Ring! Ring! Hot News, 27th April 2009
In Today's Issue: crisis club DTAG back in the relegation zone; AT&T hits results on the nose; prepay/postpay split explains it all;
sack sue the board!; 6-hour nationwide GSM outage; T-Mobile USA shifts 1 mega-Android; wants to abolish SIM cards; Reliance turns on GSM and heads for 100 megasubs; Amazon beats the spread; Texas Instruments calls the bottom; Apple ships 1 billion App Store downloads, boosts margins; "Baby Shaker" app canned; Juniper calls the bottom; AT&T CAPEX steady; IMS "business" standardisers "jump on moving train"; Nokia squorges WidSets into Ovi, announces prizes for Flash Lite apps; only 23,000 Comes With Music users; roaming price caps are here; T-Mobile UK launches "comes with connectivity" BlackBerry; Angelina is amused by the Palm Pre; weird BT/Voda/IWF censorfest; Pirate Bay judge is conflicted; Google's peering strategy and stealthy CDN; OQO = dodo
Deutsche Telekom is back in trouble; a surprise profits warning reduced its predicted EBITDA for 2009 from €19.1bn to €18.7bn. The trouble seems to be concentrated at T-Mobile USA and in the UK, where the company's mobile operations are lagging badly. Some suggested that this means that telcos aren't so defensive after all; but we disagree. AT&T, after all, hit off expectations nicely with its own results last week, and it's notable that one big contributor was the differential between AT&T's success in signing up contract customers and T-Mobile USA's in signing up prepaid customers. That is to say, T-Mobile seems to have succeeded in attracting low-spending, high churn users...and this is never likely to be a great strategy unless you're Lebara.
In other DTAG news, the firm is suing former chairman Klaus Zumwinkel over his role in the spectacular spy scandal that rocked the company last year. They may also go after former CEO Kai-Uwe Ricke as well. But this couldn't save them last Tuesday, when the entire T-Mobile network in Germany experienced a six-hour total outage. Both the HLRs reportedly crashed, causing SIM verification for outbound calls and routing for inbound to fail.
On the brighter side, though, T-Mobile USA shifted 1 million Googlephones since October, and as Telephony Online points out, that's a good performance given that they started with only 21 3G networks. T-Mobile USA does have a cunning plan, however; break GSM! Apparently they like the idea of an embedded (i.e. nonremovable) SIM card; that'll fix those damn churners, and incidentally prevent them from using 999 service when T-Mobile's crashy HLRs are down...
Telco 2.0 bulls could point to Reliance Industries this week; the Indian operator announced that it aims to sign up 100 million subscribers by the end of the year, and as usual, the secret is nothing more than good old GSM. As soon as the GSM net went live earlier this year, subscriber growth shot through the roof. And Amazon pushed up its profits for the first quarter 24 per cent.
After Intel, Texas Instruments is the latest company to feel its supply-chain tentacles stroking along the bottom of the business cycle. They reported this week that the overstock of mobile device silicon that had built up in the system had now cleared, which given the tightly-coupled supply chains typical of the industry implies that the production lines will be rolling again very soon.Other signs of optimism were visible at Apple, which reported good numbers mostly based on strong iPhone and iPod shipments. A key driver, of course, is the App Store, which has just seen its billionth download. And their economies of scale are permitting them to increase their margins. There are, however, some problems; Apple just suppressed an application that asked the user to rock a baby to sleep, using the device accelerometer. It was pointed out that encouraging baby-shaking was unwise. Anyway, note this remark from Tim Cook, Apple's COO:
"Verizon is on CDMA, and we chose from the beginning of the iPhone to focus on one phone for the whole world. When you do that, you go down the GSM route. CDMA doesn't really have a life to it after a point in time."Ouch. Meanwhile, Juniper Networks reported that carriers' CAPEX has begun to recover, as analysts noted that AT&T had roughly maintained its usual CAPEX profile. So what's happening with the IMS people? Via Skype Journal, we learn that they're working on some sort of BSS-OSS standardisation thingy. SJ's comments are sensible, of course, but what jumped out at us was this quote:
"The train has left the station; now we're jumping on the moving train" said the Forum's Michael Khalilian.Yes. Very wise. Jumping on a moving train..
Nokia's platform activities, meanwhile. Well, there's certainly been a lot of them. Now, however, they are trying to cat-herd all those initiatives into a coherent business, under the Ovi brand. The latest thing to be stuffed into the Ovi iSausage is WidSets, a Java-based widgetry community they've had for quite a while. It doesn't bode well that everyone will apparently have to sign up for Ovi anew...one thing about service migrations is that some user loss is inevitable, but more hoops to hop through will drastically boost it. There's also a prize going for the best Flash Lite application.
Another N-service, which confusingly isn't integrated with Ovi, is Comes With Music, their unlimited but DRM-ridden bundled music service. So far, it's got a spectacular 23,000 users; a rival points out that this is probably another example that people would rather buy their music than rent it, and a cite to Doctorow's Law is probably in order here.
The good news, however, is that taking your CWM device with you is less likely to lead to monster phone bills; the EU roaming price caps are here.
Whatever happens with "comes with music", "comes with connectivity" has been a success with the Amazon Kindle. And here's a new example: T-Mobile UK is offering a new BlackBerry plus a year's unlimited Internet service and hosted BlackBerry service for a single upfront payment of £180. Voice and SMS are subject to the usual PAYG terms, but of course if you churn away you lose your year's worth of data. It's a neat offer targeted straight at small businesses and tradesmen - a traditional mobile industry market since the 1980s.
Another traditional market, but one which has been much more risky, seems to be film stars and celebrities in general. We reported on the curse of Maria Sharapova, femme fatale of the handset market. Then there was the Paris Hilton/Sidekick hack. Now, Palm appears to have found a prototype Pre for Angelina Jolie. She is, reportedly, amused. We'd have advised them to have Naomi Campbell test it for general build quality and ruggedness, but there are some ethical concerns with such a plan.
Regarding ethical issues, what is going on between BT and the Internet Watch Foundation? The IWF is the industry-funded outfit that provides a list of child porn sites for UK ISPs to filter; not so long ago, it fatfingered Wikipedia. Now, users of BT Mobile Broadband have been reported that the Pirate Bay has been censored, with the squid proxy returning a page claiming that the IWF has requested the block. The IWF denies it, and after all, it has no right or duty to censor anything expect CAI (Child Abuse Images). But the thing about censorship is that once it's in place it has a way of spreading. So did BT block it? The Mobile Broadband service is actually an MVNO riding on Vodafone's network; did Vodafone do it? And what are they doing pretending to be the IWF?
Relatedly, the Pirate Bay founders' appeal looks to have gained some speed; it turns out that the judge in the case sits on the board of a pro-copyright lobby group.
Brough Turner, meanwhile, has a great post on Google's peering strategy and the emerging Google CDN; it looks like Google is providing racks of servers to the ISPs it peers with, thus creating a distributed cache or content-delivery network. The minimum peering commit is 5Mbits at any of 33 Internet exchanges; how many telcos would hook up a peering circuit for 5Mbits?
And it looks like the OQO ultra-mobile PC is not long for this world. We remember taking part in a network trial in which one of the test endpoints was an OQO; one of the vendor in question's engineers remarked that their main use for it was to keep their coffee hot as the device pushed out so much heat...