What a waste of four years

By The Informer

It is with a heavy heart that the Informer sits down to write of the departure from Nokia’s most senior seat of Olli-Pekka Kallasvuo. The CEO of the world’s largest handset manufacturer is getting the ceremonial, handcrafted Nokia wellington boot later this month, to be replaced by Stephen Elop, the soon to be ex-head of Microsoft’s business division. As if they’re worried that Kallasvuo might deface the big table, or steal some biscuits, he’s been kicked off the board immediately. Although he has been allowed to stay on at Nokia Siemens Networks in a non-exec capacity.

If he’s got tears to shed over his ejection, Kallasvuo will at least be able to dry his eyes on one of the 4.6 million Euro notes he’s being given to take with him, or one of the 100,000 Nokia shares that were stuffed into his going away bag for emergencies. After 30 years at Nokia, the last four of which were both the most senior and arguably the least successful, it’s not a bad haul.

So why is the Informer so despairing at this news, he hears you ask? Certainly it’s not out of any personal compassion for OPK, the Informer having never met the man. No, it’s simply that it’s taken four years—the duration of Kallasvuo’s time at the top—for the Informer to remember how to spell his name without having to look it up. Now the skill has been acquired, it’s become redundant. Like when the Informer finally learned how to use his hula hoop. What a waste.

Anyway, While Elop may not have quite as big a pair of shoes to fill as Kallasvuo did when he replaced Jorma Ollila, he has a weight of expectation on his shoulders. The company badly needs a turnaround and if Elop can’t manage it in the next four years then he’ll presumably be given the old heave-ho with a big bag full of money. It’s a win-win.

“The time is right to accelerate the company’s renewal; to bring in new executive leadership with different skills and strengths in order to drive company success,” said Ollila, who remains chairman of the board, because he did good. “The Nokia Board believes that Stephen has the right industry experience and leadership skills to realise the full potential of Nokia. His strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company,” he added.

It’s slightly more glowing than what was said when Kallasvuo’s tenure was announced in 2005. “The Board is convinced that Olli-Pekka Kallasvuo, with his strong industry credentials and over 20 years of experience at Nokia, will provide the required leadership for the Company in the future.”

Meanwhile, over at the infrastructure business, Nokia Siemens this week invested £4m into UK-based application server and service brokering firm OpenCloud. Existing investors Advent Venture Partners and No 8 Ventures added a further £1m to the pot. NSN said that it will integrate OpenCloud’s technology into its charge@once modular convergent charging and billing tools. The two firms have 13 joint customers through a partnership they started two years ago and this latest investment round will give OpenCloud access to the NSN global customer base.

Vodafone was in the mood for extrication rather than investment this week, as it got shot of its 3.2 per cent stake in China Mobile. The UK carrier expects to raise around £4.3bn before tax and other costs, which represents a reasonable return on its investment in the original stake ten years ago. Needless to say Vodafone pledged to remain cosy with its Chinese comrade, with ongoing collaboration in areas such as roaming, network development and green technology.

Group CEO Vittorio Colao said that the move was part of a wider plan to dispose of minority stakes, so we haven’t seen the last of this kind of news. Some 70 per cent of the net proceeds of the sale will be returned to shareholders through a share buyback, while the remainder go into the debt jar.

In Vodafone’s home market of the UK, Swedish infrastructure player Ericsson reported this week that the ten thousandth active shared site has been activated in the MBNL network owned and occupied by T-Mobile and 3UK. Described by those involved in the project as monumental, the integration programme will be deemed complete when 12,400 sites are actively shared. Ericsson became the managed services partner for MBNL through a deal struck in November 2008.

The next phase of the project is likely to involve some kind of integration with the Orange UK network, following this year’s merger of Orange and T-Mobile’s British operations into Everything Everywhere. Earlier this week the newly created firm announced that customers of the two operators will be able to register to use both networks.

For the time being, users have to register to be able to gain access to whichever of the two networks they do not subscribe to. Everything Everywhere made much of the improved service that these users could expect, in terms of coverage, which rather suggests that the coverage of both networks was a tad patchy in the first place. From next year, the firm said, users can look forward to automatic hand-off between networks enabling them to take advantage of whatever is the strongest signal.

The UK is rapidly moving towards a two network state, with Vodafone and Telefónica’s O2 now under pressure to deepen their own sharing relationship, currently restricted to passive activities like site sharing.

Advocates of network sharing suggest that, were we to start the whole thing over again, the most sensible approach would be simply to create one network, and then rent capacity to service-level operators. And the arrival of LTE is expected to bring with it something of a shift in this direction as operators look to manage the costs of deploying an entirely new network.

Certainly that’s what two Polish operators want to do, and they’ve been granted permission by that country’s regulator. One of those carriers is the Orange operation in Poland, and the other is Play. The two firms have been given permission to create a joint venture dedicated to selling broadband access, which they will do under a new, shared brand, rather than their existing monikers. The JV will compete in Poland’s upcoming 2.6GHz spectrum auction for LTE.

But not everybody wants to wait for the auction, and Polish carriers CenterNet and Mobyland claimed Central Europe’s first LTE network this week, which is operating in the 1800MHz band. The two firms said that they will roll out LTE across their existing GSM1800 footprint.

Meanwhile the Hungarian regulator has revealed plans to offer a fourth licence before the end of the year. The market is currently home to Vodafone, Deutsche Telekom (Magyar Telekom) and Telenor. Quite how popular the licence will prove is debatable. With 10.8 million subscribers at the end of June this year, according to Informa’s WCIS, penetration in Hungary was nearing 110 per cent.

Now, among the most frequent advice given to the Informer by the army of healthcare professionals that remain perplexed by his many strange medical conditions is to “keep taking the tablets”. The Informer isn’t the only one that’s going to be obeying this mantra over the next few years if new research from Informa Telecoms & Media is anything to go buy.

The research house reckons that sales of smartbooks—especially in tablet form—are expected to grow from 3.65 million this year to nearly 50 million by 2014. The definition of smartbook in this instance is any multifunctional portable device with embedded cellular or WiMAX connectivity, discounting wifi-only devices and those relying on a dongle. An alternative definition of smartbook, of course, is ‘litigious chancer’.

“Speaking of WiMAX” is a paragraph opener that’s been getting a little dusty of late. Here’s a morsel, though: First International Telecom (Fitel), one of the six WiMAX licensees in Taiwan started operations in Hsinchu City, northern Taiwan on September 9, with Taipei following. The operator has 40 WiMAX base stations in Hsinchu and has plans to double the size of the network. In Taipei, it has set up 50 WiMAX base stations.Meanwhile Chinese vendor  ZTE is understood to have picked up a WiMAX supply contract to BSNL in India.

And that’s about the size of it this week.

Take care

The Informer