Telco 2.0 News Review: RIM, Groupon and more Skype
Telco 2.0 Top Stories
- Devices: RIM getting a touch of the Nokias
- Strategy & Finance: Is Groupon the face of Bubble, 2.0?
- Broadband Connectivity: LightSquared & Sprint - who's the customer?
- Technology Disruptions: Alcatel-Lucent's ultra-low power LTE
- Voice 2.0: Purge at Skype - 6 VPs out ahead of Microsoft deal closing
- The Sixth Bullet:
HappyEfficient 100th Birthday, IBM!
[Ed. In case you missed it, we published our latest new research report Strategy 2.0: What Skype + Microsoft means for telcos last week, and Alcatel-Lucent are presenting more on their new radio device at Telco 2.0's free online virtual event Best Practice Live! next week, 28-29 June 2011.]
RIM shares plummeted by 21% after they announced a profits warning six weeks after their last update. Not enough BlackBerries are selling and ASP is down - perhaps not surprising as there hasn't been a new device since April, 2010. RIM has re-announced the next one several times, hardly helping sales of the existing range. 500,000 PlayBooks have been pushed out of the factory, but it's anybody's guess how many of those are somewhere in the supply chain rather than selling to end users.
Meanwhile, the much-announced BlackBerry Bold Touch 99xx devices have been delayed due to unspecified problems in production (Japanese parts, perhaps?) and now they're coming at the end of August. Perhaps.
O2 UK has announced that it won't sell PlayBooks but it will "consider" selling BlackBerry devices. Nice of them! And it's hardly encouraging that RIM is both buying back stock and refusing to say what the ASP actually is.
Mind you, has anyone else noticed that technically, you're not allowed to use a PlayBook on a plane? It requires your BlackBerry to be switched on and paired via Bluetooth, so you can't turn off all the radios as the airlines want you to. This is not the best idea for a device marketed to North American business executives, to say the least. On that score, though, it's only as bad an idea as a $500 laptop that won't work on a plane.
Meanwhile, in contrast, Computer Weekly reviews the Motorola Atrix smartphone and thinks it's great. They also try out the companion device it plugs into to make it into a sort-of-a-laptop and conclude that, although it's quite cool, it's not worth £250 as after all you could get a netbook for that.
Is there a pattern developing here? "Not quite a computer but still pretty pricey" is a device category that seems to return every few years, without noticeable success.
While we're ruthlessly knocking everything in sight, what about this piece on Groupon? We covered the fact that out of nearly a billion dollars in venture capital funding the company has received in the last 12 months, about $120 million was actually used in the business and the rest was basically pocketed by the company's directors, their wives, and a few favoured early investors.
TechCrunch has a detailed dissection of the business model. It's not the first time the point has been made that a large part of Groupon's business is essentially providing trade finance for small businesses, although it's worth repeating. They also make the point that it's not a great deal for the merchants from a marketing point of view and it's mostly the cashflow/credit aspect that makes it worthwhile, and therefore that credit risk will become a huge issue for the company as soon as the merchants work this out.
On the other hand, Groupon's own financing is heavily dependent on the difference between the VisaNet rules and the terms of business it sets for the merchants. Visa payments are cleared within a few days of the transaction, but Groupon pays the first instalment to the merchant within two weeks and the rest out as far as 60 days, so it can use the float as a source of financing for new deals.
There's a distinctly shaky sound to that, but it's actually worse than TC thinks. Whatever Groupon might put in its Ts & Cs for consumers, if it wants to accept credit cards, it's got to comply with the credit card networks' rules. The daddy is of course Visa and its IORs or International Operating Regulations. Time was, this bible was secret. These days, you can get it on the Visa website as a monster PDF. Whatever the legal protections for credit card users in the US are (in the UK they are very strict thanks to the Consumer Credit Act 1975), cardholders have the right to contest a transaction and request a chargeback from their card issuer up to several months later (it varies depending on the type of transaction).
Visa merchants don't have an account with the issuing bank, they have a revolving line of credit. So when that happens, the VisaNet clearing system claws back the transaction value from the merchant - in this case that's Groupon - immediately, pending settlement of the row through the dispute resolution mechanism. So if a major Groupon customer looked like failing, Groupon itself could be hit by a cash-sapping wave of chargebacks that it would have to pay out immediately from its incoming cash flow.
Elsewhere, LightSquared has been condemned by the FCC for interfering with the GPS band. An expert panel on space-based navigation and timing went so far as to argue that the decision to let LightSquared go ahead with the buildout should be reversed.
However, Philip Falcone was able to tell the intrepid band of LightSquared investors that they have a customer - Sprint. Or was it that Sprint has LightSquared as a customer? Business Week has more detail but it's still far from clear what's up. A little while ago, LightSquared announced it was a customer of AT&T, and nobody could really see how they could make money as a reseller/MVNO. So is this more of the same, or is Sprint a wholesale buyer? It's not clear either way.
You'd probably do better to bet on incremental progress. T-Mobile USA has announced another wave of HSPA+ speed upgrades towards 42Mbps.
We'd cover this Telecom TV story if it wasn't for the "take a survey" pop-up that won't go away. But you might be able to guess what it's about if you take in this Alcatel-Lucent presentation on their new very low-power, self-organising LTE base stations. As mentioned above, we'll also be seeing more on this at our Best Practice Live! free online virtual event next week.
In other network news, an Australian opposition politician gets his numbers badly wrong over the NBN and South Korea's super-broadband networks.
RevK has a practical and potentially commercially valuable suggestion for BT Openreach - provide a BT-managed edge device with each FTTC, FTTH, ADSL2+, or even LTE/WiMAX hookup, that exposes Ethernet-level diagnostic tests through a common API so both BT and upstream-customer ISPs can check the performance of their lines and identify faults easily. Chances of it happening, anyone?
Cable & Wireless Worldwide is apparently considering "retreating to the UK". Perhaps they could call it something like "Cable & Wireless UK".
Benoit Felten gives an interview to a Dutch newspaper saying that net neutrality will save KPN. Unfortunately nobody's translated it.
The BBC releases a smart-TV app to Samsung's app store to provide access to their Internet news product on the telly.
Red Bee Media, which operates several UK broadcasters' VOD infrastructure, is planning to sell a Cisco-based video platform more widely.
Comcast demonstrated its Xfinity TV platform and also a gigabit connection over cable. Scary.
As the Skype-Microsoft merger approaches closing, the former owners Silver Lake have carried out a massive executive purge, with the VPs of Mobile, Strategy, Skype for Business, Advertising & North America, Marketing, and HR all getting the boot. The explanation is deeply cynical - as Felix Salmon explains, most of the Skypers have a lot of accumulated share options and these are typically covered by change-of-control clauses. Therefore, the Microsoft acquisition would vest the shares immediately and require either Silver Lake or Microsoft to buy them out. Sacking everybody instead avoids this tedious detail, although it's absolutely certain that there's going to be a lot of litigation.
Coincidentally, Skype for Business VP David Gurlé spoke on the Bay Area's French-American TV channel just before this. (The Valley has a French TV station? Who knew?)
Meanwhile, the 2 billionth download of a Skype client was recorded.
Voice on the Web has a detailed review of Skype's latest carrier partnership, with TELUS Mobility in Canada, riding on their new HSPA+ network. Interestingly, you can't currently have a SkypeIn number in Canada but you can have one elsewhere, so while you're online you'd be an odd bird, a theoretically foreign number that would actually be in Canada but not subject to termination charges. TELUS will let you (as I think we've said) put Skype credit on your phone bill.
Here, as Phil Wolff points out, is a candidate for a bid from Microsoft - Skylook, the company that integrates Skype into Outlook.
IBM is celebrating its hundredth birthday. Having been almost the original cloud company with all those mainframes, they invented the PC and nearly creatively-destroyed their own business. These days, the cloud is well and truly back and IBM is a key player.
An IDG survey suggests that European CIOs are more interested in the cloud for scaling than for low low prices.
Apple iCloud is running...Microsoft! Specifically, part of it seems to be in the Microsoft Azure cloud, with content sometimes appearing from Amazon Web Services' CDN. So what's with that huge data centre? This may be an example of the "develop in the cloud, deploy to hosted servers" model, or perhaps evidence that the iDatacenter is behind schedule.
High Scalability has a nice piece on automating management of a big AWS application, as if you needed a reminder that the big stumbling block in the cloud is often the management and development tools. And the Fed's pope of cloud, Vivek Kundra, is off, to a job at Harvard University.
Microsoft has released a free SDK for the Kinect, the 3D games controller beloved of hackers. Watch out for much more fun and games - someone's already used it to control a Quadracopter, while someone else used them to draw passers-by on the Ramblas in Barcelona and then print a statue of them on a RepRap. It was art, like. And Visual Studio has gained support for HTML5.
Meanwhile, Microsoft is trying to stop people selling cheap memory cards for the XBox by using the Digital Millenium Copyright Act. Mixed message, anyone?
Yahoo! has a new mobile app out - it's an app for, eh, finding other apps.
EverythingEverywhere, Vodafone, and O2 have set up a joint venture to get an NFC-based mobile payments system going in the UK. They hope the rest of the industry will sign up as well.
Connected Planet has a look at Ericsson's acquisition of Telcordia and concludes it's a pretty good deal - did you know Telcordia makes revenue of $284,000 per employee?
ICANN has decided to allow the creation of commercial global top-level domains (i.e. like .com) - the Internet engineering world is up in arms, beginning at the top of this NANOG thread, as this raises the risk that if someone was to create - say - http://microsoft, most computers would resolve that to microsoft.[current hostname].com if the network they're on has such a name anywhere.
A study of Ugandan mobile money users shows that only 30% aren't sharing a phone, which doesn't seem to stop them from making use of the mobile banking and payments system.
To share this article easily, please click: