New neighbours

By The Informer

Last week the Informer joked that Nokia might get turfed out of its recently sold headquarters to make way for a Chinese tenant. It could never happen, of course. Could it…? Huawei got all up in Nokia’s face this week by announcing the opening of an office in Helsinki. Statements of intent don’t come much more pointed than that.

The Chinese vendor said that it will drop €70m on a new R&D centre in the Finnish capital, with plans to hire 100 staff over the next five years. The firm’s head of Central, Eastern and Nordic Europe, Kenneth Fredriksen, said that “the open and innovative environment in Finland is an ideal place for Huawei to strengthen our global R&D capabilities for devices,” without making any explicit observations that there might be one or two Nokia employees looking for a move.

In the face of open hostility from the US, Huawei is going all out to establish itself in Europe, where it now employs 7,000 people. In the autumn it pledged to invest £1.3bn in the UK, creating a number of “centres of technical and financial excellence” and procuring British products and services.

One thing the firm is now doing over here is running the 3UK network. In 2010 3 revealed that it would not renew the managed services contract with Ericsson that had been in place since 2005 when it reached the end of its term. That happened this week and Huawei will now deliver service management and operations for the operator’s core network, the transport network and the ICT applications. Huawei has roped TechMahindra in to manage the ICT piece.

This is a coup for Huawei; the original contract won by Ericsson was one of the defining early managed service contracts and was believed to be worth somewhere in the region of $2.2bn.

However, what Huawei has inherited is fundamentally different given the change in scope that occurred during the creation of MBNL, the network JV now owned by 3UK and Everything Everywhere. As the lead services provider on this project, Ericsson announced that the network merger was completed in November 2010, with more than 12,000 sites consolidated.

That five-year managed services deal was struck in 2009, giving Ericsson a couple more years before it comes up for renewal.

In March, Huawei won a five-year agreement from Telefónica’s UK operation, O2, to manage the operator’s multi vendor core transmission and mobile access network. This was Huawei’s first major managed services deal in the UK.

One of the biggest stories in the UK this year was the controversial decision by Ofcom to allow Everything Everywhere to steal a march on its competitors by re-farming 1800MHz spectrum to use for LTE. Those competitors began to gain ground on EE this week as Ofcom took deposits for next month’s spectrum auctions.

Ofcom has set a reserve price of £1.3bn for all available spectrum, including 2x15MHz of 1800Mz spectrum that Everything Everywhere is required to divest as part of its deal with Ofcom. In his recent Autumn Statement, the UK Chancellor George Osborne pegged the amount the UK Treasury is hoping to raise at £3.5bn, which puts the official view slightly above industry expectations, but broadly on par with the amounts raised in similar auctions in other European markets such as Germany.

Shortly after the deadline for applications closed, the Financial Times reported that UK wireline incumbent BT, which was once the owner of Telefónica’s O2UK operation, will join the four British mobile carriers in the auction.

Back to 3, though, and the firm’s Austrian operation was this week cleared by the EC to acquire its Orange compatriot. The move comes after more than ten months of intense scrutiny of all aspects of the proposed merger by the EU and Austrian authorities, according to Hutchinson 3G Austria CEO Jan Trionow.

“The combination of the two businesses will result in a stronger challenger in the Austrian market, able to take the fight to the two incumbent MNOs, for the benefit of Austrian consumers,” he said.

Across the border, German incumbent Deutsche Telekom pledged this week to invest €30bn in fixed and mobile infrastructure between now and 2015. €6bn will go on FTTC broadband and LTE deployment in its home market, while €4bn has been earmarked for LTE rollout in the US.

In other LTE news, Ericsson has launched MTN’s 4G network in South Africa, following a 12-month trial. The service is live in Johannesburg, Pretoria and Durban but not yet available in Cape Town.

Meanwhile Ericsson is going to have to struggle on alone with its silicon business ST-Ericsson now that its partner in the venture, STMicroelectronics, has announced that is giving up the fight. Divorce proceedings have already begun and the Decree Absolute is expected towards the end of next year. This is almost certainly not what Hans Vestberg wanted for Christmas.

“We have made the decision to exit ST-Ericsson after a transition period. We will continue to support ST-Ericsson as their supply-chain partner, advanced process-technology partner and application-processor IP provider,” said Carlo Bozotti, president and CEO of ST. “Based on that, our new strategy is centred on leadership in sense and power and automotive products, and in embedded-processing solutions. Our specific focus is on five product areas: MEMS and sensors, smart power, automotive products, microcontrollers, and application processors including digital consumer.”

In other vendor news Alcatel Lucent’s vice president for the global Vodafone account has jumped ship to Nokia Siemens Networks, where he will perform the same function. In an internal memo to senior management seen by Telecoms.com, NSN’s head of European customer operations René Svendsen-Tune announced that Wolfgang Hackenberg had joined the firm to assume control of the Vodafone account, which has been under interim management since the middle of the year.

In April this year NSN poached Alcatel Lucent’s president of End to End networks to lead its Americas business. Ken Wirth was instrumental in developing Alcatel Lucent’s LTE proposition, and was recruited to strengthen NSNs offering in the 4G technology.

Earlier this week research house Infonetics reported that NSN had increased its market share in LTE infrastructure from13 per cent to 21.5 per cent during the third quarter of this year. The firm said that the three largest deployments during the quarter in revenue terms were in North America, Japan and South Korea. NSN said that its performance reflected “the company’s strong position in every major account in Japan (NTT DoCoMo, KDDI and Softbank Mobile) and South Korea (KT, SK telecom and LGU+) as well as the T-Mobile rollout in the US.”

On the handset side of the fence, and in the wake of the problems surrounding Apple’s own Maps application, Google Maps has made a triumphant return to the iOS platform.  Although Google Maps was preinstalled on previous versions of the iOS platform, Google did not offer a version of its app for the latest iteration, iOS6. Instead Apple, having dispensed with a native installation of Google Maps, created its own mapping application in a move to take more control of the assets on its devices.

The plan backfired, however, and several glitches in the app were exposed. Apple CEO Tim Cook conceded that users were better off using rival services, and apologised for the glitches in the Cupertino firm’s own offering.

Google has now responded to Apple users calling out for the reintroduction of the firm’s Maps app by rolling out a free Google Maps for iOS6 app in more than 40 countries and 29 languages via Apple’s App Store.

Apple and Google are probably not quaking in their boots at the thought of operators’ attempts to get in on the OTT action through the JOYN collaboration. But the carriers are undeterred and his week a Silicon Valley startup received funding from Vodafone to push the project along.

Vodafone Ventures, the US investment vehicle for Vodafone group, led the $8.3m financing round with help from Tokyo-based game creator MTI. The startup, Jibe Mobile, is developing applications and technology for the GSMA-backed Joyn initiative that will deliver inter-carrier rich communications services (RCS).

Last month, three Spanish operators became the first to offer cross-network rich comms services, with Movistar, Orange and Vodafone enabling customers to chat and enrich messaging or voice calls with images or video. Additional services such as voice over IP (VoIP) and IP-video calling are set to be introduced in the near future.

Jibe said it will be developing the world’s first open technology platform leveraging RCS 5, enhancing its open APIs to help developers incorporate real-time, ‘rich communications’ into mobile applications.

“There is no doubt that rich communications is becoming an increasingly important part of the consumer mobile experience. Jibe’s mission is to make carrier-grade communications simple and accessible for the global market,” said Jibe co-founder and CEO Amir Sarhangi. “In-app communication increases user engagement and creates new monetization opportunities for developers.”

And that is about the size of it, not only for this week but for the whole year. The Informer is off on his Christmas holidays now and will be back once more in the first week of January.

He hopes you all have a fine time over the holiday season.

Take care

The Informer