Comcast, Vodafone, NBN, Sprint, Apple, Lenovo - Telco 2.0 News Review

Posted on

Comcast jumps in on Charter-TWC; continued cable consolidation coming; Liberty Global; Ono

We were all watching the Charter-TWC deal, and then it turned into a Comcast-TWC deal. Comcast, not content to pick up assets Charter might offload, jumped in with a $45bn bid for the whole of TWC this week and got a yes. Much reaction is here.

This takes Comcast to 30 million subscribers, by far the biggest of the US cablecos and also bigger by some way than either Verizon or AT&T's fixed operations. Quite recently, a deal between Discovery and Scripps was abandoned because Discovery decided on balance that it had all the scale it needed - now, it's more than likely that we'll see further consolidation of the cable business, especially in the light of Comcast's vertical integration with NBC's content business.

It may be more important still, as Jodie Griffin at Public Knowledge points out, that Comcast might have as much as half the US market for triple-play. She argues that either the FCC or the antitrust regulators should veto the deal, not so much because of its consequences for consumers, but rather because of its potential impact on content providers. A case in point is Netflix's effort to get its app onto cable STBs, which is now very much on hold.

Comcast is likely to sack most of the TWC executives. The point is made that Comcast has a lot of regulatory pull - the new FCC chair, Tom Wheeler, is a former cable industry lobbyist, and in the other direction, Meredith Attwell Baker, the FCC official who signed off on Comcast-NBC Universal, is now Comcast's lobbyist.

In other cable news, TWC has started free-upgrading its top tier of subscribers from 50 to 100Mbps. Liberty Global has results; 7.6 million out of its 21 million subscribers are still on analogue, which is surely a huge upsell opportunity, and 10 million are taking only TV. Not surprisingly they're very keen to push broadband to them.

Also, Liberty has 2.5 million subscribers with TiVos, of which 2 million are on Virgin Media. They also have half a million on their own platform in Europe. Is it time to go all in on TiVo, or even acquire the company?

Ono, meanwhile, is considering Vodafone's offer of £6bn. The key point is probably this:

Selling at €7bn would clear Ono's debt of €3.42bn and give the investors a return of €3.58bn. The four investors put in €1bn for a 54 per cent stake and would see a return of €1.8bn. This is a moderate rate of return in the VC business.

Nice work if you can get it. The Ono deal may, in part, be explained by this regulatory row between Vodafone.es and Telefonica - VF alleges Telefonica's deal to share fibre-to-the-home assets with Jazztel is anticompetitive. Perhaps that's why VF is £6bn keen to own broadband assets there.

Vodafone deploying ftth.ie; NBN political shambles; BT denies underspending fibre budget

Vodafone is increasingly interested in fixed broadband. In Ireland, it's planning to run fibre to 450,000 homes using the Irish electricity grid's rights-of-way and civil works. Legislation to that end is passing through the Irish parliament, and Vodafone picked the ball up and ran with it.

In Australia, the NBN build goes on despite communications minister Malcolm Turnbull's efforts to stop it. In fact, Turnbull the minister has a problem; however little he likes it, the NBN is now his network and he's got to look after its interests. Now TPG Telecom wants to run its own fibre-to-the-building into some of the most promising deployment areas. Will he let it? Or let it build, then buy it? Or what?

Similarly, the Aussie government is in the difficult position of having both opposed the NBN, but also having promised to build it faster. Here's a minister promising rural Australians super-fast broadband:

Fletcher said the goal is to beat Labor's coverage targets through the extensive use of fibre to the node (FTTN). He claims that placing equipment within an exchange in a rural town with a 100-metre radius will provide most premises NBN services.

In the UK, it looks possible that BT may reach its self-imposed targets for FTTC rollout without spending all the money it budgeted. Although this is in part because Openreach was more efficient than expected, the carrier seems a little embarrassed by the whole issue, presumably because it can already hear the calls for more fibre.

Meanwhile, the closure of South Yorkshire Digital Region is set for 15th May, and the government is being asked for another £10m to overbuild it. Belfast city council has £16m available to spend on faster links for SMBs, but it's only going to use "over £9m" of it. The rest is going on a public wi-fi system and we wouldn't bet against it ending up in BT's Wireless Cities line of business.

What does seem to encourage BT to roll out fibre is....competitors rolling out fibre. Meanwhile, Bogota's FTTH network launches phase one.

The Google Fibre Blog has a guide for communities interested in fibre.

Apple joins WebRTC; BBM gets voice; Viber = $900m to Rakusen; Ericsson brings Kodiak PTT to Europe

Apple has joined the WebRTC Working Group, the Cisco Mobile twitter feed announces with 140-character concision. This is an important moment - not only does it signal Apple's interest in voice, it's also an unusual case of Apple getting involved in an open, interoperable networking solution - they usually prefer to keep everything within the walls.

The last time we remember them doing something explicitly protocol-based was Bonjour multicast-DNS, and that caused iTunes, so watch out! Disruptive Dean discusses the possibilities, and argues that Apple is likely to give FaceTime more developer options, try to build it up as the primary telephony option on the iDevices, and to use WebRTC to batter Adobe Flash further.

Meanwhile, BlackBerry has added free calls to the BlackBerry Messenger app:

Japanese retailing giant Rakuten has acquired Viber, for the little matter of $900m in cash. That brings Rakuten a half decent mobile VoIP app, its supporting infrastructure, and some 300 million users. On the other hand, Viber is one of those companies where "stickers" are part of the business model, so it's up to Rakuten to find something useful to do with it.

Here's another hybrid, MVNO plus option, UppWireless.

Chatternets is a WebRTC app that lets you talk immediately to anyone who's looking at the same webpage. You probably want to think carefully about which pages you try that on.

Check-Connectivity.com is a Web site that returns debugging information on your WebRTC app.

Meet RAVEL, your new favourite acronym, for Roaming Architecture for Voice over LTE with Local Breakout.

Ericsson and Kodiak Networks are trying to push a hosted PTT solution in Europe. Telstra is offering a cloud-based version of BlueJeans' videoconferencing solution.

Simwood has a report coming up on the various fraud, spammers, and wildlife that gets trapped in their VoIP honeypot.

Voice has got so complicated these days - in the 1950s, innovation meant making a handset that was "little, lovely, and it lights!"

pink_princess_big.jpg

Sprint results less horrible than expected; T-Pricing cut; VZW gives an inch; demand more WiFi spectrum

We were waiting for this - Sprint results. They weren't as bad as you might expect. In the fourth quarter, they managed to add customers at last (477,000), taking the score for the year to a net loss of 2.3 million subscribers. That said, a postpaid ARPU of $63.29 shows why the US market remains interesting.

Financially, they lost $1bn in Q4, compared with $1.3bn in Q4 2012 - but the worrying bit is the driver of this improvement, as RCR Wireless points out. CAPEX seems to be slowing down, which isn't what you'd expect from an operator carrying out a huge network upgrade. And voice seems to be a problem:

"During the construction phase, there is a period of disruption to our network service which will manifest itself in higher voice service drops and blocked calls," [CEO Dan] Hesse explained. "Voice performance is very noticeable to customers, so heightened blocks and drops contribute significantly to churn."

Read our Executive Briefing on Self-Disruption: How Sprint Blew It today

Meanwhile, T-Mobile USA has given its quick-upgrade product another turn. Jump! subscribers who pay $10 a month extra can now have an upgrade whenever they want, as long as they've paid 50% of the last one off and trade it in.

Verizon Wireless held out the longest of the US operators, but it has now given just a bit of ground to the price war. No price points are changing, but subscribers who take their pay-for-upgrades plan or who sign for 2 years will see bigger data bundles. The company is also closing 5 call centres with the loss of 5,200 jobs.

Masayoshi Son is still hoping for a crack at Sprin-T-Mobile.

Meet WiFi Forward, a campaign to get the US TV whitespaces assigned for unlicensed use, and specifically, more WiFi bandwidth.

The US Department of Labour writes to carriers, pointing out that five tower climbers have been killed this year so far.

Vodafone has signed up Moneygram, the remittance network, for interoperability with M-PESA. That creates an additional 16 million addressable users for the platform. Vittorio Colao, meanwhile, is displeased by Facebook's 0.facebook.com wanting to be zero-rated.

Singapore state holding company Temasek is looking at selling its stake in Thai 3G operator Shin Corp. As a first step it's going to be offered to SingTel. Back in 2006, the tax treatment of Temasek's acquisition of the shares was a contributory factor in a military coup against Thai president Thaksin Shinawatra.

The Indian 2G reauction is over, at $9.8bn in bids. Vodafone, Idea, and Bharti came off best; Reliance Jio and Uninor stayed in the game; the rest are getting out. As a result, Bharti Airtel has offered $110m for Loop, a deal that would bring them 3 million subscribers.

App-le; Lenovo boss says he will "turn Motorola around in a few quarters"

One of the most remarkable phenomena about Apple is the enduring appetite for third-party apps for the iOS platform. Customers keep spending and developers keep hacking. The result is nicely summarised by Horace:

Screen-Shot-2014-02-10-at-10.03.55-AM-620x420.png

So, the iTunes operation is getting on for half a Google, and interestingly, it's driven by apps (the red sector on the chart) above all. Apps have also accelerated sharply since Q1 2013. He also points out that it's half a Google with something like 25% greater margins, and that it all fits together:

The missing piece in the puzzle is that the iPhone and iPad and iPod touch and Apple TV are pieces of an inter-dependent network of assets. The iTunes stores, Apple's services and Apple Retail are easily ignored because they are not "profit centers" but I believe they are a key component to the sustainment of these margins

This blog post points out that apps make up the great majority of Facebook's advertising revenue - when will Apple or Google launch something to address this, and what will that do to Facebook?

Elsewhere in hardware, Lenovo's CEO reckons they can turn Motorola Mobility around within "a few quarters".

Asus, meanwhile, shipped a flaw eight months ago that lets users on the Internet access any network-attached storage on the LAN side of their N66U-series routers. This week, a hacker decided it was time for action and wrote a script that crawled the Internet for the routers, tested for the vulnerability, and left a text file warning the user of the issue.

Wyless, the M2M-focused MVNO, has bought Aspider, a similar Dutch company. Lighting that leads you to the cheese. Spotify staffs up for an IPO. YouTube battles clickfraud. Cloudflare is hit by a giant NTP denial of service attack. Neul realigns itself, trying to appeal to telcos. A study shows the rays aren't controlling your thoughts.

And oh dear, oh dear, oh dear. Free-space optics has its uses, but whoever is selling it to high-frequency trading companies on the grounds that the laser beam is "faster" than fibre-optics is either an idiot or someone with a genuinely twisted sense of humour.