Telco Q3s: VZ, AT&T, Orange, China Unicom, EE, MTN - Telco 2.0 News Review
- Strategy & Finance: Telco Q3s: VZ, AT&T, Orange, China Unicom, EE, MTN
- Broadband Connectivity: VZW CapEx peaks: Ericsson APAC sales strong but Nokia in the frame; Mobile CDN
- Internet of Things: DTAG partner program spreads IoT apps around; Telefonica's IoT kit; "smart" meters?
- Smartphone Roundup: Huawei, ZTE smartphone Q3s; Google battles the rebel droids; LG resumes chipmaking
- Apple: AT&T grabs the SIMs, drugstores opt out of Pay, salvaging sapphire, search privacy
- Voice 2.0: Google acquires Firebase; $14bn OTT menace
- Cloud Computing: Amazon Q3s on Fire; HP OpenStack launch; IBM Q3s; scaling with Xiaomi and Facebook
'Digital Asia 2014' Executive Brainstorm and Innovation Forum, run by STL Partners in collaboration with Telkom Indonesia, is designed to equip 250 specially-invited business leaders from across the region's telecoms, enterprise and technology sectors with new, breakthrough ideas, methods and tools on how to grow significant new revenues in the next 12-18 months leveraging Mobile, Cloud and Big Data.
Telco Q3s: VZ, AT&T, Orange, China Unicom, EE, MTN
It's time for the telco Q3s. The dynamic duo go first, with TelecomTV pointing out that Verizon is on $3.8bn of net income and AT&T is on $3bn, and most of the rest of their numbers are roughly similar.
That said, the main story at AT&T is wireless net-adds, with 2.4m year-to-date and 785k in the quarter, while service revenue is flat and operating-level profits falling.
The explanation of this is that equipment sales are going up as a percentage of revenue, as the operator matches T-Mobile's giveaways, and this means paying Apple and Samsung's danegeld. Meanwhile, in the wireline world, net income was down quite sharply, 17.2% year on year. AT&T blames, in part, the cost of buying TV rights for U-Verse - tellingly, unlike Verizon, they don't give any detail of the broadband speeds their customers are taking.
So, it's a picture of resold content and hardware making up for weaker mobile service revenue, hit by the price war, and weaker broadband, hit by the lack of a good broadband product. On the other side of the hill at Verizon, wireless reported both a huge net-adds quarter, 1.5m more subscribers, and 4.8% year-on-year growth in service revenue. Like AT&T, though, margins have slipped a little, although a margin on service revenue of 49.5% is nothing to complain about. In the wireline world, VZ's revenues from consumers were up 4.5% and their ARPU was up 10.3%, and 57% of customers are now taking more than 50Mbps. VZ's operating margins in wireline are substantially worse, which may be explained by the fact they are still migrating more customers to FTTH - 91k in Q3, targeting "high maintenance" sections of the copper network.
In the enterprise, AT&T Business Solutions has been releasing a lot of new products this year, especially in the cloud, and we note that their "strategic business services" segment grew its revenues by 14.3% year-on-year. Verizon's was up 1%. This is anything but an audited metric, and there is a lot of scope for playing games with definitions, but Verizon Business's cloud offering is very much "generic VMWare reseller" and AT&T may well have an advantage here. Verizon Wireless, by the way, provides a sighting of that very rare bird, an M2M revenue number: $150m in Q3 and $400m year-to-date. Unlike AT&T, though, they don't report anything like a count of M2M devices.
Meanwhile, VZW has been spotted adding its own unique identifier to HTTP requests in order to facilitate third-party ad targeting. And speaking of the US price war, Sprint has doubled the data bundle on its cheapest shared data package.
America Movil saw a nasty hit to net profits in Q3, blaming the arrival of regulation in Mexico. The good news was that service revenue was up 3.4% in Brazil.
China Unicom's results for the first 9 months are out. Revenue was down 2 per cent, but profits up 26%. The explanation is that underlying service revenue is up 5.5%, and the carrier has dramatically reduced its handset subsidies, apparently because the Chinese government wanted this across all the operators.
Orange saw slightly weaker revenue, but has kept ahead of it with cost reductions and held its margins steady. Interestingly, it's beginning to open up the investment tap a bit.
Their UK joint venture with DTAG, EE, claims 5.6m 4G subscribers, the most of any European operator, but says nothing at all about margin. They seem to be becoming a bigger and bigger MVNO platform, as well as cutting 350 jobs.
Three months after turning up 3G, Mobilink Pakistan has a million subscribers on it. And MTN saw subscriber growth of 2%, and claims data revenue was great but won't say what it was.
VZW CapEx peaks: Ericsson APAC sales strong but Nokia in the frame; Mobile CDN
Verizon's Q3s included guidance that wireless CapEx this year would be flat at last year's $17bn, which strongly suggests that their LTE build is complete, and suggests that infrastructure vendors are going to see much less demand from North America in the near future. For example, Verizon may have been as much as 14% of Alcatel-Lucent's sales in Q2, something less than 10% of Ericsson's, and by far Juniper Networks' biggest customer.
For the time being, Ericsson's sales are still rising, quite strongly, with sales in the Network division up 13% in Q3. They did notice a fall of 3% in the US, but did well in the Middle East, India, China, and Russia. Interestingly, Global Services did less well, growing 2%.
Nokia Networks reported sales up 13.5% year-on-year and operating margins up from 8.4% to 13%. However, they also said most of this was coming from either "Greater China" or "North America". The company is paying a special dividend, although if US infrastructure spending stops sharply that might not last.
Starhub has trialled delivering HD video from CDN nodes built into its base stations, using Nokia Networks' Liquid Applications technology.
The 3G, 4G, 4.5G, and 5G Wireless Blog has an interesting whitepaper on LTE carrier aggregation. It's complicated.
Zayo, the dark-fibre company and backbone ISP formerly known as Above.net, got its IPO away at $19/share, a bit lower than expected. It also snagged a contract to build a national fibre network for O2 UK, which wants to own and operate its own fibre. This is backbone or transmission, not backhaul, as the network will link 19 aggregation or core sites.
Fibre backhaul has played a key role in how Europe's best-performing operators broke away from the competition into the top-right sector of this chart. Find out more with our Differentiated Mobile Data Executive Briefing
DTAG partner program spreads IoT apps around; Telefonica's IoT kit; smart meters found stupid
Deutsche Telekom is starting a new European partner programme that aims to identify Internet of Things applications that work in one European market, and promote them on a pan-European basis. There are 34 apps from 15 vendors in Poland, the Netherlands, Slovakia, the Czech Republic, and Hungary at launch, and as you'd expect from DTAG, it's all very, very industrial.
Telefonica, meanwhile, has a new product line based on the popular Arduino IoT development board. "Thinking Things" is a set of modular sensors and gadgets you can stick together to make simple IoT projects based on their 2G network.
Spanish hackers have discovered that they could do anything, really, with the whole country's smart meters by attacking from the power-line communications interface and exploiting the rather poor encryption standard used.
Huawei, ZTE smartphone Q3s; Google battles the rebel droids; LG resumes chipmaking
Huawei's consumer business shipped 32 million devices, including 16.8m smartphones, up 26% year-on-year in Q3. The proportion of mid- and high-end phones was up 162%, and the regional results were really dramatic: shipments were up 98% in Asia-Pacific and 322% in the Middle East and Africa. ZTE, meanwhile, said its net profits were up 191% in Q3, on revenues up 24%, after its handset shipments rose 40% in the year. However, it also said that revenue from wireless "terminals" was "largely unchanged", which implies its average selling price must have slid quite impressively, and that its infrastructure sales were up 13%. So perhaps they're being pushed further downmarket in terminals, but making real money in infrastructure?
Here's a review of the Lumia 530, priced at $69, aiming for a gap between the Motorola E and that $35 Firefox OS gadget. Whether the gap exists or not, Ars Technica argues that the older 520 is actually superior.
Google reckons that some of the most important developing markets have as many as 30% of their Android phones running non-Google "forkdroid" or alternative ROMs based on the open-source version of the OS. They don't make any money like that, so they're trying to make it easier for those vendors to sign up for the Open Handset Alliance.
LG has bounced back somewhat via its flagship Androids. Now it's trying to replicate some of the Apple/Samsung, hardware-intensive strategy by going into the chip business. LG has designed an eight core system-on-a-chip using ARM's big.LITTLE architecture to fit in four Cortex A15s and four Cortex A7s. They're going to have them fabbed by Taiwanese manufacturer TSMC.
Roku may try an IPO.
Apple: AT&T grabs the SIMs, drugstores opt out of Pay, salvaging sapphire, search privacy
So Apple made the big jump and launched its own multi-IMSI SIM. And AT&T said no. Or rather, once you pick AT&T on the device, that's it, you're locked to their network. Unless, of course, you pull out the SIM and substitute in another one. Which is the point of having a physical and user-replaceable SIM in the first place.
John Legere of T-Mobile was predictably snarky, saying that AT&T's move was "typical", that Verizon Wireless had chosen not to play ball, and that T-Mobile and Sprint had "embraced" it. He also said a lot more about the process of enabling devices that come with multi-IMSI SIMs.
Meanwhile, a British startup is using a similar approach to provide once-only or local numbers.
Two US drugstore chains have turned off Apple Pay, apparently to support their membership in the rival MCX (Merchants' Customer Exchange) payments and data-gathering initiative. Here is a case that MCX serves merchants much better and they are the key actor in the ecosystem.
There have also been some problems with Bank of America customers being double-billed.
Apple is trying to salvage something from the GT Advanced Technologies wreck. Apple says it's willing to buy sapphire crystals but not "materials" from the company, and will work with it on scaling up to produce bigger "boules" of the stuff per batch.
Mac OS X Yosemite, rather like Ubuntu Linux since 12.04, has an integrated search feature that combines desktop search with various kinds of web search. As with Ubuntu's feature, this has been criticised from a privacy point of view, but Apple has gone to some lengths to mitigate the issue. For example, search requests are identified by an arbitrary key that is changed every 15 minutes. And of course you could just turn it off.
Google acquires Firebase; $14bn OTT menace
Juniper Research thinks operators might lose as much as $14bn in revenue (basically voice and SMS) this coming year to OTT competitors. Interestingly, over six years, that's about as much as our November 2013 Future Value of Voice & Messaging Strategy Report predicted would be at stake.
On that theme, Google just acquired Firebase, a popular cloud-based messaging platform often used as the signalling layer for WebRTC apps. When we say popular, we mean 100,000 active developers popular. Google will presumably integrate this in Cloud Platform, pouring more fuel on the WebRTC fire.
Simwood discusses responses to toll fraud.
Vodacom Tanzania is rolling out voice biometrics for authentication.
Amazon Q3s on Fire; HP OpenStack launch; IBM Q3s; scaling with Xiaomi and Facebook
Amazon's Q3s are out, and they are disappointing. Amazon lost more money than it expected, and warned that it would probably lose money in Q4, when retailers usually coin it, and the revenue growth, usually promising, missed expectations too. North American media sales, the core business, was especially poor, while a marketing survey of its customers couldn't find even one Fire Phone user.
A marketing survey of 500 Amazon customers could not find any who reported owning a Fire. A great many of the reviews on Amazon's own site give the Fire the lowest possible rating.
A $200 price cut last month briefly pushed the phone up on Amazon's list of top-selling electronic products, but it quickly fell off again. Thousands of employees spent years developing the phone. It is a rare case of Amazon completely misjudging the appeal of a new product.
Mr. Szkutak said Amazon had $83 million worth of inventory of the phone at the end of the quarter. That should last until the sun goes dim.
Elsewhere in the cloud, Hewlett-Packard released its version of OpenStack as a community edition, as well as a development platform running in their own cloud for applications developers to check out their work.
IBM's Q3s were not good, with net income off 18% and margins suffering badly. The good news was that cloud revenue was up more than 50% year-to-date and mobile doubled.
Yahoo! reported material revenue from mobile for the first time.
Xiaomi is moving its international users' data out of data centres in Beijing and into Amazon Web Services' cloud and Akamai's CDN. Obviously this provides a big performance boost, but it also shifts their stuff outside the reach of Chinese censors.
Schneider Electric argues that data centres aren't getting more power-dense, and in fact, it's not worth it, as this chart shows.
Facebook has dramatically improved the performance of its mobile app by dropping a typical web approach with JSON and HTTPS in favour of the lightweight MQTT push protocol.
The FCC is releasing all the submissions to the Open Internet Order consultation on net neutrality:
In the interest of ensuring that the public has open access to the nearly 2.5 million reply comments that were filed during the official reply comment period (July 19-September 15), we are today releasing those reply comments in one zipped XML file. This file includes 725,169 comments the FCC received through ECFS and CSV file uploads and another 1,719,503 comments received via the email address, for a total of 2,444,672 comments received during that time period.