US price war, French LTE, CES news: Telco 2.0 News Review
- Strategy & Finance: Price war rages in US: T-Mobile offers to buy out contracts, Sprint huge family discount, what will VZW offer?
- Broadband Connectivity: French LTE scoreboard - EE on 2 million subs - a look into the Indian 3G market
- CES: T-Mo attention seeking - no Lenovo smartphones in the US - AT&T connected car - Samsung Q4 - gadgets
- Apple: Apple and Samsung CEOs: Mr Cook, I've been expecting you - Apple enterprise sales - developer payouts grow faster than app volume
- Voice 2.0: Smile, O2 testing VoLTE - the new VoIP frauds of Christmas 2013 - 7 non-voice use cases for WebRTC
- Privacy and Security: Another Huawei paranoia story - Ubuntu considered secure - Knox vulnerability
- Technology Disruptions: Orange gaming cluster; Cockcroft's 2013; IBM struggles to sell Watson
Bookings are now open for our OnFuture Americas 2014 event in Mountain View on 20-21st May
Price war rages in US: T-Mobile offers to buy out contracts, Sprint huge family discount, what will VZW offer?
Reuters reports that a price war has broken out in US wireless, and it's quite likely to crush margins across the board. T-Mobile USA lit the fuse, and although AT&T claimed for some time that they weren't going to respond because they were just picking up the "cost conscious", they've now plunged in head first. The following chart, from a forthcoming Telco 2.0 Executive Briefing, sums up the changes:
Last week, AT&T started offering up to $450 in service credit for new joiners from T-Mobile. This week, T-Mobile announced at CES that they were going to pay early termination fees for subscribers who wanted to switch to them. They're willing to go up to $350, making a maximum signup bonus of $650 if you include the $300 trade-in.
According to a Nielsen poll, about 40% of US consumers have been dissuaded from switching carrier by the need to pay an early termination fee, so this is potentially significant, if only in a negative price-war way.
This isn't quite the bonanza it might seem, as Ars Technica points out. T-Mobile's strategy is very much about reshuffling the monthly bill between the service contract and the price of the phone. If you're not going to pay for a new phone, they miss out on that part of the deal. Ars editors, perhaps the people in the world most likely to buy their own iPhones, repeatedly found that they might actually do better to pay the early termination fee out of their own pockets.
Sprint, for their part, launched a new "framily" plan, like a family plan but including your friends too. You get a $5 discount for every extra person on the plan, so if you can rope in 6 other people, your $55/mo unlimited voice/text/1GB plan comes down to $25/mo. Sprint also provides some extra detail on network plans here.
In other US carrier news, AT&T Mobility has announced a "sponsored data" product that lets upstream customers pay to have their content excluded from the data cap. It's going to be interesting to see if this works, not least because the inevitable regulatory row is getting going. The FCC says it will "monitor" the issue, and AT&T says it won't "favour" sponsored data over other traffic, which makes us wonder what the point of the whole exercise is.
They're also trying out a quite substantial discount for people who volunteer to let AT&T sell their data. The subscribers in question are on AT&T's GigaPower pilot fibre network in Austin, and they get the service for $70/mo as against $99. So, a two-sided sort of week for AT&T.
T-Mobile and VZW, meanwhile, have agreed to trade blocks of spectrum. The deal, quite complicated, involves T-Mobile buying 15 licences in the 700MHz band for some $2.36bn, while also swapping licences in higher bands in five markets for eight more 700MHz blocks. This means that T-Mobile now has 700MHz spectrum in 9 out of the top 10 US markets, and will presumably be adding LTE there in due course.
Speaking of spectrum, this had to be the oddest of bid stories. Having failed to nick Sprint from under the nose of the Samurai Son, and flirted with either carving out Clearwire or having a go at T-Mo, the Satellite Cowboy, Charlie Ergen of DISH, tried to buy LightSquared, the company that thought it could repurpose a huge block of satellite spectrum as cellular but...couldn't, not without breaking GPS. LightSquared's owners said upstick unoffer at $2.2bn, and the Cowboy rode out of town.
French LTE scoreboard - EE on 2 million subs - a look into the Indian 3G market
It's the moment of truth. France's regulator has released numbers on who's got the LTE. Interestingly, although Bouygues has 6,655 Node Bs theoretically "enabled" for LTE, they've only turned up service on 714 of those, which is actually fewer than the 824 Free Mobile sites running LTE. That said, Orange has got 3,649 out of 3,820 sites live in the 2.6GHz band.
EE, meanwhile, announced its two millionth subscriber. It took them 10 months to reach the first million, but the second million have signed up since September. (No wonder, given the vast quantity of hardware they were giving out in the run-up to Christmas.) They claim that the network has reached 70% population coverage and the UK is adding LTE subscribers faster than any country but South Korea.
Elsewhere, Vodafone is building a stake in Greek fixed operator Forthnet. Telenor says it might consider more projects in Asia beyond its roll-out in Myanmar. South African incumbent Telkom is planning to cut jobs - they've already cut the bottled water and the long service award, so what other options remain?
The 3G & 4G & 5G Wireless Blog goes to India and notes that people seem to love big-touchscreen phones and there are a hell of a lot of cheap Chinese Androids about. Carriers would be less pleased to hear that everyone uses Whatsapp, and thanks to the crowded Indian 3G market, price-war conditions prevail with 6GB of prepaid data setting you back £10.
Somalia is famous for its proliferation of semiofficial GSM operators. The effect is to drive down prices so far that people in neighbouring Djibouti gather at the border to make calls on the next-door network, which looks like this (from here):
CES: T-Mo attention seeking - no Lenovo smartphones in the US - AT&T connected car - Samsung Q4 - gadget roundup
As we mentioned, T-Mobile USA has had a good year, adding millions of subscribers while annoying its competitors thoroughly. It's CES time, and T-Mobile USA CEO John Legere took the opportunity to sneak into AT&T's developer event for the party. Legere posed for photos and posted a couple of tweets, before someone at AT&T gave him the attention he so obviously wanted by having goons throw him out in the street.
It wasn't perhaps the most exciting CES ever. Lenovo took the opportunity to inform everyone that they aren't launching a smartphone in the US this year, which is a tad negative for headline news. Ars Technica has a roundup, and interestingly suggests that anything really interesting in our mobile-first era will appear at MWC instead.
Connected car seems to have been a theme - notably, AT&T announced its "modular connected car", which turns out to be an Ericsson product.
Mozilla announced that they've got Panasonic to take Firefox OS for smart TVs, and a new line of ZTE phones. BlackBerry named a Head of Devices, which is the sort of thing you'd think they already had.
Samsung launched another round of huge-touchscreen gadgets at CES, the NotePro and TabPro. Hollywood director Michael Bay, who was meant to introduce the gadgets, flubbed his lines and corpsed. And then Samsung did the same - Q4 profits were distinctly off, partly because of the need to commemorate 20 years of their "New Management" strategy by paying out large bonuses to everybody. Now that's what we call new management.
Toshiba showed off the first 4K laptops, while the camera and TV vendors were all about the 4K video as well. Trust Dan Rayburn to play the spoilsport - he argues that the cost of streaming video in 4K will be about four times that of HD, and very few content owners who aren't subscription-based will be able to afford that.
Apple and Samsung CEOs: Mr Cook, I've been expecting you - Apple enterprise sales - developer payouts grow faster than app volume
The CEOs of Apple and Samsung are going to meet in an effort to settle the latest patent dispute between them before it comes to court in March. The meeting, in the presence of a "mediator", must happen before the 19th of February. So far, Apple has taken $930 million off Samsung in patent infringements.
Meanwhile, China Telecom is trying to spoil the China Mobile iPhone launch party, cutting prices and throwing in extras like an extra battery.
Forrester reckons that Apple's enterprise market share has gone from around 1% in 2009 to 8% today, but that doesn't count iPhones. As the Wall Street Journal points out, this is an important omission, as companies that deploy iPhones very often also take iPads and eventually start buying Macs. A case in point is Cisco Systems, which started off by letting employees bring their own iPhones, began supplying them, and now has a PC fleet that is about 25% Apple.
Horace argues that apps are sold like media, but are out-competing the other media. One piece of evidence for this contention is this chart, showing that revenues to developers on the iOS platform are growing faster than app shipments, and therefore that apps are winning spend from other media.
Smile, O2 testing VoLTE - the new VoIP frauds of Christmas 2013 - 7 non-voice use cases for WebRTC
Smile Communications, a pan-African LTE wireless ISP and a very early Telco 2.0 client, is live in the field these days, and is testing VoLTE in Uganda. They've also considered putting Skype traffic in a preferential quality-of-service class.
O2 Germany has tested VoLTE hand-off on their production network, bringing a serious deployment a bit closer.
UK VoIP carrier Simwood's blog reports on a new toll-fraud attack they encountered over Christmas. Interestingly, the hackers didn't do a high-rate brute force scan and then start pulling traffic, but rather, they reconnoitored gradually in advance and then kept the traffic on any given trunk at a low level, spreading it over numerous routes.
They've also started flagging calls with broken or spoofed caller ID.
Another Huawei paranoia story - Ubuntu considered secure - Knox vulnerability
Three UK government departments have become deeply worried about their Huawei teleconferencing setup, fearing it's secretly been compromised by the secret agents of a foreign power.
In fact it might have been, as this blog post using Snowden material makes clear - just not the foreign power they were thinking of.
The UK government has also given Ubuntu Linux the highest rating in a security assessment, but the problem is that a lot of people probably now think this is a trap.
What was thought to be a vulnerability in Samsung's Knox, which provides a separate virtual machine for your personal stuff on a highly secured enterprise Android, turns out instead to be a problem with Android. Originally Samsung denied it was a problem at all, but it wouldn't go away, and now Samsung and Google have carried out a very rare coordinated disclosure.
Those texting washing machines and Internet fridges we discussed earlier have in common that they are all potential targets for hackers. Ars makes this point, and argues that it is very unlikely that the manufacturers will be committed to supporting the software when they could instead sell more hardware. Bruce Schneier agrees strongly, pointing out that embedded devices are very often hideously vulnerable and very rarely get updates.
Orange gaming cluster; Cockcroft's 2013; IBM struggles to sell Watson
Twitter took out the biggest single lease on a data centre last year.
IBM is starting a new division to commercialise its Watson supercomputer, but as the WSJ points out, this is a problem - they've been struggling to sell it up against open-source Hadoop.
Alcatel may sell its enterprise division.