a week in wireless

Lay off of my blue suede shoes

If you’ve recently bought a pair of new work shoes, you should be wearing them in right about now. Just over two weeks to go people, and everybody remembers getting caught out just once, turning up to the Fira in a new pair of one and twos, then having their feet cut to ribbons over the next few days. Nokia CEO Stephen Elop is still settling into OPK’s shoes but if expectations are to be realised he will be looking to put his own stamp on the company in the days before Barcelona.

On Thursday the Finnish giant reported a downturn in fourth quarter net profit, from €948m in the final quarter of 2009 to €745m in the same period in 2010. Net sales for the period were up however, from €11.98bn to €12.65bn. Nokia’s handset unit has been swimming against the tide of late, with each and every noise it makes drowned out by deafening enthusiasm for anything to do with Apple or Android. But if the crystal ball gazers are correct, Nokia may well be basking in the limelight again come February 11, the firm’s financial and strategic briefing day.

Elop, who is an ex-Microsoft man and clearly believes in the value of software, is expected to announce a new operating system strategy incorporating with Android, Windows Phone, or both. Some pundits reckon the post-results conference call on Thursday was laden with hints to this effect, as Elop acknowledged the “war of ecosystems” and the need “to build or join a competitive ecosystem.” But let’s not forget Meego, the interbred Linux architecture from Nokia and Intel that is supposedly designed for high end devices. It’s been well over a year now and there’s still no Meego devices to be seen, so the platform is overdue an outing, but there’s also the great danger of such an announcement underwhelming completely.

According to Informa analyst Malik Saadi: “Nokia has already revealed that it will use MeeGo to tackle competition in the tablet and high-end smartphone markets. But could MeeGo on its own enable Nokia to regain market share in these segments? A straight answer to this question is NO!!”

The Informer doesn’t believe the industry will be waiting for that one with baited breath as it will all have been expelled during the unveiling of Android 3.0, also known as Honeycomb – a new version of the Android platform for tablets, which claims to introduce a new “holographic” UI theme, whatever that is.

Japanese vendor Sony was raking in the “ooohs” and “aaahs” this week when it showed off its latest toy – the PlayStation NGP, successor to the popular PSP portable console. It had been rumoured that Sony Ericsson would be finally unveiling the much anticipated PSP phone during MWC, but it may be that Ericsson has little to do with this venture and the NGP is it. After all, it does boast both wifi and 3G connectivity, and a five inch screen, putting it on a par with the Dell Streak. What sets it apart from anything else though is the four core ARM Cortex A9 processor. It’s a real beast of a machine.

Swedish kit vendor Ericsson benefited however from ongoing improvements at its handset joint venture, reporting a 172 per cent year on year increase in annual net profits, which hit €11.2bn, compared to €4.1bn for 2009. For the fourth quarter, net profit climbed €504 per cent year on year to €4.4bn on the back of better earnings from Sony Ericsson. But it was a different story at chip venture ST-Ericsson, where operating loss increased sequentially to $119m in the fourth quarter mainly due to higher operating expenses as well as price erosion due to ongoing legacy product transition. However, the chip vendor also saw $13m in savings as it completed its restructuring plan.

Ericsson CEO Hans Vestberg tried to reassure investors: “In 2010, mobile broadband subscriptions increased 30 per cent to approximately 500 million, still only representing some ten per cent of total mobile subscriptions. We expect the strong uptake for mobile broadband to continue in 2011, with the number of mobile broadband subscriptions expected to double and hit one billion already this year. Mobile data traffic is forecasted to almost double annually over the coming years.”

Also speaking in soothing tones was ex-Orange man Sanjiv Ahuja, the chief of US wholesale debutante carrier Lightsquared, who was seeking to address the country’s communications authority’s concerns that the LTE and satellite-based network may interfere with GPS services. In a letter, Ahuja assured the FCC that “there will be no interference,” in order to keep investigation at bay and its rollout plans on track. Lightsquared is currently running trials in Baltimore, Denver, Las Vegas and Phoenix and plans to launch in the third quarter.

If you recall, industry bodies, including the National Telecommunications and Information Administration and the Department of Defense, Transportation and Homeland Security, recently raised concerns that a modification of Lightsquared’s licence to allow for terrestrial as well as satellite offerings will cause interference with existing services. The underlying fear of course was that Lightsquared would put minimal effort into its satellite operations and try to enter the US as a new LTE carrier primarily.

The smooth talking paid off, with the FCC granting Liqghtsquared the requisite waiver on Thursday.

Speaking of ex-Orange men, the chief of electronic payments and transactions at France Telecom’s Orange group has jumped ship, to head up the mobile unit at MasterCard Worldwide. Mung-Ki Woo is joining the company as group executive for mobile, taking on global responsibility for innovation, commercialisation and development of strategies to support mobile payments. Woo was until recently VP of electronic payments & transactions at Orange, where he led the development of the Orange Money m-payment program across Africa, as well as the carrier’s contactless offerings in Europe. But now he’s off to Mastercard to work his Mung-Ki magic.

There’s clearly some fascination with contactless payments at the moment. Everything Everywhere, the parent company of T-Mobile UK and Orange UK, is panning to roll out a commercial contactless mobile payment service by early summer. The initiative builds on last year’s partnership between Orange and Barclaycard, which introduced a system based on NFC, in the form of a credit card rather than a phone. But going forward, Everything Everywhere will be working with handset manufacturers to incorporate technology that will allow users to pay for goods and services with their mobiles at more than 40,000 retailers, by simply waving their mobile phone against a contactless reader.

The launch proposition will focus on an industry backed, SIM-based approach to payments ensuring enhanced security for customers, as well as to initially provide a single point of customer care contact. MasterCard will provide the payment capability for the contactless mobile transactions.

Hot tip: Expect a similar announcement from another UK operator next week.

Sticking with the UK, mobile operator O2 made a bold move on Wednesday, promising free wifi for UK users, regardless of the provider they are with. As one of the world’s iPhone pioneers, O2 has struggled to support the growing demand for data services in the wake of the smartphone boom and this latest ploy is a clear effort to shift usage off the cellular network and onto the fixed.

The carrier is aiming to create a scaled wifi platform that will comprise at least double the combined number of premium hotspots currently offered by its partners—BT Openzone and The Cloud—by 2013. O2’s new business development director Tim Sefton said: “Only 20 per cent of people who have access to free public wifi on O2 tariffs actively use it despite the majority of devices being wifi enabled.”

Yet traffic offload is not the only motivation for O2 to roll out its own wifi network. Shortly after the announcement, British broadcaster BSkyB confirmed its acquisition of the Cloud, giving the firm ownership of over 5,000 public wifi locations across the UK.  Sky said it would use the acquisition to support its mobile activities, allowing users of Sky Anywhere to access to content on multiple devices.

An O2 spokesman told the Informer that the real onus for its wifi initiative would be on the partnerships it would form directly with venue owners. “We recognise that this business model will enable us to create a number of strategic venue partnerships, of benefit to O2 and our also our customer base. From the point of view of our venue partners, the strength of the relationships lies on the fact that O2 Wifi will be open to everyone, not just O2 customers,” O2 said.

Perhaps the key here is the carrier’s scope for integrating O2 Wifi with the capabilities afforded by its advertising network O2 Media and pre-pay cash card offering O2 Money. Giving away free wifi access to all comers would give O2 the opportunity to directly harvest lots of customer data, which it could then use to better target its advertising. And with mobile payments, especially those of the NFC variety, looming large on the operator agenda right now, having a mobile money strategy in place makes sense too.

Unfortunately though, all this hype about the impressive click through rates from mobile advertising seems to be somewhat overblown. Research released this week and conducted by Harris Interactive on behalf of mobile ad firm Pontiflex in December 2010, found that 47 per cent of mobile app users click on mobile ads more often by mistake than they do on purpose. Sausage fingers beware!

Take care

The Informer

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