5G, Verizon, 700MHz, HPE, Microsoft, Spotify: Telco 2.0 News Review
- 5G: Verizon fixed-wireless plans, Samsung Research, plus Nokia, Bouygues, SFR, DTAG, Intel news
- US Carriers: VZ strike is over; T-Mo is smartphone No.1; 700MHz pricing; dodgy dealings; $2bn for rural
- Global Carriers: European 700MHz; 3UK sues EE; keep O2 UK?; more LoRa; Millicom sells, Orange buys
- Cloud Computing: HPE-CSC; big AT&T SDN launch coming; Verizon NFV demo done; OSM Release Zero is out
- Smartphone Roundup: Microsoft cuts 1850 jobs in smartphones; grim China numbers; Siri SDK; Xilinx rumours
- Voice 2.0: Twilio Programmable Wireless, IPO details; H.264 wins the codec war
- Content: Apple might "buy Time Warner"; AT&T might buy Yahoo!; Google Maps ads Spotify financials
- Security & Privacy: The rays are back; really creepy targeted ads; SWIFT two-factor auth; North Korean Facebook
5G: Verizon fixed-wireless plans, Samsung Research, plus Nokia, Bouygues, SFR, DTAG, Intel news
Here's an interesting panel on 5G - Verizon director of corporate technology, Gerry Flynn, is very clear that they are thinking primarily in terms of fixed wireless in the 28GHz band when they say 5G and they mean to shoot for very high data rates. AT&T's director of advanced radio technologies, Arun Ghosh, makes the interesting point that the technology barrier for millimetre-wave spectrum is getting from a dish antenna to something you can fit in a phone. Obviously this is less of a problem if the form-factor is "something on the roof".
If this Samsung European R&D presentation is anything to go by, they're making progress on the problem. Also, 5G and 802.11ax WiFi have a lot in common, and the real gains from beamforming kick in once you start doing it in 3D.
CEO Lowell McAdam fills in some more detail. He says the carrier has tested up to 1.8Gbps, that he expects the roll-out to justify the CAPEX bill based purely on fixed-wireless, and that VZ will use it to expand its gigabit services beyond the FiOS footprint. That's pretty big; the current rush to get more FTTH or DOCSIS 3.1 out there just got a new participant.
McAdam expects to be able to provide the service anywhere within 1km of a fibre run; not only does VZ Business have a hell of a lot of metro-fibre, companies like Zayo would be more than delighted to sell it to him, so that could spread really quite quickly.
Over in mobile, Bouygues says it's achieved 1Gbps with quad-band LTE carrier aggregation, in a lab test. That used 60MHz of spectrum, 4x4 MIMO, and 256QAM modulation, with two bands for the uplink and four for the downlink. SFR, meanwhile, added its 1800MHz spectrum to its carrier aggregation and announced that speeds are up to 337Mbps if you have a Samsung S7 phone. Deutsche Telekom's CAPEX is up 13% year-on-year.
Nokia has announced a 4G network in a rucksack for the usual public safety/disaster response/warlike use cases.
VZ strike is over; T-Mo is smartphone No.1; 700MHz pricing; dodgy dealings; small cell costs; $2bn for rural broadband
The Verizon strike may be over, after the company reached a tentative agreement with the CWA and IBEW unions. The deal includes some of the flexibility provisions the management wanted, plus a substantial raise - 11 per cent over 4 years - and it recognises 65 union workers in Verizon Wireless retail stores, which sounds ridiculous but sets an important precedent as VZW wasn't unionised at all. Although VZ is allowed to send customer service calls out-of-state under the deal, something management dearly wanted, it must maintain the overall proportion of calls handled by union workers.
With that out of the way, let's get on with the show. T-Mobile has become the biggest single sales channel for smartphones, having just squeaked past Verizon Wireless. This represents their transition from a pure discounter to a value play, something you can also see in this analyst note. The authors expect the sheer pace of subscriber growth to slow down, but its composition to shift, including more high value retail postpaid smartphones. (This may already be happening.) As a result, they expect T-Mo's FCF to break out on the upside.
Meanwhile, T-Mo has acquired a 700MHz spectrum block covering Chicago for some $420m. This was rather more than expected, but as it turns out, the spectrum has an interesting history. Originally auctioned in 2008 to Verizon Wireless, it was left unused due to interference issues for years. In 2013, the FCC took action on the interference, but VZW still didn't utilise it, although its value has sharply increased. As the 600MHz won't be available for a while, and it allows T-Mo to fill in a blank on the coverage map, its value has increased again and that's why T-Mo forked out.
A pension fund manager reckons T-Mo gave itself a big hand by changing its accounting practices to avoid admitting quite how many of the phones it sells on the instalment plan walk at the end of the contract. This is a significant issue, as device instalment plans make operators carry a lot of unrealised receivables from their customers on the balance sheet. Complaints data suggests a lot of customers don't realise they owe the carrier money at the end of the contract.
Would there be any news from Sprint, perchance? Yes, yes, there is. CFO Tarek Robbiati says we should expect action on the scheme to sell and lease back their spectrum holdings pretty soon. After all, they need the cash, as a large chunk of their debt falls due this year and in 2017. Robbiati says:
"We do want to retain ownership of the spectrum," he said. "We want to do it in a way that allows us to raise capital without relinquishing the rights on the spectrum."
All clear so far? Meanwhile, he also says their small cells cost "60 to 70 per cent" of a macro cell. Which is all very well, but if you need four times as many of the little chaps, that's not much help. Robbiati also said Sprint is essentially giving up on M2M and wholesale in favour of total concentration on hanging on to retail postpaid customers.
A big part of Sprint's small cells story is its partnership with Mobilitie, a company that acquires small cell sites and manages them on behalf of carriers. Here's a weird story - it seems to have been going around putting in planning applications in the names of supposed utility companies or even government agencies, probably in the hope this will help it get approval quicker. If you remember, the original idea was to get Mobilitie registered as a CLEC telco in all 51 states, as this status brings with it various privileges in terms of planning and access to publicly owned rights-of-way. But apparently that wasn't enough.
Lawyers for the local governments involved have been combing databases to identify the straw applicants, who are usually based at Mobilitie's head office address (subtle!), and now they've had to promise not to do that again.
Here's an interesting argument that the 600MHz auction might be enough spectrum, plus a lot of WiFi, to launch a new US mobile carrier, especially in the light of the FCC consultation on special access.
The FCC is going to be holding one of those reverse auction thingies it likes so much to allocate another $2bn for rural broadband.
And the widget on Verizon's FiOS web site that says "4 agents are waiting" or whatever? It's a random number.
European 700MHz; 3UK sues EE; Telefonica might keep O2 UK; more LoRa; Millicom sells, Orange buys
The European heads of government have signed off a plan to release the 700MHz for mobile broadband by the 30th of June, 2020, at the latest, with each country having the right to delay by two years if they have interference issues. Cross-border coordination must be completed by June 2017 and national-level plans published by December 2017. WRC-15 decided to leave the 470-694MHz bands for the broadcasters in exchange for handing over the 700, but the council also suggested that some of the 470s might in fact be used for mobile broadband.
This is interesting: 3UK is suing EE, claiming they're not playing fair on their infrastructure-sharing agreement. 3UK says it was promised at least 3,000 more base stations back in 2010, when Orange UK merged with T-Mobile UK, with which 3UK had a pre-existing agreement, to create EE. However, it's only actually been allowed to install its gear on 1,301 ex-Orange sites.
We remember hearing from a very senior EE executive that they were horrified by the state of the Orange infrastructure when they took it over, and most of the extra investment in voice a few years back went into fixing it, so does that have something to do with it?
Meanwhile, 3UK is encouraging its users to dump MMS for some over-the-top app instead, and increasing its prices 40% to get the message across. Presumably, traffic levels are so low they'd like to get rid of the infrastructure?
Telefonica is now thinking it might keep O2 UK after all, according to Bloomberg, although not so much that it's not trying to tear up the exclusivity agreement with Hutchison. In the meantime, it has named a whole galaxy of banks as financial advisers and book runners for the IPO of its towerco, Telxius, which is expected as soon as July.
French regulator ARCEP has published a review that says network investment has gone up since the launch of Free Mobile, but that national roaming - i.e. the Free/Orange deal, there is no other - must go. Seeing as Free's 4G base station count has caught up with SFR, the point is presumably that by the time they implement the end of national roaming, Free will already have built their way out of it. And that way, everyone will be happy.
BT has set a fibre-optic speed record. Telecom Italia has lost out in the bidding for Metroweb, in favour of the electricity grid operator ENEL. Vodafone's Chief Commercial and Strategy Officer, former Southern Europe and Italy CEO Paolo Bertoluzzo, is leaving. Tele2 is beginning to roll out LoRa. So is SK Telecom, and the lucky (but not surprising) winner is Samsung.
Orange may be about to buy Millicom's Tigo operations in Senegal, Ghana, and Chad. Nigeria is auctioning 2.6GHz spectrum, and there is only one bidder - MTN. You know, the company Nigeria just hit with a $5bn fine. Forget it, Jack...
And Telstra's CTO has quit amid allegations of CV-padding and plagiarism.
HPE-CSC; HPE "focusing on the cloud"; big AT&T SDN launch coming; Verizon NFV demo done; OSM Release Zero is out
So HPE just merged its IT services operation (i.e. the old EDS business) with CSC. This means, apparently, that the rump HPE will focus on data centres and the cloud, plus IoT, security, big data, and the Aruba networking business - although, of course, they recently gave up on the public cloud.
Confused? Well, they're still developing Helion, their flavour of OpenStack, which recently released version 3.0 - although they also have a development platform that uses Amazon Web Services. You should be confused. Amid all this, the company actually had a decent quarter.
AT&T says it's going to launch an SDN-based product in 63 countries simultaneously, later this year. It's almost certainly something out of the business services line, although they're not saying what yet. Meanwhile, Verizon says it's finished deploying OpenStack in five data centres, supporting its own network-on-demand product.
The ETSI Open Source MANO project has shipped code, with Release 0 appearing a month ahead of schedule.
Telefonica, Facebook, and Microsoft are building a new transatlantic submarine cable network, between Northern Virginia and Bilbao, with spurs into the Mediterranean and northern Europe.
Microsoft cuts 1850 jobs in smartphones; grim numbers from Xiaomi, Lenovo; Siri SDK; Xilinx rumours
Last week we heard that Microsoft has sold the right to make Nokia phones. Now we hear they're backing further away from the smartphone business - 1,850 jobs are going, although they plan to keep the Windows 10 Mobile version going. 1,300 of those are at "Microsoft Mobile" in Finland, aka the Nokia smartphone development team. Nokia itself isn't helping - the Finnish trade unions suspect it's going to sack as many as 15,000 people as it integrates Alcatel-Lucent.
If you're a hardcore Nokia nostalgist, you're probably one of the people who rushed to sign up for a Jolla phone under their crowdfunding initiative so fast they sold out.
Radio Free Mobile picks over the numbers from Xiaomi, and concludes that its shipments and therefore revenue will likely fall in 2016, the much-vaunted ecosystem hasn't amounted to anything much, gross margin was 20% at best, and FCF margin last year might have been 3%. The company has $1bn in cash at the bank, so the margin for error is pretty tight. In the light of this, there is next to no chance of getting out for anything close to the $45bn paper valuation.
In fact, the Chinese smartphone market looks radioactive at the moment. Lenovo just announced that device shipments in China were down 85%, and startlingly few of them were (relatively) high-value Motorola smartphones.
Apple, meanwhile, is looking at its services game - there's going to be a SDK for app developers to work with Siri, which sounds useful and fun. Siri is also, supposedly, coming to the next version of OS X, and 9to5Mac reckons it knows details of the new MacBooks coming later this year. Apple guru John Sculley, meanwhile, has his own Android phone out - it looks cool, and the pricing is very un-Apple indeed.
A whole lineup of semiconductor companies have agreed to standardise how their hardware accelerators (think GPUs) interface with the CPU cache, so as to make it easier to build custom systems-on-chips. The point is to compete more effectively against Intel in the data centre. ARM, IBM, Qualcomm, and FPGA specialist Xilinx are involved.
Speaking of Xilinx, there are rumours someone's going to buy the company, possibly Intel. There's a good discussion of the possible upshot here. Although FPGA development might slow down as a result, if Intel wants to deploy them more widely in the data centre, they might also become more available for desktop and mobile applications as a result. And telco vendors won't get their own way all the time.
That Opera deal has gone ahead at the second time of asking.
Although Google won through against Oracle, it hasn't stopped Huawei suing Samsung over a whole brick of assorted patents.
And Jawbone has dumped its whole inventory of fitness trackers on a distributor, and won't be making any more. Apparently it's going to concentrate on "clinical grade" devices, but would anyone be surprised to see them exiting?
Twilio Programmable Wireless, IPO details; open-source platform for WebRTC; H.264 wins the codec war
For years now, people have been saying things like "Wouldn't it be cool if we could provision SIMs like you fire up a virtual machine in AWS EC2?" A few startups have had a go at that kind of super-MVNO - an honourable mention goes to the UK's Simwood Mobile - but so far not many have tried and even fewer have conquered. Now, Voice 2.0 powerhouse Twilio is giving it a go with its Programmable Wireless. It will surprise exactly no-one that T-Mobile USA is the wholesale partner. There's sample code here.
This TechCrunch piece has pricing - the first 1GB of data is priced at $25/mo, which suggests they're actively trying to discourage you from running a nano-MVNO, as you can buy the same data volume direct from T-Mobile for $5/mo! Beyond that, you pay $2/SIM/mo flagfall, plus $0.10/MB/mo for traffic in "IoT mode".
Some might say that if they can buy wholesale data service at $5/mo and resell at $25/mo, they damn well deserve one, but the numbers are harder - the company is still making a loss, of $35m in 2015, although it's growing fast, from revenue of $49m in 2013 to $166m in 2015. Of the 900k developer accounts, 28k are classified as active customers, growing at the same rate as revenue. Also, 17% of its revenue comes from processing WhatsApp's verification SMS. That said, the gross margin over and above the telco and AWS bill averages between 50 and 55%.
Swedish regulators say VoIP minutes of use overtook traditional at the end of 2015.
Here's an open-source PaaS for WebRTC voice apps.
Microsoft Edge has just added H.264 support in its WebRTC implementation, which means H.264 is now the one codec that works across all the browser vendors.
Apple might "buy Time Warner"; AT&T might buy Yahoo!; Google Maps ads; 3UK adblocking; Spotify financials
Apple executives have apparently sounded-out the possibility of buying Time Warner, because merging with Time Warner has such a good record of success for Internet companies. Well, because everyone's worrying about their volumes and they have $216bn of cash on the balance sheet.
But that's not the most surprising content deal of the week. AT&T has jumped into the bidding for Yahoo!, apparently in order to get their advertising business. Verizon CEO Lowell McAdam, meanwhile, won't talk about the bid for Yahoo! but did say that the Go90 video app had been "overhyped".
Google is going to start selling ads inside Google Maps Mobile, in the form of additional sponsored points-of-interest. Was anyone else surprised to learn you couldn't do this already?
3UK is going to trial Shine's ad-blocking through DPI technology.
Here's an interesting report on the emerging arms-race between adblockers and anti-adblockers.
The ad crisis isn't just for online companies - Daily Mail & General Trust is suffering.
Spotify is growing like hell, and is increasingly dominant in the paid-for streaming market, but its huge bills from the record labels mean that its growth just brings huger losses.
SoundCloud's new "auto-mastering" feature is getting bad reviews.
The rays are back; really creepy targeted ads; SWIFT two-factor auth; North Korean Facebook
A pre-print study seems to suggest that the rays! give you cancer - however, they also make you live longer, they're worse if they're GSM, and the effect only exists if you're male. And a rat. That's probably why we have pre-print servers. (Also, a massive study of Australians going back to 1982 found nothing a couple of weeks ago.)
Anti-abortion activists have discovered geo-targeted mobile advertising. It's as bad as that sounds.
After that thing where someone hacked the SWIFT inter-bank data network, they're rolling out two-factor authentication.
A new twist on delivering malware through an ad network - only drop the payload onto some users, via the ad network's own targeting capability. That way, you improve your chances of a successful exploit and make it more difficult to detect the attack, because it doesn't happen if you're not the target.
Google has paid out $65,000 for 42 bugs in Chrome.
And meet North Korea's globally available clone of Facebook.