for how the US had conducted the 700MHz and AWS-3 auctions. EU digital vice-president Andrus Ansip is going that way too, arguing for a coordinated approach to licensing the 700MHz across Europe. The UK is trying to move the broadcasters out and get 25MHz of it available for mobile broadband quicker, but this is a national initiative at the moment.

The UK government may be thinking about changing the planning law that applies to mobile infrastructure, although at the moment this is pretty insubstantial. However, it’s certainly amusing that the prime minister now regrets campaigning against mobile phone masts.

The responsible minister has declared victory and 90% coverage with “superfast” broadband, as redefined down to ADSL2+. This makes it somehow ironic that they’re busy changing the planning regs and casting about for more spectrum. IHS reckons new entrants are going to start deploying much more fibre, while Openreach is gingerly trialling a 1Gbps SMB product in Bradford.

Very few details of last week’s crunch meeting with the Euregulators have been disclosed, but it looks like a 3UK-O2 deal would lead Tesco to buy out O2 UK’s stake in their MVNO, Tesco Mobile.

German regulators seem to be lobbying for less Euro-regulation, and more autonomy, almost certainly in support of DTAG’s consolidate-to-invest agenda. DTAG, meanwhile, is looking at the idea of spinning off its 40,000 European towers as an infrastructure subsidiary.

Ex-EE CEO Olaf Swantee takes the job at Sunrise in Switzerland. Vodafone Germany upgrades another 620k homes to 200Mbps cable.

MyRepublic pricing details; Mittal expects Indian price war; Indian 3G usage up 85%; 1bn 4G users; Softbank reorganises

Xavier Niel’s operator in Singapore, MyRepublic, is progressively unveiling its strategy and as we said last week, it looks a lot like Free. Their cheapest service plan is going to be $5.79/mo for 2GB of data. Compared to Singtel’s $14/mo, that’s brutally cheap. When you remember that T-Mobile USA’s marginal pricing is around $5/GB, it’s even cheaper. They’re also planning to offer an unlimited data plan at $57/mo, implying they expect an average unlimited user to draw down 20GB/mo of data. Not coincidentally, that’s the biggest Free Mobile bundle. Within the week, prices came slithering down across the industry.

Bharti Airtel chairman Sunil Mittal says he expects a price war in India that will take the market from 10 operators down to five, or rather “four plus one”, with Bharti, Vodafone, Idea, Reliance Jio, and the state-owned operator BSNL surviving.

Nokia reckons mobile data traffic in India grew 85% in 2015, with the average monthly usage reaching 750MB/user. The vendors’ club, the GSA, meanwhile, reckons we’re through one billion 4G users and adding 1.7m users/day.

This is the ideal moment for a snapshot review of the 4G roll-out so far. Get it here.

The Chinese Ministry of Commerce is not happy about the US sanctions against ZTE, much as you’d expect.

Softbank is planning to re-organise itself into two divisions, one for Japan and one for “international”. That latter division will basically include two assets, Sprint, and Alibaba.com. It is probably no accident that you can imagine Softbank selling both of them.

XL Axiata and Ooredoo’s Indonesian OpCo are looking at 4G network-sharing under a so-called MORAN (Multi-Operator Radio Access Network) arrangement.

The rather odd partnership between Telstra and the San Miguel brewery to launch a third operator in the Philippines has broken down. Meanwhile, Telstra has turned up its first SDN products, an enterprise VPN and a hosted security service.

MTN apparently offered to pay $1.5bn of the famous $5bn Nigerian fine.

Millicom denies planning to launch an MNO in Mexico. Marco Patuano denies he’s under pressure to sell TIM Brasil.

Softbank, not Sprint, in the market for 600MHz; Sprint “5G” small cells; AT&T signs 2m unlimited plans; regulating third-party data usage

This is strange. We mentioned that Softbank has moved Sprint into a separate “international” division. Despite this, Softbank is still planning to take part in the 600MHz auction, in its own right rather than as Sprint, and apparently a special-purpose company is being set up for this. The official line is that Sprint has plenty of spectrum, and indeed will have a huge spectrum advantage once it gets the 2.5GHz block going. So what gives?

CFO Tarek Robbiati says they’re building a 5G network, not a 4G one, repeats that they have all the spectrum but doesn’t explain why their parent company is buying more, and says they intend to densify the network much more by adding large numbers of small cells. This doesn’t sound much like the other week’s strategy of declaring CLEC status and building 120-foot high minimacros on government land, does it? Meanwhile, here comes another wave of prepaid price cuts.

AT&T is claiming that 2 million customers signed up for its revived unlimited data plan, although most of those are upsells rather than net-adds. The soft cap kicks in after 22GB/mo, about 10% more than Free’s expected usage of 20GB. Oh, and there’s a new corporate identity, but as the piece says, pretty much anything would pale in comparison with 1983’s enduring classic.

VZW, meanwhile, followed its usual policy of holding the line on prices, adding some more to the bundles but not cutting the headline price point or going unlimited.

T-Mobile USA’s CFO, Braxton Carter, claims VZW is “losing the LTE game” and that’s why they’re so keen to do 5G early.

Lawman Wheeler fined Verizon Wireless over its so-called “supercookie”, which linked its users’ web browsing to marketing information, this week. He then proposed rules for the re-use of mobile broadband data. You would be able to presume user consent regarding data you need just to provide the service, as long as you only use it for operational purposes. Using the data to market your own services would be allowed unless the user opted-out. Providing it to third parties would be subject to opt-in consent.

And Google Fi is out of invite-only mode. They’ve also discovered the delights of handset subsidy; for a month, you can get a Nexus 5X for half price if you also take Fi.

NYU Wireless releases 5G simulator; ARM doesn’t believe in VR hype; Exynos S7s > Qualcomm S7s; Xiaomi in trouble

The NYU Wireless project, increasingly influential on 5G and close to Nokia Networks, has released its 5G channel simulator software for millimetre-wave spectrum in open source. Getting the mmWave propagation models and channel simulations ready was a major to-do item from the Phoenix 3GPP RAN meeting last autumn, so this is a significant step forward. The NYU Wireless director, Ted Rappoport, says interestingly that the multipath properties are similar to those in 4G and the main difference will be a new directional antenna.

Apple has sent out invites for a product launch on the 21st of March

The CEO of ARM Holdings is sceptical about the size of the market for dedicated VR hardware.

Here’s Ars Technica’s in-depth review of the Samsung Galaxy S7. They took the trouble to evaluate both the US (i.e. Qualcomm 820) and International (i.e. Exynos 8) versions, and found that the Samsung-designed version has a distinct lead on most of their benchmarks. That said, the weird pinkness in the camera white balance is still there, like it was on the S5 and S6.

Xiaomi may be having the same basic problem Google has with Android - nice OS, decent hardware, but where is all the money? Meanwhile, Indian OEM Micromax’s CEO quits.

We may be looking at another go-round of whether the Google Apps bundle is anti-competitive.

Wire, the VoIP and instant messaging startup from the Skype founders, has added end-to-end encrypted video. (Are they trying to create the original Skype, again?)

Why you shouldn’t be excited by that computer playing Go.

Bosch’s IoT cloud launches; Sierra Wireless on LTE-M; Android light switches

Bosch says it’s now “a full-service IoT provider for connectivity and the Internet of Things”. They have a cloud platform for managing your things, a portfolio of devices and reference designs, and presumably an MVNO relationship with some carrier (we guess DTAG). And, of course, they know an awful lot about the cars and other machines the things get built into, as well as having long-standing business relationships with most of the companies involved. This was always likely to be a significant threat.

On a similar theme, General Motors just bought a self-driving car startup.

Sierra Wireless, which manufactures the radio modules, has also set up its own MVNO. Having done that, it’s probably little surprise that it’s committed to LTE-M and thinks it will “keep telcos relevant”.

Linux developer Matthew Garrett stayed in a hotel with Android tablets for light switches. It was “as bad as you’d imagine”. Anyone with a computer and a hank of Ethernet cable can control the lights and curtains in any room. He also bought some awful light bulbs that can both crash, and forward packets from their own ad-hoc WiFi into the owner’s local network.

An exploit for every version of Windows ever. Fortunately, there is some software you can rely on - this hacker spent 11 days trying to crash the popular open-source database SQLite and couldn’t, even after 473 million separate interventions.

The UK’s smart metering programme is so dear it’s only a little more expensive to roll out energy storage.

And, 140 years ago this week, the first telephone call.

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