China, ITU, T-Results, UK Fibre, Apple: Telco 2.0 News Review
- Infrastructure: Huge Chinese network JV; ITU reckons the UK has 7th best broadband; Nokia Q1
- US Carriers: T-Mobile scores 2.4 million net-adds, loses more as % of revenue than Sprint
- Regulation: Wheeler: Title II hasn't gone away; L(3) fingers five peers over Internet congestion
- UK Focus: Freeview menaced by "stealth switch-off"; Sky, EE Q1s; UK fibre
- Smartphone Roundup: Smartphone scoreboard; top apps; Samsung slides a tad; Apple sapphire begins to flow; patent lawsuits considered pointless
- Voice & Messaging 2.0: Dutch cablecos preparing huge VoWLAN; HOWTO build Tuenti's WebRTC; Twitter Q1s
- Security & Privacy: Cellular jammer man; IE bug keeps zombie XP undead; Symantec says AV is dead, however; Valley rebels against gag orders
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Three of the four operators with "China" in the name are interested in an epic network-sharing joint venture. It's Mobile, Telecom, and Unicom, no sign of Netcom yet, and the Ministry of the Information Industry is keen, so it could well happen.
The ITU has rounded up the world's broadband stats. It reckons there are 3 billion Internet users, 40% of humanity. Fixed subscriptions are growing at 4.4%, although fixed telephony has lost 100 million lines since the peak in 2009. There are 2.3 billion mobile broadband users, and ITU counts 7 billion mobile users. In terms of speed, apparently the UK is 7th fastest in the world.
Really? Well, the decision to put everything above 10Mbps, advertised downlink, in one bucket is clearly doing a lot of the work here, and curiously, the ITU doesn't include Japan, Sweden, or Australia. The Australian NBN, meanwhile, is flirting with the idea of having the retailers or the customers provide the CPE themselves.
Nokia is primarily an infrastructure company these days, and its Q1s were reasonable, with an actual profit of €110 million in the quarter, compared to a €168 million loss a year ago. Within that, the action was mostly about improved margins in Networks and improved sales at Here, which is getting close to breaking even (it lost €3m at the operating level). The stock market got excited about the idea it might buy Alcatel-Lucent.
Here's a good writeup on OpenBTS 4.0, which now runs up to 1000 subscribers on a node, and now has a commercial deployment, on the little islands of St. Pierre & Miquelon.
The more daring investor may be disappointed by the next story: there will be no 3G auction in Iraq, and instead the three existing operators will just get licences. That said, things aren't what they used to be: Econet Wireless in Zimbabwe reports profits down 15% although its revenue rose 8%. The problem is that the voice business has, as they say, matured. On the good side, their mobile money transfer business grew 307 per cent.
Our The Future Value of Voice & Messaging Strategy Report covers the problems of the maturing - or declining? - voice business in depth, while our Communications Services: What Make a Winning Value Proposition? Executive Briefing looks at solutions and our Self-Disruption: How Sprint Blew It EB provides a detailed crash investigation of one particular case
T-Mobile scores 2.4 million net-adds, loses more as % of revenue than Sprint
Last week brought the AT&T and Verizon Q1s. This week, it's T-Mobile's turn. Everyone was expecting a pricewar-tastic quarter from the uncarrier, and they hit the nail on the head, with 2.4 million net adds in Q1. Even if you just look at the T-branded, postpaid number, it was still a million-plus quarter, their fourth in a row. And a lot of carriers would kill for $50 of monthly ARPU.
That said, they're buying market share in a big way. EBITDA is down 12.2% quarter-on-quarter, "reflecting increased equipment sales due to the significant acceleration in customer growth"
This refers the details of their fast-upgrade plans. Although the new metric of "average billings per user", which includes the payments on the phone as well as the service revenue, is up strongly, the fast-upgrade plans also include a substantial element of cheap shiny gadgets. T-Mobile pricing on iPhones, for example, is keen, and the terms of service imply that it's possible to upgrade a while before actually paying off the full cost of the device, which is an implicit device subsidy.
You could look at the official statement for some time before realising that it doesn't mention whether the company made money or not; it lost $151m in Q1, on revenue of $6.87bn. Ironically, Sprint lost exactly that much money, on revenue of $8.87bn, so T-Mobile's negative margin is substantially greater than Sprint's.
You won't find anyone at Sprint crowing over that, though. Sprint was losing subscribers again after its relatively reasonable Q4, with 467,000 net losses and churn rising. However, Sprint remains an ARPU star with postpaid coming in at $62/mo - T-Mobile probably sees that as a target.
Neville Ray, the T-CTO, announced that the operator would get its new 700MHz block into service by the end of the year. Sprint, for its part, says that its churn stabilises when 70% of a market is covered by its new LTE net. Also, they've turned off Picture Mail.
This leaves a question. VZ, AT&T, and T-Mo all had powerful Q1s, and between them they racked up literally millions of net-adds. Sprint's losses aren't anywhere near enough to account for them. Where are they coming from?
With MetroPCS borged into T-Mobile and Leap swallowed up by AT&T, U.S. Cellular is the last of the big regionals standing. And it's getting less big steadily, having lost a million customers in the last 12 months. It lost 93,000 net postpaid in Q1, and gained 13,000 net prepaid. Churn rose dramatically, after the billing system broke down - postpaid churn is 2.3%, up from 1.7% last year, and prepaid is 6.9% (even Sprint's is 4.5%). Still not enough, but that's the kind of level we saw at Leap before they sold up to AT&T.
AT&T is reportedly looking at a deal with DirecTV, on the grounds that if the FCC lets Comcast own TWC, they'll all want one too. DirecTV has more TV, and AT&T would like that; AT&T has customers, and DirecTV would like those. The company would be about as big in terms of subscribers as Comcast-TWC, and AT&T could easily afford it, so the big question would be what the regulators say. Meanwhile, AT&T also wants to deploy LTE on aeroplanes.
Bell Canada reported net profits for Q1 up 8.7%, after a good quarter for its mobile unit.
Last week, we mentioned that Verizon has been caught using strawmen to lobby for the New Jersey state regulator to let it off its irksome 1990s commitment to lay fibre to the whole state. It turns out they don't just want to avoid laying more fibre; they're arguing that fixed-wireless is as good. Ask Fire Island.
Verizon and AT&T have both opposed the idea of a restriction on how much spectrum below 1GHz one carrier can own. As you might expect from the two biggest spectrum owners. Now, the House Republicans join in.
Wheeler: Title II hasn't gone away; L(3) fingers five peers over Internet congestion; Comcast streaming games
There's an old joke about "the people have spoken. What did they say?" FCC Chairman Wheeler has blogged, and you could say the same thing. It looks like he's trying to reassure his critics that reclassifying broadband under Title II is still "on the table" as they say, without promising anything, and trying to give the impression that he won't frighten the horses, while also promising a strong Open Internet NPRM via Section 706.
While all this is going on, we're also getting a unique insight into the negotiating process of top-level Internet peering, driven by the pressure of streaming video. Netflix has confirmed that it's signed a paid-peering agreement with Verizon, like the one it signed earlier with Comcast. It's pointed out that VZ had refused a counter-offer of using Netflix's OpenConnect CDN for free, which Cablevision accepted, and argued that this is because VZ has a competing CDN. However, the same source speaks of "AT&T CEO James Ciccioni", so...
Level(3), meanwhile, has cracked open some interesting secrets in a fascinating blog post. The backbone operator has 51 peering agreements, of which 48 are settlement-free. Among those are six ports where L(3) observes congestion. 5 of those are in the United States and one is in Europe. L(3) asserts that those five US peers are all major eyeball ISPs, and points out that they observe no persistent congestion in markets like the UK where there is competitive broadband access.
Comcast, meanwhile, wants to stream computer games from Electronic Arts, but as Ars Technica points out, you can't be sarcastic about this like The Register, because Comcast settled its peering row with L(3).
It's all very complicated, although perhaps not as weird as the 77,000 identical videos posted to YouTube by "Webdriver Torso", which seem to be some sort of instrumentation intended to measure how YouTube treats various kinds of video. Bizarre.
Freeview menaced by "stealth switch-off"; Sky, EE Q1s; UK fibre
The move of TV and video online is driving all sorts of odd phenomena. The chair of Digital UK is worried that Freeview, the UK's digital terrestrial TV platform, faces "switch-off by stealth" as the broadcasters lose interest in developing new features for it and OFCOM increasingly turns to its spectrum resources to meet the mobile industry's demands.
Sky is still adding net broadband subscribers, 80,000 of them in the quarter, as well as deepening its subscriber base by selling more Sky+HD set-top boxes. They now have almost half the base on +HD.
A group of whistleblowers say that they have recruited some of the salespeople from the UK's notoriously pushy electricity and gas companies, and they're up to their old tricks.
Virgin Media, meanwhile, is refreshing its list of bundles. The effect is to cut prices somewhat, while also adding some very sharp MVNO pricing - £8/mo additional gets you unlimited national calls and a GB of monthly data. There's also some free Netflix up for grabs as a short-term offer.
EE claimed 889,000 LTE net adds in Q1, and ARPU up 2.2%, although operating revenue fell 1.7%. If you back out changes to termination fees, it would have grown, but only 0.8%. The answer is that the prepaid user base is shrinking, by 321k net losses in the quarter. Given their pricing, EE is probably quite happy to shed prepay customers and gain high-spending double-speed 4G contracts.
Ad-funded MVNO Samba Mobile has shut down, citing the cost of wholesale data service.
The UK government's Super-Connected Cities scheme is in trouble; in Oxford, so far only two businesses have taken it up, in Portsmouth four, and in Brighton, nine.
Smartphone scoreboard; top apps; Samsung slides a tad; Apple sapphire begins to flow; patent lawsuits considered pointless
Comscore's smartphone market share metrics are out for March, and they show Apple as the biggest manufacturer in the US, with 41.4% of the market, and Android as the biggest platform, with 52% of the market, while Facebook is the biggest app, reaching 75% of the audience. Interestingly, out of the next five apps, four of them ship with Android devices by default; if you exclude those, the second-biggest is Pandora Radio.
Samsung's market share seems to have slid back very slightly, for the first time since Q4 2009, on a different measurement. It might have something to do with things looking up a bit at HTC, whose new flagship phone has done well, and might perhaps make a profit.
Horace notes that Apple is adding users much faster than Amazon, but revenue per user is flattening out while Amazon's is steady. Both companies, though, actually have revenue, which is something most of the startups who boast of huge numbers of "monthly active users" can't say. He also argues that tablets are likely to saturate at about the same time and the same penetration level as smartphones, having started much later. Interestingly, games consoles have long since saturated:
Charles Arthur, meanwhile, reports on the end of the Samsung/Apple lawsuit. In the end, it looks like Apple will get $120m, and immediately pay $158,000 right back to Samsung over another patent. Or to put it another way, the whole business has changed nothing except for enriching the lawyers. Unless you're HTC and you settled out of court and now have to pay Apple a fee per phone.
It looks like Apple's artificial sapphire factory is coming on stream gradually.
AMD is planning to ship consumer-grade ARM chips in 2016, with the interesting feature that the x86 and ARM chips will be pin-compatible. You can see why they're doing it.
And Tesco is launching its own Android device.
Dutch cablecos preparing huge VoWLAN; HOWTO build Tuenti's WebRTC; Twitter Q1s
Two Dutch cablecos, UPC Netherlands and Ziggo, are trialling voice over WiFi, in a move that will hit KPN hard again. UPC's owners already have an MVNO in Belgium, and Ziggo has one in Holland, and the next step seems to be using their enormous fleet of hotspots. UPC has 500,000 and Ziggo has a million. An interesting detail is that they're testing a protocol called WISPr (Wireless Internet Service Provider Roaming), rather than ANDSF as specified in Hotspot 2.0.
Telefonica's social network, Tuenti, has a blog post about how they engineered their voice features, using their existing XMPP chat infrastructure for the signalling and some of the NAT-traversal, and a fork of Jingle for the bearer protocol.
Telestax's Restcomm is now part of Metaswitch's Project Clearwater, providing yet another web-voice integration option.
And although Twitter saw its advertising revenue grow 125% in Q1 to $226m, of which 80% was mobile, it's still not breaking even.
Cellular jammer man; IE bug keeps zombie XP undead; Symantec says AV is dead, however; Valley rebels against gag orders
Some people get really annoyed about people yelling into mobile phones. Really annoyed. Jason Humphreys is one of them, and he installed a jamming device in his car to silence the phones around him in traffic. In April last year, MetroPCS filed a complaint with the FCC that two of their cell sites were regularly being jammed. The FCC investigated, Humphreys was caught, and admitted it. He got a $48,000 fine, but at least he showed those phone-using scum who was boss.
Microsoft wanted to turn off support for Windows XP so very badly. But then the latest Internet Explorer bug came along and it was so awful that several governments advised those affected to just use another browser. As a result, Microsoft has issued a patch for XP even though it's officially dead.
Symantec thinks PC antivirus software is dead.
Major Silicon Valley companies have begun informing their customers when the government demands their data, in defiance of requests for secrecy.
Unexpectedly, a more radical NSA reform bill is being taken forward by Congress, one that would ban the bulk collection of US call-detail records.
Does Mexico's new telecoms law permit a huge expansion of government censorship?
Oh dear: digital video recorders get turned into Bitcoin-mining machines.
And finally, on July 23rd, 2012, we nearly had a solar storm the size of the legendary, telegraph-frying Carrington event of 1859. Don't have nightmares, now.