By The Informer

The Informer got a software update for his Nexus this week and the resulting tweaks to the interface led him accidentally to the data usage display. He was somewhat surprised to find that the second most data-hungry app on his phone was Google+, a service he has never used. Over a ten-day period Google+ huffed back 5.54MB of data over the mobile network, all of it in the background. This might not sound like much but it’s all relative; roughly one per cent of the monthly allowance, Google+ usage outstrips Facebook by some margin and leaves Gmail in the dust. And it’s worth repeating: This app has never been used.

The fourth most hungry app over the period was a fun geo-marketing demo from Devicescape that the Informer downloaded at MWC and hasn’t touched since. This one consumed 2.01MB in the same period, again all in the background; a neat, if slightly cheeky way of demonstrating need for the kind of wifi offload strategy that Devicescape advocates.

So the Informer was primed for the results of a study released by Actix this week which found that 70 per cent of smartphone data sessions are not initiated by the end user. While the observation that apps consuming resources unbidden threatens network performance and customer experience is nothing new, Actix offered another point of interest. Operators looking to optimise their networks based on KPIs like dropped sessions might be basing their activities on misleading data.

One UK operator that was part of the study was seeing a high number of dropped data sessions in a particular location, which turned out to be the entrance to an underground rail station. These dropped sessions weren’t user initiated, they were just background requests being interrupted by users’ moving out of coverage.

All of which reinforces how important it is for applications to be designed with the network in mind. The network cops most of the flack for poor performance but app design that doesn’t consider network impact is often the bigger problem. One of the most interesting demos the Informer saw at MWC was Ericsson’s app verification platform; a solution designed to let the operator vet applications on exactly this basis.

Ericsson has long struggled with its silicon JV ST Ericsson (STE) but now those struggles appear to be over. Last week we had the news that STE’s CEO Didier Lamouche had thrown in the towel, while STMicroelectronics has made no secret of its desire to exit the JV. This week the two firms finally conceded that, in the absence of a buyer, there is no way forward and the operation is to be dismantled.

Ericsson will take on the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode while STM takes on the existing ST-Ericsson products (excluding LTE multimode thin modems) and related business as well as certain assembly and test facilities. STM also gets the pair’s collection of Neil Sedaka albums, which is a secret source of relief to Ericsson because it hates Neil Sedaka and has always had to pretend otherwise. STM will play Breaking Up Is Hard To Do repeatedly for the next few weeks.

After the split it is proposed that Ericsson will assume approximately 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China. ST will assume approximately 950 employees, primarily in France and in Italy, to support ongoing business and new products development within ST. The dismantling is expected to be completed during the third quarter of 2013, subject to regulatory approvals.

In a bid to move on, Ericsson announced a five-year managed services deal with Telekom Austria’s Serbian subsidiary Viptel. The deal is an extension of a partnership signed between Ericsson and the Austrian incumbent last year. It also announced that it has won a three-year exclusive supply deal with Chile’s Entel, which old-timers will remember was once the sole GSM outpost in Latin America.

In other Austrian news the market’s regulator TKK has announced that it will auction spectrum at 800MHz, 900MHz, and 1800MHz in September this year for the provision of LTE services. It is the largest spectrum auction the market has ever seen and the TKK is reserving two blocks of prime 800MHz real estate for a new entrant. This seems a bit loopy to the Informer, given that at the end of last year, according to Informa’s WCIS, four operators were doing battle for 13.4 million subscribers.

TA rules the roost, with Deutsche Telekom in second place. Orange in third and Hutchison’s3 in fourth are both some way off the pace. What do they need a fifth player for?

Meanwhile local firm Kapsch Carriercom has bought NEC’s Portuguese GSMR business, moving into terminal production (which will be moved to Austria) and taking over contracts with rail operators in Spain, Saudi Arabia and Finland.

A little further North East, Vodafone has announced a partnership with Polish operator Polkomtel. A few years back Vodafone decided to trim its portfolio by offloading non-controlling stakes. The firm’s 24.4 per cent of Polkomtel was sold in 2011 but the bond clearly remains. Polkomtel now becomes a partner operator, and will offer dual-branded services with Vodafone in Poland.

Also cosying up to Polkomtel this week was Nokia Siemens Networks, which has supplied the operator with a CSFB solution to enable voice alongside LTE.

LTE continues to gather momentum and the Global Mobile Suppliers Association put out its latest figures this week, with the number of networks in operation now standing at 156. GSA chairman Alan Hadden said that almost 100 operators had launched LTE in the past year, with LTE1800 proving the unifying band. Some 69 operators are using LTE at 1800MHz and Hadden said it is “likely to remain the prime band for LTE in the foreseeable future.”

Getting ready to join the fray are the four Hong Kong operators—SmarTone, GeniusBrand, ChinaMobile Hong Kong and CSL—that have just secured 50MHz of spectrum in the 2.5/2.6GHz band in that market’s recent spectrum auction. The total amount bid was $200m.

Hong Kong, like Austria, has 13.4 million mobile subscriptions. There are five operators in the market, however, one of which opted not to bid. A prospective new entrant to the market did participate but failed to win any spectrum. Take note TKK.

Now, much has been made of the disruptive impact of Chinese vendors Huawei and ZTE on the mobile market. But as far as the Informer’s concerned they’re never going to take over the world unless they can set aside their differences until the market has been sewn up.

There are all sorts of funny stories about the two firm’s attempts to get one up on each other at trade shows; directing each others’ deliveries to the wrong places, intercepting one another’s customers en route to meetings and so on. These are great in a Harold Lloyd sort of a way but now it’s all getting a bit serious and they’re going toe to toe in the court rooms of Europe.

Huawei claims that ZTE has infringed its LTE and terminal patents and has filed against it in Germany, France and Hungary. ZTE says it’s all bull. By way of response ZTE has filed 18 suits back at Huawei in Europe and China.

The two vendors’ compatriot operator China Unicom reported a net profit increase of 68.5 per cent year-on-year this week, to RMB7.10bn ($1.14bn). The firms said service revenue growth outstripped the industry by 4.1 per cent. Mobile accounted for 60 per cent of service revenue and non-voice for 53.1 per cent.

Low cost smartphones are key to the firm’s improvements. In its earnings report it said that one of the ways it had driven “rapid growth in mobile data business” was to “further improve smarpthones’ quality to price ratios.” Mobile data consumption on its network grew by 92 per cent in 2012, year on year. Low cost devices also enabled the firm to cut its handset subsidy cost from 17.7 per cent of total 3G service revenue in 2011 to 10.2 per cent in 2012.

It used to be felt that there was no way out of a dependency on handset subsidies but research from Informa Telecoms & Media released this week suggests that European operators are increasingly distancing themselves form subsidies, instead looking to sell smarpthones on instalment plans. Some 30 operators have moved to leasing or financing schemes in Europe, Informa found, reducing their financial burden while still keeping high end devices in the market.

“The keys to a successful financing program are transparency, simplicity and flexibility,” said Francesco Radicati, a research analyst within Informa’s European Operator Strategy team. “The rising cost of devices like the iPhone means operators have to pay increasingly large subsidies to offer ‘free’ phones. Financing allows operators to continue offering phones for a low up-front price without subsidising them; as an added bonus, it makes it easier to market smartphones to consumers on pay-as-you-go.” You can find out more about it here.

Data isn’t the only game in town, however, and HD Voice has been in the news again this week, with Telenor claiming a Norwegian first with the deployment of the technology throughout its network. The service is not being priced at a premium, but users do require a compatible device.

“During the last few years, there has been a rapid development of mobile technology and soon there won’t be anything that you can’t do with your mobile phone,” Berit Svendsen, CEO of Telenor Norway, told Telecoms.com. “But one area has been lagging behind. Sound quality during calls has not seen any significant improvements since the introduction of GSM in the early 90s.” You can read the full interview with Svendsen here.

Finally this week they’ve been shuffling the deck at France Telecom. Vivek Badrinath, formerly the head of Orange Business Services (read an interview with him from last October here) becomes deputy CEO, with responsibility for innovation, technology and customer experience. Thierry Bonhomme moves into the space vacated by Badrinath…

And the Informer moves into the space between editions of AWIW. He’ll be back the first week of April, after the Easter break.

Take care

The Informer