The LTE World Summit 2012 proved to be a great success

The curtain has come down on another successful LTE World Summit event, which took place this week, in Barcelona, Spain. More than 2,000 delegates attended the event, representing more than 100 countries from around the world, indicating LTE’s impact the world over. There were over 100 exhibitors and also a series of masterclasses for the more technically minded to enjoy.

There was a wide range of speakers across the packed 11-track program and those attending the main keynotes were treated to speeches and presentations from some of the leading operators and vendors in the industry. They addressed some of the big topics and issues of the day, including signalling issues, strategies for lowering rollouts cost, the use of small cells, the problems with wifi offload, pricing strategies and general concern over LTE monetisation.

The actual event was prefaced by a Signaling Day that, as the name implies, focused on the signaling issues that are affecting all operators. It was well received and by the end of the day the phrase, ‘signaling storm’ had clearly taken over from last year’s ‘data tsunami’ as the buzz word of choice.

There was also the Operator Mindshare, a new format that involved executive from major operators hosting round table discussions on key topics to encourage new innovative thinking. There was much lively discussion and it all went off without any fisticuffs, with is either a relief or a disappointment, depending on your point of view.

The main event in the Catalan capital was opened by a welcome from Spain’s telecommunications minister, Mr Victor Calvo Sotelo, and followed by comments by the CTO of Orange Spain, Eduardo Duato. After admitting that operators in the region were having a particularly hard time, Duato called on the communications minister to make things easier for local operators, by freeing up more spectrum and helping to promote site sharing.

Also beamed via a live video link was the CTO of Deutsche Telekom, Germany, Bruno Jacobfeuerborn.  Jacobfeuerborn admitted he didn’t have to worry about bandwidth, with a 70MB/s LTE connection in his office. “But what about the rest of Germany?” the host Informa’s chief research office Mark Newman, cheekily quipped.

Other key figures appearing on stage included the CTO of 3, UK, Ed Candy, the CTIO of Etisalat Marwan Zawaydeh and the animated Yoshiki Chika, the CTO of Japan’s SoftBank. In his keynote speech Chika gave an animated talk highlighting the benefits of using TD-LTE spectrum as the most suitable technology for mobile broadband.

Another keynote highlight was the chief policy officer of Russian LTE provider Yota, who revealed that it was learning to deal with being one of the most congested network in the world with ouver 100 users per cell.

Meanwhile, Sung Man Kim, president of the network business unit for Korea’s KT Corporation said that the industry needed a paradigm shift in its approach to dealing with data traffic, and put forth its cloud-based RAN as the way to go forward. With speeds of 35Mbps and rising at its busiest location in Seoul Gangnam area, it seems to be doing a good job.

Clearly the event was a major success for the industry and all now look forward to the next one, LTE Asia, taking place on 18-19 September 2012 Marina Bay Sands, Singapore.

Its broadband operations netted revenues of PHP 5.8bn ($133m) in the three-month period, up 34 per cent from one year earlier, with its DSL services generating around half of this total (PHP 2.6bn), its wireless network Smart providing PHP1.7bn, and the Digitel group delivering the remaining PHP 800m.

PLDT is approaching the end of a two-year PHP 67bn network modernisation programme this is scheduled to be completed later this year, improving the speed and quality of services for around 50mn subscribers.

Connected cars have been getting a lot of attention in 2012 so far

Connected cars are fast becoming the topic that has the telecoms industry’s tongues wagging excitedly. This year, Ford’s chairman gave a keynote presentation at Mobile World Congress, RIM showcased a connected Porsche at its BlackBerry World 2012 event, and Google secured the first ever self-driving car licence in the US. And as the connected car market continues to evolve, mobile operators are finding that they have a key part to play in the ecosystem, and are having to invest time and resources to ensure they are not overlooked as the connected car market matures.

In-car connectivity can be enabled for a range of applications, such as navigation, safety, such as for emergency calls, usage based insurance to monitor how safe a driver you really are, entertainment and even congestion charge or toll payment.

Currently, revenues that operators are seeing from the connected car market are modest. Both 3UK and the Netherlands’ KPN told Telecoms.com that the income they receive from their efforts in the connected car market are “negligible”. However, the telecom industry will benefit from the growth in connected cars although the size of the opportunity will depend on the type of connectivity that prevails in the car.

There are two different approaches to providing in-car connectivity; the built-in approach and the brought-in approach. The built-in approach involves the automobile-OEM embedding all of the hardware required for the connectivity into the vehicle at the point of manufacture. With the brought in approach, the user is required to bring in their own device, whether its phone to tether or a broadband dongle to plug in.

Smartphone integration and tethering will lead to greater data consumption in the car, according to industry body the GSMA, but will effectively restrict the value of telecom operators to selling more data. Embedded telematics, however, provides telecom operators with a much broader opportunity to provide more advanced M2M support to vehicle manufacturers.

Research conducted by automotive technology consultancy and research firm SBD on behalf of the GSMA concurs that today, the global total revenue for the automotive embedded telematics market stands at around €1.5bn. But the association’s research forecasts that it will grow at CAGR of 24.6 per cent over the next 15 years to reach €20bn by 2025, by which point all cars on the road are expected to have broadband connectivity.

The bulk of this revenue is expected to be from the sales of vehicle-related services and content. However, SBD also forecasts that connectivity revenues alone will increase to almost €4bn by 2025.

For the operators, this requires ensuring that geographically, their network coverage is extended.

“We’re investing in expanding our coverage,” explained KPN’s strategic partnership manager Alan Beveridge. “Covering the population is one thing, but cars go to places where people don’t live, such as motorways, so we need to ensure that we can provide coverage in these areas.”

This involves spending large volumes on infrastructure and venturing into new markets. Although KPN’s mobile business operates in Netherlands, Belgium and Germany, the operator is taking a global approach to the connected car market. Beveridge explained that, because consumers often take their cars across national borders and car manufacturers don’t always tailor their vehicles to specific markets, operators cannot be too narrow in their approach to connected cars.

“This means that we have to reach roaming agreements with operators abroad – it’s much the same way as we facilitate roaming for handsets,” he added.

Another challenge lies in the fact that operators are dealing with a new type of manufacturer, not just handset and tablet manufacturers. Automobile manufacturers are new entrants to the telecoms market, and according to Toyota’s general manager for telematics and special projects, Derek Williams, ascertaining value for money is no easy task.

“We can only pick operators to work with based on the tenders that they bring to the table. We select operators based on the offers they submit, so at this stage, we don’t really know whether we’re getting value for money.”

He added that the firm is also having to venture into unchartered territory, by agreeing SLAs with operators, using its own IT departments expertise to ensure network security in the cars and dealing with customer complaints when there are network issues.

In addition, the GSMA believes that car manufacturers will need to begin setting up app stores for the applications that will be delivered in-car. Renault is one example of a car manufacturer that has set up its own app store, R-Link.

The Android based in-dash control, communications and entertainment system can download apps for drivers to run in their cars. Initially, 50 apps have been made available and the open philosophy of Android is clearly a major feature when deciding which platform to run its future portfolio on.  

RIM too, could have a part to play in the delivery of software to cars, since its QNX platform is used in 60 per cent of the cars on the road today, the firm claims.

Regardless of the software players that take the lead in the car space, operators will still have to compete for business of car manufacturers. And while the future looks bright for operators, with the forecasted revenues suggesting that it will become a lucrative revenue stream for them, KPN’s Beveridge warns that they must act today or risk losing out to rivals.

“Although the revenues from telematics that we’re currently seeing are negligible, we have to invest today. We need to invest for the connected car market to take off. We can’t wait for customers to demand these services first, because they don’t know what capabilities will be available – there’s nothing to demand yet.”

CTExcelbiz was launched through the operator’s subsidiary China Telecom Europe, and its MVNA partner, Transatel.

China Telecom has introduced anMVNO into the UK market, becoming the first Chinese operator to launch a service outside of China. CTExcelbiz is running on Everything Everywhere’s network and offer a customised service to the UK’s Chinese population.

CTExcelbiz was launched through the operator’s subsidiary China Telecom Europe, and its MVNA partner, Transatel.

The service is a tailored Pay-As-You-Go service that will offer Chinese language voicemail services, bi-lingual Chinese-English customer service hotline and website, unlimited free calls among  CTExcelbiz users and low-cost bundles, available in-stores and online.

“With increasing numbers of Chinese visitors to the UK, we will be rolling out innovative and targeted mobile services to our customers,” said Yan Ou, Managing Director of China Telecom (Europe). “These will include the provision of a local Chinese number for friends and family to call; a chat application for customers to share content with each other; and an information service hotline in Chinese targeted at travellers to the UK, to name just a few.”

Francesco Radicati, research analyst at Informa Telecoms and Media, explained that there has been a rise of ethnic MVNOs that target specific communities in the UK market.

“Traditionally, the UK operators weren’t able to get into these communities, so MVNOs such as Lebara and Lyca Mobile sprung up in response to that. Those were never really primary SIMs, most people generally used a UK operator SIM, such as Vodafone, for example, and then for calling home they’d use a Lebara or Lyca SIM,” he said.

“That’s changing now though. O2 for example has launched its international calling rates and there is Skype and other OTT options.”

“For China Telecom it’s a way to reconnect with customers who have moved to the UK, and to hold on to existing users while they’re visiting, whether as students, businesspeople or tourists. It’s also a way for companies such as Everything Everywhere to get access to this market.”

Network sharing is the only way forward for European operators, the CTO says

In a frank assessment of the challenges faced by European operators deploying LTE, Eduardo Duato, CTO at Orange Spain, told delegates at this year’s LTE World Summit that operators “can’t make a success of LTE unless we change the way we roll out networks.” Despite the improvements that LTE offers over previous generations of network technology in terms of cost and spectral efficiency, Duato said that operators “have to make a massive investment to make money from LTE.”

Network sharing is the only way forward for European operators, he said, comparing Europe – with more than 100 operators – to the US, which is a comparable size and has only a handful of carriers with nationwide network deployments. “It doesn’t make sense to have this many networks [in Europe]” he said “we have to move to LTE network sharing.”

Duato called on national and European regulators to do everything possible to support operators intent on building pan-regional shared networks, as well as the vendor community. When asked how he thought vendors would react to the drop in network sales that such widespread sharing would inevitably bring about, Duato suggested they could make up the shortfall through larger managed services deals.

He also intimated that Orange might be prepared to give up spectrum to enable this strategy, given the right circumstances. While the operator has little to spare in urban areas, he said “we don’t need all the spectrum we have in rural areas.” He added that if operators were allowed to pool frequencies, then negotiations would be made easier.

Adressing the issue of operators’ relationships with OTT players, Duato said: “It is extremely difficult, almost impossible, for operators to profit from OTT services.”

This view runs somewhat in contrast to another speaker at the Summit, John Blakemore, director of European regulatory affairs, Hutchison, who said: “We don’t have a problem with innovation coming from the OTTs. A few years ago, we had a service called ‘X-Series’, where we worked with Microsoft and Yahoo, and Skype to put their services on mobile devices. We did that when it was still early days and the services weren’t out there in the market. If you look at the industry as a whole, our record of developing services is not that strong. As operators, what we’ve been really good at is deploying efficient networks and making sure our networks support services – and that’s fine. We’re a little bit more relaxed about the content and applications not coming from within the industry.”

Talmon Marco, founder & CEO, Viber Media

Talmon Marco, founder & CEO, Viber Media is speaking on Day One of the LTE World Summit, taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Just ahead of the conference we speak to him about why LTE is important to Viber and why roaming issues need to be resolved to ensure OTT services can prosper.

How did you come to create Viber and what was your motivation?

As users of other solutions we were frustrated by the lack of an easy to use mobile voice and messaging solution. We felt that both the network and the phones were getting to the point where such a solution was feasible and yet none was in existence. So we decided to build it.

How important are technologies such as LTE to disruptive technologies such as Viber?

The quality of the network is extremely important to a service like Viber. While Viber has multiple mechanisms in place designed to improve user experience on sub-optimal networks, a good quality network is essential to a good service. LTE improves network quality thereby making services like Viber significantly more appealing to end users.

Have you any concerns about spectrum harmonisation issues and poor LTE device availability hampering take up of technology such as Viber?

As with all new technology, LTE has its growing pains. Spectrum harmonisation is one such challenge. Device availability is another. That said, there is no doubt that LTE is happening. It can always happen faster. We are quite happy with the take-up rate of Viber, but obviously it can always be better.

Viber brings free voice, text and photo messaging to users, and thus removes revenue opportunities for networks. Does this make for a difficult relationship with operators?

Not necessarily. In the long term we believe Viber will help operators streamline their operation and services by focusing on improving their network and providing a great user experience. We see great opportunity for both operators and Viber in partnering to deliver innovative OTT services to their users. OTT can help carriers differentiate their services.

Many network operators believe that OTT players are a burden on networks and should in some way be made to contribute to costs. Where do you stand on this?

OTT players do not burden the network. They do not behave in an “abusive” way. Users are paying for the bits that they transfer and choose to use these bits via OTT services. A 20kbps voice conversation or a 200 byte transmission of an OTT text message represents far less burden on the network than a three-minute YouTube clip.

There’s been some pressure recently by the EU to lower roaming prices for voice and data. Is enough progress being made on this?

We’re seeing some nice progress in this field as multiple European operators are now offering more reasonable roaming packages. In the long term, we believe that roaming charges are an artificial cost that should go away. At the end of the day the added costs of providing roaming services are minimal.

Do you think technologies such as Viber will render VoLTE redundant, before it is even introduced by operators?

This is difficult to predict. It’s possible that services like Viber will end up powering VoLTE.

Innovation is clearly key to your company. Do you feel there is enough innovation in the mobile industry and if so, can you provide examples?

If you compare the state of the mobile world in May 2007 to May 2012 you can’t avoid the conclusion of a massive transformation in mobile. Innovation is everywhere. A good example would be a service like Waze that uses the power of the masses to generate a real time traffic map (and also the map itself) of the world by observing the location of its users and the speed at which they are moving . Such services were not possible before the smartphone revolution.

What changes would you hope to see in the industry in the next five years?

We hope to see continued improvement in networks combined with a simplification of local and roaming tariffs, making a high quality network available to everyone all the time.

The LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your http://ws.lteconference.com/interest.

African Undersea Cables: Steve Song, Many Possibilities

Africa is my destination this week. I’m on a mission that’s both personal and professional.

Officially, I’m here to work with clients, catch up with our growing regional team and speak at Informa’s inaugural Cloud Africa Summit.

Unofficially, I hope to prove myself wrong about the déjà vu that I feel about aspects of Africa’s ICT market.

The IMF just said that sub-Saharan Africa is beginning to stand on its own feet, pointing to its sustained and major progress since the millennium.

Not least, financier George Soros recently described Africa as ‘one of the few bright spots on the gloomy global economic horizon.’ (And having met and worked for Mr. Soros, I warrant that he pulls no punches.)

Great leaps forward?
Meanwhile, progress in ICT – which is intimately linked to economic health – rarely traces a smooth curve. Take the international Internet bandwidth spike from new African submarine cables.

Lighting the long-awaited EASSy cable gave countries like Kenya 10 times more capacity overnight. And only two weeks ago, the 5.1Tbps WACS cable landed in South Africa to great fanfare. More cables are to come.

Africa’s outrageous international bandwidth prices are well under attack. But let’s hope that’s not the whole story.

Plus ça change
As a veteran of Europe’s bandwidth bloodbath, this all seems eerily familiar. My concern: A race to the bottom in international (wholesale) bandwidth pricing, and poor attention on fundamentals. What do I mean by fundamentals? I mean the critical need to close the loop by providing local and personal on-ramps to digital superhighways and clouds.

A rough calculation suggests that Kenya’s international internet bandwidth exhibited a 140% CAGR between 2005 and 2010. Yet personal access still equates to only 2,378bps per capita, according ITU figures for 2010. And Kenya is better off than most on some metrics: Smartphone penetration of mobile handsets is 14% versus South Africa’s 22% and Uganda’s 2%, per Informa estimates.

A delicate ecosystem
In 2003, I co-authored a major market study of the South African telecom market for the South African Department of Communications. My specific remit was to evaluate enterprise and wholesale services, size the market and detail its prospects and impediments.

In some ways, nothing has changed: Being a successful digital society still means keeping a delicate ecosystem in balance. That ecosystem includes many elements – and it’s not just submarine cables. Terrestrial fiber, spectrum, Internet exchange points and datacenters are among the telecom assets also required. But that is certainly not all. Affordable devices, ICT literacy and investment, rule of law and many other factors are highly relevant.

Enter the Cloud
With some irony, I reread these nine-year-old words:

Many [telecom operators] are exploring expansion into the IT services space as a way to increase wallet share with business customers.

Hosted IP telephony can help businesses increase their productivity by virtually eliminating the boundaries of the workplace [and] will become the foundation on which all other services will be built.

Indeed! And as Informa’s Telecom Cloud Monitor indicates, African operators like MTN, Safaricom and Vodacom are among those taking action. The cloud’s operational model offers extraordinary new opportunities.

But let’s be very clear: Every new kilometer of sub-sea cable and square meter of server space is only part of what Africa’s ecosystem needs to become truly digital.

This new initiative is intended to place the city in the vanguard of global technology, and comparable to other well-connected capital cities such as Seoul and Tokyo.

Telefónica has already started the project in districts including Hortaleza, Arganzuela, Moncloa-Aravaca and Fuencarral-El Pardo, using a team of around 2,200 engineers.

Deployment will continue throughout this year in other neighbourhoods across the city, with the aim of connecting over 80 per cent of homes and businesses to the FTTH network by the end of this year.

Outside of the capital, Telfónica has already installed fibre networks in towns such as Pozuelo, Majadahonda, San Sebastián de los Reyes, Tres Cantos, Las Rozas, Alacalá de Henares and Alcobendas.

By the end of the first quarter of this year, Telefónica had covered 1.3 million homes and businesses across Spain with its fibre footprint, with over 200,000 active customers.

Viettel is seeking more African opportunities

Vietnamese carrier Viettel has expanded beyond Vietnam, Cambodia and Laos, this week lighting up its first operation in Africa – a mobile network in Mozambique.

Viettel acquired a licence for the country in January 2011, and said it has since built out 12,600 kilometres of fibre optic cable and 1,800 mobile stations in Mozambique. The carrier said this network represents 70 per cent of the total of Mozambique’s available fibre optic cable and 50 per cent of the country’s mobile stations, effectively tripling the density of Mozambique’s telecom infrastructure per one million inhabitants.

“This is the first time many areas will have had access to telecom services, so the company has made a major contribution to the implementation of Mozambique’s socio-economic development and poverty reduction strategy,” said Mozambican president Armano Emilio Guebuza.

The Movitel-branded network doubles the network coverage commitments identified in the mobile licence, while Viettel is also providing free internet for 4,200 schools as part of the group’s pledge to the Mozambican Government.

“Mozambique is Viettel’s first market in Africa. Viettel is seeking for new opportunities to expand its investment in other African countries,” Viettel said in a statement.

Mobile data growth is a key reason Facebook is investing in a private fibre network in Europe

Mobile operators worldwide should be preparing for an impending surge in traffic over the next several years,  with mobile users in 2016 consuming an average of 6.5 times as much video, over eight times as much music and social media, and nearly ten times as much games than in 2011.

The statistics are drawn from recent forecasts from Informa Telecoms & Media, but with foresight of this curve, social giant Facebook is investing in its own European fibre network, to cope with similar increases in traffic on internal systems.

Erik Hallberg, president at TeliaSonera International Carrier, which is building the network for Facebook, explained that the infrastructure will be used to backhaul traffic between its newly-built datacentre in Sweden – the hub of its European operation – and datacentres elsewhere. The company has already set up long distance links to provide capacity between its European and US datacentres.

“Facebook is processing enormous amounts of data per user, and it needs to sort it and share it with everyone,” Hallberg told Telecoms.com. “This will be the main place for Facebook to aggregate data for European and Middle East users. It needs a network to take traffic back and forth and make data accessible to Facebook users.”

Ron Kline, principal analyst, network infrastructure, at Ovum added that resilience of the network is a key reason for Facebook to invest in its own private network.

“One of the tenants of Facebook and any other internet service providers is that the network can’t fail – the reliability and resiliency of the network are key,” he said. He added that latency is another consideration, because if it takes too long for a signal to transfer to the network, then Facebook will have issues with sessions timing-out, which would affect internal processes such as backup and mirroring.

“The other thing is they have huge amounts of data – it’s hard to imagine how much data is in these datacentres – just racks and racks of servers,” Kline added. “It’s a lot of bandwidth. To buy here and there from different carriers is virtually impossible – you need to have a private network that can be sized to the bandwidth requirements and give you the most reliable network you can have.”

Projections from Informa show that there will be a huge upsurge in traffic for most mobile data services over the next five years, largely driven by the spread of smartphones and a 23 per cent increase in the number of mobile users.

“The top three data guzzlers on mobile phones over the next five years will be applications, video streaming and web browsing – in that order of importance,” said Guillermo Escofet, senior analyst. He added that global mobile data traffic will grow from 3.89 trillion MB in 2011 to 39.75 trillion MB in 2016, amounting to a tenfold increase.