a week in wireless

New broom

What do Newcastle United FC, the population of the United States of America and Alcatel Lucent have in common? They’ve all been looking for leaders, that’s what. And while our stateside cousins have plenty of time to make up their minds and the board at St James’ Park will probably just have to take whatever they can get, Alcatel Lucent this week appointed Ben Verwaayen as CEO. He’ll be filling the hole shortly to be left by Pat Russo, who announced in the summer that she’d had enough, after presiding over a Q208 loss of more than $1bn.

Verwaayen knows a thing or two about telecoms. He ran BT for six years, leaving in June this year and he’s got previous at Lucent, where he was once vice chairman of the board. He also did nine years in charge of KPN’s telecoms business in his native Netherlands. So if anyone can improve the fortunes of Alcatel Lucent, you might think, it will be Verwaayen. After all, he was instrumental in the turnaround at BT.

But that’s really the question, isn’t it. It’s not whether Verwaayen can do it. It’s whether it can be done full stop. Verwaayen will be joined by Phillippe Camus, who takes over as chairman from Serge Tchuruk on October 1st.

In other news this week, Alcatel Lucent was awarded the WiMAX Forum Certified seal of approval for its Compact Base Station at 2.5GHz.

Mobile WiMAX made its debut in Russia this week through a pilot in Moscow and St Petersburg being run by a company called Scartel. For the early stages of the pilot the firm has deployed 150 base stations in Moscow and 80 in St Petersburg, all supplied by Samsung, and will offer service to 2,000 users. By the end of the year, though, the carrier expects to have 1,000 base stations in place, offering population coverage of more than 20 million people across the two cities.

The proof of US carrier Sprint’s WiMAX pudding is only weeks away now, with the launch of Xohm scheduled for this month in Baltimore. Historically, Xohm has been no respecter of deadlines, but this week Sprint announced a group of partners that will provide location-based and personalised services over the network. At launch, a Xohm portal will offer location-based content from various brands, including: Google, uLocate Communications, Yelp, Eventful, Topix, Navteq, AccuWeather, Openwave Systems, and Autodesk.

Staying in the US, analyst firm Comscore has reported that strong growth in 3G uptake has brought the States level with Western Europe on penetration terms. Comscore reckons 3G penetration is now 28 per cent on both sides of the pond, as the number of US 3G users leapt by 80 per cent over the past year to 64.2 million. The only individual major European countries exceeding the US in 3G penetration are Italy and Spain where penetration now stands at 38 and 37 per cent respectively. The slow kid of Western Europe’s 3G scene is France, with penetration of just 17 per cent, said Comscore.

This is all good stuff but analyst firm Ovum threw the spanner of realism into the 3G works this week, reminding the industry that ‘broadband’ is a relative term. The firm reckons that fixed line substitution is a blind alley for cellular carriers looking to market their mobile broadband services in Western Europe and they would be better off focusing on complementary prepaid offerings. The kinds of speeds offered by fixed broadband in the region and the high penetration of these services makes head to head competition impossible, the firm said.

There are some niche markets where mobile solutions are more suitable, like habitually nomadic consumers (the MVNO that serves the Gypsy community, surely that’s a business just waiting to happen), or those in short term accommodation (ditto people who’ve just got out of prison). But this won’t be enough to sustain the mobile players.

They should look instead to position their broadband services as a complement to domestic fixed offerings. While long term contracts have appeal for operators in that they help guarantee future revenues, the preferable option, said Ovum, would be to offer prepaid solutions that allow consumer to use mobile broadband only as and when they need it.

The results from Europe’s largest Near Field Communications (NFC) trial were put out by Nokia and O2 this week, with the headline statistic that 78 per cent of users want contactless services on their mobiles – if they were available.

The trial ran for six months and concluded in May this year. It saw 500 users given Nokia handsets loaded with credit card accounts and Oyster (London’s contactless public transport pass) services. Oyster proved the most popular application, with 89 per cent of trialists saying they’d like to keep the functionality on their handsets.

Nokia even went so far as to claim that having Oyster on their phones actually induced trialists to use public transport more frequently. Just over a fifth of trialists reported an increase in their public transport journeys during the trial period. This may well be the case. But unless these people were asked, specifically, whether they increased their number of journeys just because they had an NFC handset, then it seems to the Informer that such a claim is a little far-fetched. It would take a lot more than NFC to get him on the tube any more than is absolutely necessary.

Nokia also launched its ‘Comes with Music’ platform this week, as UK retailer Carphone Warehouse began taking orders for handsets with the platform pre-loaded. Nokia announced the subscription service – which unlike some rival offerings allows users to keep their music – in December 2007 and has been eagerly signing deals with leading record labels such as Universal, Warner and Sony BMG.

Meanwhile rumours were circulating towards the end of the week that Nokia is set to announce compatibility for the BBC’s iPlayer on its latest top end bauble, the N96.

Talking of baubles, Apple iPhone users will be able to circumvent cellular networks to make calls thanks to a voice over internet protocol app supplied by Belgian phone firm Nomado Telecom.

The tech provider claims callers could make savings of up to 80 per cent connecting to the internet via the terminal’s wifi connection. Calls made via Nomado’s cellular VoIP service start from just E0.025 per minute to other mobiles and are free between fellow Nomado users. Music to the operators’ ears this ain’t.

In an interview with one of the Informer’s chums at Mobile Communications Internationa,l Hugh Roberts, a senior strategist with Patni Telecoms Consulting warned that mobile operators need to embrace multi-platform services rather than seeing this as a competitive threat. “With the advent of multi-mode handsets, the combination of VoIP routed not by the cellular infrastructure but via wifi/wimax/etc access will be appealing to customers, notably those who already sit in cafes using VoIP on their PCs,” he said, adding: “This isn’t a VoIP issue per se, but third party VoIP will be one of the services singled out by MNOs as a battleground in their fight to maintain outdated strategies and business models.”

Operators need not panic just yet over the perceived threat of VoIP. Nomado notes that VoIP technology isn’t quite ready to take over. The VoIP providers are unable to offer a static cell phone number to their users claims the firm. That means that even if users switch to their service, their cell phone number will remain the same and if their provider charges them for receiving calls over their network, those charges will remain. Nomado’s VoIP app is already available on a range of Nokia, Samsung, HTC and other smartphones.

Finally, kit vendor Ericsson this week announced a deal with Vietnamese carrier Hanoi Telecom which the firms say is the largest single telecoms deal that has ever been struck in the nation.

Worth $450m, the deal is built around a three-year managed services contract that will see Ericsson assume complete control of the management, operation and network design of HT’s mobile network. During this time Ericsson will also oversee the migration of HT’s network from CDMA to GSM/EDGE. Commercial launch is scheduled for the end of 2008.

Informa Telecoms & Media has forecast that the managed services market will be worth $18.46bn by 2012, and Ericsson is the clear leader in the sector. In March this year the Swedish player claimed to be supplying service to 185 million end users across the world through its managed services portfolio. The firm’s Global Services unit currently accounts for one third of Ericsson’s total revenues.

And that’s about the size of it.

Take care

The Informer

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