Long shots and shortcomings

By The Informer

This week the Czech Republic, France and England have been battling it out in different groups for a shot at lifting the European LTE cup. Well, in fairness that victory was claimed a long time ago by the Scandinavian operators, and as is typical, England’s chances really aren’t looking too good.

The Czechs got a shot in first earlier week, with Telefónica O2 switching on its LTE network in the municipality of Jesenice and its surroundings; a total population of almost 10,000. The network operates on the 1800MHz frequency using Telefónica‘s 2 x 10MHz spectrum block. Chinese vendor Huawei supplied the infrastructure.

French mobile operator Orange wasn’t far behind, activating its first LTE coverage in the city of Marseille, promising connectivity speeds of up to 150Mbps. The operator said Lyon and Nantes will also 4G coverage by the end of the year, followed by 12 other cities by summer 2013.

Interestingly, Orange’s announcement steered well clear of the LTE acronym, instead referring to the technology as 4G only, and promising it to be ten times faster than current 3G speeds. However uptake may be slow as the operator acknowledges that compatible devices will only be made available over the coming months.

Meanwhile the UK Government’s decision not to facilitate the deployment of LTE until 2013 at the earliest has been labelled “appalling” and has forced the UK to surrender its position as one of the leading communication markets in the world. This is the judgement of a C-level executive from one of the UK network operators, who spoke to the Informer under condition of anonymity.

His comments were made at the same time the UK’s Minister for Culture, Ed Vaizey, speaking at a conference in London said that Ofcom is being held up in its approach to LTE licensing by fear of litigation from the UK operator community.

“Ofcom needs to go through a massive process [with LTE] as it will get sued by telcos if it doesn’t get it right,” Vaizey said. ”So, if you are looking at what is delaying it, it is not Ofcom it is the telecom companies.”

But our operator exec reckons that the UK Government has “lost the plot and let us fall behind.” We led with the deployment of PCN; we were also at the forefront with 3G (and the Government did very well out of that); but with LTE, they have let us get behind the world. This was the gist of the argument, which also notes that while the auction of LTE spectrum is still scheduled for the end of 2012, much of the spectrum allocated will not be clear until 2013 —and in some cases late in 2013.

Things are getting interesting on the Informer’s wet little island, with the UK now split into two network camps—Vodafone and O2 wanting to deploy LTE in collaboration while 3UK and Everything Everywhere are expected to rollout the technology through their MBNL network joint venture. Collaboration, it seems, will be an essential part of the deployment process.

But there is also some speculation that Everything Everywhere could be the subject of a takeover bid by private equity house KKR, which also owns British retailers Boots and Pets at Home. The retail angle certainly fits and the bid is reportedly being masterminded by former EE CEO Tom Alexander.

The idea that EE might be an acquisition target for a high street retail specialist reflects the operator’s evolved position. It no longer manages its own 3G network, having devolved responsibility for this to the MBNL shared venture with 3UK, which has seen T-Mobile, 3UK and Orange pooling together infrastructure equipment and tower sites.

If things are getting confusing then that may explain why Everything Everywhere has a confused brand strategy, with T-Mobile and Orange continuing to face the UK consumer as separate entities, while a considerable marketing push has been put behind the parent brand. It is unclear what would happen to the three brands if the operation was acquired by a separate entity, although the Orange brand arguably has far greater traction in the UK market than T-Mobile, and certainly more than Everything Everywhere.

Another brand with not much traction, Motorola Solutions, was also this week making a bid for yet another brand with not much traction – one time gem in the UK’s tech crown and the company that spawned Symbian:Psion.

Psion now describes itself as a ruggedised mobile device manufacturer, which makes it sound like it has a square jaw and stubble you could strike a match on. Well Motorola is hoping to strike a match and believes £128m ($200m) could seal the deal.

According to David McQueen, principal analyst at Informa Telecoms and Media, it is likely that the move is an attempt by Motorola Solutions to safeguard its fortunes in business market, which is being eroded by the rise of consumer technology players, such as Apple and Google, whose tablet devices are being increasingly used by business users.

“The problem with tablets is that they’re not really ruggedised and security is an issue,” he explained. “Taking an iPad or Android tablet into the office causes a headache for the CTO, because there’s very little security on them.” He also cautioned that by acquiring Psion, Motorola Solutions may only be focusing on its short-term future.

Web giant Google was thinking about its long term future this week, with another acquisition – this time of a patent portfolio on “beam forming” Mobile Transmit Diversity (MTD) from US-based Magnolia Broadband.

While the patents cover methods for increasing spectrum utilisation – or network capacity, expanding coverage, improving uplink transmission speeds at the cell edge, and improving device battery life, the cynical Informer believes this move is less about making technology available to Motorola Mobility, and more about shoring up Google’s own patent war chest ahead of some of the lengthy courtroom battles likely to drag on for years to come.

Nokia Siemens Networks (NSN) was playing a similar game of improving smartphone performance, but coming at it from the networks side. The firm demonstrated a new feature for HSPA+ networks that it claims improves smartphone performance, despite research suggesting that there is not a lot of difference between vendors’ offerings.

NSN’s feature implements a bundle of standards-based features that deliver Continuous Packet Connectivity (CPC), which it claims provides “five times more uplink capacity” and allows operators to support more smartphone users on HSPA+ networks.

However, while vendors have been quick to point out how their technologies trump that of their rivals, telecoms.com has recently surveyed a group of CTOs from leading operators around the world, and the consensus was that there is not much difference between vendors’ offerings.

The first couple of interviews have been made available this week, here, and the full series will be printed in the forthcoming issue of MCI.

There’s some interesting points, from Yves Bellego, Director of Technology Strategy for Orange Group, talking about why he doesn’t like using femtocells because they interfere with the macro network. And Andrei Ushatskiy, Vice President and Chief Technology Officer for leading Russian carrier MTS, on the prickly subject of net neutrality.

The Russian carrier recently embarked on a revenue share deal with Google for Android apps sold in Russia. Within the framework of the agreement, MTS installs Android Market as the primary interface on all of the MTS-branded Android smartphones it sells. Google has set up a special MTS-branded section in the Android Market to promote MTS-branded applications as well as those developed by MTS partners. Under the revenue-sharing agreement, MTS will get 25 per cent of the revenues from each paid mobile application bought from MTS-branded mobile devices.

Also in the OS market, US software giant Microsoft unveiled its latest operating system for mobile handsets, Windows Phone 8. The announcement was made in the same week as the firm launched its Surface tablet device, which runs on the flagship Windows 8 operating system for PCs and tablets.

The mobile OS shares common code with Windows 8, and has a similar tiled interface. It also shares common networking, security, media and web browser technology, and a common file system with the PC and tablet version. Microsoft also unveiled two of its own tablet devices, in an attempt to compete with rivals Apple and Google as well as its own OEM partners. The Surface devices come in two flavours: one running an ARM processor featuring the Windows RT operating system, and one with a third-generation Intel Core processor running on Windows 8 Pro.

Malik Saadi, principal analyst at Informa Telecoms & Media believes that the new OS will challenge the “ageing Apple iOS”.  He said that smartphones running the WP7 platform have been missing some of the most innovative features necessary to win the heart of advanced users – the “super-smartphone” owners in particular.

In related news, Korean vendor Samsung has come up with a sneaky way of converting iPhone users to Android users by helping them transfer their content from one brand device to the other. The firm has signed an exclusive licensing agreement with developer Media Mushroom to make its Easy Phone Sync app free for users with Samsung Galaxy smartphones. The app allows users to port iPhone content to their Samsung phone and also allows the device to sync with iTunes.

Finally, there was a lack of harmony in India this week as leading network infrastructure vendors have pulled out of negotiations with India’s state-owned telco BSNL.

Huawei, Alcatel-Lucent, Ericsson and Nokia Siemens Networks have withdrawn from the tender, saying they cannot match the proposal from Chinese vendor ZTE. According to local reports, ZTE is offering to install around 14.4 million lines for BSNL for just $840m, while Huawei had quoted $1.3bn, Alcatel-Lucent quoted $1.8bn, Ericsson $2.3bn and NSN $2.5bn.

The pricing difference is sizeable and gives some insight into the pressures on the market, but BSNL’s network expansion plans have already been hit by politically-motivated delays, such security concerns around allowing Chinese vendors to install kit in border areas.

But the other vendors have the upper hand now, due to the fact that Indian laws require multiple suppliers for large contracts, and that the other bidders must match the lowest price awarded. Therefore, if competing vendors do not match ZTE’s bid, then the network expansion will be delayed once again.

Some things are a long time coming.

Take care

The Informer