a week in wireless

Paranoid Android

In The Hitch Hiker’s Guide to the Galaxy Douglas Adams’ android Marvin suffered from acute depression since his brain was reputedly the size of a planet and thus the menial tasks of existence only ever occupied the tiniest fraction of his vast intellect. It’s funny how life sometimes imitates art isn’t it?

The world got a first look at Google’s very own Marvin earlier this week. The G1, running on the Open Handset Alliance’s Android platform, will be launched in the US under a partnership with T-Mobile USA. You’ll doubtless have read all about it by now, but just in case you haven’t, here are the basics: it’s being manufactured by Taiwanese handset firm HTC, it has a touchscreen and trackball as well as a slide out Qwerty keyboard, 3G HSPA, EDGE and wifi provide the connectivity along with GPS, while the camera weighs in at 3 megapixels. And it comes packed with Google apps including Google Maps with Street View, Gmail, Google Talk and YouTube, as well as a full HTML web browser and Amazon’s MP3 store. Phew.

The gadget hits shelves in the US on October 22nd but consumers are able to pre-order the device already. It will cost $179 with a two-year voice and data agreement. Europeans will be able to get their mitts on the gadget less than month later, with the G1 to be available in the UK in November, and across Germany, Austria, Czech Republic and the Netherlands in the first quarter of 2009.

Predictably, the blogosphere is split fairly evenly into love it/hate it camps. For the record, the Informer thinks it looks like a cross between the Photoshoped ‘iPhones’ we all saw before Apple launched its terminal and a Nintendo DS. It does also bear more than a passing resemblance to the T-Mobile Sidekick, but given its heritage, that’s hardly surprising. Still there’s no accounting for taste is there? The Informer loves Marmite and Mrs the Informer can’t stand the stuff.

Google founders Sergey Brin and Larry Page probably couldn’t give a monkey’s what the Informer thinks though, they’re so rich and famous now, they’ve reached the stage where they think it’s OK for grown men to rollerblade around wearing business casual. What’s the betting we’ll see Steve Jobs on a Segway before the year is out?

Staying with handsets, Sony Ericsson has followed Nokia’s lead (the cruel among you might argue the fifth placed terminal JV has little option) and announced the forthcoming availability of an unlimited music phone. PlayNow Plus, will go toe-tappin’ toe-to-toe with Comes With Music in the fourth quarter.

It’s difficult to pinpoint exactly when SE lost its way. The Cyber-Shot and Walkman brands seem as strong as ever, but hardware alone is not enough these days. The firm’s latest marquee gadget was manufactured by up and coming Taiwanese vendor HTC and now it’s ripping off Nokia’s unproven business model of gifting consumers with a limitless music downloads which they can keep after their contract expires.

The Informer is not privy to the deal that SE has struck with the record labels, but if it’s anything like the deal Nokia is rumoured to have sealed, SE might well end up paying out as music hungry punters start a download frenzy. Guillermo Escofet, editor of Informa Telecoms & Media’s Mobile Media, says an internal source at Nokia suggested that the Finnish giant was paying each record label a royalty of $12-15 per handset sold, this covers just 35 downloads per user, beyond which Nokia will be paying the labels $0.60-0.70 for each download. “If the source is right, Nokia must be hoping that people don’t download too many tracks, or it’s likely to lose a lot of money,” points out Escofet.

Apparently, Nokia has done the math though. It reckons your average punter downloads just 35 tracks per year…um, can anyone out there think why we might expect that figure to ramp up faster than Evel Knievel when punters can help themselves at the musical buffet of plenty? Anyone? The Informer will let Escofet explain: “On subscription-based FTD services, in which people are normally given unlimited access to music catalogues for a flat fee per month, the typical download rate is about 30 tracks per month, after the novelty wears off. In the first month or so, the number of downloads tends to be much higher.”

Nokia, of course, might be able to afford what could turn out to be a bit of loss leader, while SE cannot. The firm lost its fourth place spot earlier in the year to LG and has been slipping down the handset league table with the same sort of inevitability that saw Motorola lose its second place spot to Samsung. The rise of the Koreans seems inexorable.

Over at KTF though someone’s taken the party out of Seoul. The chief of the country’s second placed wireless carrier has been arrested and charged with accepting bribes. Local press reports state Young-Chu Cho received bung payments amounting to more than $2m from equipment suppliers.

Staying in the Far East, Japanese operator Softbank will score a world first in January, when it becomes the first service provider to launch 3G femtocells in a commercial capacity. The carrier will be using kit provided by Ubiquisys.

The femto firm’s CEO, Chris Gilbert, quite literally had this to say: “The Japanese market has always led the world in mobile technology so it comes as little surprise that SoftBank is the first operator to deploy 3G femtocells. By quite literally turning their mobile network inside out, they are in the process creating a mobile broadband network with vastly more capacity and coverage than anything seen before.”

The Japanese market led the way with i-mode and also features the world’s only data-only mobile VoIP carrier. Neither of which innovations took off elsewhere. So it’s a bit early to use Japan as a benchmark for the success of femtocells. Still, with disruptive players like Softbank and Sprint backing the technology, it would be unwise to write it off, although in the rest of the world, the debate rages on.

Number crunchers at Informa this week predicted that by 2013, almost 60 per cent of mobile data traffic will be generated by users from the comfort of their own sofa. But while new gadgetry, sexier apps and cheaper tariffs all mean more data usage, the carriers also have to address the problem of providing capacity to meet this demand.

3G waves aren’t known for their ability to go through walls and users in busy urban areas will probably have to fight for capacity with everyone else in the same cell. But this is where femtocells come to the rescue. Informa reckons that by 2013, femtos will help operators offload up to eight per cent of total mobile traffic to fixed networks via the end users’ broadband lines. That’s assuming femtos become commonplace within the next five years.

Not so fast, say the crystal ball gazers at Ovum. “In general we would advise operators to hold back on deploying femtocells until standards-based equipment becomes available, unless the need to be particularly disruptive in the market is their overarching market strategy,” warned Steven Hartley, senior analyst with the research firm.

Hartley believes that until standards-based kit is available, Softbank and Sprint’s end user devices will be saddled with uncompetitive pricing because the ops won’t be digging into their pockets for heavy subsidies. The fact that mobile operators might also be using someone else’s pipe to carry their traffic also raises numerous quality of service issues, while the lack of standards means a greater risk of technical implementation issues, and resulting customer problems.

It’s a bit of a chicken and egg situation, says Hartley. The technology and costs are not where they need to be to make femtos attractive mass-market consumer propositions, but until volume orders are placed the costs cannot fall to make them a mass-market proposition. Until then, femtos are stuck in business model limbo.

The Informer had lunch with a big name in the consultancy and network optimisation space this week, and much of the main course was spent chewing over the business case for femtos. The Informer’s lunchtime companion reckons there isn’t one, at least not yet anyway. Even in the US, where coverage is notoriously patchy, the consultant said the best solution is to pop down to Radio Shack and pick up a repeater for about half of what a femtocell would cost. So it looks like the jury is still out on whether femtos are in the running to be a disruptive technology.

Speaking of Sprint-backed disruptive technologies, the certification of Chinese vendor Huawei’s 802.16e USB dongle by the WiMAX Forum has been described by Disruptive Analysis’ Dean Bubley as an “industry milestone” and should give the mobile WiMAX market a significant boost in the near term.

“Given their track record of ramping up volumes, plus their enviable record at signing up distribution channels, the advent of the Huawei device signals to me that WiMAX is due to have one of its periodic upswings in confidence over the next few months,” said Bubley.

WiMAX has got a long way to catch up though. According to the analysts here at Informer Towers there will be four billion mobile subscriptions, worldwide, by the end of this year. The Informer wonders who the four billionth mobile subscriber will be. When he or she walks into the phone shop to become officially ‘connected’ will lights flash and claxons hoot? Will he or she be greeted at the door by a beaming Rob Conway and Craig Ehrlich, from the GSM Association, and have all expenses paid tickets to the Mobile World Congress thrust into their unsuspecting mitts?

Probably not, Rob ‘n’ Craig are likely to be too busy with the Association’s latest initiative. They’ve got one in the pipeline apparently. The Informer doesn’t know exactly what it is yet, as it’s not being officially announced until next Tuesday, but the focus is on preinstalled 3G, sorry, ‘mobile broadband’, in laptops.

The word from those in the know is that the announcement will be truly “surprising” and brings together the operator and laptop manufacturer and OEM industries. So what’s the big deal? Perhaps the GSMA will be unveiling a natty little “GSMA certified mobile broadband ready” sticker, which will be put on said devices. A bit like Intel Inside but …er definitely not wifi or WiMAX, OK.

Those WiMAX guys have already got their stickers, although they’re a bit touchy about where the WiMAX Forum Certified badge can go. It can’t, for example, be used on “promotional articles such as bumper stickers, coffee mugs, tshirts, baseball hats, flying disks, tie clips and the like.” Big lumps of iron only folks.

If the GSMA chiefs aren’t busy attaching 3G Inside stickers to computers in the run up to Christmas maybe they’ll be sticking pins into their Viviane Reding voodoo doll. The pesky EU killjoy has been sharpening her axe again this week, proposing to cut the price of roaming text messages by as much as 60 per cent by next summer.

The Brussels-based bureaucrat wants EU citizens travelling in other EU countries to pay no more than Eur0.11 per SMS compared to the current EU average of Eur0.29. A deadline of July 1st, 2009, has been set for prices to fall.

The Informer’s Teutonic cousin, Karl-Heinz Rummermonnger, was in town this week. With Orascom expressing an interest in Austrian operator Telekom Austria, Rummermonnger reckons Telekom’s main shareholder, the government, is now considering offloading a stake to Naguib Sawiris, with funding to come from the Orascom head honcho’s private equity business, Weather Investments.

Staying in Austria, the carrier One –which is joint owned by France Telecom and a private equity firm – changed its brand name to Orange. The Austrian operator has become the second company in as many weeks to join the Orange brand, following the recent launch of operations in Kenya.

Down in South Africa, meanwhile, Rummermonnger reckons Vodafone is on the verge of a deal with Telkom, with an eye to taking a larger stake in the Vodacom mobile operation. At present, Big Red holds 50 per cent of Vodacom, but has long been keen to increase its stake and has come close on occasion, although talks with Telkom always seem to break down.

It now looks like Telkom might be willing to sell Vodafone a further 12.5 per cent, following the break down of merger talks between Telkom and Nigerian mobile operator Globacom, owned by business tycoon Mike Adenuga.

In other M&A news United Arab Emirates operator Etisalat says it has struck an agreement to buy 45 per cent of Indian mobile operator Swan Telecom for $900m in cash.

Nine hundred million dollars, in cash. Wow. That’s quite the bundle, imagine how long it would take the cashier to count it out. “How do you want that sir?” “Oooh, tens and fives please.” The Informer’s crossing his fingers, his toes and his eyes today because it’s a Euromillions Lottery roll-over of £100m and his £2 stake in the office syndicate could well result in next Friday’s A Week in Wireless being written from a yacht in the Maldives.

It’s nice to dream, it could be you.

Take care

The Informer


  1. Avatar CAT 26/09/2008 @ 4:16 pm

    SE may be intrested in Gaming and the fact, that G1 looks pretty much like competitor Nintendo‘s GameBoy or BrainTrainer sure adds some food to that thought.

  2. Avatar CAT 26/09/2008 @ 4:23 pm

    And of course the fact, that T-Mobile “mothership” Telekom is still mostly owned by “Germany’s Dumbest Bank” (according to BILD) KfW and that T-Mobile has also spied upon other key stakeholders in Germany and (most certainly) the EU does not make the Paraniod Pink Panther any better here…

    Biggest question remains, how a Google Account required to get your phone number at all (see iPhone) then is securely and certainly DECOUPLED from that same Google Account.

    Otherwise I am not sure, if people would have to be more scared about T-Mobile or Google spying on them (or maybe both combined?!)

    Maybe in the US regulators and people don’t give too much about that, but privacy and data protection laws in most European countries are at least on paper much stronger…

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