A Knight’s Tale

By The Informer

Many years ago the Informer sat in a university lecture room doodling on his notepad. Back then this was an actual notepad, the whole concept of portable computers being nothing but a geek fantasy. After all, this was a time when you had to be accompanied by an IT student into their baffling department if you wanted to have a look at something they kept there called The Internet.

The lecture in which this doodling occurred was on Medieval Literature and, not for the first time, the Informer was wondering if learning these seven hundred year-old French songs would ever prove useful in the far-off world of work. So he was surprised and gratified to switch on his computer at the beginning of this week and see a reference online to the Conquest of Orange.

Guillaume d’Orange (or William of Orange) skipped about in ninth century France like Brave Sir Robin and came, a few hundred years later, to be a central figure in that country’s medieval epics. In one such work, he conquers the Southern city of Orange and cops off with the King’s wife. It’s all very French. Typical to the genre, Guillaume has to overcome a number of challenges en route to the eventual conquest of both city and queen.

Almost a thousand years later we now have the Orange Conquests 2015, a new five-year business plan from the French telecoms group that it hopes will represent a positive overhaul of the organisation. As far as we can tell, though, Orange Conquests involves no plans for a romantic liaison with the wife of the head of state. Mick Jagger already did that part.

Instead group CEO Stéphane Richard has promised to create 10,000 new French jobs at Orange by 2012 and increase the firm’s global subscriber base to some 300 million by 2015. And as if in some updated, corporate nod to the epic song format, Richard set out three challenges that the group must meet. “An unprecedented social crisis in France, a fast changing ecosystem and a tense competitive and regulatory environment” must all be dealt with as part of Richard’s knightly quest.

The five-year plan is Richard’s attempt to make his mark on the firm, which he assumed control of in March this year. He inherited an organisation with some serious problems, not least a spate of employee suicides – some of which were explicitly blamed on the firm’s culture and stress levels – that have shaken the carrier over the past two years. Richard pledged to offer his employees “a beneficial working environment thanks to a new vision of human resources.” The 10,000 new hires are intended to offset the problem of a rising average age among the group’s employee base and departures due to “natural attrition”. He didn’t mention the less natural attrition of the suicides, unsurprisingly.

Also on his to-do list is a bid to “regain the trust of [Orange’s] customers” and a drive to renew growth in the firm’s emerging markets. Nowhere in his communication did Richard explain how all of these achievements are to be financed. What he did say was that this rather tricky and most prominent of challenges would be dealt with during phase two of the project, which starts now and runs to the Autumn.

If Orange had 300 million subscribers today, it would equate to just six per cent of the global mobile customer base. The industry can celebrate quite an achievement this week with the news, which appeared from a variety of sources, that there are now five billion mobile subscriptions worldwide. Swedish vendor Ericsson reckoned that subscriber five billion signed up for service on Thursday this week, and said that we’re currently running at two million additions per day. There are more than half a billion 3G subscribers, the firm said, before shoeing in its prediction – so often repeated, it seems, that it’s almost attained catchphrase status – that there will be 50 billion connected devices by 2020. From now on, those words must be followed in all of our heads by the sound of a snare drum and cymbal in quick succession.

Not all of those subscribers will be noteworthy for there loyalty, of course, and many will buzz between carriers like bees between flowers. In the UK that process is set to become somewhat easier, as regulator Ofcom has ruled that, from April next year, carriers will be obliged to port user numbers on request within a single day period, down from the current two-day deadline. Back in 1999, Ofcom reminded us, the slack-arsed carriers used to take 25 days to port a number, using fax as the preferred method of communication.

Meanwhile the European Court of Justice has ruled that EU regulators can set number portability retail charges (in markets where they apply) at rates below the cost incurred by the carriers.

And the ECJ was also involved this week in Telefónica’s ongoing attempts to gain control of its Brazilian JV with Portugal Telecom, Vivo. The Portuguese Government, you may remember from last week, used its ‘golden share’ to vote down Telefonica’s proposed acquisition of PT’s stake in Vivo but on Thursday this week, the ECJ ruled that the golden share “constitutes a restriction on the free movement of capital”, adding that because the share allows an influence on the management of PT which is not justified by the size of its shareholding in the company, it “is liable to discourage operators from other Member States from  making direct investments in PT since they could not be involved in the management and control of that company in proportion to the value of their shareholdings.” This is probably not the last of the twists and turns this saga will take.

Talking of twists and turns, when Google announced its free Maps and Navigation offerings for Android in late 2009, Garmin and TomTom were among those portable navigation device (PND) retailers whose stock took a dive. Nokia’s decision to make its mapping service free to all users did nothing to help their cause. Perhaps still feeling the heat from this sector, Garmin this week launched an attack on the purveyors of ‘free’ navigation software.

Garmin did a test drive of the Calais to Paris route, using an Android mobile phone, an O2 UK prepaid SIM and O2 UK data plan, as well as Google Maps Navigation. The findings? Well the 185 mile trip cost £36 in roaming charges one way, but could cost between £24 to £39 depending on your provider, and between £52 and £78 for the return journey. Garmin worked this out as a cost for navigation services of over £0.20 per mile. (O2 has suggested Garmin’s figures are somewhat awry, however.)

The navigation firm acknowledges that the cost may be slightly cheaper for a postpaid subscriber, but the service still uses around 13MB of data for a one-way trip, Garmin said. arguing that free offerings typically download mapping data on the fly.

Garmin’s head of communications, Anthony Chmarny said: “Using free satellite navigation isn’t as free as it would like to make out, especially when you are using your mobile phone abroad. Many of the well known navigation products use the mobile phone network to download maps as they go, meaning people could end up with a nasty shock when their mobile phone bills arrive – the costs could be double that of the fuel used for the journey they were navigating.

Under new data roaming regulations, which came into effect on July 1, EU mobile users will be able to use €50 of data whilst abroad before service is suspended, unless they request otherwise, a move designed to go some way to acknowledging the consumer ‘bill shock’ issue.

But it’s hard to argue with free. Skobbler, which recently released its own free satnav app for the iPhone, said this week that, since its UK launch just three weeks ago, the app has been downloaded more than 72,000 times.

To put this figure into perspective, a total of 266,000 PNDs were shipped into the UK market in the first quarter of 2010, according to industry researcher Canalys, the firm said, with Skobbler’s three week run equalling 27 per cent of all UK PND shipments in the first quarter of 2010. In “the coming days” Skobbler will launch an Android version of its app, the firm said.

Skobbler uses community maps from OpenStreetMap (OSM), the Wikipedia of maps that already has over 250,000 users worldwide dedicated to updating and creating a free map of the world.

Over in New Zealand, roaming is about to become a bit more difficult for users of Telecom’s CDMA services. The carrier has given switch-off dates for its EVDO and CDMA-based WorldMode Roaming service (November 30^th and October 28^th respectively) as part of its bid to shift customers onto its new XT WCDMA network, which it launched just over a year ago. A handful of roaming destinations will remain, but XT offers customers 70 more destinations than the WorldMode total, Telecom said.

In the world of handsets, Nokia has been indulging in a spot of chest thumping, with Anssi Vanjoki, head of the new Solutions division, attempting to whip up a storm of corporate pride with a blog post promising that the firm will reclaim its leadership in the smartphone space, where it has for some time now been languishing. Vanjoki’s post actually came out last Friday, after AWIW had gone out, and in it he promises that “the fightback starts now”.

“I am committed, perhaps even obsessed, with getting Nokia back to being number one in high-end devices,” he said, conceding that this would prove more than a little challenging. “Achieving this will require performance and efforts over and above the norm,” he said. He also scotched mischievous rumours that the firm might be looking to bring an Android handset to market.

It wouldn’t really make sense for Nokia to join the Android party so late, given how much of a lead other players have established. Top of the bunch is Taiwan’s HTC, which turned in some strong results for Q210 on the back of strong sales of Android product like the Magic and G1. Total revenues reached NT$60.5bn (€1.5bn), up 58.45 per cent  year on year, while net income leapt 33 per cent to NT$8.64bn. Nokia really does have its work cut out in the high end.

In light of this the Finnish firm offloaded its wireless modem business to Japanese semiconductor manufacturer Renesas for $200m, this week, as part of a bid to refocus itself. Nokia and Renesas said they will continue to collaborate on the development of modem technologies for HSPA+ and LTE as well as on research into future radio technologies. The deal will see 1,100 Nokia R&D staff, currently based in Finland, India, the UK and Denmark, transferred to Renesas along with an undisclosed number of patents relating to wireless modem technology.

While Renesas talked up the benefits of the acquisition in terms of its strengthened position in the sector, Nokia suggested that the wireless modem business had come to be seen as a distraction from that key aim of re-taking the lead spot in the smartphone space. “The alliance enables us to continue to focus on our own core businesses, connecting people to what matters to them wtih our mobile products and solutions,” said Kai Oistamo, executive vice president.

Finally, and while we’re talking silicon, US vendor Qualcomm has struck a non-binding agreement with Taiwanese operator Far EasTone, giving its MediaFLO mobile-TV-cum-datacasting technology a foothold in the country.

Qualcomm sees Taiwan as a receptive market for mobile TV technologies, as pay TV penetration is already at 81 per cent, the company said.

“We are now in discussions with Far EasTone to determine the right business model and structure of a possible MediaFLO venture, said Neville Meijers, senior vice president and general manager of Qualcomm MediaFLO Technologies.

The agreement between Qualcomm and Far EasTone comes in advance of an anticipated UHF spectrum auction in early 2011, when Taiwan’s regulatory agency, the National Communications Commission, is expected to issue two mobile TV licenses in the market.

MediaFLO is high on the agenda at Qualcomm HQ after it emerged recently that uptake of the service is known to be a source of disappointment among Qualcomm’s senior executives, with Jacobs keen to significantly redefine the firm’s role in the MediaFLO technology play by getting more involved in deployments.

Maybe he’ll get medieval on its ass.

Take care

The Informer