It's an Out(r)age!

By The Informer

It’s a funny old world, isn’t it. One minute you’re riding high as the Best Network in the UK and the next you’re sending sheepish text messages to your customers, apologising for a 13-hour service outage. That’s been the story this week for UK operator EE, whose network fell over on Wednesday evening, less than a week after it issued a press release proclaiming its status as the number one mobile network in the market.

“We strive to set new standards in performance and reliability,” CEO Olaf Swantee said last week and he was true to his word. A new standard was duly set; it just wasn’t a particulalry good one.

EE announced the outage on its Twitter feed, taking advantage of the light-hearted nature of the medium to blame it on “gremlins” in the network. Don’t these people know you’re not supposed to feed them after midnight?

Rather a large number of EE customers then took the opportunity to voice their discontent, with many demanding to know what kind of compensation they could expect.

Networks have outages from time to time, as the few non-hysterical participants in the twitter storm attempted to point out. But this did not stem the tide of monstrous indignation and, even if you feel that the level of outage outrage is disproportionate, the compensation claim is reasonable. Naturally most customers were demanding a month’s service for free, but this is ridiculous. Instead EE should compensate users for the time during which they were unable to use the service.

Someone paying £40 for the month of March is paying £1.30/day. For 13 hours missed service the user, under this model, is owed 70 pence.  Of course EE has around 30 million UK customers so, depending on the numbers affected, this is still a non-trivial sum. Whether or not EE has the analytics available to identify all affected users and whether or not it feels compelled to offer some kind of compensation remains to be seen.

When it had fixed the problem it tweeted its customer base telling them that in order to restore service to their devices they needed to (All together now): Turn it off and turn it on again!

Still, EE customers had it a lot better than subscribers to UK MVNO Ovivo, which chose the same day to cease operation altogether, with no prior warning, citing circumstances beyond its control. Ovivo was an ad-funded MVNO on the VodafoneUK network which offered service with no monthly fee in return for the consumption of advertising material pumped to the device every ten minutes. This has been done before. Didn’t they learn anything from Blyk?

Offering a more positive spin on the MVNO model, VirginMobile is preparing to launch an MVNO in Saudi Arabia after the country’s telecoms regulator the Communications and Information Technology Commission (CITC) issued the firm with a licence to do so.

The CITC announced in January last year that it was inviting applications from for MVNO licences and said in July last year that it received applications from five parties: Virgin Mobile, AxiomMobile, Lebara, FastNet and SafariConsortium.

According to the ArabianGazette, Virgin Mobile’s Middle East and Africa business announced this week that it has now been granted an MVNO licence. It is currently unclear which Saudi network will host the new MVNO.

Virgin Mobile has advertised a number of vacant positions on its Saudi website since October last year, including head of Virgin Mobile prepaid segment, customer care director and corporate affairs director.

Back to the UK and the market’s mobile operators, EE, O2, 3UK and Vodafone, have joined the UK Information Commissioner’s Office in a fight against SMS spam, using the GSMA’s Spam Reporting Service, itself based on technology from Cloudmark.

A straw poll at Informer Towers suggests that SMS spam is not so much of an issue and that nuisance calling from phoney injury lawyers and PPI scammers is far more of a pain. This will be addressed as a “next step” the GSMA said.

In another GSMA-led initiative, operators in the Middle East and Africa have agreed to cooperate on network infrastructure sharing initiatives in an effort to provide mobile broadband access to under-served rural communities in the region. The operators also intend to drive down the cost of mobile services for consumers across the regions.

The agreement followed a meeting at Mobile World Congress in Barcelona last month, which involved senior leaders from the eight groups involved in the initiative. The groups include: Bharti Airtel Africa, Etisalat Group, MTN Group, Ooredoo Group, Orange Africa, Middle East and Asia, STC Group, Vodafone Group Africa, Middle East and Asia Pacific and Zain Group. Together the operator groups cover 551 million mobile connections across Africa and the Middle East.

“We are greatly encouraged by the shared vision of mobile operators and the common urgency to find solutions that will drive down the cost of mobile and Internet services and help connect the unconnected,” said Anne Bouverot, director general at the GSMA.

In related news, Indian operator RelianceJioInfocomm has signed a tower sharing agreement with local passive network infrastructure provider ViomNetworks. The agreement follows a similar agreement Reliance Jio signed with local infrastructure provider BhartiInfratel earlier this month for its pan-Indian operation.

Reliance Jio will use Viom Networks’ 42,000 telecom towers, which span the country. It said that the sharing agreement will ensure a speedy network rollout, cut capital costs and reduce the environmental impact made by the operator.

Prior to announcing its tower sharing agreement with Bharti Infratel this month, Reliance Jio Infocomm announced an infrastructure sharing agreement with Bharti Airtel, Bharti Group’s operator subsidiary.

Reliance Jio said that the agreement is in line with an earlier comprehensive telecom infrastructure sharing arrangement between itself and Bharti Airtel, which is aimed at avoiding duplication of infrastructure in order to preserve its capital and minimise the firm’s environmental footprint.

The big M&A news of the week was that Vodafone has had its bid for Spanish cable player Ono accepted, another milestone in its bid to expand its presence in existing markets. It turns out that the magic number required to end the cable operator’s pantomime IPO (Oh yes it is! Ono is isn’t!) was €7.2bn.

Vodafone said the acquisition will give it a time to market advantage when launching products and services in Spain. It also intends to capitalise on Ono’s distribution and marketing capabilities and aims to cross-sell products and services to each company’s customer base. Vodafone estimates revenue synergies with a total net present value of approximately €1bn.

According to Vodafone, Ono has Spain’s largest fibre networks, with a reach of 7.2 million homes, or 41 per cent of all Spanish homes. However, its customer base  currently stands at just 1.9 million homes and Vodafone highlighted the attraction of Ono’s spare capacity.

“Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction – together with our fibre-to-the-home build programme – will accelerate our ability to offer best-in-class propositions in the Spanish market,” said Vodafone  CEO Vittorio Colao.

The deal continues the trend that saw Vodafone’s acquisition of German cable provider KabelDeutschland for €7.7bn last year. Vodafone plans to use that acquisition to offer premium unified communications services to consumer and enterprise customers in  Germany and believes that by creating an integrated communications operator it could generate around €11.5bn in revenue each year in Germany.

There’s a lot of this about at the moment and last week, French conglomerate Vivendi  announced that it would enter exclusive negotiations with investment vehicle Altice over the sale of mobile operator SFR. Altice said it intends merge SFR with French cable player Numericable.

This week Bouygues said “not so fast” and reasserted its own claim on the French number two mobile operator by increasing the cash part of its offer to Vivendi. The offer now stands at €13.15bn.

Vivendi’s Altice announcement comprehensively rebuffed Bouygues’ earlier offer of €11.3bn in cash and a 43 per cent stake in the new entity that would be formed by its proposed merger. This in itself was an €800m improvement on its initial offer of €10.5bn but a three per cent less stake than the 46 per cent stake it had originally offered to Vivendi.

However, the Vivendi board did not rule out Bouygues’ offer entirely and said that at the end of the three weeks, it will meet again to examine the next steps and “decide if it should put an end to the other options envisaged”.

Seemingly unwilling to wait, Bouygues submitted its  latest offer on Thursday this week. The €13.15bn in cash on the table is €1.4bn more than Altice’s offer, but the operator is now offering just 21.5 per cent of the new entity into the bargain. Altice’s offer consists of an €11.75bn payment to Vivendi as well as a 32 per cent equity share in the combined listed entity that would be formed by a merger between SFR and Numericable.

According to Bouygues, a merger with SFR would generate €10bn in synergies. If the merger goes ahead, Bouygues plans an IPO of the new entity, which it says with give Vivendi an immediate opportunity to monetise its stake in the entity. It also claims that the reduced size of the stake will make it easier for Vivendi to sell its stake whenever market conditions are optimum.

In a bid to allay competition authorities’ concerns over a merger between the two mobile operators, Bouygues has also entered into exclusive negotiations with rival Free, owned by parent company Iliad, to sell its mobile phone network and portfolio of frequencies for “up to €1.8bn”. The deal was conditional upon Bouygues successfully completing its bid for SFR.

Let’s nip back to Spain for a moment and a bit of enterprise news from incumbent operator Telefónica. The firm’s digital services wing announced a deal with Samsung on Monday that will see the Korean vendor’s recently revamped mobile application containerisation platform Knox made available to Telefónica Digital’s global enterprise and public sector customers.

The move comes as organisations in both the private and public sectors face continued challenges in providing secure access to corporate data on both corporate and non-corporate issued devices.

In other Android news Google has extended the platform to support wearable devices. The Android Wear extension is intended to bring a common user experience and a developer platform to wearable devices. Google is also inviting software developers to sign up to use the alpha version of its SDK, the Android Wear Developer Preview. The current Android Wear Developer Preview is intended for development and testing purposes only, said Google. The firm added that it may change the Developer Preview significantly prior to the official release of the Android Wear SDK.

Sticking in the US, mobile operator Sprint has extended its LTE coverage to 20 new markets, taking the total number of cities in which the service is available to 402, the firm said. It also introduced its Spark service, which takes advantage of LTE-Advanced techniques including carrier aggregation, in two new markets, Provo, Utah and Trenton, N.J.. Sprint said that it expects to have LTE coverage of more than 250  million people by the mid point of 2014.

China Unicom, meanwhile, became the last of the Chinese mobile operators to launch LTE services this week.

In other Chinese news the world’s largest operator, ChinaMobile, reported the first drop in profit that it has seen since 1999! Is this the beginning of the end of the Chinese telecoms growth engine? Net profit for 2013 was around $19.5bn, down just shy of six per cent year on year.

China Mobile complained of a “number of challenges”, including the impact of OTT products on its traditional communications business, intensifying competition from other carriers and saturation in its core markets. “Welcome,” said the leading mobile operators of the West. “We’ve been expecting you.”

Sticking in the region, Nokia Solutions and Networks announced two Asia-Pac deals this week. It has delivered multi-band carrier aggregation technology to TaiwanMobile and signed a memorandum of understanding with Chinese content and application delivery solutions provider ChinaCache.

The Finnish firm has supplied its Liquid Radio and Liquid Core technology to the Taiwanese operator and will also deploy LTE-Advanced carrier aggregation technology, combining the 700MHz and 1800MHz spectrum bands, to increase bandwidth and network performance.

According to NSN, Taiwan Mobile has focused on using the 700MHz band to deploy LTE coverage as it has been harmonised across several Asia-Pacific markets as well as Latin American markets. But while the band is suitable for providing indoor cell and rural area coverage, the operator is providing additional capacity using the 1800MHz band to aggregate the two frequencies and better serve high density areas.

“NSN is now the sole supplier of Taiwan Mobile’s 2G, 3G and 4G networks,” said Markus Borchert, president of NSN Greater China region. “With our innovative carrier aggregation solution and network planning and optimization services, the operator can combine its spectrum for significantly increased data throughput and an unmatched customer experience.”

The deal with ChinaCache sees the two firms undertaking to jointly develop next generation mobile content delivery solutions using NSN’s Liquid Applications technology. NSN said the technology will enable content to be delivered directly from LTE base stations, which results in faster data throughput and can also translate into improved customer experience.

NSN also appointed a new head of South Africa, Deon Geyser.

In other personnel news, Tele2 has a new CFO in the shape of Allison Kirkby, who was once of Virgin Media.

Let’s end this week on a rare high customer service high note, since we started on a low one. Australian telecoms regulator the Australian Communications and Media Authority has announced a “sustained reduction” in complaints to the Telecommunications Industry Ombudsman (TIO) from consumers regarding customer service issues.

In September 2011 ACMA warned operators to improve their customer service and complaint handling by February the following year or face tougher regulation. At the time, the regulator had recently completed a public inquiry and found that the majority of consumers were dissatisfied with their experience of customer care in the industry, regardless of which service providers they were with and which products they offered.

ACMA said that customer complaints have gradually fallen since its announcement, despite an upturn in the first half of 2013. It said that data published by the TIO this week reveals that in the quarter ended December 2013, the body received the lowest amount of complaints in a quarter in six years.

Happy Days!

Take Care

The Informer