No more gluttony… And donuts

By The Informer

Maybe the Informer’s just getting old and the revisiting of his former beliefs is all a part of that process. But he’s sometimes astonished to discover that things he firmly supported around 15 – 20 years ago (tie dye, gypsies, the Levellers, etc…) no longer have his backing. Take the internet for example. For much of that last 15 – 20 years, the Informer, in various incarnations, has been fed and sheltered by producing content for the tubes. And the vast majority of that content has been given away for free.

That’s what the internet is for, right? Well, that is the dilemma with which the Informer is currently struggling. As a bit of background here, UK newspaper the Times (owned by Rupert Murdoch’s News International group) is just about to put up a pay wall around its digital content, and many expect the rest of News International’s portfolio to follow suit.

The big debate here centres on whether or not the strategy will work. Will people pay for content when they can just as easily get much the same stuff elsewhere for free? There’s an interesting piece on the BBC by Sean Coughlan, who argues that this is the way the internet was meant to be. It was supposed to be a repository of premium content, where sites might have a niche following of paying subscribers, rather than trying to scrape by relying on advertising revenue. The “digital hippies” ruined all that, by setting up camp and encouraging everyone to give their stuff away for free. So the challenge now is to try and convince internet users worldwide that they should actually be paying for stuff they like.

Yes the Informer’s having a bit of a grumble, and no, he’s not going to start charging for AWIW, but the point seems fair that if the content is good quality and unique, then consumers shouldn’t have too much of a problem paying for it.

This situation is really not that different to what’s taking place in the mobile world right now. Anyone who’s been to an industry event in the past 12 months or so will have heard plenty of chat among the telecoms industry’s movers and shakers about just how unsustainable the flat-rate-unlimited-data tariff model really is. It’s been a long time coming, mainly because the carriers have been understandably nervous about telling consumers that there’s no such thing as “unlimited”. But it’s finally happened: AT&T has called time on the all you can eat data buffet.

From June 7, the US carrier will discontinue its flat-rate-unlimited-usage offerings and start selling buckets of data, just like the old days. Is this bad for the consumer? AT&T says it will make mobile data more affordable for more people. It will only be the tiny percentage of so called “heavy users” who are out of pocket, but that will probably free up some network resources.

So what’s the deal? From Monday, AT&T will offer the DataPlus tariff with 200MB of data per month for $15, with users charged an extra $15 for 200MB more if they exceed that amount. While the DataPro packages provides 2GB for $25 per month, with users charged $10 for an additional 1GB of data if they exceed that amount. AT&T says that at present, around 65 per cent of its smartphone customers use less than 200MB of data per month on average, and 98 per cent of smartphone customers use less than 2GB of data a month on average.

So the reality is that, if you want to use 300MB/month, then the only option is to pay for 2GB, because it’s cheaper than paying for 400MB. Part of the point of unlimited data plans (aside from enticing customers onto the mobile internet) was that they simplified tariff structures and got rid of illogical situations like the one detailed here. Surely, after all this time, carriers can do better than this.

AT&T said it will send subscribers three text notifications or emails – after they reach 65 per cent, 90 per cent and 100 per cent of their data threshold. Smartphone users, including iPhone users, can also download an app that allows them to track data usage. This move will be watched with interest by the rest of the industry and no doubt more carriers will follow AT&T’s example.

Vodafone, for one, looks likely. Earlier this week the Big V scrapped the fair usage policy on its 500MB Flexi or Value Pack offerings, introducing out of bundle charging for pay monthly customers that go over the 500MB limit. Under the new charging structure, monthly bundle customers will pay £5 for every 500MB after the first 500MB, while customers without a monthly bundle will pay £0.50 for every 10MB after the first 25MB.

Like AT&T, Vodafone said it is introducing a real-time notification service to alert its customers to their usage patterns and be completely transparent about these charges. “The reason we’re introducing these charges is to make it fairer for everyone, and to protect our network from data abuse,” the company said.

One company that might be hit by this move is VoIP provider Skype, which finally got its service working over 3G, having released an iPhone app a couple of days ago. The big news for Skype is that there was some pent-up demand for said app, which the company claims has been downloaded over five million times already.

At present, Skype-to-Skype calls over 3G will be free (although operator data charges may still apply) and will remain so until the end of 2010. But then it looks like Skype will start charging for 3G calls.

PLUG ALERT:

Coincidentally, telecoms.com will be running a webinar on the very subject of policy management and charging models for mobile data next week, in association with Openet. When the Informer had a recent chat with Jonathan Downey, director of product marketing at Openet, Downey said that he expects an increase in the number of Kindle-like charging models, where there is no formal subscription deal in place between the operator and the consumer, but the price of the data transfer is included in the price of the content itself.

You can register for the webinar HERE.

PLUG ENDS!

There may be some truth in this as the Informer heard from the horse’s mouth just yesterday that there are numerous European negations taking place to get Spring Design’s Android e-reader that goes by the name of Alex into the hands of every Tom, Dick and Harry in Europe. But this is another market that stands on shaky ground at the moment. If you remember last week, the Informer’s chums at Informa Telecoms & Media forecast that the e-reader’s days are numbered, with strong competition coming from a wide range of consumer devices.

Research released by the analyst forecasts that e-reader sales are expected to peak at 14 million in 2013, before falling by 7 per cent in 2014, due to a shift away from dedicated e-readers – think the Amazon Kindle and the Barnes & Noble Nook – towards multifunction device types like mobile handsets and tablet form-factor devices including the Apple iPad.

Apple says “iPad” while Asus, on the other hand says “Eee Pad”. That was the song being sung at the Computex trade show which kicked off in Taipei, Taiwan on Tuesday, as Asus unveiled a Windows 7-based touchscreen device that will come in ten- and 12-inch in versions and is powered by an Intel Core 2 Duo chipset. The tablet is expected to retail for less than $500 and will be available in early 2011. What’s not clear is whether the device will support 3G as well as wifi.

In related news, San Diego-based Qualcomm said that it has sampled its first dual-CPU Snapdragon chipsets, with the MSM8260 and MSM8660 running at up to 1.2GHz. The Snapdragon is a popular choice among the Android community, and the chipset is making waves in the smartphone, netbook and tablet sectors.

Sticking with open source operating systems, tablets and Computex for a moment, a handful of industry players got together this week to throw some support behind the Linux-based tablet movement. Texas Instruments, ARM, IBM, Samsung, ST-Ericsson and Freescale announced Linaro, a not for profit open source software engineering company, tasked with providing new resources and standardised components for developers working on embedded Linux systems and middleware components.

Moving on now to Finnish-German equipment vendor Nokia Siemens Networks (NSN), which this week appointed BT’s current head of mobile technology as its new chief technical officer, effective July 1. Hossein Moiin will report directly to NSN CEO, Rajeev Suri.

The new role of CTO was created by NSN following its 2009 reorganisation, which included the elimination of the role of chief operating officer from January 2010. In his position as CTO, Moiin will be responsible for developing and advocating the company’s technology strategy and long-term views on network architecture.

Prior to working for BT, Moiin held positions with T-Mobile, including group vice president for technical strategy and chief architect. Moiin was also chief technologist for the Network Service Provider Group at Sun Microsystems.

Now then, It was metaphysical poet John Donne who said that ‘no man is an island’. He may have been a literary genius, and the Informer is loath to suggest improvements to works that have been admired the world over for the best part of 400 years. After all, the only poem the Informer can recite from memory begins: “There was a young girl from Nantucket…”

Nonetheless, Donne would have been well advised to add some parentheses to that line, containing the words: “Apart from the Isle of Man, of course, which is clearly an island”. To be fair, it most likely didn’t scan that well.

What do you know about the Isle of Man? Probably not very much, if you’re honest. The Isle of Man is a self-governing British Crown Dependency located in the Irish Sea. It’s not part of the UK, but the UK is to all intents and purposes responsible for it; crucially in the areas of defence and foreign relations. It’s a bit like a student that lives in a different town, but comes home with holdalls full of washing that needs doing every now and again, and retains umbilical financial relations with its parents.

It’s famous in motorsport circles for its (literally) breakneck road races and, in this industry, for being an advanced testing outpost for Telefonica O2. It was the site of Europe’s first 3G network, through O2 subsidiary Manx Telecom, and Europe’s first HSDPA service as well.  That relationship has now been brought to a conclusion, though, with the sale of Manx Telecom to a pair of investment firms, HG Capital and CPS Partners for £158.8m.

Telefonica’s European strategy is all about focusing on its core markets, so it makes sense to offload the little Manx operation. It’s a shame, though, the Informer always liked the idea of the good folk of the Isle of Man getting access to cutting edge technology ahead of their megacity cousins on the UK mainland.

Telefonica’s Brazilian strategy, meanwhile, is up in the air as wrangles with Portugal Telecom continue. The Spanish incumbent and Latin American big boy has increased its offer to buy the 50 per cent of Brazilian firm Brasilcel that is owned by Portugal Telecom to €6.5bn. Telefonica had previously offered €5.7bn for the stake, an offer that was rejected, leading the firm to suggest that a hostile takeover bid for its Portugese counterpart – in which it already holds a ten per cent stake – remained an option if a sale of the Brasilcel stake could not be agreed.

Brasilcel owns 60 per cent of mobile player Vivo, which leads the Brazilian mobile market and had 53.9 million subscribers at the end of the first quarter this year, according to data from Informa’s WCIS. Telefonica is keen to merge the Vivo operation with its Brazilian fixed arm Telesp, in a bid to drive cost synergies in the market, a move which Portugal Telecom views with scepticism.

And from John Donne to another of our great poets, Homer Simpson. “You tried your best and failed miserably,” he told his son. “The lesson is: Never try.” And it’s a lesson that could easily be applied to the attempted merger of Orange and TDC’s Swiss operation, which was blocked by the Swiss competition authorities in April. This week, France Telecom quietly conceded that there was no alternative and that the two firms were ceasing discussions and withdrawing their appeal.

If the humble pie doesn’t taste too good, perhaps they could get themselves a donut. Mmmm, donuts… Is there nothing they can’t do?

Take care

The Informer