a week in wireless

Time to de-clutter

OhmyGodOhmyGodOhmyGod! Kate Middleton is having a baby!! It might be a boy!! Or a girl!!

Right, that’s that out of the way, let’s get on with the real news. Christmas will soon be upon us and what better time than this to de-clutter. So says Nokia Siemens Networks, anyhow, as it continues to jettison non-core assets.

“Darling, can we please get rid of this BSS unit? You never use it and it’s covered in cat hair.”

“My mum gave me that!”

“Yes, darling, but we both know you’re never going to take it up seriously.”

“But it’s got 1,200 employees! Look at their little faces!”

“They’ll be ok, someone else will look after them.”

“Well if that’s going then we’re getting rid of your optical networks business too!”

Redknee is bagging NSN’s BSS business for an undisclosed sum (probably a snip, then). As well as the staff it gets 130 existing customer relationships, including half of the top 100 mobile operators in the world, the firms said. Earlier in the week NSN announced plans to offload its optical networks business to an investment firm called Marlin Equity Partners in the hope that it will become “an industry leader in the fragmented optical networking sector”—and what are we without hope? Also, what is fragmented optical?

Nokia Siemens has now divested seven of its non-core units (although the optical business had not previously been identified as such) since this time last year, as part of its restructuring plan. There are three more to go, the firm’s VoIP business and it’s Narrowband and Carrier Ethernet units. These businesses are apparently in “maintenance mode”. If the Informer were you, he’d wait ‘til the new year sales. They’ll be cheap as chips.

NSN is betting the farm on specialisation in networks; the exact opposite of Ericsson’s strategy to build strength in breadth. “We think the industry is evolving towards vendors that are focused and not ones that try to be end-to-end,” said an NSN spokesperson. “We see that as something our customers are supporting and actually now our competitors are trying to copy it.”

Whether the firm’s self-styling as a “mobile broadband specialist” makes a more convincing story than Ericsson’s one-stop shop remains to be seen; but NSN’s competitors would doubtless take umbrage at the implication that diversity leads to mediocrity. All of this divestment is quite possibly a bid to make the firm a more attractive acquisition target, of course. Because the parents aren’t exactly living the high life at the moment.

Nokia took the non-core assets argument to a new level this week by embarking on an HQaaS strategy. The firm announced the sale of its Espoo headquarters to a real estate outfit this week as part of a deal that will see it lease the site back. It may make financial sense for now but how must it feel to have to flog your home to an estate agent and then pay them so you can carry on living there? Sad times.

“When good opportunities arise we are willing to exit these types of non-core assets,” said Timo Ihamuotila, Nokia’s CFO, before selling his shoes to the local cobbler and immediately renting them back.

Once Nokia no longer owns this particular non-core asset, of course, it won’t really be in control of when it has to exit it.

The Informer’s chum and ITM analyst Malik Saadi had some words of encouragement to offer: ““The situation is getting critical. Nokia cannot afford another bad quarter, it’s now playing for its survival over the next two quarters,” he said. “I don’t think investors will afford Nokia another bad quarter and Q4 is going to be very tough, the competition is very intense.” Sorry, did the Informer say ‘encouragement’? He meant ‘doom’.

Can you imagine the awkward moment when Nokia’s new landlord has to turn the firm out onto the street so a Chinese family can move in? A Chinese family with a $20bn credit line from the state bank? This, of course, is the alternative to asset stripping and selling your shoes. What you do is, you go to the bank and ask for twenty billion dollars. ZTE is hoping that it will work.

According to Hou Weigui, the firm’s chairman, ZTE will use this financial support to “grasp the opportunities in the markets for 4G, fixed broadband, enterprise networks and terminals, consolidate our advantages and migrate to the higher value solutions, as we aim to achieve a global top-3 position before 2015.” Wiffle waffle wiffle waffle wiffle waffle. Condense all of this advantage consolidation guff and you get the posh girl’s catchphrase: “Daddy pays!”

But casting itself as the Veruca Salt of the telecoms industry might not help ZTE, according to Matt Walker, an infrastructure sector analyst at Ovum. “Accepting this support will make it harder for ZTE to further penetrate western European and North American markets, where policymakers are concerned about unfair competition from Chinese suppliers,” Walker warned. “This news will not go unnoticed by ZTE’s opponents, both those in the marketplace and the political sphere.” D’oh.

In happier news there is now LTE in Hobbiton. New Zealand’s incumbent operator Telecom has begun trialling its LTE network in parts of Wellington and Auckland. Alcatel Lucent is running the trial in the Lower Hutt area of Wellington while Huawei is flipping the switches in Auckland’s North Shore. The lucky folk getting access to the trial network will be able to watch highlights of last Saturday’s Rugby match between England and the All Blacks in glorious HD. What a game that was! Telecom is aiming for commercial switch on in late 2013 or early 2014.

Meanwhile the Malaysian Communications and Multimedia Commission has forked out 2.6GHz spectrum for that country’s own LTE operations. Eight operators have been allocated licences: Celcom Axiata, DiGi Telecommunications, Maxis Broadband, Packet One Networks, Puncak Semangat, REDtone, U Mobile and YTL Communications.

Eight LTE network operators in a market of 30 million people?! Even Ofcom wouldn’t go that far. MCMC chairman Dato’ Mohamed Sharil Tarmizi said that he believes that the commission has struck a balance between ensuring “healthy competition in the market and promoting industry development that will help spur growth for existing operators and new market entrants.” The Informer believes that was the MCMC has done is sow the seeds of future rounds of consolidation.

They already have LTE in Tajikistan but you can’t use if it you’ve got an iPhone 5. Last week’s Telecoms.com scoop on Apple’s LTE network testing policies brought the Informer into touch with Mr Jafar Asimov, head of the automation department at the country’s leading operator, Babilon-Mobile.

Asimov said that he’d been trying to get in touch with Apple in a bid to get his LTE network approved by the handset vendor, but to no avail. Babilon, which had three million subscribers at the end of September, activated its LTE network in October after re-farming 2G spectrum in the 900MHz and 1800MHz bands. But the operator only realised there was a problem with Apple’s latest smarpthone when iPhone 5 owners began complaining that LTE connectivity was not working on their device.

There are no handset subsidies in Tajikistan so users often bring their own devices to the network. Asimov said that it was only when he got iPhone 5 handsets in for testing that he discovered there was no way of activating LTE connectivity without Apple’s intervention.

“There is no information available about activating LTE,” he said. “We got no help and no response from Apple on this.”

Asimov said he believes that Apple activates LTE by running a whitelist of approved networks.

“According to our research, the iPhone 5 talks to a server at Apple, which keeps a list of approved PLMN (public land mobile network) codes,” Asimov said. Every operating network has a PLMN administered by the country’s regulator. It is a unique code identifying the operator. If the code is present in the database when the device comes online, then an LTE switch magically appears in the iPhone settings panel, he said.

“We have the network, we have a reasonable subscriber base, and we are eager to provide our customers using iPhone5 the best experience using our fast and reliable high speed internet access,” said Asimov.

Informa analyst Dimitris Mavrakis said that Apple’s policy is indeed likely to hit the smaller networks hardest. “Apple would not do this to the tier one players,” Mavrakis said. “But for smaller operators, or European players with a limited subscriber base, Apple has the audacity to do this and I’m not sure all operators will even make it to the testing phase.”

Apple has decided to anoint T-Mobile USA, however. The only major carrier not to sell the iPhone in the US, T-Mo will begin offering Apple products in the new year, its parent Deutsche Telekom said this week. Now, at last, it can be like the other children.

Standing in the naughty corner this week is Nordic operator Telenor. The firm is being investigated by the EFTA Surveillance Authority, which monitors compliance with European Economic Area rules in Iceland, Liechtenstein and Norway, as well as the Norwegian Competition Authority. It seems that Telenor might have been abusing its dominant position  in the market and engaging in anti-competitive practices. Bad Telenor! In your basket!

In a statement the firm said: “Telenor has strict internal rules and procedures on compliance with laws and regulations. Telenor will co-operate with the authorities in carrying out the investigation so that it can be conducted in an efficient manner. Besides this, Telenor has currently no further comments on this issue.” Among the no further comments was: “we’re innocent”.

Finally, the Informer can’t believe that five years have passed since last Neil Papworth graced his weekly scribblings. And ten years have passed since the time before that. This is because this week saw the 20th anniversary of SMS messaging. And Mr P’s name gets bandied about on these occasions because, as a young network engineer, he sent the first text message all those years ago. The Informer has no idea why this is really newsworthy, or Papworthy, but somebody always puts out a release about it and the Informer always feels strangely compelled to give it a nod.

Seriously, though! Kate Middleton’s having a baby!!

Take care

The Informer

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