Ring! Ring! Hot News, 14th April 2008
In Today's Issue: Data surge at 3UK; price war in Sweden; Vodafone (powered by BT); what next after Big Ben?; more Phorm horrors; Carphone vs BT vs OFCOM; BT vs WiMAX; UK 2.5GHz auction coming; Qualcomm: Is a Telco; flying femtocells and Truphone; bad science at NTT; Apple zaps SDKs; Opera for Android; mystery MVNOs; Sonopia is toast; Embarq embarks on Telco 2.0; big chip merger; Safaricom caught fibbing about subscribers; mobile banking hits Orascom
There's been a surge in data traffic and revenue at 3UK after they launched their wave of HSPA dongles last year; can anyone guess their secret? That's right, they radically cut prices, and guess what, demand went way up. While it's certainly good news for anyone who wants mobile Hovisnet service (it's the Net wi' nowt taken out), how long will it be before they find themselves stuck between raging demand and yet another trip to see the nice man from Ericsson?
Another 3 data market is Sweden, where they have about as many customers as 3UK claim to have gained with dongles, at a considerably higher price point. Not that it's going to last, though, as Tele2 has just kicked off a price war. They had to get over losing an expensive lawsuit against TeliaSonera somehow.
3UK is trying to digest the bitblitz by means of an infrastructure sharing deal with T-Mobile, their fellow mobile Hovisnet provider in the UK. (Well, O2 formally offers plain data, at a screaming 128Kbits/s. Which doesn't really count.) Vodafone, meanwhile, is taking the whole thing a step further, with a giant contract with BT's wholesale division; literally all Vodafone UK cell sites and BSCs/RNCs are getting an optical Ethernet feed from BT's shiny new network. It makes sense; after all, if you're a British mobile operator, you're by definition BT's best customer, and BT's whole strategy of the last few years can be summed up as "great at wholesale". It's a pity, really, that rival NTL Telewest Business chose this week to claim that business has no confidence in 21CN. Well, for values of business not including Britain's biggest firm...
Speaking of BT's strategy, it was announced this week that Ben Verwaayen is standing down as CEO on the 1st of June. Britain's most successful International Relations graduate is handing the job to Ian Livingstone, current BT Retail chief, whose first priorities will be to execute on 21CN, deal with the Government on fibre deployment, and (we sincerely hope) do something about the Phorm disaster before completely losing the Internet community's confidence. Latest news is that the new design of the system - it keeps getting torn up and redesigned as more tentacled horrors are discovered - will make the DNS record for webwise.net effectively part of the UK critical national infrastructure. No DNS reply for webwise.net, no web for you!
We said there's an issue of confidence here; that goes double for BT's complex political relationship with OFCOM and the rival ISPs who use its wires via Openreach. The regulatory settlement is up for review, and BT wants to push up the price it charges for the use of an unbundled line; unsurprisingly, its competitor-customers like Carphone Warehouse are trying to work the regulator to prevent this, but of course they can't go too far for fear of being roped into a government-backed fibre build. It's complicated; it could be our motto.
Interestingly, there are signs that Ian Livingstone's BT may go for WiMAX in a serious way. In Italy, where BT has a substantial enterprise operation, they've signed a deal to offer WiMAX connectivity to their business customers where the fibre doesn't reach, and in an independent development, Livingstone is reported to be keen. BT's been interested for a while; its response to the OFCOM consultation on the 2.6GHz band was highly positive, and quite a lot of 21CN planning envisaged reducing the access loops to two technologies, DSL and "WLAN or 802.16".
Speaking of that spectrum, it's now all systems go for the auction of up to 400MHz of technology-neutral, FDD and TDD spectrum between 2.5 and 2.69GHz across the UK. Gentlemen, start your engines. After all, you can now buy WiMAX Forum certified kit. If you can think of something useful to do with it all, that is. Maybe someone will want it for a MediaFLO or other mobile-TV net? Qualcomm just did, buying spectrum in the US to look after its own technology; in the future, everyone will be a telco for 15 minutes. If you do have a good idea, it looks like Aircom can help you with your WiMAX network planning.
Airlines, for example; the European Union has taken steps to permit the deployment of femtocells in planes. Stand by for fearsome roaming charges and planeloads of "nokia tune". Alternatively, you could use Truphone, at least when you get there. The all-open-source mobile VoIPers just bought a company that sells cut-price roaming SIMs.
You think phones in the sky are annoying? NTT DoCoMo R&D is working on a phone with smelly effects. And this in Japan, a country where All Nippon Airways flies domestic routes with 747s stripped down and fitted with extra seats. 400 or more smellyphones going off at once in a jet in summer? Please. Fortunately, it looks like the market has spoken; NTT DoCoMo has lost its cherished status as owner of an actual majority of Japanese subscribers.
Apple seems to have decided it doesn't want to risk developing a monopoly in smartphone software development. They're preventing this by, well, having the iPhone SDK kill the device when it expires. It's just yet another example of how difficult these hybrid developer environments are to get right; the Symbian Signed wars continue.
Fascinatingly, Telephony Online reports that Apple originally planned to service the iPhones through an interesting form of MVNO. All iPhones would talk to a server at Apple - well, obviously they would, as an MVNO has its own HLR. But the clever bit is that Apple would have contracted with multiple operators for wholesale service, and the iPhone would roam onto the lowest cost operator at a given time and location. Neat, unless you're a telco getting dynamically price-squeezed and also taken for revenue sharing on top of that. However, you have to wonder how badly it could have gone wrong, given Apple's tendency to resort to tactical info-war on its iPhone customers.
Here's an example; Sonopia, the US startup MVNE, is dead. It's always looked like a good idea; MVNOs stand or fall by their differentiation, so the ideal MVNO would be small and hyper-specific....which would however make it tough to set it up. So there's a niche for a business that does nothing but create small MVNOs, right? Well, they tried. Telco 2.0 has always suspected that this is probably a better idea as a telco business unit than an independent company, but you never know until you try.
It's hard to avoid the conclusion that the new voice and messaging world is going through the inevitable adaptive radiation phase; the creatures who entered this new habitat are multiplying fast and speciating, but at some point the test will come, and bring with it a Darwinian shakeout. I mean, how many over-the-top IM clients with no apparent business plan can anyone possibly want?
Some people are serious about dramatically better voice and messaging; Embarq is launching a new product for its fixed-line customers, a cordless VoIP phone that provides online phone book/business directory service, visual voicemail, and news feeds. Disclosure; they are a Telco 2.0 client. And the US government is working on delivering emergency alerts to the public by SMS.
NXP and STMicro are getting together for their wireless products. A huge merger or JV? Bound to work. Rather as mergers and acquisitions are driven by fuzzy math and big talk, so are subscriber figures. This week it's Safaricom (something of a Telco 2.0 darling) who's been caught fibbing; turns out their subscriber numbers actually include everyone who's ever been a subscriber. Imagine if Voda did that...
Safaricom is famous for its mobile banking system, M-PESA; it looks like emerging market specialists Orascom are going that way too.