a week in wireless


And the winner is…

The Informer, truth be told, was never very good at football. When the family photos come out and the sporting endeavours pages are reached, the Informer is always standing still on the pitch, a faraway look in his eye as the game rages on, somewhere out of shot. His kit, an immaculate white, signals his abstention from the fracas.

Some of us lie in bed thinking, as Tony Hancock once said, and that was more to the Informer’s liking. The only times he regretted this were at his football club’s annual awards nights, when the boys who were skilled at the game climbed onto the stage to receive plastic trophies, while their parents beamed and clapped with vicarious pride.

Such adulation passed the Informer by until, one year, a new award was created just for him. Sportsman of the Year recognised the metronomic doggedness with which the Informer turned up for matches, and sat most of them out on the sidelines. Too young to be embarrassed by this act of vicious pity, the Informer was overjoyed to be called up onto the stage to receive his award from Jimmy Hill. He basked in the glow of celebrity, it was his time to shine.

These memories came flooding back this week when the Informer received the news that the nominees for the Global Mobile Awards have been announced. If you’re looking for evidence of how the industry has changed, this list of worthies isn’t a bad place to start. Back in the day, the awards were mostly given out to operators, by an operator body recognising operator’s achievements. Today most of the nominees are vendors of one ilk or another, with only one out of the 23 gongs being fought over exclusively by carriers—and that’s an award that recognises effective marketing.

Obviously this is partly because of the willingness of vendors to spend large on tables at events like this, and their craving for such recognition. But it also indicates the uncomfortable truth that operators are responsible for very little of the innovation in the industry today.

The awards also illustrate the organisers’ unwavering enthusiasm for celebrity association. Duffy’s performing this year, and the GSMA has also hired a Canadian band called Metric to play at their party. Metric are renowned for their ability to soundtrack the exploits of a bunch of wealthy bloodsuckers—as the GSMA pointed out, the band supplied the music for last year’s hit vampire movie Twilight Eclipse.

This year’s awards ceremony will be hosted by Jonathon Ross, a man whose enduring popularity surely ranks as one of the great mysteries of the cosmos. While the GSMA trumpeted Wossy’s many achievements in the world of broadcasting, it neglected to include the fact that, along with Russell Brand, he generated almost 45,000 complaints in 2008 with a piece of broadcasting described by Ofcom as “gratuitously offensive”, and was suspended from the BBC. Still, edgy awards hosts are all the rage since Ricky Gervais’s turn at the Golden Globes last week.

Making his second appearance in the World Congress keynotes this year will be Google CEO Eric Schmidt—although it will be one of his last acts as CEO. Google announced on Thursday that Schmidt is to become its executive director, making way for founder Larry Page, who will take over at the helm. At the grand old age of 37, Page has now acquired the maturity to lead the company he started; Schmidt joined a decade ago to add some experience to the mix.

Last year Schmidt slipped a velvety threat in among all of his niceties, warning that Google will soon have more information about operators’ customers than the operators do themselves. This week Google quietly encroached a little further onto operator territory by live testing the ability to port mobile numbers to its Google Voice VoIP service. Now geeks who want to move into the cloud can terminate their mobile contract and shift the number to Google Voice. The only question that raises is how to get online when out of range of wifi if you’ve just terminated your mobile contract.

Schmidt vacates the hot seat on a high, with the firm reporting fourth quarter profits of $2.54bn, up from $1.97 for the same period in 2009. Revenues were $8.44bn, up 26 per cent year on year. Google’s co-founder, Sergey Brin, will focus on strategic projects and new products, the firm said.

Stepping aside under less positive circumstances this week was Apple CEO Steve Jobs, who announced that he is once again to take medical leave. Jobs has suffered with pancreatic cancer in the past, and underwent a liver transplant in 2009. The news sparked the now familiar gush of speculation as to how Apple might fare were its talismanic leader to be forced to withdraw more permanently.

Malik Kamal-Saadi, principal analyst at Informa, argued that the company would be materially unaffected by Jobs’ absence, so long as it maintained the strength of its product portfolio. “Although the financial community is nervous about Steve Jobs’ departure, consumers care more about Apple as a desirable brand and less about the popularity of Steve Jobs,” he said. “From that perspective, as long as the company continues to innovate as it has in the last few years, it will enjoy a healthy performance over the coming years. With its existing products alone, there is no doubt the company will continue to score significant sales and revenue growth in the coming years, despite the mounting competition it faces in the mobile and tablet markets.” Informa expects sales of the iPhone to approach 50 million devices in 2011 and those of the iPad to be in the range of 30 million.

The company, at least, is in rude health. Its results for fiscal Q1 were record-breaking, with revenues of $26.74bn yielding profits of $6bn. Sales of the iPhone were up 86 per cent year on year, at 16.24 million units for the quarter. And the iconic handset’s big brother, the iPad, also performed well, with 7.33 million units shifted during the quarter. The firm’s Mac PCs were present at the party, with 4.13 million units sold, up 23 per cent on the same period in the previous year.

Staying with the executive theme, WiMAX pioneer Clearwire announced this week that it has a new chairman in John Stanton. He replaces US cellular superstar Craig McCaw, who quit the post at the end of last year. McCaw’s departure is hardly great for corporate confidence at Clearwire—it was his idea, after all, and much of its attraction to investors was down to his track record.

The news of Stanton’s appointment was delivered thus: “Clearwire…today announced that the majority of the Clearwire Board of Directors has elected John W. Stanton as Chairman of the Board.” This is a roundabout way of saying: “Not all of the Board of Directors are convinced that our new Chairman is any good.” It’s never been an easy ride for Clearwire, and it’s not looking any rosier in 2011, really.

One of the first problems that Stanton must oversee is a lawsuit from Sony Ericsson over the Clearwire logo. The operator plans to launch own-branded handsets in the US and Sony Ericsson evidently doesn’t want consumers confusing the two organisations—which is hardly surprising. When the Informer learned of this, he realised he couldn’t remember what the Sony Ericsson logo looked like. It’s not the most memorable badge in the game. And, truth be told, it doesn’t really look much like the Clearwire logo, beyond being a cirle with some green on it. Still, lawyers have to eat as well.

Sony Ericsson revealed this week that it has now turned in four consecutive profitable quarters. It was a close run thing, with the firm posting just €8m for the final quarter of last year. Still, that’s a lot better than Q409, when it posted a loss of €167m. Full year profit for 2010 was €90m, compared to 2009 when the company rather inconveniently misplaced €836m.

President and CEO Bert Nordgberg described 2010 as “a turnaround year” for Sony Ericsson, and attributed improvements in the firm’s fortunes to its “shift towards an Android-based smartphone portfolio.”

Sony Ericsson’s determination to focus on quality in the higher end of the market appears to be paying dividends. Average selling price for the quarter was up year on year, from €120 to €136, and also for the full year, from €119 to €146.

But the firm’s new direction also necessitated a thinning of its portfolio as it stripped out lower end products, causing shipment volumes to drop to 43.1 million for the year, down from 57.1 million in 2009. Quarterly shipments were down to 11.2 million from 14.6 million year on year and, while there was a sequential improvement, it was only eight per cent; something Sony Ericsson attributed to “a lack of new product launches during the quarter”.

If you want to buy a high end phone from US carrier Sprint, you’ll be paying a $10 surcharge from February, as the firm looks for a way to cover network investment costs created by greedy data hogs. Sprint’s going for a simpler take on things by just whacking a one-off charge on the kind of handsets that contribute to the problem, rather than messing around with usage caps and allowances.

Three of Northeast Asia’s largest carriers – Japan’s NTT DoCoMo, China Mobile, and South Korea’s KT, have established a broad business partnership focused on international roaming for voice and data services. A business cooperation committee to be set up by the three companies will consider opportunities for collaboration, with a focus on the rising popularity of smartphones. Specific areas to be looked at include international roaming, enterprise services, LTE and other network technologies, smartphones and common platforms.

China Mobile and South Korea’s SK Telecom were also focusing on LTE infrastructure trials, tapping Japanese vendor NEC. The vendor has formed an alliance with China’s Wuhan Research Institute of Post and Telecommunications (WRI) to develop and field test both FDD and TDD flavours of LTE kit. China Mobile intends to start deploying LTE later this year.

Over in Russia, communications minister Igor Shchyogolev, has said that LTE licenses could be tendered in the second half of this year. Getting 4G services deployed is an entirely different matter, however, as the spectrum in question is presently occupied by the Russian military—and they’re not known for their pliancy. So the country’s operators will have to strike a separate bargain with the armed forces and ask them, probably very politely, to vacate the frequencies.

There wasn’t much politeness between Russian operator VimpelCom and investment partner Telenor however, with the pair still slugging it out over VimpelCom’s proposed acquisition of Wind Telecom, part of Egyptian billionaire Naguib Sawiris’ Weather Investments vehicle and owner of Orascom.

VimpelCom’s supervisory board has given its final approval for a merger with Wind, but Telenor has said that it will try to stop the transaction from being completed. “We did not support the original proposal because it did not make strategic or financial sense,” said Telenor spokesman Dag Melgaard. “As a result of this transaction, VimpelCom minority shareholders’ existing 18.6 per cent voting stake will be diluted to 12.9 per cent, despite their having an economic stake of 16.3 per cent,” he added.

Should the deal go ahead, VimpelCom will own, through Wind Telecom, 51.7 per cent of Orascom Telecom and 100 per cent of Wind Italy, creating the world’s sixth largest mobile carrier by subscribers.

Partnerships were also going pear-shaped for Vodafone in India this week, where local partner Essar has thrown a strop, claiming that the Big V is trying to take full control of the Indian operator on the cheap. Vodafone owns the bulk of the company – 67 per cent – following a merger between the two in 2007. However Essar has a put option enabling it to sell out of the venture and bag as much as $5bn for the stake. But a JP Morgan report this week reckons Essar’s stake is only worth around $2bn. Now the pair are debating the best way to find a fair valuation of the asset, with as much as $3bn at stake.

And finally something that has nothing to do with wireless, except for the fact that the Informer heard it on the wireless this morning. It has emerged that the reason the UK’s shadow Chancellor resigned this week is because his wife has been having it away with one of the policemen assigned to the couple as security.  Now that’s what the Informer calls under-cover police work! It gives a whole new meaning to the phrase: “I hope you used protection”.

Boom boom!

The Informer


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