Apple CAPEX, Kill Your PBX, When Facebook ads go bad - Telco 2.0 News Review
- Strategy & Finance: Operators face up to the brutal future in Europe
- Smartphone Roundup: Apple buys a Yahoo! worth of machine tools every three years
- Broadband Connectivity: 4.5bn smartphones times YouTube = get serious about mobile CDN
- Telco 2.0 Themes: Major mobile money JV; understanding M-PESA in society; Netflix on really big cloud systems
- Voice 2.0: Enterprises chuck out the PBX; call centres considered harmful
- Valley Roundup: When targeted ads attack
Coming, ready or not! The Telco 2.0 EMEA Brainstorm is this week.
Operators face up to the brutal future in Europe
2013 is a "Darwinian tipping point" for European telcos, who will have to embrace innovation in key sectors like the cloud, mobility, and big data, and create strategic relationships with other players like the CDNs, says IDATE. You may have seen this somewhere before - it's as if they were facing a brutal future or something.
And, indeed, we see the impact of this on the players most exposed to the economic crisis. Telefonica is looking at selling O2 Ireland in order to raise €700m and reduce its debts. Telecom Italia is selling off the fixed operator preparatory to a merger, perhaps with Hutchison although no decision has yet been taken. And Vodafone is spending £900m on network CAPEX in the UK, as it fights for share and prepares for 4G.
We could do with more of that. The GSMA points out that 20% of connections in the US are on LTE compared to 2% in the EU, US mobile industry CAPEX has gone up 70% since 2007, and it's actually falling in Europe.
Free Mobile does reverse quadplay, selling fixed services to people drawn into the shop by the cheap mobile service, but of course it also has some millions of fixed customers to upsell. They can now get the discount on a second mobile plan, deepening Free's presence in its fixed-line households. This is also possibly a step further towards profitability - by definition, Free already has a WLAN hotspot, small cell, and Internet link in place to serve these people.
At the very last moment, as the auctioneer cries "Going...Going..." and lifts the hammer, who's this buckskin-clad figure barging into the hall? It's the Satellite Cowboy himself, with a new offer for Clearwire, upping the price by a dollar a share and promising to take over the $80m/month funding roll. Meanwhile, the cable companies who own stakes in Clearwire have not surprisingly come out against DISH's bid, being DISH's competitors. And another dignified public event degenerates into a vulgar brawl. You'd think they were doing it on purpose.
As a result, the final-final vote gets put off to consider the offer. Boringly, Institutional Shareholder Services recommended its clients, who speak for much of Sprint, to vote for the Softbank deal and put an end to all the fun.
Kevin Russell, who was usually quotable as CEO of 3UK, is now running Optus in Australia.
Australia's telecommunications industry "has gone backwards in the past five or six years - I don't think any of us have covered ourselves in glory....You can't rely on fifteen-year-old children going over their caps and having two or three thousand dollar data bills. That's just wrong - it's wrong morally, it's not sustainable.
Apple buys a Yahoo! worth of machine tools every three years
The killer app in mobile, it seems increasingly clear, was really manufacturing. Horace points out that Apple fans (and knockers) who wonder why they don't make a big acquisition with their money are missing the point - Apple's capital investment is the equivalent of buying a Yahoo! every three years. And nobody thinks the iPhone production tooling is a worse investment than buying Yahoo! Probably not even Yahoo! Over the years since the iPhone launch, Apple has invested $21bn in manufacturing and the scary thing is that they're planning to spend another $10bn this fiscal year.
Google spends money on Glass and self-driving cars and Internet balloons and robot kites and whatnot, but you suspect Apple is probably building a Death Star to exterminate its competitors. Or perhaps it's an iWatch, or an iHat? Mary Meeker certainly thinks so, but Tim Cook thinks wearables are only ever going to be a niche.
Anyway. In fact, Apple actually invests more money in manufacturing than Intel...if not as much as Samsung, although Samsung also makes a lot of other stuff that's out of scope here.
Samsung, though, is not totally committed either to competing with Apple, or to being a component vendor competing with Intel. They announced this week that the new flagship Android tablet would use an Intel processor, and the first major Samsung device to use something other than ARM technology.b
Meanwhile, here's a rundown of the new Intel CPU architecture, Haswell. At the moment, it's going into the super-high performance, less power critical areas like desktops and servers, leaving the Atoms to deal with mobility, but power consumption is a key element of the new chips and Intel plans to use them in Android devices and Ultrabooks in the future. Intel also just acquired STEricsson's GPS chip business.
ARM, for its part, also has a new line, providing a CPU similar to the Apple A6, fitting in their range between the Cortex A9, now considered a low-cost option, and the top dollar quad-core A15.
Says Microsoft: The future is killer devices, connected to amazing cloud services, and we should think of tablets as being PCs because people very often use them in the same way. The only problem for Microsoft there is that presumably you'd have to count iOS on the iPad as a PC operating system, and that wouldn't do anything nice for the Windows market share numbers. The point is also made in comments here that iPads should be considered to be the supposedly missing low-cost MacBook.
Apparently, a Samsung Galaxy S4 will survive marginally longer underwater than an iPhone but the iPhone will withstand being dropped from a greater height. But will it tell Cupertino about your irresponsibility? Apple settles a lawsuit over the iDevice warranty, after it turns out that the telltale alkaline strip hidden in the device to detect if water has got in and therefore provide grounds to refuse your claim may change colour just because the atmosphere is humid. In other Apple news, they respond to the devaluation of the yen by putting up prices.
Firefox OS tablet a-coming. And Bloomberg Businessweek reports on Android getting everywhere, making Google "the dominant software player in a connected world" on every metric, except for revenue or profit. They use a NASA project to build small satellites cheaply using Android as an example, but how many nanosatellites running Android are going to click on adverts?
4.5bn smartphones times YouTube = get serious about mobile CDN
Ericsson presented its forecasts for the industry today, and it expects the number of smartphone subscriptions globally to get to 4.5bn by 2018, or to put it another way, the end of the non-smartphone. That means a lot of cat videos, and as a result, they forecast 60% annual growth in video traffic over the same period.
Cisco, for its part, issued its own crystal-ball exercise at the same time. As has happened over the last year or so, the Cisco VNI has walked back some of the spectacular forecasts for IP traffic growth it used to produce - they're expecting a 23% CAGR for 2012-2017, although that covers all Internet traffic. That said, they expect Internet traffic to be majority-mobile by 2016, so the two forecasts are not that contradictory.
Cisco, predictably, expects the major rules-of-thumb of the Internet to remain in force. Busy-hour traffic will increase much more than average traffic, representing the structurally high peak-mean ratio typical of IP networks that also sells routers via the provision-for-the-peak principle. Peering will still be the basic architecture of the Internet, with metro-area traffic growing much faster than backbone traffic. And CDNs will be very important, delivering 65% of the total video on the Internet by 2017.
Given that video will be 80% of the total traffic, that implies a lot of CDN growth, and we made you a report on what to do about it. Cisco also made you a bigger router, and only a terrible cynic would see anything other than coincidental in the timing. Meanwhile, Nokia Siemens Networks joined Intel's Smart Cell initiative to deploy applications (like CDN nodes) to the small cell.
No wonder, then, that a Verizon-Limelight Networks deal is on the cards.
Could the UK benefit from more openness about 4G network planning?
A problem for both the NBN and TurnbullDSL: Telstra's ducts are crammed with undeclared asbestos. We remember when OFCOM's infrasructure-sharing trial project discovered that a surprisingly large percentage of BT's ducts were full of raw sewage. At last, someone's beaten that one.
This piece on the Iranian Internet notes that Iran is very much in the business of providing Internet transit as well as cutting it off. Renesys, meanwhile, points out that cutting off the Internet in Turkey is easier said than done, given that there is no monopoly transit provider and a wealth of international cable landings - even after the Turkish prime minister said Twitter was the "greatest scourge in the world".
Major mobile money JV; understanding M-PESA in society; Netflix on really big cloud systems
Caixabank, Santander, and Telefonica have set up a joint venture to develop new digital businesses. Seeing as this is two banks and a telco, you might expect it to be some kind of digital wallet/m-payments play, and you'd be right.
the company will begin its activities with the management of an online community to ease the connection between merchants and consumers when it comes to offers, discounts and promotions. This community will be a new tool for retailers to boost sales.
Additionally, the joint venture will develop a Digital Wallet in which customers can keep all their cards, which will serve as identification in stores and for making purchases within the digital community, as well as being a person-to-person (P2P) mobile payment service for community members
Here's a fascinating read on the user anthropology of M-PESA, by far the most successful of m-payments projects. Notably, you shouldn't expect it to be used by the poor (they have no money), at least as first, and it's very important to understand when money isn't money and when it's more than just money. And mobile money sometimes makes men economically more like women.
There's a bidding war on for Hulu, but it looks like it's going to end up in the TV industry. On the other hand, if you want to understand either online video or the cloud, Netflix is the company to ask, and specifically its CTO, Adrian Cockcroft. Here he is speaking to the Linux Foundation on why the cloud is "dystopia as a service".
Enterprises chuck out the PBX; call centres considered harmful
Enterprises are spending much less money on voice hardware, with the market for PBXen falling 10% in the first quarter, putting it back where it was in recession-hammered 2009. On the other hand, spending on unified communications solutions and software is growing strongly, up 21% in the same timeframe.
It looks like the underlying provision of telephony is being commoditised, deflated, and demonetised, with value shifting to features, integration, user experience, and adjacent systems - the core message of our voice practice since the beginning of Telco 2.0. On that note, the BBC goes to see Calltrunk.
Salesforce thinks the call centre is finished, because today's kids will just use Twitter. However, at least in Australia:
For every customer that says an issue was resolved through Twitter, another claims their tweet to a company was ignored.
Chris Kranky looks at how VoIP is evolving towards a couple of huge proprietary ecosystems and a vast diversity of verticalised apps, mostly around the definition of identifiers. Dan York blogs FCC CTO Henning Schultze's recent presentation on the future of the PSTN and the future of telephone numbers as an application-layer identifier that is relatively trustworthy, memorable, and highly interoperable.
This is also why Cisco is suing Microsoft.
RevK experiments with his own replacement identifier, and the comments discuss the surprisingly large phenomenon of SIP spam. DarkReading discusses what to do about SIP denial-of-service attacks. Voxygen builds its own Thunderbirds communicator with a RaspberryPi, their API, and some casemodding.
And here's a Twilio co-founder on how to price cloud services:
When targeted ads attack
The problem with algorithmic ad-targeting - what if the algo determines that your customers like both your product, and rape? It seems to have happened to Nissan, the Nationwide Building Society, and Dove skincare products, whose adverts were automatically targeted by Facebook on a variety of highly offensive posts whose content is probably not worth going into further. The selection seems to suggest that this is a bug, but it's quite possible that ad-targeting might tell you things about your customer you'd rather not know.
Meet the Big Data sceptics.
Is Marissa Mayer's Yahoo! doubling-down on the old "web portal" concept, or is it aggregating a lot of tools that all do one thing well, like Unix utilities, or is it just trying to remind us that it exists?
Replacing all your newspaper photographers with iPhones.