Ring! Ring! Hot News, 9th March 2009
In Today's Issue: Huawei beats the recession with bizarre "low prices and good products" strategy; politics of standards in China; Google counts its money, cries out "Mine! All mine!"; music biz friendly version of YouTube on the pad; Tiscali looks increasingly doomed; BBC's mystery atom smasher project; ZillionTV considered helpful, at least by Telephony Online; OFCOM greenlights UK FTTC, makes BT Wholesale very happy; UK cable ducts are quite often full of excrement - official; Ballmer in more conference fun'n'games; bishop goes after SMS and Facebook, leaves XMPP IM, Skype, Bebo out of it; Amazon Kindle on your iPhone, but do you need to pay for the data?; investors go wild with Palm Pre; ZTE's $40 solar-charging gadget; more Nokia open-source code; wink at your mobile; three strikes is back in France; Kundra appointed US CTO.gov; Martin Geddes sends his familiar spirit to eComm in the form of a black cat
Let's start with some bullish optimism; Huawei's CMO boasts that the company is looking at $30bn worth of infrastructure contracts this year, many of them on the Chinese 3G rollout. Of course, it's a racing certainty that the Chinese government will steer a lot of the work to its own vendors; but this alone cannot account for Huawei's success. According to Societe Generale, they doubled their share of the world market last year, going from 7% in 2007 to 14.4% last year. We reckon the reasons include "low prices", "hard work", and "investment in products".
The classic example of the Ministry of the Information Industry's intervention in the vendor market is its support for TD-SCDMA, the homebrew 3G standard that has always been a couple of years behind the GSM/UMTS world. The repeated delays in 3G licencing were probably at least in part an effort to give it time to catch up; eventually, MII arranged the licences to force at least one national deployment, over the profound misgivings of China Mobile.
It looks like the problems are far from solved; China Mobile is offering foreign vendors cash in exchange for help getting the thing working. On the sidelines of MWC, it seems, China Mobile execs were quietly meeting with Nokia, Sony Ericsson, LG, and Samsung to discuss an arrangement under which the carrier would provide cash up front to fund R&D work on the technology, presumably also promising to buy the handsets that might result. Oh dear, oh dear; this national prestige project is getting less national and prestigious by the day. There's also an interesting interview with Wang Jianzhou here.
OK, optimism spot over. Eric Schmidt of Google has a strategy for the recession: hoard cash. I'm surprised he didn't suggest stockpiling krugerrands, toilet paper, and ammunition. At the same time, however, it looks like a Google-record industry deal is in progress to create a "content owners' YouTube".
Tiscali has been the UK DSL operators' crisis club for a while, but now it's seeking a chat with its banks after a deal with BSkyB fell through. The usual problems - roaring video traffic, no value-added revenue to speak of, exploding BT backhaul bills - are being compounded by the drop in the sterling-euro exchange rate, which renders its revenues from the UK less valuable.
However, there could be some hope in the offing; the rumblings continue about a BBC-driven effort to standardise integrated video delivery across Internet and broadcast systems. Worth noting that the Freesat project gives the Beeb a satellite delivery capability, historically the cheapest way to deliver masses of video content. And Telephony Online reports on an interesting targeted-ads and fancy CPE play in online video.
OFCOM finally made its mind up this week - BT's fibre-to-the-cabinet build has got the green light, on condition that BT provide wholesale bitstream-like Ethernet access and make it possible for unbundlers to put their gear in the street cabinets. However, the regulators aren't promising any price controls for wholesale access, arguing that this will be constrained by the market. Not an obvious conclusion, seeing as the only other national broadband operator doesn't provide wholesale service and has no regulatory requirement to offer bitstream, unbundling, or indeed anything else.
At the same time, the regulator published a study of the potential for duct-sharing which showed that a majority of ducts have spare capacity, a surprisingly large percentage are entirely empty, but the spare capacity isn't necessarily available all the way along the duct, and a remarkable number of installations are full of rainwater or worse, raw sewage. Enter your own regulator/incumbent joke below.
It's not getting any better for Steve Ballmer; perhaps he should avoid conferences for a while? Or at least stop talking about iPhones? After his clash with John Strand at 3GSM, he put his foot in it again at a Microsoft event, while wearing a Windows Home Server sticker on his head. There is such a thing as dignity, and that's not it. We'd be remiss if we didn't mention the bishop who wants the youth to give up SMS and Facebook for Lent; oddly enough, he's fine with Bebo, Jabber-based instant messaging, blogs, etc, so they won't get bored.
Content is king, distribution is King Kong; Amazon always recognises this, and they've just announced an application that implements the Kindle's functionality on iPhones. Pretty cool; more channels is usually good news, especially for a quintessential volume business like Amazon. Question, though; the crucial feature of the Kindle was the bundled data transport on Sprint's network. This was both a brilliant and liberating idea, getting rid of a huge barrier to usage, and also a decision that seriously constrained the device - it meant that Kindles would be trapped in the United States.
Now, iPhones are GSM devices. So they certainly won't be on Sprint; but does Amazon have a bulk data contract with AT&T? And what about the wider world? iPhones roam, and the App Store is global, so it's possible they could pop up all over the place. Operators are likely to be delighted by the traffic. Hackers, meanwhile, can now sell unofficial iPhone applications through a kind of shadow App Store; everyone's got one now!
An investor in Palm, meanwhile, is predicting the doom of the iPhone. We shall see.
Far from the frivolity of iPhone fandom, ZTE is focused on the poor; they have launched a $40 GSM device that includes a solar panel to charge itself in the sun. It beats cranking a Freeplay to charge up your mobile, and it will surely help GSM spread even further in Africa. Meanwhile, Nokia updates its SDKs, putting more code into open source. It will help you do things like this - an application that converts text messages into graphics. Right.
Crazy R&D project of the week; a user interface that uses facial expressions, so you can wink at your phone to start it playing back an MP3 file or whatever. Which could get you in trouble; after the French government's record-industry inspired three-strikes plan failed in the European Parliament, they've brought it back at the national level.
Vivek Kundra becomes the US Government's CTO; we're not sure what that entails, but it's got to be a better idea than hiring the people who got Motorola into this mess. Kundra used to run Washington, D.C.'s IT services and is apparently keen on mobile broadband; so no doubt the news that Clearwire is pushing on with the WiMAX deployments would cheer him.