China Mobile, welcome to voice & messaging disruption! Telco 2.0 News Review
- Strategy & Spectrum China Mobile profits fall; 1800 band key in LTE, says GSA; 45% of mobile traffic offloaded
- Disruptive Carriers: French Revolution: Bouygues strikes back, with political support
- Net Neutrality: Apple, Comcast in streaming talks; L(3) leaps into the neutrality debate; future regulation; we have met the enemy and he is us
- Voice 2.0: Skype rebuilds around push; Google Voice migrates into Hangouts; Twilio, the AWS of voice?
- Privacy & Security: Snowden: the NSA hacked Huawei; it's not just the metadata any more; Android security
- Digital Commerce: Retailers turn off their NFC readers - is this the finish for ISIS?
- Cloud Computing: Serving Whatsapp; Telstra hands Cisco the keys to the cloud; Adobe streaming from AWS
- UK Broadband: BT Wholesale runs out of Internets; UK telecoms CAPEX falling since 1997; £10m good ideas fund
China Mobile profits fall; 1800 band key in LTE, says GSA; 45% of mobile traffic offloaded to WLAN; US spectrum
China Mobile's annual profits have fallen for the first time in 14 years. It's the familiar story of the mix shifting from voice and messaging to data as disruptive OTT apps hit the traditional services - messaging revenue is off 6.5% and voice off 3.4% while data revenue is up 24%.
Events like this are precisely why we created ourThe Future Value of Voice & Messaging strategy report. Check it out!
Another problem is that China Unicom, which got the world standard UMTS network in the shakeup of the Chinese industry, has been able to offer better 3G coverage and speeds and therefore to win subscribers off China Mobile. By definition, those customers tended to be heavy data users and therefore unusually valuable, so China Mobile's 2G/3G mix also suffered.
China Mobile's response is to press ahead with 4G deployment and to push iPhones. So far, most of the first 1.34m 4G users are iPhone users. They intend to increase capital spending on LTE by $12.1billion this year, with the main roll-out peaking this year and next.
The Global Suppliers Association says there are now 742 LTE devices on the market, and much more interestingly, that the 1800MHz band is emerging as the most important one for 4G. We mentioned this last week, pointing out that it provides for 2G/3G/4G working. 589 out of those 742 gadgets have Band 3. It's still relatively fragmented, though, as 1800MHz represents only 43% of deployed networks.
Cisco reckons that 45% of global mobile Internet traffic was offloaded to a wireless LAN in 2013, and it will soon surpass the volume of traffic carried on the cellular networks. Very interestingly, data from SK Telecom, which has a very advanced public WLAN, suggests that users aren't substituting WLAN for cellular - rather, heavier WLAN users are also heavier cellular users.
The Samsung Galaxy S5 expresses this trend in the most direct way possible. The "Download Booster" app it ships with implements multi-stream carrier aggregation, that is, it uses the cellular and WLAN radios concurrently for the same data stream. As with a lot of advanced features, while this is planned for the future in LTE-A and 5G, it's being delivered today in WLAN.
T-Mobile USA is offering the gadget for pitched into a debate about how the next major US spectrum auction should be structured.
AT&T wants the AWS-3 auction, covering 50MHz of 1.7 and 2.1GHz, to be organised in big geographical chunks, so-called Economic Areas (EAs). T-Mo, on the contrary, would like it to be broken up into smaller chunks, so-called Cellular Market Areas (CMAs). AT&T would also like to keep the spectrum in big blocks in terms of bandwidth, fitting at least a pair of 10MHz LTE channels in each. T-Mo would rather split it up. The basic issue here is whether AT&T actually needs another huge block of spectrum, or whether they're trying to tie it up so smaller operators (like T-Mobile, of course) can't get at it.
Sprint, meanwhile, has come dead last in a customer satisfaction survey, and is responding in the time-honoured way, by sacking 1,550 customer service staff. Tellingly, two MVNOs that use their network did dramatically better.
French Revolution: Bouygues strikes back, with political support
In France, although Vivendi has plumped for Numericable's offer for SFR, it's far from over. Bouygues has come back with a new offer including more cash. Altice, the Numericable parent company, says it won't up its own bid, but we'll see how long that lasts, as they also say they want to close the deal this week.
The new bid contains €1.4bn of additional cash, but perhaps more importantly it also contains a large quantity of political support, including not just the industry minister Arnaud Montebourg but also the president. With the political support comes the support of the public bank, CDC, and two of the major shareholders in Bouygues, JC Decaux and the wealthy Pinault family.
Montebourg's role has been a little ambiguous. Last week, he publicly broke the news that Vivendi was going to plump for Altice before the market opened, as if he was trying to bounce someone into accepting it. Since then, though, he's expressed increasingly public and strident opposition to the deal, denouncing the owner of Altice as a tax-evader. And he followed through, as well: the Finance Ministry has opened an inquiry into his tax affairs, while pressure is exerted to get him to move his money back into France.
Apple, Comcast in streaming talks; L(3) leaps into the neutrality debate; future regulation; we have met the enemy and he is us
Apple is reportedly in talks with Comcast about a streaming service for Apple TV users. The source frames the story as a net neutrality issue, but we would point out that as a cable operator, Comcast has the option of delivering video over the cable TV path. Virgin Media, for example, makes the BBC iPlayer available in this manner. One way to implement this would be for the Apple TV to take over as the set-top box.
If anyone understands the core Internet, it ought to be Level(3), the massive backbone operator. Their general counsel, Michael Mooney, this week took to the company blog to explain their view on the Netflix/Comcast/Verizon affair. L(3) sees it as a classic Internet peering war, and argues that the US telcos are trying to exploit it to reinforce their monopoly position:
And none of this is new. These last mile ISPs know full well the consequences of what they are doing. We wrote AT&T about it in February 2011. We have written to other ISPs about it since then. In each of these cases, we offered to sit with the ISP to hammer out a fair, equitable, scalable and resilient network architecture, but to no avail. We have also advised the FCC of the issue on more than one occasion, beginning in 2013 and as recently as three weeks ago.
Public Knowledge has filed comments with the FCC on Section 706 and the Open Internet Order, arguing that traditional PSTN regulatory principles are the best basis for Internet policy and that Title II reclassification is vital.
With all the arguing about "OTTers using all the bandwidth", it's perhaps worth pointing out that operators could do more to be efficient. This post at the 3G, 4G, and 5G Wireless Blog is ostensibly about security, containing a monster presentation on that subject, but just check out that graphic! The multiple layers of protocol encapsulation typical of cellular networks are contributing a truly absurd amount of overhead. This may seem obscure, but if someone offered to reduce the traffic on your most congested link by 18% at no cost, you'd take it.
It's even worse when you remember that some fixed networks will handle frames as big as 9000 bytes - so the potential waste compared to the best available solution is truly enormous.
Skype rebuilds around push notifications; Google Voice migrates into Hangouts; can Twilio be the AWS of voice? "Legacy SIP"
Skype has rebuilt its Android app in order to make drastic reductions in its power draw on standby. A big part of this seems to be using server-side notifications, and therefore another step away from the original P2P concept.
Google, meanwhile, is said to be planning to shut down Google Voice and add some of its features to Hangouts. That would include their PSTN interconnection and numbering, which would mean that Hangouts users could use Google for all their voice services.
Is Twilio good enough to be the "Amazon Web Services for Comms"? The point is made that the combination of SIP, Asterisk, and AWS EC2 might not be ideal, with the protocol arguably aging, Asterisk itself not being designed for huge scale, and AWS not providing the insight and control into their internal network that you need for really good voice.
Twilio, for its part, launches a major new feature, its Global Low Latency architecture. This is intended to serve calls from the nearest Twilio site to the client, thus improving setup times and voice quality. They also announced improvements to their call recording functionality, and made the following interesting statement that partly answers the last story:
Twilio Client enables VoIP calling to browser-based and mobile applications, leveraging WebRTC for real-time communications and connecting to legacy SIP and PSTN networks
"Legacy SIP and PSTN"? Meanwhile, Tropo's chief scientist has released a new edition of his book on WebRTC, updating it to match recent changes in the RFCs and to include captures of actual WebRTC sessions.
Which WebRTC TURN hosts get through all the port blocking options?
Snowden: the NSA hacked Huawei; it's not just the metadata any more; Android security disaster
Now here's a Snowden story for you. The NSA apparently launched a major effort to penetrate Huawei's internal network, intercepting e-mail and reading source code. As a result, they also succeeded in getting access to major Chinese mobile networks and spying on key politicians. A document shows, interestingly, that Kenya was a major target.
At the same time, it emerged that the NSA was also recording calls as well as collecting metadata, and in fact it had scooped up all the telephone traffic for a month in one unnamed country.
Here's a new and scary Android security exploit - it's possible for an unsigned app to acquire any new capabilities that are added by a software update, thus providing a slow privilege-escalation attack.
Retailers turn off their NFC readers - is this the finish for ISIS?
A group of US retailers is planning to launch its own mobile payments/coupons/hyper-local marketing platform, the Merchant Customer Exchange (MCX), which will be based on QR codes scanned by smartphones. Very interestingly, the carriers' payments JV, ISIS, is alleging that the MCX members have turned off the NFC readers installed in their tills, thus cutting ISIS out of the game. Apparently, the retailers are also displeased by the fees the banks charge to service NFC transactions.
We created the Digital Commerce strategy report to cover precisely these issues - and now there's an Executive Briefing on the technology battle between NFC, Bluetooth Low Energy, SIMs, the cloud, and QR.
Instagram has grown an internal economy, in which brands pay photographers whose work attracts followers.
And a band has discovered a fascinating way to make money from Spotify: they have released an album of recorded silence. Fans can stream it from all their devices, morning, noon, and night, thus running up the audience metrics and triggering royalty payouts.
Serving Whatsapp; Telstra hands Cisco the keys to the cloud; Adobe streaming from AWS
Renesys has an excellent post contrasting Facebook and Whatsapp's global hosting strategies, making the excellent point that Whatsapp (entirely hosted on dedicated machines in SoftLayer data centres on the US East Coast) was well suited to its initial rollout but much less to scaling up globally, while Facebook uses Akamai's vast CDN presence. This would have been much more of a problem with the introduction of latency-sensitive voice.
Telstra is deploying Cisco's cloud services platform. This quote explains why we are wary of putting your cloud strategy quite so much in the hands of the vendors:
The move could be the start of a trend that sees Cisco become more entrenched in operators' business, moving out of its core role of providing routers, servers and switches, to both selling and handling the management of the infrastructure - something more akin to how companies like Ericsson operate in the telco space.
The Adobe Media Server is now available in the Amazon marketplace; watch CDN margins for everyone except Akamai get ground down further.
BT Wholesale runs out of Internets; UK telecoms CAPEX falling since 1997; £10m good ideas fund
BT Wholesale is turning away new orders for its WBC backhaul product because it's run out. Seriously; some exchanges are out of port capacity and others of bandwidth. Thinkbroadband points out that BTw predicted in 2013 that traffic would increase fivefold from there to 2018, so they can hardly claim it came as a surprise.
Broken Telephone points out that telecoms CAPEX has been gently falling in the UK for years, which might have something to do with it.