Verizon; Patent Peace; Cable Deals; Lenovo buys IBM servers - Telco 2.0 News Review
- Intellectual Property: Peace breaks out in the Android wars
- Broadband Connectivity: Verizon has the pipes, and it's going to use them; T-Money; AT&T/Vodafone no deal
- Strategy & Finance: Vodafone buying Ono, Liberty buying Ziggo; French network sharing
- Hardware: Apple Q4; 2013 in semiconductor shipments; Samsung, LG, Nokia results
- Cloud Computing: Lenovo buys IBM servers; exit Savvis; Microsoft Q2 is all about enterprises
- Security & Privacy: Verizon puts a number on surveillance; Neiman-Marcus virus "in place for 3 months"
- Technology Disruptions: One small cell per person; WiFi aggregation; green HTML; Ka-band
Here's a video that should explain why you should attend our OnFuture Americas event in Mountain View on the 20th-21st of May
Patent peace: Ericsson, Samsung, Google, Huawei, Apple settle their differences
Is peace breaking out among the industry's intellectual property rivals? Ericsson has agreed to settle a dispute with Samsung, dropping a lawsuit it filed at the end of 2012. In exchange, Samsung will drop its counterclaim. The solution is a cross-licensing deal which, according to Ericsson, will increase their cash flow in 2014 and will run for several years. The money involved is substantial - Ericsson claims it will increase its net income by $512 million in the fourth quarter.
At the same time, Samsung and Google signed an agreement to licence each other's patents for the next 10 years. Google and Samsung are usually on the same side on IPR issues, but the next story is more telling, as it involves a case in which Apple is involved.
Rockstar, a consortium of companies including Apple, Ericsson, BlackBerry, Sony, and Microsoft which bought a large portfolio of patents from the wreckage of Nortel Networks, has agreed to settle a lawsuit it filed against Huawei, Google, and a who's who of Android vendors.
This does begin to look like a deliberate effort to clear the decks of outstanding issues. Does it imply that a broader peace treaty is coming that would resolve all the Android-related lawsuits?
Verizon has the pipes, and it's going to use them; T-Mobile does mobile money; AT&T/Vodafone no deal
In the US, Verizon's Q4 results dropped, and it was a strong showing on all fronts. Wireless had 1.65 million net-adds in the quarter, of which 1.57 million were postpaid, and 1.4 million took 4G. Smartphone penetration is at 70% and surely can't have much further to go, while ARPA is $157.
The earnings call was, not surprisingly, a run-down of triumphs. Over the whole year, VZW added 4 million subscribers and increased its service revenue by 8%. Wireline added 600,000 more fibre subscribers and achieved revenue growth of 4.9%, when any revenue growth at all is challenging for most ex-incumbent fixed operators.
The secret seems to be pretty simple: it's broadband. 55% of new FiOS subscribers in Q4 were on a service tier above 50Mbps, and they got 126,000 net adds in broadband in the quarter, as well as rolling over 80,000 existing broadband subscribers onto FiOS. The pattern is clear that VZ is concentrating on the fibre footprint and gradually withdrawing from the areas beyond it - total retail residential lines are falling. Similarly, we've already seen that the great majority of their net-adds in wireless are taking 4G. VZ invested heavily in the "happy pipe", with FiOS and then with LTE, and they're now reaping the benefits.
Meanwhile, Sprint has given notice of job cuts coming. Their quarterly numbers are expected on the 11th, and in the light of Verizon's stellar performance, AT&T's massive giveaways, and another big T-Mobile quarter, it's hard to see how they can avoid being dreadful. Especially as AT&T's customer-retention splurge now includes their low-cost prepay offering Aio Wireless.
The H-block auction moves on, having reached a total of $300m.
T-Mobile USA may be an "uncarrier", but like all carriers it wants to get into mobile money somehow. The service is based on a partnership with a bank (Bancorp) and provides a prepaid debit card, an app, and various basic banking services like cheque clearing.
Here's an interesting take on the revived net neutrality issue - Netflix's lobbyist tells Congress that they're not worried, because no ISP could risk being that network that doesn't have Netflix, and anyway they account for so much traffic that throtting 90% of the traffic to speed up the other 10% doesn't make much sense.
AT&T, meanwhile, has officially denied any intention of bidding for Vodafone in a statement to the London stock exchange. Exchange rules state that they can't try again for six months after such a denial. Inevitably, this has only induced more speculation, as well as dropping Vodafone shares about 6%.
Vodafone buying Ono, Liberty buying Ziggo; French network sharing; Sawaris in for TIM Brasil?
Vodafone, for its part, is buying a Spanish cable operator, Ono, as it adds more fixed assets all over Europe. Buying cable makes sense, not just for the TV, but also because it offers a quick upgrade route to high speed broadband.
Another European cable deal is on the cards, as Liberty Global acquires Dutch operator Ziggo, for €10bn including the assumption of its debts. This has the consequence that Réne Obermann, the former T-Mobile International and DTAG boss, is looking for a job again, having taken the CEO's slot at Ziggo.
In France, SFR and Bouygues are looking into a network-sharing agreement in order to cut their costs and survive the price disruption unleashed by Free Mobile.
In the UK, is the deployment of BT's VDSL harming competition? In North-East Somerset, they won't mind if it is - Wansdyke Telecom is a new community fibre project around there.
Manchester and Salford city councils are offering grants of up to £3,000 for small businesses to get high-speed Internet access. It would be nice to think this would serve to get some public fibre deployed, but realistically, like most of the BDUK programme, a lot of it will be a subsidy to BT VDSL.
Elsewhere in the world, Naguib Sawaris is interested in buying TIM Brasil, which might be a solution to the TI/Telefonica row.
Apple Q4; 2013 in semiconductor shipments; Samsung, LG, Nokia results
Apple's Q4 drops this evening, 2000 GMT. While we're waiting, figures for 2013 semiconductor sales are out. Between them, Apple and Samsung bought $52.5bn worth of chips last year, while the next eight biggest buyers together took $54.8bn worth. The three biggest PC manufacturers - HP, Lenovo, and Dell - took $27bn, showing the swing towards mobile and Macs very clearly.
Samsung, meanwhile, was the world's second biggest producer of chips as well as being one of the biggest consumers of them. They shipped $33.5bn worth in 2013, a market share of 10.5%, second only to Intel. No bad thing, either - Samsung Mobile had a poor Q4, with its sales flat year-on-year, its operating profits down 18% sequentially.
A group of Foxconn executives have been accused of corruption by Taiwanese police. This comes at an awkward moment, when the company is looking at moving production out of China, to Indonesia and even the United States.
LG made a small net loss in Q4, about 64 billion won or €43 million. This was a big improvement year-on-year, as the corresponding quarter in 2012 was a 478 billion won loser. The key driver was far better performance in smartphones - shipments were 13.2 million, twice the corresponding quarter in 2012.
Nokia had full-year results out, and they weren't good. That said, they could have been much worse. The company was in profit to the tune of €519m, only a return of 4% but much better than the alternative. Sales were down 17%, essentially because NSN didn't do as well as it has been doing - as the networks business now has to carry the whole company, this is serious. Meanwhile, the phones business is now described on Nokia's books as . There are yet more Nokiadroid rumours.
And it's 30 years since the Mac launched.
Lenovo buys IBM servers; exit Savvis; AWS refreshes Redshift; Microsoft Q2 is all about enterprises
Lenovo is buying IBM's x86 server business for some $2.3bn, essentially repeating their deal with IBM for the ThinkPad PC division. Names like BladeCenter will go to Lenovo, while the power-saving ARM systems and old-school mainframes stay with IBM.
On a similar theme, another storied name is leaving us - Centurylink is retiring the Savvis name from its backbone ISP and data-centre business. They acquired the company, once one of the key Tier-1 operators, back in 2011.
Amazon Web Services refreshes its Redshift big data product, adding "Dense Compute" nodes as an option. These are configured with more CPU and less storage, so it's actually true that the dense nodes are the smart ones.
Horace wonders why people see Google as infallible. Good point: here's the crash inquiry into a world-wide outage on Gmail caused by a problem with their automated configuration management. Perhaps that's why they're buying an artificial intelligence company.
Microsoft's Q2 is out, and the take-home message is that growth is increasingly concentrated in enterprise products. It's always worth remembering about Microsoft that it's a company whose biggest product is called "Office", but the numbers are impressive. It's not just Office, either, but also a lot of server products and cloud.
James Hamilton has a fascinating post on the importance of archiving, Facebook's strategy, big data, and open hardware.
Verizon puts a number on surveillance requests; Neiman-Marcus credit card virus "in place for three months"
After the Snowden disclosures, ,Verizon has chosen to start publishing details of the requests for data they get from the government. Not surprisingly, their volume and scope are far greater than they were for, say, Apple. The Feds wanted information on 320,000 separate occasions. It's worth pointing out that out of those, 85,119 were requests to locate a mobile device after a 911 call, which even Edward Snowden can hardly object to.
We now know what the malware was that got into Target's credit card readers and stole 40 million cards. It reads the data from RAM, keeps it, and waits until everyone's gone home for the evening to send it to a compromised PC via NetBIOS - because who monitors *that* these days? - before the command-and-control server logs in via FTP to collect the take.
Neiman-Marcus, meanwhile, have given some detail about their own POS terminal disaster. Just over a million cards were taken, of which 2,400 have been defrauded. But the worst of it is that the malware was operational from July to mid-October, and they only found out this month, after Visa noticed unusually high levels of fraud.
A small network in Wyoming was the subject of a massive denial of service attack of an unusual kind. It seems that the Great Firewall of China started routing traffic from China into it - this was originally thought to be an operator error, but then it turned out that one of the companies hosted there has a long history of providing service to Chinese dissidents. The GFW, of course, has an endless supply of traffic from China it would usually dump. So why not, instead, reroute it and use it as a weapon?
A serious vulnerability in Google Chrome means that a website that once gets granted access to the microphone can keep it after the tab closes.
VMWare acquires AirWatch, a mobile device management company for $1.54bn, the biggest buy in its history.
French carriers have started imposing a termination surcharge on calls with wrong, missing, or spoofed caller ID, in an effort to get rid of voice spam originating from North African call centres. Simwood approves, but points out that as the charge is based on the caller ID presented, this creates an exciting new attack vector - set your competitor's caller ID, then crank up the robodialler, and they get a huge bill.
One small cell per person; WiFi aggregation; green HTML; Ka-band
Bell Labs thinks we will use "billions of small cells".
Telefonica I&D are working on a form of carrier aggregation for WiFi.
The 3G, 4G, and 5G Wireless Blog provides a rundown of progress on SRVCC.
OFCOM knocks open a chunk of the Ka-band for mobile Earth stations to use for satellite broadband.
In some parts of the US, literally no girls at all take computer science in high school.