Regulation, Americas, Europe, APAC, Cloud: Telco 2.0 News Review
- Regulation: GSMA ups the pressure on Oettinger; TIA threatens investment strike over Title II, VZ doesn't care
- Americas: VZ "over-the-top mobile first"; US price war gets even wilder; TI steps back from Brazilian deal
- Europe: Altice closing on PTel; telcocracy descends on London for BT/EE; small cells on billboards
- APAC News: Xiaomi: huge growth, patent rows, astonishingly low margins; Indonesian NBN?
- Security & Privacy: 100TB of Sony secrets leaked; full details of Belgacom GRX hack; PlusNet spam
- Cloud Computing: US companies plan to spend more on cloud in 2015; OpenStack revenues; Cisco analytics
- Voice 2.0: More AT&T VoLTE; Voxeet, 3D audio conferencing startup; beating censorship with WebRTC
- Valley Roundup: Qualcomm drops Krait, back to ARM; Facebook drops Bing; Spain vs. Google
GSMA ups the pressure on Oettinger; UK MNOs meet Javid halfway; TIA threatens investment strike over Title II, VZ says it doesn't care
The GSMA fires its lobby cannon again: Director General Anne Bouverot says it's ridiculous that there are almost a hundred MNOs in Europe, compared to "three or four" in the US, and further argues that wholesaling is likely to "reduce" incentives to invest. The context of this is that they're trying to influence the new European Commissioner to on the European Parliament's text of the next telecoms directive.
At the same time, the GSMA re-elected Jon Fredrik Baksaas, Telenor CEO, as chairman. Baksaas resigned from Vimpelcom's board earlier this week.
In the UK, meanwhile, the government and the operators are negotiating over that time David Cameron had a dropped call again. It looks like things are moving away from the national roaming proposals towards a change in spectrum licencing, from a population coverage target to a geographical coverage target, to be monitored by OFCOM.
The FCC is also taking an interest in rural broadband this week - if you want Connect America funding, you'll need to offer at least 10Mbps downlink, up from 4Mbps, although in exchange you get a longer commitment from the government and some other goodies.
The TIA, meanwhile, persuaded a variety of tech companies including Intel, IBM, and Cisco to sign a letter denouncing Title II reclassification and claiming that it would reduce investment in telecoms by between 17 and 32 per cent. However, Verizon CFO Fran Shammo told a conference this week:
I mean to be real clear, I mean this does not influence the way we invest. I mean we're going to continue to invest in our networks and our platforms, both in Wireless and Wireline FiOS and where we need to. So nothing will influence that. I mean if you think about it, look, I mean we were born out of a highly regulated company, so we know how this operates. But related to this discussion around Net Neutrality, the FCC has the right to regulate under 765, they do not need to go to Title II, and why would you go to a 1930 piece of literature to try to regulate something that is a 21st-century technology.
And I also think that if you look at other countries who have done this, it kind of leads you down to path of total failure because it really, really slows down investment and slows down innovation
So it slows things down apparently - but Shammo literally says no fewer than three times that Title II won't stop VZ investing.
The FCC had a busy week. An NPRM on over-the-top video services and their access to content is close to being signed off, which would give services that provide a "linear stream of programming" the status of being a multi-channel video programming distributor, and therefore the right to get access to broadcasters' content rights. They also asked for comments on the 600MHz auction by the 30th of January, and activated a rule that triggered some more bidding on AWS-3 spectrum.
The GSMA, meanwhile, has taken a view on 5G, breaking with its policy of trying to play down "generations".
VZ "over-the-top mobile first", +200k FiOS homes; US price war gets even wilder; TI steps back from Brazilian deal
There's a lot more interesting information in that Verizon transcript. Among other things, VZ is still adding 200,000 homes/year on FiOS, and its strategy regarding video is now:
obviously our focus is over-the-top mobile first
That said, they also warned of a hit to Q4 margins in wireless, driven by churn. Fran Shammo's comments, which are worth reading, argue that this is the effect of a generation of iPhones coming to the end of their contracts. He may be right, as according to Rootmetrics, VZW is the best network almost everywhere in the US.
Meanwhile, Softbank is trimming its commitment in the US, now the Sprin-T bid is off the table. Those expensive Silicon Valley offices are going, and the engineers there are trekking back to Kansas City. It's been suggested that Sprint might need as much as $3bn in extra capital, not counting spectrum acquisitions, and if it makes do without it, that might be because it scales down its network CapEx. Brrr.
T-Mobile, meanwhile, is selling $1bn of shares with a view to more investments, having just turned up the 27th wideband-LTE market of 2014, New York City. It will probably need every penny: it just announced a $40/mo price cut on the first two lines in its unlimited data family plan, responding to Sprint's "Cut Your Bill In Half" promotion. AT&T's MVNO brand, Cricket, is offering a $100 service credit to any churner from T-Mo, Sprint, their MVNOs, or (oddly) Cincinnati Bell. We're not quite at "sign up and we will hand you raw cash" yet, but you can see it from here.
T-Mo also has a new wholesale customer: Vodafone. Having sold out of VZW, Vodafone still has enterprise customers with large operations in the US, so it's now starting up an MVNO running on T-Mo's network to serve them before they all churn. AT&T, meanwhile, added some more suppliers to its Domain 2.0 SDN program, notably Ciena, Brocade, and old favourite, Cisco.
A lot of countries have tried to set up a national emergency service network via the spectrum process, and to the best of our knowledge it's never yet worked well. The US's effort is accused of hiring the directors' old mates, all of whom are ex-Vodafone (or even ex-Airtouch).
Argentina's second operator, Telecom Personal, has signed up for Jasper Wireless's M2M product. Entel and Ericsson are testing the so-called APT band in the 700s, the first such trial in Latin America. Claro Brasil thinks it might do about $3.6bn in CAPEX this year.
And Telecom Italia has decided to wait and see what happens with Oi and the unwinding of the PTel merger before it makes a move. Among other things, they want to be sure there is a clean break with the whole BES mess, that the Brazilian government makes certain assurances, that Oi reduces its debts, and that its two-class share structure gets reorganised.
Altice closing on PTel; telcocracy descends on London for BT/EE; small cells on billboards; French 700MHz
On the other end of the line, Oi's board of directors has agreed to sell PTel to Altice. As a result, the PTel holding company has called a meeting of shareholders for the 12th of January, with one item on the agenda. Oi owns the actual business, while the PTel holding owns 25.9% of Oi (and €900m of worthless Espirito Santo paper). The PTel board meanwhile turned down Isabel dos Santos' spoiler bid.
London is filling with telco executives this week, as Telefonica CEO Cesar Alierta was followed here by most of the boards of DTAG and Orange. They're trying to sell their respective UK networks to BT. O2 would cost BT less - £9.4bn rather than £12bn - but you don't get as much network for that, as this RootMetrics study shows. There's also a bid for EE floating about headed by Tom Alexander (previously of T-Mo UK) and backed by private-equity funds....
...and it's EE! Exclusive negotiations open for the acquisition of EE, at a price of £12.5bn in cash and BT shares. That makes Deutsche Telekom a 12% shareholder in BT and entitled to appoint a director, and Orange a 4% shareholder.
The long-running Orange Wednesdays cinema offer is going, perhaps as a result. Here's a review of EE's multi-tuner TV box. Like Virgin Media, BT is formally allowed to call its service "fibre optic".
Vodafone will be installing small cells on billboards owned by JCDecaux around the UK. They're also being sued over the acquisition of Kabel Deutschland, by a US hedge fund that feels it should have had some more money. The hedge fund has commissioned an audit that says, strangely enough, they should have had some more money. At the same time, a court cleared DTAG of overcharging KDG for duct access.
And France will auction 700MHz spectrum next year. Xavier Niel is quoted as suggesting Bouygues might be forced to drop out.
Xiaomi: huge growth, patent rows, astonishingly low margins; Indonesian NBN?
Xiaomi is No.1 in China and the fastest-growing vendor in India, as it floods the nation with cheap Android phones. Sounds great - until an injunction banned all shipments to India over a catalogue of alleged patent infringements. Ericsson is the aggrieved party, and as MWL points out, it's usually a fair assumption that nobody bothers with patents in China, but that's very much not true once you look outside the great firewall.
It's not as if intellectual property claims were the only issue standing in their way, either. While the row was going on, the company dropped a regulatory filing that gives us a major insight into their business. Specifically, while being the No.1 vendor in China and the No.3 globally, Xiaomi is getting an operating margin of 1.8%, net profits of $56m for the year. Samsung Electronics' operating margin is 18.7%, almost exactly 10 times Xiaomi's, and Apple's is 28.7%.
Huawei, meanwhile, has signed another five-year contract with Telenor, to upgrade its existing 2G and 3G networks while also providing consulting on their 4G deployments.
Taiwanese operator APT has soft-launched its 4G network. South Korean operators SKT and LG U+ are deploying the OneM2M platform. The Hong Kong spectrum auction has achieved its goal, getting China Mobile into the territory.
Indonesia's minister of telecomms says he expects Telkom to lead their national broadband drive, and will offer the carrier "incentives".
The Aussie NBN Co has signed a revised agreement with Telstra to take control of the copper and cable networks, while NBN Co and the government are promising several different things about Internet speeds.
100TB of Sony secrets leaked; full details of Belgacom GRX hack; PlusNet spam
Hackers have brought about a massive data leak at Sony, including unreleased movies, vast quantities of internal e-mail, sensitive strategy memos regarding Hollywood content, tension between Sony Pictures and the wider company, the role of CEO Kazuo Hirai, and racist jokes about President Obama. There's some discussion at Bruce Schneier's, including this gem:
documents leaked after the recent attack show the company had just 11 people assigned to its information security team: 'Three information security analysts are overseen by three managers, three directors, one executive director and one senior-vice president.'
What a mess. Meanwhile, a fresh drop of Edward Snowden documents makes it possible to write a detailed history of "Operation Socialist", GCHQ's hack of Belgacom system administrators' computers. It becomes completely clear that, yes, it was Belgacom's role as roaming hub and GRX provider that interested the spooks, who wanted to run man-in-the-middle attacks on targets' smart phones.
And on a much less exalted scale, Plusnet faces an Information Commissioner's Office inquiry into whether its users' e-mail accounts have been compromised by spammers.
US companies plan to spend more on cloud in 2015; OpenStack revenues; Cisco analytics
Two-thirds of US companies will increase their spending on public cloud by at least 15% in 2015, according to a survey. 10 per cent will increase it by as much as 30%.
ReadWrite looks into the future of OpenStack, arguing that it's likely to be well behind AWS and Microsoft Azure for the foreseeable future, although the revenue will be more than welcome for companies the size of Red Hat, a major contributor to the platform.
Cisco has announced analytics software to run on your edge routers as part of their network-is-the-cloud vision.
Here's a great comment on AWS:
Maybe the true genius of AWS is the pricing model that makes expensive look cheap.
And here's a great case study of debugging a strange problem inside Amazon's cloud.
More AT&T VoLTE; Voxeet, 3D audio conferencing startup; directories; beating censorship with WebRTC
AT&T has given more details of its VoLTE deployment. It claims it has coverage in 17 US states, plus Washington D.C. Interoperability should be coming next year, plus hopefully some more devices (currently they only have the Samsung Galaxy S4 Mini).
Here's yet another WebRTC startup, Voxeet. Their USP is that they do conferencing with very high-definition, 3-D audio, porting Intel's 3D audio technology into a conferencing application for the first time. It's long been used for gaming, of course. Interestingly, it also provides separate voice streams (i.e. WebRTC Media Streams within a single association) for each participant and does the mixing on the client side, so you can choose to place people in the virtual conference room where-ever is convenient.
Dan York discusses the problem of finding other users and asks who has the best directory.
Here's a rundown of recent UC news.
XMPP standardiser Peter Saint-André is optimistic about the WebRTC video codec compromise, but thinks the long term solution is to create a new open-source video codec like Opus for audio.
Simwood is offering fraud protection via Indirect Access.
Qualcomm drops Krait, back to ARM; Facebook drops Bing; Spain vs. Google
Qualcomm has shown off the new flagship SoC for 2015, the Snapdragon 810. Interestingly, they've dropped the Krait architecture they introduced for the Snapdragon S4 in 2012, in favour of using stock ARM designs, a combination of the A57 and A53 64-bit cores in the so-called big.LITTLE architecture that provides both low-power and high-performance cores as needed. It will be fabbed by TSMC at 20nm, which itself requires a new process. Meanwhile, Apple's A9 chips are sampling from the Samsung plant in Austin, suggesting that the 14nm process required is working.
Spain has legislated to make Google pay newspapers for snippets; Google News in Spain shut down; now they would like it back.
And finally, France's space agency is working with Google's broadband balloons.