Ring! Ring! Hot News, 30th March 2009
In Today's Issue: Sony Ericsson warns on profits, top exec quits - we reveal the Sharapova factor; new SE gadget advertised as "comes with BBC iPlayer"; Moto shuts down video store; high speeds with unfeasible numbers of copper lines; Blockbuster's CPE video distribution play; Nokia cans $5bn worth of outsourcing contracts; CAPEX down 20%; horror numbers at China Telecom; rather good ones at Hutch; Skype, the world's no.1 in international voice; Ovi Store presos; UK spectrum chess - T-Mobile caves on 2.6GHz, Orange offers 900MHz universal notbroadband; first Samsung WiMAX gadget; at last, a new CDMA 3G network; Vodafone & O2 share airconditioning; Arqiva to supply cell sites to MBNL; FTel/Vivendi row continues; Telecom Plus - that's not quite what we meant by multiutility; Dell is an MVNO; CPW wants Tiscali for some reason; i-Plate pushed; Piratbyran's VPN; CDNs are the solution; Akamai's State of the Internet conclusions; US shamed on Internet routing clue; no more "sell it to Google"; Chinese secret police hackers!!!
Tennis star Maria Sharapova is the femme fatale of the mobile industry. Consider this: back in 2005, with Motorola riding the RAZR boom, they brought out a Maria Sharapova V3 (it was Schiaparelli-pink, with her signature). And look what happened since. Now, Sony Ericsson has signed her up. And you know, things aren't so great there either. At least this gadget is actually a new product.
In better SE news, this weekend we spotted the new Cybershot gadget being advertised with the USP that it works with the BBC iPlayer. Backhaul engineers, fasten your seatbelts; we're in for a bumpy night. Relatedly, Motorola's film download service is shutting down due to a lack of users, marketing, and everything else really. It certainly will be interesting to see how well the Samsung video store goes. If you're shuddering with dread at the thought, you might be interested in new options for really high bandwidth on copper, but you have to wonder who there is who can afford 25 leased lines to their nodes but can't afford to pull fibre instead and be secure for the foreseeable future.
We've often said that using set-top boxes and other CPE is a major opportunity in online video distribution; here's an example. Blockbuster is offering its own PVR; in fact, it's pushing a version of the TiVo which comes with its download service onto the local hard disk, selling them through its existing stores. As well as potentially being a major boost for the TiVo itself, which has fallen behind the field, it gives Blockbuster a considerable content caching capability...and aren't TiVos devices that are meant to integrate with broadcast TV?
Meanwhile, the economic news continues grim. Nokia has decided to end outsourcing of its mobile phone "engine" manufacturing operations, as part of its cost-cutting drive as sales fall; iSuppli reckons it's worth about $5bn to the existing subcontractors. UBS estimates that telco CAPEX fell by 20% in the first quarter of 2009. Presumably that may improve as the Verizon Wireless, China Unicom, and Turkcell megadeals start to show up in the numbers.
Horror numbers at China Telecom; 96% drop in net profits. Mostly this is accounted for by the tanking value of their WLL (Wireless Local Loop) not-quite-mobile business; with roaring GSM growth, and the arrival of 3G, it's probably no surprise that this is being squeezed. Further, there's the upheaval caused by the general reorganisation of the industry; CT took over the CDMA2000 network operated by China Unicom, which got the UMTS licence in exchange. Hutchison, however, reported a 39% drop in losses at 3 Group as its networks gradually make their way towards profitability.
3, of course, was the first mobile operator to make nice with Skype; according to Telegeography, Skype is now the biggest single provider of international voice minutes. In a sense, that doesn't say much - after all, there are a couple of hundred territories in the world and most of them have more than one telco, so the maximum scale of an international voice network is inherently limited. Still, 8% of international voice and 33 billion minutes of use are very significant numbers, even if only 8 billion minutes were revenue-attracting SkypeIn/SkypeOut traffic.
Presentations on the Ovi Store are here at Alessandro Paces' blog on Forum Nokia.
Meanwhile, in the UK, there's been movement in the various interlocking spectrum games. T-Mobile has dropped its objection to the sale of the 2.6GHz band, aka the sweet spot for WiMAX and other mobile broadband things; Orange has offered to deliver the piddling 2Mbits universal service so beloved of Lord Carter if they get their hands on the refarmed 900MHz GSM band. 3UK has promised to sue Orange over that. So the unreported middle here might be that T-Mobile and O2 have dropped their objections to 2.6 in exchange for divvying up the 900s and cutting 3 in on the deal. (What did happen with the joint Orange/O2 UK trial of UMTS-TDD down in Bristol, anyway? We heard the results were good...)
In other mobile broadband/WiMAX news, the first Samsung WiMAX device on Clearwire/Sprint has been made public. It's a big screen MID/web puck with a slideout keyboard. When we think of the US 700MHz band, we usually think of Sprint and Clearwire, but there is some other activity going on. Cox has a chunk of the spectrum, and they are putting together a team to build a CDMA network there - at last, a launch customer for Ultra Mobile Broadband! - which will make them a quad-play operator.
Details on the Vodafone/02 network sharing deal; apparently they are going to share space in cabinets, power, and air conditioning, which is nice-to-have but hardly sensational. It could be a start of deeper infrastructure sharing, although the major outsourcing contracts signed last week might go against that. Meanwhile, MBNL (T-Mobile UK/3UK) has tapped Arqiva to provide its cell sites.
We've said before that the bottom layers of the telecoms infrastructure - ducts and dark fibre - ought to be run as a utility maintenance business, in shared, neutral, or public ownership. In France, for example, duct access is a regulated product, and Iliad among others has been taking full advantage. (Note that despite this, FTel and Vivendi are still having a damn good row about structural separation.)
But we hadn't envisaged that anyone would sell service as a multi-utility: Telecom Plus is doing just that, wrapping POTS and DSL service in with gas and electricity, and they seem to be doing pretty well, even if the name reminds us of Telecom Gold.
Meet Dell, the MVNO: they are launching one to provide HSPA connectivity bundled into laptops. Admittedly it's in Japan only at the moment, but, well, watch out!
Meanwhile, Tiscali is on sale again, this time Carphone Warehouse is the bidder; it may prove hard to sell again, as the carrier is losing money and customers fast and is struggling to pay its debts. BT is pushing the i-Plate again - a filtering device that fits into the line socket and supposedly improves DSL performance dramatically. The science is pretty sensible - Claude Shannon again - but, y'know, it's still not fibre to the home, is it?
The Pirate Bay has launched its effort to stay ahead of even national signals-intelligence agency snooping; it's a version of the service provided over a strongly encrypted VPN. Relatedly, we recently read an OFCOM report on online video which made the rather good point that there is little point in trying to manage the video boom by traffic-shaping video, because video is the majority of the traffic. What they did find useful was content-delivery networking, and lots of it, the closer to the edge the better. That's not so far from the conclusions of our new Online Video Market Study.
No surprises, then, that Akamai is still growing and so is the Internet. Odd fact of the day: according to Akamai's numbers, Tunisia has the highest percentage of broadband connections in the world. Renesys, meanwhile, have been having some fun with the data in the Internet's various routing registries.
One of the problems with Internet BGP routing is that there is no authentication that a router has any right to announce the prefixes it is announcing; one solution is to get Internet operators to record their routing policies in a big database, so that downstream networks can verify the routing updates they receive. The only problem is that there are at least 39 different routing registries. Renesys scraped them and compared the information in them with the true facts; it turns out that a depressingly large number of countries would do better to erase everything from the registry, because at least that wouldn't be misleading.
Being European seems to help; if you filter the countries with less than 1000 prefixes (it's much easier to keep 1 network in order than 100), the top 10 are Poland, Ukraine, Austria, Russia, Switzerland, Italy, Germany, the UK, and Romania. The United States is at 21, between Korea and Indonesia. Stelkom of Slovenia, AS43061, takes the cake; it has a 100% record for its seven prefixes.
Google has supposedly stopped collecting start-ups for the time being; does this mean the end of the classic "sell it to Google" (not-a)business model? Oh well, there's always the option of selling your start-up to the Chinese secret police. It's a pity, then, that the British government's security advisors are apparently wedded to US rightwing scare stories about Huawei, when the real Chinese hackers are probably in their Windows PCs already.