Altice, Euregulators, 5G, M2M, Cloud: Telco 2.0 News Review

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Drahi plunges on Cablevision; Comcast's new enterprise unit; VZ - speed first, don't expect growth for 2 years

So, Patrick Drahi and Altice strike again with another cableco deal. This time it's a biggy, Cablevision, the fourth-biggest US MSO and the one that covers New York City. The deal means that the Dolan family, pioneer investors in cable for the last 42 years, are making their exit. Drahi is promising to drive down costs because he "doesn't like to pay salaries", but he did stretch to the $128m golden goodbye for the current CEO.

The deal is pricey, valuing Cablevision at 10x its FCF, and the debt-financed structure will take the leverage ratio up to 7x EBITDA.

As usual, Drahi is using other people's money in spades; Altice is only paying $3bn in cash out of the $17.7bn total, and as well as the banks, two pension funds are taking 30% of the equity. However, Cablevision has the highest monthly ARPU in the business at $158, so if the cost reductions really exist, there's substantial scope to drive up margins. Drahi has pencilled in $900m of "synergies" and a target 50% margin, compared to 39% at Suddenlink and 40-odd in some of the European MSOs. If that was delivered, the financials look much better, with the leverage ratio going under 5.

If 50% margins were delivered, of course, that would suggest all cablecos ought to be much richer, as a Moffett analyst points out here. But that might be harder than it looks. Cablevision's footprint is a key market for Verizon FiOS, too, a tougher proposition than a copper-line telco. US content rights are dear, especially for a cableco that's not Comcast, and Drahi says he wants to deploy FTTH, implying a forklift-upgrade rather than an incremental DOCSIS 3.1 rollout.

Cablevision also has a under-reported enterprise operation, Lightpath. This week, Comcast announced the startup of a new division focusing on large enterprises, both inside and outside its footprint, after it signed up network-to-network interconnection for managed Ethernet with essentially all the other cablecos.

Level(3) is playing this down, arguing that it's more likely to bring them more backbone traffic than it is to nick their customers. They're also cutting jobs in the division most exposed to competition from Comcast, though. Meanwhile, Comcast CEO Brian Roberts gives a number of 11m public WiFi hotspots and seems to be angling for carrier offload business, and their X1 STB platform is on trial with Cox.

Verizon CEO Lowell McAdam says they won't be selling the wireline division, they will be concentrating on more speed, and they are "open" to resuming FiOS rollout. It does look like DOCSIS 3 and up is pushing US wireline into an investment cycle. McAdam also warned not to expect much profits growth in the next two years.

Typically, moving from U-Verse to DirecTV means a $17 price cut. AT&T says it's not a problem.

FCC Commissioner Pai says the RLECs should get universal service money for broadband-only plant. Mozilla gets a grant to popularise muni-fibre. Moody's downgrades Sprint's credit. And AT&T has put up a $250,000 reward for information leading to the conviction of the mystery fibre chopper of Berkeley, who caused yet another major outage last week.

VF/Liberty still hanging fire; Euregulators want to see 3's O2 homework; TeliaSonera exits Eurasia

The rumour mill has been grinding away on the idea of Vodafone making a bid for Liberty Global, or some sub-set of it, for ages. John Malone said this week that the talks between the two companies haven't yet arrived at any solution, although "conceptually there could be some real value created". He gives the impression that the talks go on, but one option - a full-cream, outright Vodafone bid for the whole of Liberty Global - is off the table as Vodafone just doesn't want to spend that much money.

Meanwhile, the European Commission's decision to kibosh TeliaSonera/Telenor Denmark is being read as the strongest possible signal that Commissioner Vestager has made up her mind, and come down strongly on the "competition first" side rather than the "E5 telco" side. In the Brussels political game, this also suggests that Vestager and Competition, and perhaps also the Digital Single Market vice-president, Andrus Ansip, have won out over Günther Oettinger's Digital Economy & Society directorate.

As a result, all other telco M&A in Europe is back up in the air. Having already started a preliminary inquiry, Vestager is apparently going to move straight to an in-depth Stage 2 review of the 3UK-O2 merger, and Hutchison is actively looking at what concessions it could make to save the deal. An alternative would be to badger the UK national authorities to assert their authority over the matter, and the Competition and Markets Authority is seeking comments on whether or not to do it.

After last week's surprising push by the indie fibre deployers to defend BT, this week Vodafone, TalkTalk, Sky, and a gaggle of lobbies wrote to OFCOM arguing for the full separation of Openreach. Interestingly, OFCOM director Sharon White has tweed that the market might need "lighter" regulation; does this mean let BT do what it wants, or does it mean "if we break up BT, then we won't need so much micro-regulation?"

Telecom Italia denies that Vivendi is increasing its stake towards 20%.

Not very surprisingly, the Norwegian regulator finds that Telenor has a dominant market position.

TeliaSonera is pulling out of its Eurasian markets, closing an extended soap opera of bitter ownership disputes, lawsuits, and corruption allegations. OpCos in Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova, and Tajikistan are up for sale as a result, but TeliaSonera expects to take its time over the disposals. Another Swedish company, Tele2, has just reached Moscow with its network rollout.

Commissioner Pai admits that T-Mobile zero-rating music is effectively a net-neutrality violation.

Here's an interesting story. After the FCC's universal access programs were criticised for being open to fraud, the commission required a lot more documentation before you got a subsidised mobe. Suspecting that the carriers might lose or misuse this personally-identifying information, the commission also required them to destroy it after use. Now, MVNO Tracfone, CTIA, and USTA are suing for the right to keep it.

One solution to Lawman Wheeler vs. the Satellite Cowboy: abolish the small business discount entirely.

Mexico has dramatically lowered the access prices for its planned 700MHz national wholesale network. Nigeria's broadcast regulator has reassigned a block of the 700 band to MTN Nigeria without asking the telecoms regulator. Cote d'Ivoire wants a fourth operator.

It turns out anyone can read Vodafone's twitter conversations with customers.

3GPP sketches out the 5G plan - target 2019; Nokia wants to go faster; AT&T disses VZ's 5G-by-2017 boast

3GPP fired the starting gun for 5G RAN standardisation this week, at its workshop in Phoenix. The upshot, according to the WG chairman Dino Flore, is that three use cases are being taken forward as a priority: enhanced mobile broadband, massive M2M, and ultra-low latency communication. To achieve this, the 3GPP decided, we will indeed need a new, "non-backward compatible" radio air interface, although LTE-A development will go on in parallel.

The RAN70 meeting in December will start work on the study item for the new radio, with the first phase of the project targeting the end of 3GPP Release 15 in H2 2018, and the second the deadline for IMT 2020 submissions in December 2019, which also happens to match Release 16. Channel modelling work is expected to begin in Q1 2016, with the first report back in March. At the link, there's a vast supply of slideware from every company you can imagine and a few others.

Nokia Networks, meanwhile, screams because it wants to go faster, targeting a full, commercial 5G deployment for the 2020 European Championships. As that year's championship will be spread over 13 European nations, rather than having a host country, they're basically arguing for EU-wide 5G within six months of the standard being released.

How many times has the 5G centre at the University of Surrey been announced? Once more will do it, because it's opened.

AT&T is unsurprisingly sceptical of Verizon's claim to deploy 5G by 2017.

Telstra has launched its first tri-band LTE-A device. Like every other such device we've heard of, it's a Qualcomm X12 modem under the bonnet, which also makes its way into the Snapdragon 820 SoC.

Here's a cool open-source telecoms project from Pakistan.

LTE-M goes into 3GPP; Orange LoRa goes national; T-Mobile.cz does Sigfox; ALU buys Mformation

3GPP has also been busy about M2M this week. Although there were two very distinct schools of thought going into the meeting, they've agreed to work out a harmonised proposal for so-called Narrowband IoT (NB-IoT), aka LTE-M, that will go into Release 13 next year. The point is to provide an M2M version of LTE that runs in a much narrower subchannel, in a lower band (probably GSM900) and at lower power.

Over on the LPWAN side of the fence, Orange has announced it's deploying a LoRa network across France. Meanwhile, T-Mobile's Czech opco claims it's going to cover the whole of Czech territory with Sigfox.

Alcatel-Lucent has acquired Mformation, the M2M device management company. ALU reckons this means it has 700 million M2M devices under management, more than anyone else, and it matters because at least 50 million devices are known to have been compromised or recalled in the last year.

IBM is offering connected cars as a service in the cloud - now if they were only self-driving, they'd have the most buzzwords in one headline ever.

Creative Connectivity calls bubble on the smart home. EETimes does something similar with wearables.

And ViaSat's KA-band broadband service is coming to Boeing aircraft.

Skype is down; Skype is also increasingly a WebRTC app; 3UK VoLTE; voice and messaging as an interface

Skype is down for much of the world. Interestingly, instant messaging still works, but not presence, and calls fail because of the inability to see presence. Unless, of course, you're using the new Skype for Browsers web page.

Does that have something to do with Microsoft's wider agenda? Microsoft just announced that ORTC, their flavour of the WebRTC JavaScript API, landed in both Edge, the new browser, and Skype. The result is this complicated vision of how Skype, Skype for Business, the web site, and SIP-based devices fit together:

201509-Skype-ORTC.png

Which might also give us a clue what's broken - the signalling service. There's much more analysis of MS, Skype, and ORTC/WebRTC here.

Skype is increasingly marketing itself to broadcasters as an ingestion solution, in the unexpected form of hardware. Chris Kranky's event reports back. 3UK VoLTE is here.

Here's something interesting: why make a user interface when you can use messaging? And again, at WalMart.

VMWare OpenStack? Microsoft Linux! AWS down; 30k jobs go at HP; Uber architecture

We discuss the ongoing transformation of Microsoft in this Executive Briefing, but we weren't expecting this - not only does MS not have any problem with Linux in Azure these days, it's developed its own Linux distro. Azure Cloud Switch is a high performance SDN virtual switch that uses the Open Compute Project API to configure the ASIC hardware it runs on and speaks the usual SDN protocols north to the controller.

On a similar theme, VMWare is offering VIO, or VMWare Integrated OpenStack, to customers who would like a one-click install with less complexity. "VMWare OpenStack" isn't quite as startling as "Microsoft Linux" but it's not far off.

A massive outage ripped through Amazon Web Services' oldest and biggest Availability Zone, US-EAST-1, at the weekend. This disrupted an enormous range of websites, notably Airbnb, Tinder, and Netflix.

HP is scaling down a controversial direct sales channel that was accused of competing with their network of VARs, but that's as nothing to what's happening to their workforce.

Brocade builds its SDN Controller 2.0 on the OpenDaylight codebase.

And here's a High Scalability writeup of how Uber works.

App Store hacked; CDN provides 80% iOS 9 boost; night of the adblockers; Google's Indian railways WiFi

The App Store has been compromised. Attackers succeeded in getting app developers to download a malicious version of the Apple XCode developer suite, which added malicious code to anything you compiled on it (thus implementing part of the classic On Trusting Trust paper). Now they're scrambling to track down and revoke all the apps affected. One of them is...Tencent's WeChat. In fact the source of the malware seems to be a server in China that local developers may have used because it was a much faster way to download the whole XCode ball of wax than going to the source.

Elsewhere, Dan Rayburn shares data from PeerApp showing that 80% of the iOS 9 downloads on their customers' networks are being served from the CDN.

One effect of iOS 9 is that it makes it much easier to create ad blockers. This has led to near panic in the advertising world, which in turn caused the author of the most popular app, Peace, to pull it for fear it was too effective and would harm publishers. If VentureBeat is right, we're going to need every ad blocker we can get pretty soon.

Here's a positive review of the Moto X Pure.

Valve says it now has 1500 games on Steam for Linux, rising 100/month.

Google is deploying WiFi at Indian railway stations, under a deal that lets it use the railway right-of-way for fibre paths.

Scary Cisco malware. And the threat to your mobile phone is coming from inside your PC.