Ring! Ring! Hot News, 16th March, 2009
In Today's Issue: Microsoft app store and its developer tax; the crucial importance of ridiculous apps; Google Voice - you know, that thing from 2007; G-Checkout fees hiked; Reding after your data roaming margins; Skype for sale again; even more network-sharing in the UK; no DRM at Vodafone; Bill Morrow takes command of Clearwire; Clearwire presses on with WiMAX deployment; Vodafone Qatar to float; AT&T plans $17bn CAPEX; Ericsson sells Turkcell a network; all-IP MVNO at AT&T; yet more Russian ownership rows; Bharti Airtel CEO spooks the market; MTN's stellar results; surge in mobile money transactions predicted; Orange/Barclaycard NFC; obscure niche handset meets some social network site or other; Felten: fibre in your diet keeps you open; 33 years of Ethernet
Here an app, there an app, everywhere an app store. This time it's Microsoft who have started one up. Features and terms are similar to Apple, no surprises there, with the caveat that you have to pay to get in. There's an annual fee of $99, which entitles you to submit five applications to the store, with any further ones being charged at $99 each. The idea is, apparently, to discourage "silly" applications like the ones for the iPhone that fart. Is this sensible? Well, it's hard to avoid the parallel with Microsoft's business-making decision back in the 80s to give its tools away to developers while Apple was charging (quite steeply) for them. That paid off spectacularly for MSFT - developers developers developers, as Steve Ballmer said.
And isn't it just a tad judgemental to declare a whole swath of software "frivolous"? Frivolous applications have been a huge source of innovation for the IT industry since the students at MIT in 1962 hacked the mainframe so they could play spaceships. Producing frivolous things like computer games didn't stop Electronic Arts from making money; neither did producing frivolous things like Walkmans stop Sony making money; neither did producing frivolous things like phones with cameras in stop Nokia making money. But then, Microsoft has always had trouble with fun. This is, after all, the company whose biggest selling product is called Office.
And if, as promised, two-thirds of the 20,000 apps MSFT wants to have on sale at launch are targeted at consumers, it's hard to see where they are going to find enough Terribly Terribly Serious ones.
The wires were humming this week with the news of Google Voice. It seems almost churlish to point out that Google Voice is nothing but the free hosted IP-PBX service they bought back in the summer of 2007, Grandcentral. Yes, they've rebranded it, and they have searchable voicemail (i.e. "like Spinvox"). It would be very interesting if they were to integrate Google Talk in it, thus giving it the full richness of multiple clients, presence & availability, messaging, and extensibility that XMPP brings. But so far, all that marks it out from quite a lot of others is the Google name. Carriers should consider it another of Google's small deterrent investments - a submarine, like Google Checkout (whose fees just went up). But remember that one of the main purposes of a personal IP PBX is to let your calls follow you - to encourage more voice minutes of use. Perhaps a really intelligent operator would seek to partner with Gvoice?
Preferably, do so before Viviane Reding gets your data roaming prices, which are one of the main barriers to just buying a big data bucket and logging into your IP PBX, Asterisk box, VoIP provider or whatever from there. The European Union seems determined to cram down price caps for data roaming, which has after all often been offered on terms that would make a Sicilian usurer look like the Red Cross. Interestingly, one of the affordances of things like Grandcentral, PBXes, and Asterisk is what might be called voice as voice-over-IP. If you can route calls to another number in the SS7 world, you can use ultracheap buckets of minutes as offered by, say, 3UK to hook up your mobile, for prices that beat your likely data bills or WLAN hotspot fees, and it doesn't matter what local SIM-only deal you arrange because you still have the same number; and no carrier is ever going to try to stop you making SS7 calls.
Note that Skype is under the hammer again; no-one would bet on it reaching anything like the price EBay got it for.
No wonder, then, that the hunt for savings is going full power. O2 UK and Vodafone are the latest mobile operators to look at sharing infrastructure. And as well as them, Orange wants to join T-Mobile and 3UK's MBNL joint venture. It seems that a structural separation model in UK mobile access is emerging from the bottom up - GSM/UMTS/LTE traffic will pass over a shared RAN which handles all operators' bits on nondiscriminatory terms and earns a fixed return, while the operators compete like crazy at Layer 3 and above. It could be a great idea; Telco 2.0 was recently standing at the highest point in London, near Jack Straw's Castle, where there are three Node-Bs in twenty yards of pavement, belonging respectively to Orange, T-Mobile, and 3. Just imagine how much we would have saved had they done this to begin with. (However, some scepticism is in order - despite the creation of MBNL, there were still two MBNL-owned installations at that spot.)
Meanwhile, Vodafone has taken the inevitable plunge and started selling music without DRM restrictions. On the Web, it's already commonplace to offer bulk-licensed DRM-free content at a slight premium, and really there is no reason why anyone would want to get a whole lot of problems in order to save pence. Vodafone has apparently got licensing agreements with Universal, Sony and EMI, and will offer to exchange DRM tracks for their open equivalents free. It's sense.
Speaking of Vodafone, former head of European and Japanese operations Bill Morrow is off to be CEO of Sprint's partner and effective subcontractor in building the US WiMAX network, Clearwire. Despite everything, Clearwire is still planning to barge ahead with the build-out to 120 million people, which suggests that they could do with a gnarly old GSM network builder like Morrow around the place.
Perhaps the markets have bottomed out after all? Vodafone is looking at floating its network in Qatar on the stock market.
AT&T, meanwhile, is planning to spend $17bn in CAPEX this year; watch the vendors run after that one, especially now that Alcatel has demonstrated that the Eurovendors have "still got it". Not only does AT&T still have work to do on UMTS deployment, it's now heading for LTE, whilst also rolling out VDSL fibre-to-the-cabinet (uVerse), IPTV, and its own not-quite IMS switching and applications infrastructure. Ericsson joined in the Eurofest by selling Turkcell a turnkey HSPA net with all-IP backhaul.
Here's something interesting; an all-IP MVNO, that provides a VoIP service over AT&T's network. Clearly, Zer01 has a revenue-sharing deal with AT&T, because the data traffic is excluded from AT&T charging. Now that's a more creative way to approach over-the-top players.
Turkcell is one of the companies involved in the great Alfa/Altimo ownership dispute saga, which blew up again this week as a court in rural Siberia froze Telenor's stake in Vimpelcom. It's more surprising that Telenor still has the stake to freeze after all these years of byzantine shenanigans. Most people would have given in and sold years ago, but there is a truly Viking determination at work here. Selling your shares, however, is something that involves careful timing. Look what happened when the CEO of Bharti Airtel decided to go liquid; although he only parted with 0.006% of the operator's market cap, it was 100% of his holding, and the market gave him the bird, knocking 6% off the company. This may affect your estimate of his judgment; the fact he sold Bharti Airtel stock to buy property in these times perhaps ought to affect it even more. However, they have had some bad regulatory news regarding termination fees, and MVNOs are coming.
MTN, meanwhile, announced a storming set of results - revenues up 40%, profits up 43%, margins of 42%, subscribers up 48%. Most of the subs came from either Nigeria or Iran, where as predicted, MTN's emerging market experts have torn into the incumbent players. However, ARPU was up as well, in South Africa as well as in their far-flung investments, and they even found 250 million rand to spend on a share of the new East African cable. And they're building a shared fibre network with Vodacom and Neotel.
Informa analysts predict that mobile money transfers will rise 12-fold in the next five years, with the bulk coming from M-PESA-like mbanking services rather than the NFC ones beloved of European operators, which will still, however, get about 11% of the market. As if on cue, Orange UK and Barclaycard announced an NFC joint venture.
Some obscure social network or other has a client for the iPhone.
And Telco 2.0 ally Benoit Felten has a simple message: the success of fibre-to-the-home is driven by user adoption, not by ARPU, so open access is good for everyone.
And finally, 33 years of Ethernet.