A strange sense of familiarity

By The Informer

There is a stereoptypical portait of the London taxi driver as a bubbling cauldron of anger and resentment, white-knuckled hands clenching the steering wheel, scowl alternating between the road in front of him and the passenger in the rear view—a passenger now cast as an audience of one to a spittle-lipped tirade about how UKIP’s immigration policy is too liberal. Many cab drivers would take issue with such a narrow-minded portrait, which is ironic, as nobody loves a bigoted stereoptype like a London cabbie.

What’s this got to do with wireless, you may ask…? Well consider the following scenario: A group of licenced incumbents who have for years enjoyed priveleged market access and an effective pricing monopoly have found themselves out innovated and now face a challenge to their elevated status, as unlicenced competitors delivering equal and possibly better service get in on the act. Sound familiar?

This is what has happened to London taxi drivers thanks to smartphone app Hailo. Once a pure-blood licenced taxi app that connected users to the nearest driver directly, doing away with the awkward social dance of flagging one down, Hailo has now extended its market to private hire vehicles. (Hailo’s not a new idea, of course. Anyone remember Zingo?) The difference between cabbies and operator executives when faced with such a dilemma, however, is that cabbies know how to SAUWT IT AHHHT!

“Things turned a little bit nasty, punches were thrown and the police were called,” the head of the London Taxi Drivers’ Association told the BBC about a visit that some of its number paid to Hailo’s London headquarters this week. So, there you go, operators. Tell those consultants to shove their co-opetition where the sun don’t shine, grab a chisel, head down to OTT HQ and get a bit tasty!

Or, just shift your business. That’s what Blackberry’s doing, with its announcement this week that “no other company is in a better position…to…deliver on the vision of the Internet of Things. Increasingly spurned by the Internet of People, the Canadian vendor has intensified its focus, shrewdly the Informer suspects, on the QNX OS business that it bought in 2010.

QNX is well established in a wide range of verticals, from air traffic control, energy and medial—and, in particular, automotive. Now Blackberry, which chalked up a loss of $5.87bn for the 2014 financial year, is looking to exploit that reach with a new M2M play. Dubbed Project Ion (let’s hope it’s positively charged) the new initiative will see the firm develop an application platform to enable access to all the data that it says its embedded solutions are already collecting. It will also look to build an ecosystem around that platform, in particular targeting cellular network operators, and it will also look to strike wider partnerships in the sector.

The new Project Ion is, said CEO John Chen, “a cornerstone of Blackberry’s vision to offer end-to-end solutions for the Internet of Things.” In other IoT news, research firm Infonetics reported this week that the module market was worth $1.4bn in 2013, up six per cent year on year. Growth should accelerate from here on in, however, with that market doubling in size to $2.9bn in 2018, the firm said. Moreover, while 2G technology retains the majority of today’s market, Infonetics expects 3G to account for 67 per cent by 2018.

Now, just nipping back to the automotive space for a moment, you could hardly move at MWC this year for connected cars. And many is the operator looking at partnerships with car manufacturers that are increasingly keen to put bucketfuls of connected electronics into their machines. So it was refreshing to see UK operator EE giving those high-end, on-board solutions the brush off this week with its launch of The Buzzard.

The Buzzard (isn’t that a carrion eater? Watch out Blackberry!) is an in-car wifi hotspot backhauled over EE’s LTE network. Plugged into what used to be called the cigarette lighter in a car but is now known more prosaically as the 12v connection, The Buzzard can connect up to ten wifi devices and, EE said: “avoid the need for expensive in-built solutions”. So; up yours automotive industry! The only downside is that, if you do happen to drive past Olaf Swantee holding a piece of chicken in a big leather glove, the buzzard’ll be off out the sunroof before you know it.

The EE CEO gave an update this week in which he revealed that, during this very month, LTE subscriber uptake has surpassed 3G. The firm now has 3.6 million LTE customers and Swantee forecast that this will grow to six million by the end of this year. More than half of the firm’s LTE traffic is accounted for by video, he said, adding that LTE users have increased data consumption by 66 per cent in a year.

To meet demand the firm said it has accelerated its network rollout into rural areas, providing LTE coverage to 2,588 villages and small towns and doubling the footprint of its “double speed” enhanced LTE services. “We’re committed to remaining one step ahead – adapting our network to make 4G avilable where it matters most, with a focus on more rural areas, transport links and offering our customers the best network experience and great value, innovative devices and plans,” said Swantee. “Eeearrr, eeearrr,” said The Buzzard.

EE compatriot Vodafone had some numbers out this week and they were mighty big ones. The firm reported a huge leap in profits for the year to end March 2014, thanks largely to the eventual sale of its stake in VerizonWireless, completed earlier this year. Profit for the year was a tidy £59.42bn, up from £673m for the previous year. However, group revenue was down 2.4 per cent to £39.53bn.

Vodafone reported impairments totalling £6.6bn in Germany, Spain, Portugal, Czech Republic and Romania. While Vodafone’s emerging market properties generally performed strongly, according to CEO Vittorio Colao, combined regulatory, competitive and macroeconomic pressures in Europe continue to challenge the firm.

Nonetheless, Colao characterised the year as one of “substantial strategic progress,” citing the acquisition of KabelDeutschland, the agreement to acquire Spanish cable player Ono and the firm’s network investment programme, Project Spring, alongside the exit from Verizon.

Acquisition fever is clearly spreading through the family. Vodacom, the group’s South African outpost announced this week an agreement to acquire the market’s second largest fixed communcations provider, Neotel, in a cash deal worth $673m. Negotiations were announced last year.

Neotel launched in 2007 and runs services over more than 15,000km of fiber, more than half of which is in Johannesburg, Cape Town and Durban, Vodacom said. The firm also has access to 2 x 12MHz of 1800MHz spectrum, 2 x 5MHZ of 800MHz spectrum and 2 x 28 MHz of 3.5GHz spectrum, which Vodacom plans to use to acclerate its LTE rollout.

Divestment as well as acquisition was in the African news this week, as Orange decided to bow out of Uganda. The firm has a 53 per cent stake in OrangeUganda, which is is offloading to aspiring pan-regional player Africell, which currently had operations in DRC, Gambia and Sierra Leone.

Uganda is a tad competitive; eight operators currently serve a population of around 36 million. But there is some headroom—WCIS Plus put total subs at 21.85 million at the end of the first quarter. Not many of them, it has to be said, are on the Orange network. The firm had just 692,000 subscriptions at the end of the first quarter, putting it a distant fifth in the market behind MTN (9.55 million), Airtel (4.96 million), UgandaTelecom (3.57 million) and Warid Uganda (3.03 million).

Staying in the region, AlcatelLucent has been announced as the supplier of LTE network equipment to Somali operator Somtel.

Over the last couple of weeks there’s been fair bit of noise around Voice over LTE and, this week, it continued. ​Singaporean incumbent Singtel has launched what it claims is the world’s first commercial and fully featured VoLTE service. The city state operator, which launched the service in partnership with Samsung and Ericsson, said that its 4G Clearvoice service is the only live VoLTE service offering features such as call waiting and call forwarding over an LTE network.

The service will be made available to existing LTE postpaid customers at no extra cost, the firm said, with minutes of use drawn from existing bundles. Singtel’s vice president for consumer marketing said the launch pushed “the boundaries of innovation” and represented “a true breakthrough in the mobile industry.”

The firm also highlighted improvements in latency, promising that calls would be established in less than two seconds. And, while Singtel made no specific mention of HD voice, the announcement suggests that the enhanced audio solution is being launched alongside VoLTE. “Customers will enjoy pristine quality conversations that are significantly clearer than conventional mobile voice services. The service delivers a broader range of audio frequencies, resulting in richer and more true-to-life sound with noticeably reduced background noise,” the firm said.

The Single Radio Voice Call Continuity (SRVCC) handover solution, which moves calls seamlessly to the 3G network should the 4G connection be lost, is also supported.

The service will first be available to customers who own Samsung’s Galaxy Note 3, after a software update enabling VoLTE. Models sold from the beginning of June will have the update pre-installed, while Singtel said that other devices would receive the update “in the coming months.”

In France, meanwhile, BouyguesTelecom said it would start carrying the first voice and video calls over LTE later this year with a view to commercial launch of the service in 2015. Bouygues talked up HD voice, along with shorter call set-up times and enriched IP-based communication services such as video calling.  Ericsson has been selected to provide key components of the IMS solution for Bouygues’ VoLTE including the Multimedia Telephony Application Server, Session Border Gateway, Home Subscriber Server and User Profile Gateway, as well as software upgrades to the installed base of Ericsson LTE radio access network and Ericsson Evolved Packet Core.

Stateside,Verizon said it will start national rollout of the technology later this year, offering an HD Voice experience, using the AMR-wideband standard, which the company claims to provide the best voice quality available now and allows for future interoperability with others. The company said it will have a robust line-up of VoLTE-enabled smartphones available when the service launches, with select handsets to be VoLTE-enabled through a software update leading up to the roll out of the service.

Verizon’s VoLTE will also offer video calling options, including making and receiving video calls directly from contact lists. As part of the VoLTE video calling experience, customers have the ability to change their calls instantly from voice-only to voice and video, with the rollout also setting the stage for future enhancements through Rich Communications Services (RCS). On T-Mobile’s network in the Seattle area, VoLTE is now available for the LG G Flex, Samsung Galaxy Note 3 and Samsung Galaxy Light, after the devices are software updated.

Last week AT&T announced its plans to launch VoLTE today but this week it was more interested in content. The operator revealed this week that it plans to acquire US and Latin American pay TV player DirecTV in a deal valued at $48.5bn. The deal will create a service provider with an offering across mobile, broadband and video that is unprecedented in the market, AT&T said. The transaction, which also involves AT&T assuming $18.6bn in debt, should take a year to complete, the telco said.

The acquisition offers a number of benefits to AT&T, the firm said. It improves the firm’s income mix by greatly increasing video revenues, it will increase its fixed broadband network to 70 million customer locations and it will create significant growth in revenue collected by AT&T from outside the US. AT&T CEO Randall Stephenson said the deal would “redefine the video entertainment industry” as the firm looks to exploit a substantial retail network to deliver compelling bundled offers.

Announcing the deal, AT&T committed to a number of service and pricing pledges. The firm said that annual synergies of $1.6bn would enable it to expand existing plans for high speed broadband deployment, including 15 million mostly rural customer locations where it does not currently offer the service. The firm pledged to meet this target within four years of closing the deal.

It also undertook to freeze pricing for standalone broadband services and existing DirecTV offerings for three years after the deal closes.

Ovum noted that leading US pay TV providers have seen stagnation in subscriber numbers since 2007, with growth in the sector dominated by telco IPTV plays, including AT&T’s uVerse offering. This trend led to the acquisition of TWC by Comcast earlier this year which, if approved, will create the largest pay TV player in the US. The AT&T-DirecTV deal will create the second largest.

“The concentration of market share in the two largest operators is transformative for the US market: assuming both deals are completed around 60 per cent of the US pay TV market by subscribers will be owned by two operators,” said Ed Barton, leader of Ovum’s TV Practice. “It is perhaps still a little early to assume we are experiencing long term secular decline in US pay TV but the pattern is not encouraging for either Comcast, TWC or DirecTV given performance over the last few years.”

Barton added that the foothold in Latin America afforded to AT&T by the deal offers better growth opportunities than those available in the US. Household penetration of pay TV offerings in Latin America currently sits at around 40 per cent. The combined company will require huge cashflow to channel into network build out and improvement, he said, with AT&T likely to invest some $10bn in upcoming US spectrum auctions.

Indeed, the Federal Communications Commission is understood to be expecting a $10bn minimum for its November auction of 65MHz of spectrum from the AWS-3 band.

California meanwhile, is looking to allocate licences of a different kind – to driverless cars – as of next month, with a view to coming into play in September. Cars, while automated, must also contain a sober, insured, licensed human driver to take over if necessary.

Take care

The Informer