a week in wireless

Teutonic shifts

It’s been a big news week for German incumbent operator Deutsche Telekom, not least with the announcement that CEO René Obermann is going Dutch at the end of the year. Obermann, the Pep Guardiola of the telecoms world, is off to ply his trade in the Netherlands, at Dutch cable operator Ziggo. We already knew Obermann’s time at DT was coming to an end, with the firm announcing last December that he would leave at the close of 2013.

Ziggo’s particular stardust comes from a 98 per cent optical network that covers roughly half of the Netherlands, with TV, fixed telephony and broadband its core offerings. The firm launched a data-only virtual mobile offering on the KPN network in 2011, indicating at the time that it would like to broaden that offering to voice and other services.

Perhaps Obermann’s arrival will herald a rejuvenation in this space. Ziggo pulled out of last year’s Dutch spectrum auction when the prices got too hot. In a statement last December, Ziggo said it was still planning to expand its mobile offering using previously acquired 2.6GHz spectrum.

Recently Obermann has positioned DT at the heart of some key operator sector initiatives. First there was the Firefox OS launch on the eve of this year’s MWC, at which he was present with a number of his peers. Interestingly Obermann was the only operator CEO at the launch to play down the benefits of the new OS for operators, stressing to the audience that “this isn’t about us, it’s about Mozilla”. His fellow CEOs, on the other hand, pressed home the perceived advantages that the new OS will give operators in the smartphone ecosystem.

Speaking of strengthening the operators’ position, this week it was announced that DT will launch services based on the GSMA-led Joyn initiative to its domestic users. Vodafone has already launched the rich communications solution in Germany and GSMA said Telefónica (O2) will follow suit later this year, making it available to more than 80 per cent of German consumers.

DT worked the data protection angle in its launch statement, with a little dig at the OTT services that Joyn is being positioned to combat. “With Joyn—in contrast to the procedure with other messengers—a device’s address book always remains on the local device,” the operator said. “No copies of it are uploaded to globally distributed servers for open-ended storage. When Joyn is used via a public wifi network, initial portions of messages are not transmitted in encrypted form, but Deutsche Telekom plans to eliminate that limitation by summer 2013.”

And public wifi networks are very much on DT’s mind at the moment, with the operator also announcing a deal this week with Spain’s Fon, which curates private domestic wifi hotspots and peruades their owners to make part of their bandwidth available to like-minded consumers in return for membership of the commune.

DT currently has more than 12,000 of its own hotspots but plans to grow that number by 2.5 million by 2016 through its Fon-enabled service, which will be branded WLAN TO GO, which comes across as a bit shouty, with all those capital letters.

Later in the year DT will expand its Fon network to its properties in Bulgaria, Greece, Romania, Slovakia and Hungary. It’s another good deal for Fon, which is starting to look like a company where thinking was way ahead of the curve.

Credit where credit is due, you might say. And credit is clearly due to Telefónica, which has secured a $1bn vendor financing deal from Sweden’s Ericsson.

The operator has signed a jumbo export credit facility with Société Générale Corporate & Investment Banking (SG CIB) as agent and mandated lead arranger (MLA) with three other MLAs: The Bank of Tokyo-Mitsubishi, BNP Paribas Fortis and Santander. An MLA generally has the leading role in this financing stage of a project; often underwriting the financing.

The facility is supported by Swedish authority EKN as export credit agency and the Swedish Export Credit Corporation for the funding. It’s not just the Chinese vendors that can bring hefty finance to the table, clearly.

Those Chinese vendors are likely to do fairly well out of LTE deployment in their domestic market, it seems reasonable to suppose—if the licences are ever awarded, of course. This week local news sources reported that the country’s 4G spectrum auctions will take place before the end of this year. Although it only seems like yesterday they got around to awarding 3G spectrum.

Sticking with local sources, the Shanghai Daily reported this week that China’s Ministry of Industry and Information Technology has issued a white paper arguing that Google enjoys “too much control” over the market’s smartphone sector. The Shanghai Daily quoted the white paper as concluding that: “Our country’s mobile operating system research and development is too dependent on Android. While the Android system is open source, the core technology and technology roadmap is strictly controlled by Google.”

Google also stands accused by the MII of discriminating against Chinese firms attempting to develop their own smartphone operating systems. Android had just shy of 70 per cent of the smartphone market in Q4 last year, according to Gartner, and China is the world’s biggest smartphone market. How Google responds to the MII remains to be seen, but it could be quite an arm wrestle.

The handset manufacturing business that Google acquired from Motorola, meanwhile, shows no signs of improving health. This week it was announced that a further 1,200 jobs would go at the unit, which represents around ten per cent of the workforce. 4,000 jobs have already gone since the unit changed hands in 2011.

In a bid to turn things around, Google has hired Guy Kawasaki, a former chief evangelist at Apple, to advise Moto on product design, UI, marketing and social media.

One of Kawasaki’s key skills appears to be keeping a straight face, with Google quoting him as saying: “Motorola reminds me of the Apple of 1998: a pioneer in its market segment, engineering-driven, and ripe for innovation.”

He continued: “I believe that great products can change everything. For example, the creation of the iMac G3 – the Macs that came in colours such as Bondi, Strawberry, Blueberry, Lime, and Grape – was a pivotal event for Apple”

Far be it from the Informer to argue with a man of Kawasaki’s pedigree—but that’s a strange example to pick when you’re focussing on how “engineering-driven” the company to which you’re comparing Apple happens to be.

The smartphone market is set to outstrip the feature phone market for the first time this year, according to IDC. The research firm’s Worldwide Quarterly Mobile Phone Tracker forecasts that device manufacturers will ship 918.6 million smartphones this year; 50.1 per cent of the total mobile phone shipments worldwide.

Back to Apple for a moment, though, and the Informer was chatting to Telenor Norway CEO Berit Svendsen this week, who revealed that she’s getting tired of waiting for Apple to offer wider LTE support in Europe.

This week, the operator switched on its LTE network in the northern district of Tromsø, in the 1800MHz band. However, the iPhone 5, which supports LTE on the same band in the UK and Germany, is not compatible with Telenor’s latest deployment. LTE is not supported throughout the rest of the country either, where the operator has deployed LTE using the 2.6GHz spectrum band.

“We are still waiting for Apple to make some small changes to the iOS so that the phone works on our 1800MHz frequency up in Tromsø,” Svendsen said. “They are not ready; we have been asking them for a long time. They have been saying that they are going to fix it, but they haven’t.  We asked them half a year ago – I sent a mail to them, they have been responsive but they still haven’t fixed it.”

Never mind data, though, this week international operator Airtel, headquartered in India but with a significant footprint in Africa, was innovating in voice. The firm’s African arm has begun deployment of HD voice (HDV) services, beginning in Rwanda, Kenya and Malawi. The firm said that these deployments are the “first step” in its ambition to roll the technology out across its entire African footprint.

In a release issued Tuesday, Airtel described HDV as “the most significant improvement in voice communications in the past two decades,” with chief marketing officer Andre Beyers adding: “Surveys confirm that customers place a high value on HD Voice.”

But HDV remains a relatively niche technology in commercial terms, with the GSA reporting in late January this year that only 61 mobile networks in 45 countries had deployed the technology.

If there is any reticence among the operator community it may be because, while the improvement to the end user experience is clear to anyone who has made an HDV call, there is no evidence that any value that users perceive will translate into a willingness to pay a premium for the technology.

In a survey of more than 100 operators conducted by Telecoms.com Intelligence in January this year, just 26.5 per cent of respondents said they believed that consumers would up their spend for HDV. More positively, 61.4 per cent of respondents felt that HDV will provide a competitive advantage over OTT communication providers and 53.8 per cent said they believe it will be a key service for the enterprise market.

The survey also revealed that a number of operators are planning to introduce HDV in tandem with or after they have brought Voice over LTE services to market, although HDV does not require LTE in order to function. 34.9 per cent of respondents said they plan to launch HDV at the point of VoLTE deployment, while a further 29.3 per cent said they would launch it in the 24 months following.

Handset penetration is a key factor in uptake; as Airtel pointed out both parties on a call need to be on HDV-compatible handsets in order to get the full benefit of the technology. GSA said in February that there were 160 devices in the market (including products for consumers and specialist professionals such as broadcasters) from 16 suppliers.

Airtel said it would make further HDV service launch announcements in Africa during the course of 2013.

Finally, in news just in this morning, the champagne corks are popping at network planning specialist Arieso, which has been snapped up by JDSU for $85m. Arieso has developed a solution that uses data from user device activity to chart the geographical areas of the network that require optimisation. JDSU said it would absorb Arieso’s product line to boost its portfolio in helping operators to address the rapidly growing deployment of small cells and challenges associated with limited spectrum capacity.

The RAN optimisation and self-optimised networks (SON) markets are expected to grow from approximately $700m today to more than $1bn by 2015 and Arieso’s bookings for calendar 2012 were approximately $27m, the company said.

Listed in the Telecoms.com’s listing of the most influential women in the industry 2010, Arieso CEO Shirin Dehghan, an engineering graduate, founded the firm in 2002. She started her career developing radio propagation products for a UK startup, before joining Vodafone as a research engineer. At Vodafone she was responsible for the development of WCDMA simulation and business modelling and served on Vodafone UK’s 3G auction team, where she provided technical input to the UK board.

Commenting on the gender imbalance in the industry in 2010 she said: ““I would say that the women who are successful in what is such a male-dominated industry are generally very tough skinned since they have to clearly show they are the equals of—and in most cases better than—their male colleagues.”

Clearly she convinced JDSU.

Take care

The Informer

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One comment

  1. Avatar Larry Goldberg 08/03/2013 @ 3:16 pm

    Not even the Economist could reference Ziggy Stardust and Pep Guardiola in two paragraphs. Nice job. You’re the Peter Griffin of obtuse cultural references.

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