Nokia, OpenDaylight, Samsung, Euro Carriers, Robots: Telco 2.0 News Review
- Future Network: Nokia Q2s surge; ALU losing less; 359 OpenDaylight devs; SKT/Ericsson 5G cloud
- Europe: Telefonica, Orange, Turkcell, Proximus: strong Euro Q2s. KPN, Telekom Austria not so much
- Global Carriers: T-Mobile USA hits profit in Q2; more gigacable; weak Q2s around the MEA, Korea; Airtel execs
- Regulation: AT&T contests $100m fine; CTIA appeals net neutrality; CRTC wants open fibre; French 1800MHz
- Devices: Samsung Q2s - how soon will chips beat phones? World shipments numbers. New Motos. Nokia VR
- Valley Roundup: HERE: it's a deal; G+ vision is over; Twitter Q2s; cruelty to robots
Nokia Q2s surge; ALU losing less; 359 OpenDaylight devs; SKT/Ericsson 5G cloud; VZW small cells
Nokia Networks' Q2s are in and they're impressively strong, with net sales up 9% year on year and net profits ahead 60%. Further, Nokia's gross margin is now higher than Ericsson's, suggesting that Nokia's increasingly edge-focused product line is doing something for them. Nokia's partner in the forthcoming merger, Alcatel-Lucent, reported that its Q2 generated positive FCF for the first time since 2006 - in other words, the original Alcatel / Lucent merger has taken an awfully long time to work out. Overall, revenue was down 8%, but if you exclude managed services and some other stuff, it was up 6%.
Why you should exclude managed services is another question.
That said, the net loss is down from $298m to $54m and the company's generating cash.
Nokia is increasingly committed to a vision of mobile operators deploying cloud-based applications right down to the base station, enabled by NFV technology, with products like its Airframe servers and Liquid Applications software. Here's an interesting article about deploying grid computing in the mobile network, using Nvidia Tegra K1 mobile chips and their GPUs to support high performance compute loads.
The Linux Foundation-backed OpenDaylight SDN initiative claims it has 359 committers actively contributing code and that's more than all the other SDN projects together. They also name AT&T, Orange, Tencent, the Large Hadron Collider at CERN, and Comcast as companies that have OpenDaylight in production.
Cisco has named a new CTO and a "SVP and Chief Digital Officer". We weren't aware Cisco had much of an analogue business, but there you go. Padmasree Warrior is out as CTO-and-CSO.
Ericsson and SK Telecom have signed a deal to co-operate on virtualisation and 5G "network slicing". This will involve developing the first "5G ready hyperscale data centre". We don't believe hyperscale data centres have much of a place in a 5G future, but it's telling that both Ericsson and SKT are thinking in terms of 5G's impact on the cloud.
See our How 5G is Disrupting Cloud & Network Strategy Today briefing for in-depth Telco2.0 coverage
Meanwhile, SK Telecom is also experimenting with the Internet of Ships.
Here's an interesting interview with the VZW engineer in charge of their small cells deployment in San Francisco. VZW is using dark fibre to reach a pair of Ericsson micro-RRUs per street lamp, pulling the control functions back to a data centre in a C-RAN setup. It's the opposite strategy to distributing all the processing out to the base stations.
Half the deployment is being carried out by ExeNet Systems. Despite that, their half-owner, towerco SBAC, is selling up because they don't think there's enough margin in small cells.
Did you know CableLabs is leading the MANO cloud-management element of NFV as it goes through ETSI? Now you do.
Rackspace is offering a new private cloud product, promising that the hardware is dedicated to you. Interestingly, seeing as Rackspace was a founder member of OpenStack, it's based on VMWare vCloud.
And Telstra has decided to IPO Ooyala, the CDN they bought last August and which they're still investing heavily in. Dan Rayburn rips the dodgy numbers in their S-1.
Telefonica, Orange, Turkcell, Proximus: strong Euro Q2s. KPN, Telekom Austria not so much
Telefonica's Q2s are in. Here's the news: revenue was up 12.4% year-on-year, group-wide. And the company was profitable. In fact, net profits were up 70%...at a whole €1.89m. The Spanish business is still shrinking, but the rate is down to 1.1% year-on-year, while Brazil was up 4.5%, the rest of Latin America 10%, and the German business 67.8%. Chairman Cesar Alierta says the Spanish business was flat in May and June, the first months since December 2009 when the business didn't shrink.
Orange says its revenue grew in Q2 for the first time since 2011, by 0.4% as against -0.3% in Q1. The drivers were 4G adoption in Europe and subscriber growth in Africa and the Middle East. Orange France, for example, scored 240k net adds in H1 and beat forecasts for 4G adoption by 400k subscribers.
Turkcell says it had its best-ever quarter in Q2, with revenue up 5.8% year on year, EBITDA up 9.7%, and net income up 44%. The carrier is gaining postpaid mobile and shedding pre-pay subscribers.
Proximus reported group revenues up 1.5% in Q2, with EBITDA up 4.3%, and the BICS carrier services division up 34.9%. The CEO says to except 2-3% for the full year. Also, they would like to acquire a cableco.
In the light of those results, plus Vodafone's last week, you might be forgiven for thinking European telcos have turned the corner. Despite all the drama about Greece, various EU economic indicators (notably bank credit and car sales) are up strongly this year. Fortunately there's KPN to crush your optimism, with Q2 revenue down 5% year-on-year.
KPN says consumer revenues were roughly flat, but enterprise fell off a cliff, and the firm had to eat a pension fund charge. It's not hard to spot the problem: DSL connections for businesses dropped 19% and business voice 18%. It shouldn't be hard to spot the solution: residential FTTH scored 135k net-adds.
Telekom Austria, meanwhile, has had to cut its full-year forecasts from 2% to flat, but it's got some ideas about how to fix that - buy a cableco. Mobiltel, its Bulgarian opco, is acquiring Blizoo, a cable operator with 373,000 subscribers and 1.3m homes passed.
The GSMA needs a new boss. In the meantime, long-time CTO Alex Sinclair is filling in.
Metronet UK is rolling out its gigabit wireless leased lines in Bradford.
And Vodafone UK just added 63 4G roaming destinations, so for £3/day or £5/day outside Europe you can roam painlessly. This is probably them hearing footsteps from Carphone Warehouse's iD free roaming offer.
T-Mobile USA hits profit in Q2; more gigacable; weak Q2s around the MEA, Korea; Airtel execs sacked
T-Mobile USA reported a substantial net profit for Q2, plus another crushing net-adds performance. A disturbingly wild-eyed John Legere announced 2.1m net-adds, including 1m postpaid, in Q2, plus revenue up 14% year-on-year and net profits of $361m. A year ago, T-Mo claimed a $391m profit, but that was more than accounted for by a spectrum swap transaction that flattered their profits by $747m and actually reduced their cash, so this is big news. T-Mo expects to be profitable for the rest of the year and to sign up 3.4-3.9m subs for the full year.
Nikesh Arora, Softbank's president of mobile, says they're still committed to Sprint even though the drop into fourth place is now as good as nailed on.
Gigabit cable watch: Videotron is planning to deploy 1Gbps, but it intends to do it with DOCSIS 3.1 on the cable network instead of pulling fibre.
Ultra-low cost MVNO FreedomPop has snagged some investment from Malaysian operator Axiata, which is going to fund the launch of a new MVNO-plus product that won't be branded either FreedomPop or Axiata or anything related to them.
Ooredoo is struggling a bit - Q2 revenue was off 5% and net profits 39% year-on-year. They blame currency shifts and "security issues" in Iraq (that's ISIS blowing things up, of course). However, mobile data is now 34% of the business and it's fair to ask whether their data pricing is cannibalising the rest of the company.
Saudi Mobily, meanwhile, reported a startling 57% plunge in its net profits after a dispute with Zain Saudi over a $300m bad debt, which fed through to a disappointing quarter at Etisalat. Zain, for its part, also had a distinctly shaky Q2, with revenue down 10%.
Airtel wants to buy the old Celtel networks off Zain, and who can blame them for thinking they could do better? In the meantime, though, an executive clearout is in progress in their African operation.
And all three South Korean operators reported. SKT was off a tad (1.2%) as interconnect pricing dropped. KT did a little worse. LG U+'s profits almost doubled, though, as CAPEX on its wideband-LTE network dropped out after the rollout finished.
AT&T contests $100m fine; CTIA appeals net neutrality; CRTC wants open fibre; French 1800MHz refarming
AT&T wants to fight the $100m fine imposed on it by the FCC over data throttling. The regulator charges that they used the acceptable-use policy to ease out customers who had a legacy unlimited-data plan and the right to keep it. AT&T claims it disclosed the policy, and everyone else is doing it, and $100m is too much.
CTIA has filed its appeal against net neutrality, claiming that the FCC's "heavy handed approach threatens US leadership in wireless broadband". That might be interesting if it wasn't for the fact that CMRS - i.e. cellular - has historically been subjected to a regulatory regime closer to the new one than to the fixed broadband regime pre-reclassification.
Verizon and Centurylink both vigorously deny trying to withdraw regulated copper by stealth, in a letter to the regulator.
Canada's CRTC wants Canadian telcos to offer special access to their FTTH networks for competitors.
French regulators have given the go-ahead for Orange and SFR to start refarming their 1800MHz spectrum for 4G, under one condition: they hand over part of it to Free, which only has 5MHz of the prized 2G/4G band.
And ARCEP has also decided to stop operators using the word "fibre" unless they actually offer FTTH. In the UK, of course, both BT (and its wholesale customers) and Virgin are allowed to call their services "fibre optic" although neither of them actually offer it.
Samsung Q2s - how soon will chips beat phones? World shipments numbers. New Motos. Nokia VR cameras.
Samsung confessed that its Q2 was not so great. The Galaxy S6 devices didn't sell as well as predicted, and as a result, Sammy has been discounting heavily. (And as a result of that, this blog now has a S6.) Meanwhile, they underestimated how many people would want a S6 Edge and struggled to keep them in stock. There was some good news, like higher ASPs, but revenue in the IT & Mobile unit was off 8.4% year on year. Also, the networks operation suffered from the end of the South Korean LTE capex cycle we noted above.
Horace asks an interesting question: how long until Samsung makes more money from Apple iPhones than it does from its own products? They seem to have substantially more pricing power in semiconductors than they do in finished gadgets.
As a result, Apple is getting ever closer to overtaking Sammy for shipments, while Huawei is firmly in third place, and global shipments growth is slowing down markedly. Canalys reckons Apple was no.1 in China in Q1 but Xiaomi was in Q2.
Here's a positive review of the new Motorola Moto X and G phones.
And Nokia is going to launch a new range of VR cameras aimed at professional content creators.
Here's a list of things in Windows 10 you might want to turn off.
HERE: it's a deal; G+ vision is over; Twitter Q2s; cruelty to robots
It's a deal: Nokia has sold the HERE Maps, ex-Navteq, ex-Nokia Maps division to the German car industry for €2.8bn. In related news, Uber has been accused of putting fake cabs on its live maps, which it denies.
Google is unpicking the links between Google+ and the rest of its products. As well as pulling Google Photos out of +, you won't need to sign in to other Google apps with G+ if you don't want to, and Google will stop creating parallel G+ profiles for Google accounts.
At the same time, they're going to integrate mobile traffic data into Google Maps, so you can see how busy that restaurant or whatever will be before you try. Useful, if just a bit creepy, like so many Google products.
Vizio's smart-TVs report what you watch on them.
Twitter Q2s are out. The company's revenue is growing nicely, but MAUs could do better, and it's still losing money.
Here's an interesting peer-to-peer messaging idea.
Is it now beyond question that you should move your unified comms to the cloud?
Crypto warriors want a Tor exit in every library.
And HitchBot, the little Canadian robot that hitchhiked from Nova Scotia to the Pacific, didn't make it out of Philadelphia before vandals mutilated the poor thing.