a week in wireless

The Empire Strikes Back

This week we’re going to play a special version of the classic TV quiz show Going for Gold. Contestants must correctly identify what the show’s guest host, the Informer, is describing: Fingers on your buzzers.

“What am I?” asks our host, “In many cases, I contain elements of the original story, often with the same characters and settings. I can lead to a series, in which key elements appear in a number of stories. Although, the differences between more than one version and a series is often somewhat arbitrary.”

BZZZZZZZZZZZ! – Ed Zander, former head of Motorola. “Are you the RAZR?”

“No. I’m afraid not Ed, it’s back to the golf course for you, you’re out of the game.

“I’m attractive to my creators because there is less risk involved in returning to a story with known popularity rather than developing new and untested characters and settings. Audiences are sometimes eager for more stories about popular characters or settings, making my production financially appealing.”

BZZZZZZZZZZZ! – Steve Jobs, current head of Apple. “Are you the iPhone 2.0?”

“No, sorry Steve, I’m shamelessly cribbing the Wikipedia entry on sequels.”

They’re a tricky business, sequels. Great sequels are few and far between, the Empire Strikes Back, the Godfather Part 2, Seriously Dude Where’s My Car? – the list, frankly, doesn’t go on. It’s tempting to revisit the success of a debut offering when serving up round two. Everyone gets exactly what they’re expecting and thanks to the original’s success they don’t disappoint at the box-office. However, they can leave people feeling a little bit cheated and ultimately a little bit bored.

On Monday this week Apple unveiled the iPhone 2.0. In fairness to Jobs et al a majority of the concerns regarding the original have been addressed. The retail price point has come down, it’ll come with both HSDPA and GPS and it will be available in 22 countries on the launch date of July 22nd, consequently it will sell like proverbial hotcakes. Even though – and as the Informer writes these words he is shaking his head like Bill Murray in Groundhog Day – there are loads of technically superior handsets on the market. (Feel free to write in to tell the Informer why he’s wide of the mark, and how the iPhone’s UI sets it head and shoulders above its rivals).

OK, you’re reading this, so you’re probably interested in telecoms, so you will have already read umpteen iPhone stories this week. If you’ve just got back home from holidaying somewhere blissfully remote, like the Moon, or have a chronic memory loss condition, you can check out the finer details about the gadget and some of Apple’s other mobile newshere and for further analysis of the OEMs’ reactions to the first iPhone trythis for size.

In a PR move fooling no one South Korea’s Samsung officially launched another iPhone-a-like device, theOmnia, practically 24 hours ahead of the Apple terminal’s Californian unveiling. The Omnia is sleek and shiny, it’s got a big touchscreen and it’s got a 5 megapixel camera with, get this, ‘smile detection’. It’s a Windows Mobile device and if you clicked on the link above you’ll have seen that it bears more than a passing resemblance to all the other iMetoo devices on the market. In Latin Omnia means ‘everything’, while in Arabic it means ‘wish’. In English it means bugger all, because everyone will still want an iPhone.

The ‘iPhone effect’ is being thanked by some for the rise in mobile data usage. Maybe the device has helped raise consumer awareness a smidgen, but the Informer reckons, in the main, that we have dongles to thank for the rise in mobile data consumption. Last week the fortune tellers at Gartner suggested laptops would soon be shipping with embedded 3G capability, and the Informer thought we might be witnessing the dongle death knell. Thankfully, it looks like the comically named peripheral has been granted a reprieve, for now at least. Price comparison site Top 10 Broadband has been tipped the wink that operators will soon been sweetening their mobile data packages by attaching dongles to the deals. Not only that, the website suggests mobile will displace fixed line internet in just two years.

Backing up the ‘mobile broadband everywhere’ theory are some new statistics released by mangement consultant AT Kearney. The EU’s mobile data market, excluding text messaging, grew by 40 per cent to Euro7bn in 2007. A sour note for carriers comes in the shape of a 25 per cent reduction in the cost of data for roaming for consumers. Tom Philips chief government & regulatory affairs officer at industry lobby body the GSM Association reckons prices are coming down thanks to market forces.

The Informer thinks prices for consumers will continue to fall, or at least be forced to fall, if Viviane Reding and her army of meddlesome Eurocrats get their collective way. Which, let’s face it, they will. Speaking at a press conference after aTelecom Council meeting in Luxembourg on Thursday Reding said she was “not impressed” with the reductions so far as they equate to a drop of only on Eurocent per roaming SMS sent.

Sticking with the regulators. In the UK, Ofcom hasset out proposals for how it plans to release spectrum following the switchover to digital television. The Informer thinks it would be appropriate if Ofcom decided to award the spectrum as prizes in some sort of Dragons’ Den meets Big Brother meets the Apprentice meets I’m A Celebrity … Get Me Out Of Here! reality TV series. Potential bidders could be put through their paces shamelessly prostituting themselves under the credulous gaze of couch potatoes everywhere – think of the SMS voting revenues. Far more likely though is a boring old money spinningauction.

Speaking of money spinning auctions, in the US the Federal Communications Commission (FCC) has decided todelay a decision regarding the fate of 25MHz of left over AWS spectrum. The Informer has an idea, should the Feds be reading this, rather than holding yet another auction they should perhaps have abeauty contest to find an appropriate owner(s). Though the Informer’s suggestion is likely to fall on deaf ears.

One of the more likely options under consideration by the FCC, is to auction the spectrum off with a requirement that some portion of the bandwidth is set aside to provide free wireless internet access to the US. Speculators suggest that the winner of the auction would be required to build out a network to provide free access to 50 per cent of the US population within four years and 95 per cent in ten years. The spectrum would likely be offered as a technology neutral investment and WiMAX is being bandied around as a likely platform.

If that happens we can expect to hear the sound of excitable splashing emanating from the direction of a recently erected WiMAX patent pool. This week six leading lights in the world of mobile WiMAXannounced that they would be pooling their patent resources. Expect to see Alcatel-Lucent, Cisco, Intel, Samsung and mobile WiMAX pin ups of the operator community, Clearwire and Sprint lounging around the pool in Bermuda shorts, sipping Pina Coladas laughing and throwing a beach ball back and forth, but definitely not running, bombing or petting.

At an investor presentation on Thursday evening, Clearwire revealed its projections for business and revenue growth over the next ten years. The company reckons it can hit over million customers by 2009, rising to 4.6 million a year later. The target is 8.5 million by 2011 and 19.5 million by 2014.

Nortel looks like it will miss out on the possible poolside fun though. The infrastructure vending Canuck has decided to backLTE and therefore join fellow WiMAX basher Ericsson. This decision sent Nortel’s market valuation rocketing up by 13 per cent. Perhaps the Canadians and the Swedes can form a pool of their own, though come the winter it’d probably freeze over and they’d find themselves facing off over all the LTE deals coming their way.

In warmer climes East Africa’s biggest ever initial public offering (IPO) kicked off this week as Kenyan operator Safaricom began trading on the Nairobi stock exchange. The government’s sale of a 25 per cent stake in the carrier has proved popular, with the listing more than 400 per cent oversubscribed. Local reports suggest around 800,000 domestic and foreign investors had signed up to the offer. The government is raising about $833m from the sale, which values Safaricom at around $3.3bn. In the first hours of trading shares had already gained around 50 per cent.

Another organisation selling off, if not the family silver, then certainly some of the more valuable pots and pans was Nokia Siemens Networks. The monster vendorhas reached an agreement to sell off its Open Transport Network (OTN) which specialises in fibre optic communications. The financial details of the deal have been kept under wraps, but the move is all part of NSN’s strategic refocus on its core businesses, as the vendor aims to realise Euro2bn annually in synergy savings by the end of 2008.

One year into its operation as a merged entity, NSN is still facing a challenging market. Competition is strong and the growth outlook is not good, as chief executive Simon Beresford-Wylie readily admits the carrier was caught on the back foot. “In 2006, at the time of the merger, the market looked like it was growing. But this wasn’t the case,” he said. He said plenty more too at a recent London press event and one of the Informer’s colleagues at telecoms.comheard it all.

Meanwhile, mobile operator O2 UK has, like a crestfallenWest Ham Utd fan, been left blowing bubbles after losing a four year battle against rival 3 over the usage of bubbles in its advertising. The European Court of Justice ruled that “O2 cannot rely on its trade mark rights” to prevent the use of bubble imagery in a comparative advertisement for Hutchison-Whampoa’s UK 3G operator.

For many it’s hard to imagine anything more captivating that watching bubbles float about while listening to the dulcet tones of Sheffield’s Sean Bean. But spare a thought for the kids, for according to mobile ad firm JumpTap they’reten times more susceptible when it comes to mobile adverts. Getting your hooks into impressionable children is not a strategy that marketers have traditionally shied away from. As the famously upstanding role model Whitney Houston opined in her epic ballad the Greatest Love of All, children are the future.

Finally, on this Friday the 13th, the Informer has been thinking about all the things that scare him: Wasps, Darleks and having to work for a living are all currently vying for the top spot. IT consulting firm Unisys though thinks one of the biggest fears out there is. mobile banking…

Unisys surveyed 13,296 consumers worldwide about their mobile-device habits and how secure they feel when conducting online transactions. The results indicate a widespread apprehension about the security of mobile devices and their ability to protect pertinent information relayed in a financial transaction.

It’s not exactly A Nightmare on Elm Street is it?

Be safe

The Informer


  1. Avatar Steve Page 13/06/2008 @ 2:37 pm

    Is a Darlek a longer version of a Dalek?


    The Informer says:
    Indeed. The AWIW sub editors responsible for this slip have now been exterminated.

  2. Avatar Moray Rumney 13/06/2008 @ 2:39 pm

    Dear Informer,

    Price comparison site Top 10 Broadband has been tipped the wink that operators will soon been sweetening their mobile data packages by attaching dongles to the deals. Not only that, the website suggests mobile will displace fixed line internet in just two years.

    How can you let a statement like that go without comment? I expected this to be a prime target for poking your legendary fun at.

    One of the most valuable things I get from your column is the insightful comments. When ridiculous opinions like the one above go without comment then their credibility rises, and with sufficient repetition people start to believe that cellular wireless can somehow displace DSL.

    The facts for those who care to research them are very clear. The capacity of a typical 3G cell is currently around 1 to 2 Mbps per sector per 5 MHz – and that is the best case, indoors the figures drop substantially. Taking all 12 3G channels into account that means there is perhaps 50 Mbps to divide up if most people move outdoors into good radio conditions. In a typical urban area with an ISD of 2km the cell covers about 3.5 km2 and at a suburban housing density of 25 per hectare there could be 8750 homes. If we assume 50% DSL penetration this would give each household an average data rate near 10 kbps. Mobile broadband – my arse! This is worse than dial-up!

    Compare the mobile situation to the data density of Cable/DSL. I know people moan about not getting their peak rate all the time but the equivalent capacity for wired internet is not constrained by the laws of physics, just the laws of economics. Already today the available capacity in a reasonably served suburban area must be hundreds of times what is available today from wireless – and wired capacity has no physical upper limit. Conversely, the outlook for new wireless standards like LTE might improve things by a factor of 2, and not the required two orders of magnitude, and so the wired/wireless data density gap will continue to grow.

    People happily pay 10p a minute which is £1.30 per MByte for voice service. They are also happy to pay £15 per month for 3 Gbytes of data which is £0.005 per MByte. With the capacity of wireless networks being very limited and the cost of voice and data delivery being pretty much identical I cannot fathom how operators think they can build a business around replacing DSL with a 250:1 pricing differential. Even airline seat pricing looks reasonable against what passes for normality in the world of wireless. When people discover how to transport their expensive voice data over less efficient IP the operators’ revenue stream will collapse forcing a rethink on data pricing at which point the delusion of mobile broadband will have been fully exposed.

    In the meantime “mobile broadband” will look just great, but when the capacity runs as it most certainly will, there will be much weeping and gnashing of teeth. I predict that FMS will be recorded in the business school history books alongside the other major gaffes of modern business times like the 3G auctions, New Coke and the Hoover free flight fiasco.

    Can I ask that the next time you print something along the lines of today’s Top 10 Broadband opinion please doff your cap to Shannon and Maxwell and do your bit to help prevent the mobile industry self-destructing by shipping data dongles with every phone. Cellular wireless is a precious commodity; let’s not encourage the industry to squander it on low value, low price but high cost data services.

    After all, there is no need to consult the wireless crystal ball when you have the laws of physics on your side.

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