Cable Disruption; 1m eNode-Bs; Google IoT; Bubble Dread! Telco 2.0 News Review
- Gigabit Disruption: Charter bids for TWC; the gigabit race; AT&T fibre build back on
- Global Carriers: Vodafone/Liberty Global rumours; Vodafone full-year; VZ to sell Terremark?
- Infrastructure: China Mobile 4G: 1 million cells; 600Mbps LTE; 5G's many waveforms; Alcatel's SDN solution
- Regulation: WRC-19, but not 2019? LTE-LAA rows; 960MHz more WiFi; French minister - merger no, CAPEX yes
- Internet of Things: Google has an IoT OS; so does Huawei; $1bn a year of connected car at AT&T
- Valley Roundup: FirefoxOS moves upmarket; nope, Apple Watch; WalMart, an OpenStack company; bubble fear
[Ed: NB In case you missed it last week, we've just published a new report 'Key Questions for The Future of the Network, Part 2: Forthcoming Disruptions', which looks at the key disruptive forces on the network.]
Charter bids for TWC; the gigabit race, in consumer and in business; AT&T fibre build back on
The cable disruption continues. After the Comcast-TWC merger was shot down by the regulators, the original Charter-TWC proposal is back. Charter has apparently agreed to buy TWC for $55bn plus the assumption of $22bn in net debt, paid in a mixture of shares and cash, while it will also complete its acquisition of Bright House in parallel. That will leave Charter with 23m homes in service, as against 27m for the market leader Comcast. The assumption here is that a much bigger No.2 will be far more palatable to the FCC and anti-trust regulators than a much bigger Comcast. The deal could still fall apart, and as a result, there's a $2bn break fee or "T-Mo bonus".
Watch this space - a Telco 2.0 Executive Briefing on gigabit cable is coming this week
Charter had to move quickly, and the ultimate owner, John Malone, had to kick in $5bn of his own money - why? Well, after SFR and PTel, Altice, the holding company for Numericable was taking an interest. They've consoled themselves by taking 70% of Suddenlink, the rural-focused cableco with 1.5m customers, for some $9bn. That seems dear, especially as Altice is funding the deal entirely with new borrowing.
Meanwhile, Comcast announced six more deployments of 2Gbps FTTH, plus a new 250Mbps service tier on its existing cable network. So far, Comcast cable had 305Mbps in a small number of trials, and 100Mbps as a matter of course, so this is a big speed jump for most of their customers.
Windstream announced that it would be deploying 1Gbps FTTH this year in one market and moving on to five more if that worked well. Frontier's CEO says they will be deploying more FiOS fibre in the markets they acquired from Verizon. Wave Broadband, an independent fibre ISP on the West Coast, has raised another $130m in funding.
Interestingly, Wave says it's growing revenue at 10% annually in residential but 25% in business. Frontier says it's seen 60% more requests for Gigabit Ethernet from its SMB customers this year than it saw in the whole of 2014. Centurylink is trying to get back into profit by upping prices on its legacy products - the idea is that they'll either pay, or churn onto something new and cheaper to provide. The problem is that both Frontier and Centurylink are saying that their Gigabit Ethernet lines sell a lot cheaper...
AT&T CEO Randall Stephenson says they're going ahead with their fibre investment plans anyway. You may recall he said they would "pause" them because of Title II reclassification. Stephenson now says he thinks the measure will be "changed" somehow. Alternatively, he's seen the writing on the wall - speaking to a different audience, he says it's because of Google Fiber.
And SingTel is trialling 10Gbps speeds on its GPON fibre network.
Vodafone/Liberty Global rumours; Vodafone full-year; VZ to sell Terremark?
The cable excitement continues. John Malone said:
"We've looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe," Malone told Bloomberg in an interview.
"There's the promise of creating enormous shareholder value if we could work it out," he said, declining to comment on whether the companies were in talks.
The other company is of course Vodafone, often thought to be a potential buyer for Liberty Global, and already a repeat acquirer of cable assets. Last time the rumour mill threw up Vodafone-Liberty, Vodafone shares dived as the market feared a re-run of the share-printing era of Chris Gent. This time, the rumour sent them soaring, up 4%, strongly suggesting that what makes the difference is price.
Some of Vodafone's shareholders apparently think it should sell off the African, Middle Eastern, and Asia-Pacific networks in order to fund the acquisition of Liberty.
That, of course, would be a massive bet on European economic recovery vis-a-vis high growth emerging markets. Vodafone's earnings call gives us a read on that. Vodafone's group-wide service revenue was back in positive territory (just) for the first time in years, by 0.1% year-on-year. That broke down to 6% growth in AMAP and -2.4% in Europe. However, as Vittorio Colao was not surprisingly keen to point out, Europe actually improved quarter-on-quarter. The key driver of basically everything seems to be mobie data, no surprises there, but enterprise was also strong. On the other hand, though, migrating DSL customers in Germany over to KDG seems to come with a small price cut.
A lot of European operators at the moment seem to be pushing the idea that the worst is over and it's time to call the turn. Some of those have had to stretch pretty drastically to make that case. But Vodafone's service revenue was up quarter-on-quarter in Greece. Meanwhile, Eircom reported revenue up 5% in Q1, with its best EBITDA margin since 2010 and 250k 4G subscribers.
O2 UK had a major outage, and was chastised by a government minister on Twitter. Telecom Italia is planning to spin off its towers in order to raise about €1bn. DTAG, meanwhile, says it is "open" to selling T-Mobile USA but is in no hurry.
In the US, it's being suggested that Verizon might sell the Terremark data centre division to a private-equity buyer, or possibly to Centurylink. Meanwhile, Fran Shammo says the planned mobile video product based on the acquisition of AOL will be a "multi-billion" business, and it will be based on advertising. It won't, apparently, be "exclusive" content but it will be "different" and some of it might be multicast.
VZW is also looking to lease more dark fibre to connect up its growing small cell fleet. Rather interestingly, Shammo says the decision to deploy more small cells and DAS, and therefore more backhaul, is driven by the experience of the AWS-3 spectrum auction - adding capacity by cell subdivision is cheaper than adding it by deploying more spectrum, but only at these spectrum prices.
Verizon also had something to say about its LTE for Rural America program. 21 4G networks are now up under the program, serving 2.9 million customers. For Sprint's part, they say 16 of the 30 rural operators who lease spectrum from them under their rural roaming program have launched their LTE networks. After CFO Joe Eltenauer suggested Sprint might not need 600MHz spectrum after all, Marcelo Claure chipped in to avoid any possible misunderstanding.
AT&T, meanwhile, is going to stop promoting standard contracts and shift more subscribers to their Edge quick-upgrade plan. They're also giving some detail on their plans to deploy 4G in Mexico. Major cities and highways are going to be addressed in the next 18 months before moving out from there.
Bharti Airtel has signed up $2.5bn in financing from two Chinese banks, so it's a reasonable guess either Huawei or ZTE has an order coming soon enough.
Vodacom has had a difficult year, with total revenue up 2.1% but service revenue up only 0.2%, and net profit down 8.5%. Price pressure in South Africa is significant, and they've been moving customers onto big integrated bundles, while the regulator has been tough and the network needed work. Also, M-PESA hasn't gone over well and they had "challenges with the platform" (presumably, the new Huawei-run one?), and Telkom is rolling out LTE-A.
China Mobile 4G: 1 million base stations; 600Mbps LTE; 5G's many waveforms; Alcatel's SDN solution
Dave Burstein blogs China Mobile's results and notes that they have 140 million 4G subscribers, and are growing fast enough to meet their target of 250m by the end of the year. This requires them to install 400,000 base stations this year, taking them to a million eNode-Bs in service, probably a record. Basically all the revenue growth is coming from data, of course. Not that this is a problem - their service EBITDA margin was 42%! Dave concludes that 4G is now cheap enough that 3G rollouts will stop, as the spectral efficiency gain now outweighs the cost of the equipment and the handsets are under $70.
Huawei and Qualcomm have demonstrated speeds of 600Mbps with LTE Cat11, aggregating three 20MHz carriers and using 256QAM modulation. Not surprisingly, the 3G, 4G, and 5G Wireless Blog points out, the 3GPP is now looking seriously at coming up with a standard and a name for 4.5G or whatever comes after LTE-A and before 5G. The Blog also has lots of interesting 5G-related presentations like this one, which details the incredible array of different radio technologies proposed.
An interesting product; specialised 5GHz temporary backhaul.
Genband is consolidating carriers' TDM equipment and converting the central offices into data centres. They reckon as many as 20,000 might be available in North America. Verizon, meanwhile, reckons that it saves 80% of real estate and 60% of energy costs when it closes a TDM switch.
And in case anyone was wondering what we'd do with all that bandwidth, Spotify adds video.
WRC-19, but not 2019? LTE-LAA rows; 960MHz more WiFi; French minister - no to mergers, yes to investment
Will WRC-19 actually be in 2019? There is some interesting speculation that the world radio conference might be brought forward to 2018 or even 2017 in order to get the necessary allocations for millimetre-wave 5G squared away early. NTT DoCoMo, Ericsson, and Nokia Networks have been experimenting seriously with the 15 and 60GHz bands, so perhaps it's time to hurry up?
Here's a really fascinating debate about LTE-LAA and WiFi. Note the Cisco representative saying that everyone has been trying to make cellular more like WiFi for small cell applications, and now LTE-LAA is trying to make WiFi more like cellular...
NTIA is studying how to release as much as 960MHz of spectrum for WiFi, starting with the 3.5GHz band, by more effective sharing with federal government users.
Germany's 700MHz auction is next week, with a reserve price of €1.5bn and three bidders - Vodafone, DTAG, and Telefonica. It's the first 700MHz auction in Europe and therefore, an important marker for the rest.
French operators have signed an agreement with the ministry of economic affairs, under which they agree to cover all the remaining notspots by 2020. This will take about €40m in additional investment - which doesn't sound very much - and in exchange, the carriers will be relieved from the obligation to maintain public phone booths.
The minister has also come out saying that "it's time for investments, not consolidation" and that he doesn't believe in a tradeoff between competition and infrastructure development.
Orange has the go-ahead to buy Jazztel so long as it sells as many FTTH lines as Orange had before the merger and offers the acquirer of those assets wholesale access, both fixed and mobile.
Did you know the Facebook-backed Internet.org initiative doesn't allow any kind of encryption? Now you do. It's running into more and more trouble, as Vodafone India says no way, after Bharti Airtel dropped out.
Comcast and Level(3) have settled their peering row just before Title II kicks in. Google Fiber is auto-forwarding copyright threats, something Verizon (for example) refuses to do. Skype has been summonsed by a Belgian court to explain why it's not a telco.
Google has an IoT OS; so does Huawei; $1bn a year of connected car at AT&T
Google is developing a new operating system for Internet of Things devices - is there anyone who isn't? - which will be branded Android, and will be designed to run on devices with as little as 64MB of RAM. At the moment it's codenamed Brillo, but watch for an announcement at Google I/O.
Huawei, meanwhile, announced an SDN platform for the IoT that's called Agile, thus successfully creating a buzzword mashup. It consists of a minimal OS for the devices (called Lite), an embedded router, and a controller appliance.
T-Mobile in the Czech Republic is trialling Sigfox radios on its existing base stations.
AT&T may get to a billion a year in M2M by signing up connected cars at the rate it did in Q1 (682k net adds).
Daimler-Benz will be cooperating with Qualcomm to develop connected car applications and wireless charging technology.
And Audi will be integrating Baidu's in-car platform in vehicles going to China.
FirefoxOS moves upmarket; nope, Apple Watch; WalMart, an OpenStack company; bubble fear
Mozilla has changed its strategy for FirefoxOS. The original aim, to create a $25 smartphone, is being overtaken by Moore's law, and as a result, they're now going to aim for more exciting and compelling devices like the big KDDI FxO they showed at Mobile World Congress.
Here's an Apple Watch review after a month's continuous use. He's giving it back.
Carl Ichan wanted Apple to hurry up and launch a TV. Apple leaked the letter and let him wait.
A good discussion of what the eight cores in an octo-core ARM are actually doing. Key take-home message: it's not at all like a PC quad-core or whatever, because the "little" cores are there for energy saving, not performance. There's an interesting follow-up here about whether Apple might adopt the ARM big.LITTLE architecture, or instead provide an API to let developers use the M8 sensor coprocessor as a low-power core.
Rebuilding YouTube; Google talks, a bit, about the InnerTube project to make YouTube viable on mobile.
Microsoft Edge developers explain how HTML5 Web Audio will work in the new browser.
Facebook is worrying that Messenger adoption is slow, and hopes that games will boost it. WebRTC Hacks dissects Facebook Messenger and WhatsApp VoIP. Another terrible bug related to the 1990s crypto wars.