The blissful cloud of summer-indolence

By The Informer

My God, it’s been so quiet this week you could have heard a Trappist monk complaining about a pin dropping onto a sponge. “Ripe was the drowsy hour,” as Cockney-John Keats wrote; the summer lull looks to have begun a little ahead of schedule this year, with only a few entities poking their heads above the news parapet.

Sony Ericsson was one, offering a hair of the dog to anybody nursing a hangover from last week’s iPhone knees-up. On Tuesday the JV vendor sent its summer collection tottering down the catwalk, with the 8.1 megapixel C905 Cybershot leading the way. In tow was the F305 – a games-centric piece with Nintendo Wii-esque motion sensors on board – as well as a couple of entry-level Plain-Janes trying to dodge the flash-gun glare.

Still, the firm’s been bulking out at the mid- and low-tier levels of its portfolio in an effort to grow volume – particularly in emerging markets – and make a bid to reclaim the fourth spot that it ceded to LG earlier this year. And it will have double the motivation to oust LG, now the latter has lured Sony Ericsson’s global director of brand away with its Korean siren song and, presumably, a fattened wallet.

Andrew Walker is now marketing director for LG UK and Ireland and had this to say about the move: “LG [has] the potential to become a leading brand in this market. The exciting challenge of building a marketing team capable of realising that potential was too attractive to turn down. In this role, I will be looking at making our brand approach coherent and consistent – shedding the cliches of technology communication to focus on being accessible, aspirational, distinctive and relevant to people across the UK and Ireland.”

On reading this the Informer was moved to scratch his head. Perhaps Mr Walker had drunk deep from the well of irony, he thought. For how can you shed cliches and still look to focus on being “accessible, aspirational, distinctive and relevant”? It’s a bit like Gordon Ramsey calling a press conference to announce that he’s taken the decision to stop f*!%ing-well swearing.

It was testament to how sleepy a week it has been that there was significant press hoo-ha over some throwaway comments made to the Financial Times by the EU telecoms commissioner, Viviane Reding. In her latest campaign, Big Viv’s going after the termination rates that operators charge one another to complete off-net calls. True to form, some operators have privately harrumphed that they will just have to hike their call charges to compensate. On being asked by the FT whether this might lead to the introduction of a called party pays element to European pricing, Reding said it was up to the operators but that she had no objections in principle.

So it was jumped upon, and headlines screamed that Europe would be getting called party pays – where consumers have to pony up a charge to receive incoming calls. If the Informer were a gambling man he’d have a nifty fifty on the sure thing that this will never happen. If mobile operators were suddenly to announce to their customers that they were going to have to pay to receive calls there’d be uproar. There’d be outrage. It would go down, as the Informer’s dear old Granddad used to say, like a cup of cold sick.

Meanwhile, in other price fixing news, ahem, carriers in the Philippines have been fined a total of $8.3m for price fixing on text messages by the nation’s anti-monopoly agency. And those guys do love to text.

One thing the Informer has noticed as he scurries through London town is that UK operators have hit on a different way of cutting costs. It’s actually been around a while but there’s a big push on at the moment for SIM-only contract tariffs. And this week, MVNO Virgin Mobile released calculations it had made suggesting that UK consumers could save a collective total of £849m by opting for SIM-only tariffs.

The Informer spoke to Virgin and Vodafone this week after he saw this research and both operators trotted out the regulation blah about ‘choice’, ‘value’ and ‘flexibility’. But surely this is all about slashing subscriber acquisition costs by cutting out handset subsidies? Virgin reckons SIM-only is the fastest growing segment of the contract market over here in the UK but neither operator was willing to disclose the differential in acquisition costs between handset and SIM-only customers.

It could be, as Ovum’s Stephen Hartley suggested, that it also serves as a useful bridge between prepaid and full contract services, as SIM-only offerings tend to have a 30-day notice period. Hartley reckons that this could help woo commitment-shy pre-payers onto a contract from where they can be bombarded with enticements.

You’ve got to wonder what the handset vendors make of this – after all, Virgin found that 60 per cent of people surveyed would sooner keep their existing handset and bag a lower monthly tariff. If that translated into a commercial truth we could be looking at serious damage to handset shipments. Anyway, you’re going to have to keep wondering, as none of the handset vendors contacted by the Informer this week were willing to offer a comment on SIM-only and how they feel about a likely slow down in the upgrade cycle.

Nonetheless, the Informer will be looking into this a little bit more so he’d like to hear from anyone who has a view on the issue. SIM-only in emerging markets makes a lot more sense, so we’ll be focusing on the popularity of the strategy in saturated, developed markets. Is it going on anywhere near you? Let us know.

While we’re on the topic of research commissioned to prove a point, let’s have a look at a couple more items – it’s been a quiet week after all. First up, this old fluff from BT: The “latest figures” according to the press release sitting in front of the Informer show that office workers in the UK now see less sunlight each day than coal miners. This terrifying reality is being used by the carrier to urge corporate managers to let their drones work remotely through the magic of BT’s wireless hotspot network. Being outside and in the sun will make people happier and therefore more productive, says the frayed, hopelessly optimistic thread running through this release.

Let’s delve into this claim a little. First off, most British coal miners are now retired because the majority of mines were shut down by the Iron Lady. For all the Informer knows, these ex-miners now sit outside, basking all day long, so the comparison is meaningless. Second, this is the UK, people; there’s bugger-all sunshine anyway. Third, and most important of all, if you suddenly put a gaggle of UK desk-jockeys in the sun, they’ll blink in surprise for a couple of seconds and then they’ll go to a pub. Beer sales – not productivity – will go up.

Right, onto Mobyko, an online back-up facility for mobile data. The firm has created the ‘Mobilator’, an online calculator that enables anyone with too much time on their hands to generate a spurious ‘value’ for everything that is stored on their phone; contacts, text messages, pictures, audio, games and the rest. This calculator works on the following formula, devised, apparently, by a professor at University College London in conjunction with Mobyko:

X = St x T + Sv x V + Sc x C + Sp x P + Sm x M + Sg x G + Vm + W

At least Mobyko didn’t try and give any real weight to this frippery, joshing that “those of us not well versed in applied mathematics” should visit the site and try the application out for themselves. The thrust of the thing is that the firm is trying to persuade users to attach a monetary value to the content on their phone in an attempt to panic them into paying to keep it safe.

In the interests of thorough research – and because he had far too much time on his hands – the Informer tried it out, and found that there was £250 worth of content on his phone, including some unsolicited smut-spam.

(A quick aside here: The Informer’s mobile contract is up and he’s jumping ship from his current provider. On calling the operator to find out how long was left to run, and to inform a staff member of his impending departure and allow them the chance to talk him round, the Informer was made an offer. “I notice that you have a content bar on your account that stops you accessing adult material,” said the customer service monkey, before offering to remove it so that the Informer could spend the last month of his contract in bacchanalian consumption of barely discernible, low-grade bongo. How’s that for customer retention?)

Back to Mobyko, though. The funny thing about the service, if our content really is that important to us, is that even if you back it up, it’s not safe. Something could go wrong at the Mobyko end, or the firm could go out of business. Presumably, in this scenario, those users who have been persuaded that this insurance scheme is necessary would get the value of their content back? If it’s that valuable, eh? Let’s have a quick look at the Ts and Cs:

“It’s important to note that using the Internet has its dangers…We can’t be held responsible for any damage, loss or corruption of any data, information or material.

We are not responsible for any loss, claim or damage including but not limited to lost profits, lost savings or revenue, or loss or corruption of data or information or any indirect, incidental or consequential damages of any kind which arise out of or are in any way connected with your use or misuse of the Site even if we have been advised of the possibility of damage. Your use of the Site includes your use of information, products or services obtained through the Site.”

Righty-ho, then. If it matters that much, everybody, back it up yourself.

Perhaps Japanese carrier NTT DoCoMo worked out a similar formula for its purchase of a 30 per cent stake in Bangladeshi mobile carrier TM International. DoCoMo paid $350m for the stake, part of a renewed drive towards international expansion. Such strategies haven’t exactly reaped splendid reward for DoCoMo in the past but, after a period of introspection, the firm’s ready for another pop. In an interview in Singapore this week, according to Bloomberg, Toshinari Kunieda, DoCoMo’s SVP for Global Business, expressed an interest in the MEA region and revealed that early stage talks are going with Qatar Telecom, Emirates Telecommunications and Saudi Telecom.

Out in the Netherlands there’s been a party spirit this week; celebrations all round and fervent expressions of optimism. Not just because we might be witnessing the beginning of a return to the glorious Total Football that is characterised by the Dutch national football team but because, for sure, the WiMAX Forum threw its first ever Global Congress in Amsterdam. And there was more WiMAX news than you could shake a wobbly business model at.

It’s not often a keynote presenter, speaking at a trade show conference, draws widespread laughter from his audience. But this is exactly what happened in Amsterdam this week, when Barry West, Sprint Nextel’s CTO, spoke at the WiMAX Forum’s first ever Global Congress event.

With admirable comic timing, he called the claims made on behalf of LTE (the would-be WiMAX nemesis) as – and prepare to guffaw loudly – “PowerPoint propaganda”.

Picked yourself up off the floor yet?

OK, so maybe it’s not Comedy Store material but anyone who can get a laugh from a telecoms conference audience has the Informer’s respect.

West was, of course, preaching to a crowd of converted WiMAX sympathisers. LTE is the enemy and they want to laugh at it. But West had a point. LTE is only experimental at this stage and talk of 100Mbps to individual users, outside lab conditions, does sound fanciful.

The good news for WiMAX supporters is that West announced in Amsterdam that Xohm, the mobile WiMAX business unit of Sprint Nextel and flagship mobile WiMAX player, would start commercial service in September in Baltimore. Commercial launches in Washington DC and Chicago are scheduled during Q4 2008.

Xohm was originally slated to launch in April this year – a date presumably flagged up in more than one PowerPoint presentation – so failure to meet this new deadline would be embarrassing in the extreme for the WiMAX crowd. If another delay did happen, though, perhaps it would give any comedy-minded LTE supporters the chance to turn the tables on Barry West and think up some jokes about WiMAX.

How about this: What is the favourite song among WiMAX supporters? I don’t know, what is the favourite song among WiMAX supporters? Go West. (I thought it was WiMAX Love? – Ed.)

The other significant announcement at the Global Congress was the declaration by the WiMAX Forum that the first batch of 2.5GHz mobile products had been certified (which should ensure interoperability). A total of ten products from eight suppliers have received the thumbs up from the WiMAX Forum in this frequency band (which is also used by Xohm).

And there was some good news for WiMAX operators using the 3.5GHz frequency band, some of whom had been getting a bit antsy. Testing for 3.5GHz mobile products is scheduled for 3Q 2008, the Forum promised, with certification planned for the following quarter. The 3.5GHz licence holders have often felt aggrieved that the WiMAX Forum, in their opinion, has prioritised 2.5GHz certification over 3.5GHz certification. If the WiMAX Forum can deliver on its 3.5GHz schedule, then it should make future meetings of WiMAX Forum members a little more amiable.

Anyway, come on the Dutch!

Take care

The Informer