Ring! Ring! Hot News, 17th March 2008
In Today's Issue: Big Trouble over Phorm; no immunity for US telcos; mystery letters from Apple; iPhone hacked, cracked, and rehacked; 500 million Flash devices; unified comms drives datacentre demand; Deutsche Telekom looks at OTE; Sprint merger dread; Virgin Media USA suffers; Verizon does topological P2P; Safaricom IPO back on; BSNL looks for prepaid packet-pushing partners; Bharti Airtel looks for wholesale customers; broader broadband beats basic broadband
BT get caught over using personal data in Phorm trials: real customer data was used to test the system. The Phorm Ultimatum highlights two key considerations for any successful platform: privacy and rewards. The Pope of the Web himself, Tim Berners-Lee puts its succinctly:
It's mine - you can't have it. If you want to use it for something then you have to negotiate with me, I have to agree; I have to understand what I'm getting in return.
At the same time, the US telcos are back on the hook for illegal wiretapping after a new version of FISA, without immunity, passed the House of Representatives. It makes you wonder who you'd prefer to spy on you.
Perhaps Apple. The computer company everyone loves followed up the announcement of its iPhone SDK with a mystery letter to hundreds of developers - no-one's quite sure whether it's a threat or not. There's much to be said for taking your competitors by surprise; but astonishing them isn't quite the same thing. Over at eComm 2008, meanwhile, Google bashes the iPhone. Incredibly enough, they reckon Android is superior. Meanwhile, the iPhone hackers have knocked the firmware wide open; including the bit that lets Apple brickify ones they don't like. Linux iPhones can't be far off now; not that there would be any point, but when does that stop hackers' unbridled neophilia? Meanwhile, the port of Lotus Notes for the iPhone is confirmed. And Adobe reckons there are 500 million mobiles around with Flash Lite installed - but not one iPhone.
Building the platform requires laying the foundations. Telehouse is spending £80 million on doubling the size of its carrier hotel in Docklands, as a world surge in data centre spending keeps up. They're also adding 15,000 square feet of floorspace in Paris and setting up shop in Singapore. You can't fake infrastructure, so don't try. If you want to know who wants all that rackspace, this could give you an idea.
We've repeatedly said that Deutsche Telekom is a company with an overpriced foreign acquisition in its future: now here it is. DTAG plans to buy Greek incumbent OTE; stand by for more details, but you have to worry. At least the rumour about them buying Sprint-Nextel hasn't come true yet; Telephony Online reports that Merrill Lynch is behind it, and discusses the appalling complexity of such a deal. It would create a company with CDMA2K, UMTS, GSM, iDEN, WiMAX, FLASH OFDM, and UMTS TDD networks, and that's just in the mobile division. To say nothing of arguing with both US and EU regulators, and maybe buying a piece of a giant illegal-wiretapping lawsuit (remember, T-Mobile USA was one of the two honourable exceptions next to Qwest). Don't do it, man - think of your wife and children.
Telephony Online speculates that T-Mobile might want it as part of a grand scheme to build an LTE-based pan-global mobile empire. One network to rule them all. But if T-Mobile wanted to do that - they've already got 2+ GHz spectrum across the US for their UMTS build. In the EU, they're already acquiring masses of cell-sites for the same reason. So why would they want the Telco USSR's problems? Still, it really would be a huge, overpriced foreign acquisition. Alternatively, maybe Sprint will just demerge Nextel; leaving what?
Just to help matters, Sprint's major wholesale customer, Virgin Media USA, is suffering after a sharp drop in subscriber additions. The excuse is that they didn't see value in competing at the low end of market. The alternative, more plausible reason, is that the recession and competition is starting to bite.
Verizon looks a better bet; they're looking seriously at the problems of developing a topology-aware P2P distribution system. This is something the industry badly needs to tackle the broadband incentive problem and further develop its digital logistics capability. But if you can't wait for that, the short-term upside is still in emerging markets. Proof is that the Safaricom IPO is back on after being held up due to a screaming mob problem.
India's state incumbent BSNL is looking for franchisees for pre-paid WiMAX; Bharti Airtel is working on its wholesale business. Finally over in the Netherlands, cable and fibre pull ahead of DSL for broadband access.