When all hell breaks loose

By The Informer

What allows hundreds of known criminals to be able to roam the street at night, impedes London cyclists from getting around town, exacerbates a nation’s fears over the Olympics Games, and leaves eight million Brits up in arms? A mobile network outage, as O2 found out this week when its network failed for 24 hours.

While the network breakdown potentially affected O2’s eight million direct customers in the UK, our reliance on mobile technology behind the scenes was highlighted by some unexpected knock on effects.

It turns out that security firm G4S, which monitors miscreants for the UK’s Prison Service (heaven help us) uses electronic tags fitted with an O2 SIM card. The tags are supposed to enforce a curfew on criminals who have been restricted from leaving their homes at certain times. However, the outage caused around 250 of these tags to stop working “intermittently”.

This meant that these criminals could actually have left their homes and done a few crimes without G4S knowing. Although G4S doesn’t seem to know its arse from its elbow anyway, so perhaps it’s no big deal. Besides, how many of these offenders actually knew their electronic tag wasn’t working properly?

The Barclays Cycle Hire scheme also relies on the O2 network to process payments – at rigged rates presumably – and the network outage meant that around one in five Boris Bike terminals were out of commission. And of course, there’s an Olympics angle in every story these days, so the outage generated more concerns over London’s ability to effectively host the Olympics later this month.

According to Steven Hartley, practice leader of Ovum’s telecoms strategy team, the mass influx of visitors for the Olympics will cause significant network traffic spikes, and put pressure on the UK’s mobile networks, which already have a poor reputation compared to others in Western Europe.

“While UK mobile operators claim to be prepared, they have not yet given indication of the scale of their plans,” Hartley said. “Mobile capacity upgrades at key transport and crowd hotspots will undoubtedly take place before the Games. However, if there is a major public transport failure, the spilling over of people from a location where high network traffic has been anticipated to less well-prepared peripheral cells could prove disastrous,” he said.

At the time of writing, O2 wasn’t able to tell The Informer what caused the problem but whatever the case it was all hands on deck at O2 HQ. The Informer did actually have a meeting set up with some of the carrier’s spokespeople to discuss an entirely unrelated matter on Thursday afternoon. However, said spokespeople were requisitioned to help turn it off and turn it back on again.

But credit where it’s due, and O2’s Twitter response unit was able to keep its cool in the face of angry customers, who decided that the best way to vent their frustrations was to aim foul-mouthed outbursts at the team via the micro-blogging site.

Those tweets alone appear to have begun to repair some of the damage done to the operator’s reputation, with a number of Twitter users, as well as bloggers and media outlets, praising the operator’s cool responses.

The Informer considers that an outage on such a scale sets a dangerous precedent given the amount of network consolidation going on at the moment. With the UK heading down a two-network-market route, is there enough redundancy in place if one or both networks fall over at the same time? And perhaps such events will shine the spotlight of responsibility on the top executives.

France Telecom had a similar outage last weekend, which left 26 million users without connectivity. And this week Chief Executive Stephane Richard was hauled before France’s National Assembly to give a testimony. He pinned the blame on a failed software update from Alcatel-Lucent but not before the incident sparked government concern about the reliability of key national infrastructure.

But with such a high profile outage causing havoc with M2M services, the news that operators are looking to step up their game in the M2M space was timely. Seven operators across the world have decided to form an alliance, to collaborate in the M2M space. KPN, NTT Docomo, Rogers, SingTel, Telefónica, Telstra and Vimpelcom have agreed to cooperate to address the complex and fragmented nature of the M2M market.

The operators will agree on standards and technologies to use in the M2M sector and expect to offer better value propositions to connected device manufacturers in different markets and geographies.

The collaboration will develop a global product featuring a unique SIM, united web interface and centralised management of status and usage of M2M devices globally, via M2M specialist Jasper Wireless’s Control Centre.

According to Jamie Moss, senior analyst in the mobile content and applications division of Informa Telecoms & Media, Jasper’s involvement is key, as one the concepts that the vendor has been pushing is the ability to access “pre-acquired customers”.

“This means that if you’ve got an enterprise customer in one part of the world using a carrier that uses the Jasper platform, then should that company wish to deploy that other region in the world, all it needs to do is find another carrier using the same platform. Then it will instantly be able to manage its devices across both markets,” he explained.

“It would mean that carriers in the other markets have customers coming to them, simply because they use the Jasper platform.”

Meanwhile, web giant Google is on the naughty step once again. This time it is facing a $22.5m fine for allegedly working around security settings in the Safari mobile browser to monitor iPad and iPhone users’ behaviour. The fine is expected to be issued by the Federal Trade Commission (FTC) in the US, and would be the largest fine that the Commission has ever imposed on any firm. Despite this the sum is inconsequential to Google.

This is not the first time Google has been accused of snooping on users’ browsing behaviour. Microsoft accused the web giant of using a similar circumvention technique to monitor Internet Explorer users and it was accused of collecting data from public wifi networks when its Streetview cars were mapping the UK in 2010.

Meanwhile, we’ve heard a lot of operators and analysts talking up the cost saving that can be made by embarking on network sharing schemes with competing operators, but the drawbacks are now beginning to emerge as well.

A number of operators have announced network sharing deals in recent weeks, including Vodafone and O2 in the UK, Vodafone and 3 in Ireland, Vodafone and KPN in the Netherlands and Telia and Telenor in Denmark. However, those embarking on network sharing deals are being challenged by cultural and integration problems, according to Dimitris Mavrakis, principal analyst at Informa Telecoms & Media.

He believes that a major challenge many operators should anticipate when embarking upon network sharing deals is the extent to which cultural and integration problems can slow down their progress and success.

“If two operators cannot agree, what happens when there are three or four? The cultural problems and integration problems increase dramatically with the number of operators involved,” he said.

He explained that there are multiple types of integration issues affecting operators in this scenario.

“One vendor’s equipment may be compatible with the core network but with another one, it may require considerable effort to integrate. But there is a danger that after the equipment has been integrated the core network, it may still need considerable reconfiguration to work efficiently. This is just the tip of the iceberg; it could be that the billing system is not interoperable, or that the personnel are not trained to handle certain problems – there could be a million different problems.”

Bengt Nordström, co-founder and CEO of Stockholm-based consultancy Northstream, also told The Informer that once network sharing deals have been set up, operators have to stay on the same wavelength forever, and forever is a long time. He pointed out the problems the TeliaSonera and Tele2 had in Sweden, after the former failed to get itself a 3G licence so decided to team up with its rival on a network sharing deal. While TeliaSonera, being the incumbent, was looking to expand and enhance coverage all over the country, Tele2 was in a weaker position and wanted to keep costs down. When such disagreements occur, divorcing from your network sharing partner is no easy thing, he warned.

Preferring instead to try and work things out, a group of former Nokia execs  have decided to resurrect the Meego platform and have set up a start-up firm aiming to design, develop and sell MeeGo-based smartphones. The Linux-based mobile operating system project, which was first announced at Mobile World Congress 2010 by Intel and Nokia was dropped in September 2011.

Now though, Finnish startup Jolla aims to breathe life back into the platform. The Jolla team comprises ex-executives from Nokia’s MeeGo N9 organisation, together with some of the developers from the MeeGo open source community that had worked on the platform.

“Nokia created something wonderful – the world’s best smartphone product. It deserves to be continued, and we will do that together with all the bright and gifted people contributing to the MeeGo success story,” the start-up wrote in a hopeful statement on its LinkedIn page.

It’s been a notable week for acquisitions too, as Vodafone announced that it has got its hands on Telstra’s New Zealand business TelstraClear. In a deal worth NZ$840m ($663m), the operator group has picked up a business that it hopes will strengthens Vodafone position in New Zealand, where it is already the country’s largest mobile operator in terms of subscriber base, and also make cost and capex savings and improve its earnings per share for investors.

“The combined business will be ideally positioned to capture the benefits of the structural changes underway in the New Zealand market,” Vodafone said in a statement. “This includes the rollout of a wholesale fibre access network to 75 per cent of New Zealanders by 2019 under the government’s Ultra-Fast Broadband Initiative, which will allow Vodafone New Zealand to purchase last mile wholesale access outside of TelstraClear’s existing footprint on equal terms with Telecom New Zealand. ”

Meanwhile, Xerox announced its acquisition of customer experience specialist WDS. The firm said that it intends to use WDS’s expertise in the telecommunications industry to strengthen its portfolio of customer care solutions.

Financial services firm Visa continued its expansion into the mobile payments space by announcing a preferential partnership with Telefónica in Europe.

Telefónica Digital and Visa Europe have agreed a wide ranging strategic partnership to drive new business opportunities with both companies to co-invest in the development of products and services in areas such as mobile wallet, contactless payments (NFC), acquirer services for mobile point of sale, and merchant offers.

Visa will also take up the role of Telefónica’s preferred partner for the issuance of branded payments cards and the development of related mobile payment services.

Polish carriers Orange, T-Mobile and Polkomtel have banded together with local developers and academic institutions to create an ecosystem designed to address the growing competition posed by Over The Top (OTT) providers.

The operators have deployed an open service layer within their core networks to accelerate deployment of innovative and low cost communication services with a healthy balance between cooperation and competition.

“Our true competition comes not from the other operators within Poland, but from the OTT players. If subscribers on two separate networks want to chat or share video on their phones but their operators don’t offer the service they’ll use gTalk, Viber, Facebook or similar. To combat this we must cooperate: on open technologies, platforms and communities,” said Grzegorz Sikora, Intelligent Network Expert, T-Mobile. You would hope that goes without say, but perhaps they do have some unintelligent network experts on the job. Maybe that was O2’s problem all along?

And finally, The Informer has heard rumours that a certain “Fiddy Cent” will be attending Informa’s AfricaCom event in November. The gangster-turned-rapper-turned-entrepreneur recently set up his G-Mobile brand, thought to be an MVNO targeted at the African market and presumably part of his plan to Die or Get Rich Tryin’ (do you know he’s been shot nine times? Do you?). Those rumours are interesting if true, as The Informer suspects that there may be a few telecoms professionals that secretly love his music like a fat kid loves cake.

Peace out.

The Informer