Is an m-payments monopoly OK in one market but not in another?

Sweden’s mobile operators are the latest carriers to band together and form a mobile payments joint venture. Investment amounts have not been revealed, but Telia, Tele2, Telenor and 3 will each own 25 per cent of the new operation.

There are no details yet on the payment system to be used, although it should be noted that Telia already has an m-payments platform in place supplied by Accumulate—which supports person to person and person to machine payments.

It also remains to be seen how Hutchison-owned 3’s Swedish strategy sits with the rest of the group. In the UK, 3 is taking a complaint against rivals O2, Vodafone and Everything Everywhere to antitrust authorities after the three operators proposed an m-commerce joint venture not involving 3 UK.

Last week, when telecoms.com spoke to Stephen Lerner, regulatory director of 3 UK, he called the UK initiative: “A cosy collaboration that would control nearly all mobile wallets in the UK and control and sell advertisers and card issuers’ access to its mobile subscribers. This is anti-competitive and akin to a joint selling arrangement which creates a monopoly in several markets, including mobile push advertising and mobile payments, and should not be approved under any circumstances.”

“It threatens to shunt the future of m-commerce onto the wrong track from the start. If allowed to proceed, the JV will damage the prospects of competition in the UK mobile market and the interests of UK mobile consumers,” Lerner said.

We have contacted 3 to get comment on the Swedish developments, and whether or not the Swedish venture constitutes a similarly anti-competitive move, but have yet to hear back.

In related news, m-payment provider PaymentOne has unveiled a mobile SDK with an Android One Click API embedded, allowing developers to monetise their Android apps.

“The toughest challenge any developer faces is how to make money from their apps,” said Brad Singer, executive vice president of PaymentOne. “Freemium is a great business model to engage consumers, and we enable developers to remove all friction at the point of purchase while maintaining a highly secure transaction. In a world where every connected device is ‘commerce ready,’ PaymentOne’s SDKs continue to optimize the payment process for the specific device, platform, media and user experience.”

The move to “remove friction from point of purchase” has resulted in a trend for developers to create initially free apps that rely on in app purchases of virtual items or the unlocking of new features. Carrier billing functionality also provided by PaymentOne is proving to take the sting out of transactions by removing the need for a credit card and instead billing the user’s mobile account.

Sweden’s PTS is auctioning licences for the 1800MHz band

The Swedish Post and Telecom Agency (PTS) will begin a spectrum auction on Wednesday to award block licences for use of the country’s 1800MHz band.

The auction will assign two blocks of 35MHz of spectrum. Within the band there are also existing licensees who hold a total of two 35MHz blocks between them; Tele2, Telenor and TeliaSonera. Those operators are permitted to bid for the blocks being currently auctioned, and as the frequency is technology and service neutral, operators can use it for 3G or for 4G LTE services, according to a PTS spokesperson,

The auction will be held in two stages.  During the first stage, the auction’s 2×35MHz will be split between auction participants. Both new stakeholders and existing licence holders in the 1800MHz band can take part.

Placement in the band will be determined during the second stage. Winning bidders from the first stage can then participate, as can licence holders that already have a licence in the band, meaning that this placement round comprises 2×70MHz.

The PTS has guaranteed that all licence holders in the band will get consecutive spectrum. It has also proposed that 2x5MHz in the band shall be exempt from a licence obligation; this means that these frequencies can be used by anyone without the need for a licence from PTS, reducing barriers to entry.

Ericsson has demoed an LTE Advanced network running ten times the speed of standard LTE

While many countries LTE plans are still at the drawing board stage the ever eager Swedish are already getting a taste of its successor, LTE Advanced. This week Ericsson demonstrated LTE Advanced running over a test network in Kista, Sweden.

The test was performed using frequencies provided by the Swedish regulator the Post and Telecom Agency (PTS) and was used to demonstrate LTE Advanced capabilities such as extended multiple-input, multiple-output (MIMO) and carrier aggregation, which saw three blocks of 20MHz combined in an LTE environment for the first time. The result, Ericsson said, was speeds some ten times faster than Swedish consumers currently enjoy from current commercial LTE services.

Urban Landmark, head of spectrum department of the PTS, said in a statement; “Sweden is in the forefront when it comes to usage of mobile broadband. Sweden was both early with licensing of harmonized spectrum in the 2.6GHz and 800MHz bands, and the first country in the world where LTE was commercially deployed. The demonstration today indicates that mobile broadband technologies continue to evolve rapidly.”

Ericsson said that it expects commercial deployment of LTE Advanced in Sweden as soon as 2013.

“The next step of LTE enhances the current service offering, performance and data speed even further. It provides operators with the opportunity to capitalize further on their existing infrastructure. Once again, Ericsson is committed to supporting operators’ needs as expectations and requirements for mobile broadband services increase,” said Ulf Ewaldsson, Ericsson’s vice president and head of product area radio.

Ericsson said that the demo was made using its current commercial multi-mode, multi-standard, RBS 6000 radio base station and fully complied with 3GPP’s Release 10 global standard for LTE.  Live traffic was streamed between the RBS and a moving van from which network performance could be monitored. In the demonstration, 60MHz of aggregated bandwidth was used, and 8×8 MIMO was used on the downlink.

The LTE North America World Summit 2011 conference takes place on the 8-9 November 2011

TeliaSonera has made a bid for Polish incumbent Polkomtel

Dominant Nordic telco TeliaSonera has confirmed a bid for Polish operator Polkomtel, joining a rumoured ten other operators (including Spain’s Telefonica and Norway’s Telenor) looking to expand into the area.

Polkomtel, which operates as Plus in Poland, offers voice and 3G wireless services to a customer base in excess of 14 million and is owned by five shareholders, including Vodafone. The latter’s 24.4 percent stake gave it first-refusal on the remaining shares but it has been clear for some time that the UK-headquartered carrier would not be taking that option; last year it separated its Polkomtel shareholding out from the rest of its European division, indicating that a sale was imminent. The value of any potential Polkomtel deal has been estimated at $5 billion.

Vodafone’s 2010 strategy of divesting and streamlining operations in order to play to regional strengths saw it offloading its 3.2 percent stake in the world’s largest carrier, China Mobile, in September last year while stakes in Verizon Wireless and French carrier SFR joined Polkomtel and Bharti Infotel outside its reformed organisational units.

TeliaSonera operates in Finland, Sweden, Norway, Denmark, Latvia and Estonia and was the first telco in the region to offer the iPhone. It has over 150 million customers in the region and was the first operator in the world to commercially launch 4G.

the auction will begin on February 28th, 2011

The Swedish telecoms regulator, PTS, has set a date for the auction of wireless broadband spectrum in the 800GHz band, making the announcement on the eve of the first anniversary of the commercial introduction of LTE. The auction will begin on February 28^th 2011, with interested parties required to apply for participation by the end of January.  Nordic carrier TeliaSonera launched the world’s first LTE service in Stockholm and Oslo on December 14^th last year.

In total, 2 x 30MHz of spectrum is being made available, split into six licences of 2 x 5MHz each. A spectrum cap means that no one bidder can win more than 2 x 10MHz of the total available spectrum, as the regulator wants to ensure that at least three carriers win spectrum. Sweden currently has three mobile operators.

PTS is also imposing a coverage requirement on one of the licences in a bid to help meet the objectives of the Swedish government’s Broadband Strategy programme.

The conditions attached to this licence state that the winning bidder must deploy service so that all permanent homes and businesses that are currently without broadband service are covered by the new rollout. This deployment will be given a fixed cost, decided at the auction—it will be no less than SEK150m ($22.13m) and no more than SEK300m ($44.2m).

The successful bidders for the technology neutral licences must also undertake to remedy any interference that arises with Swedish TV broadcast services.

Sweden was one of the first countries in the world to get a commercial LTE service, when national carrier TeliaSonera launched in Oslo and Stockholm a year ago. Since then TeliaSonera has premiered LTE services in Finland and Denmark. The carrier’s operations in Lithuania, Latvia, Uzbekistan and Estonia have all launched 4G trials, it said.

Tommy Ljunggren, SVP and head of system development, mobility services at TeliaSonera

Nordic carrier TeliaSonera is no stranger to the limelight, having blazed a trail with its commercial LTE deployments. But the firm has also caused a stir by calling trials of the technology “unnecessary” and claiming that the only differentiator vendors have to compete on is price. Telecoms.com recently caught up with Tommy Ljunggren, SVP and head of system development, mobility services at TeliaSonera to get more of his thoughts on 4G.

With commercial networks already running in Sweden and Norway, TeliaSonera is understandably anxious to get the LTE ecosystem moving to clear the end user device bottleneck. To date there are only single mode dongles available, with multimode ones on the horizon and handsets and devices somewhere in the less visible future.

“It’s very exciting to be blazing the trail with LTE but we would very much like to have some pals on the running track because the whole industry needs to move now into LTE,” Ljunggren said. “I’ve launched 2G and 3G and now 4G and the boring thing is that LTE all seems a little bit too easy, we haven’t had many pitfalls, so it’s a promising technology in that sense as it’s simple, easy, and optimised for data. But we need to have some kind of fallback with 2G and 3G and we’ll likely see more voice over LTE via IMS – that’s really where IMS is taking off and voice might be where the application for IMS is.”

TeliaSonera chose Ericsson, Nokia Siemens Networks and Huawei as infrastructure suppliers for its LTE deployments, with Ljunggren causing something of a stir by revealing that there is very little, if any, technical difference between vendor offerings.

“We looked at all the technology offerings and all the features on offer by the vendors we evaluated and in the end they were all on a par. So it just came down to price. That was the only selection criteria,” he said.

“Will LTE pay for itself? I don’t know. But it’s easier because there are so many nodes that we have taken away, and its beneficial that we have focused on data only and not complicated it with voice and voice integration with legacy systems and so on.

“Now that we are pioneers we probably got a very good deal on LTE but on the pricing models we need to make some changes. When we did the evaluation of vendor s we looked at total cost of ownership – the software fees to upgrade for speed or renew function – and that can be expensive because you have to pay for each base station several times, which is what we have been doing in 3G. That’s where the pricing model is now and that has to change,” Ljunggren said.

So with the infrastructure in place and the devices on the way, what of the services? Ljunggren is also of the growing belief that flat rate data has had its time in the sun. “We should not run into flat rate pricing model as we did with 3G. For 4G we should bring a new model forward. Perhaps bring in a pricing model according to speed or different classes of service for the users.

“One important role for the operator is to provide a very good bit pipe and make revenues out of that from subscription fees and so on. But then also we have to have good partners that can bring attractive content to the table. I think we’ve gone quite far down that path where we can make good money from the bit pipe part and from the services part, and it’s true that maybe sometimes we choose a bad partner and have to learn from that.”

Mats Granryd will become president and CEO of Tele2 from September 1

Swedish carrier Tele2 on Monday appointed Mats Granryd as president and CEO, effective September 1. Granryd replaces former chief Harri Koponen, who walked out citing “irreconcilable differences” with the company in February.

Granryd is currently the head of Northern Europe and Central Asia for Ericsson. He previously led the North West Europe, India, CDMA and North Africa units and the global customer accounts for Vodafone and Bharti. Before joining Ericsson he was a management consultant in telecom strategies at ARRIGO and Andersen.

Mike Parton, chairman of the board at Tele2 commented: “I believe his excellent understanding of emerging markets, technologies and consumer implementation, together with his achievements as a divisional leader, position him well to lead Tele2 in its chosen markets”.

In the interim, chief financial officer Lars Nilsson has been serving as CEO of Tele2, following Koponen’s departure. Koponen switched Tele2’s focus over to mobile services on the company’s own infrastructure by ditching its MVNO operations, and complementing them in some countries by fixed broadband services and business to business offerings. The move boosted Tele2’s profits, but it is unclear what he fell out with the rest of the company management over.

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Telecoms.com chatted with Ljunggren at the recent LTE World Summit in Amsterdam where he commented on the maturity of the technology which made it “a little too easy” to introduce LTE, and called for more operators to finish trialling LTE and start activating it on a commercial basis.

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Håkan Dahlström, president of mobility services at TeliaSonera

In December 2009, TeliaSonera, the joint venture between the incumbent carriers of Sweden and Finland, became the first operator to launch a commercial LTE service. Håkan Dahlström, president of mobility services at TeliaSonera talks to Mike Hibberd about the motivation behind the move, the firm’s experiences with the technology so far and its plans for the future.

The Nordic markets have a pioneering pedigree. NMT, the first cellular network system that enabled roaming across national boundaries was built there. And the first GSM phone call was initiated in the region, which is home to some of the most prominent and groundbreaking manufacturers the industry has seen. It could never be said that the industry was born in one place or another, but it’s certainly true that many of its key developmental steps took place in these Northern European markets.

Over the years, though, the geographic focus has shifted as the industry has evolved. For the most technologically advanced markets, many now look to Asia, where from where a new breed of vendor also hails. The lust for growth has made stars of populous emerging territories, while the power in the wider industry is shifting to US-based internet firms and handset and software developers.

But TeliaSonera’s launch of two metropolitan LTE networks, in Stockholm and Oslo, propelled the region back into the industry spotlight in December 2009. These were the first networks built on the new standard to enter commercial service, some years before the majority of leading operators are expected to introduce the technology.

Not that the launches were full-scale, of course; nor were they intended to be. The firm took delivery of only a few thousand of the Samsung single mode modems for the initial phase of the service, after all, which rules out a capacity crunch as the driver for the early move to LTE. And with HSPA+ still providing plenty of headroom, TeliaSonera was not motivated by the evolutionary dead end that will see US vendors like Verizon among the first carriers in the world to look to LTE.

Instead, says Håkan Dahlström, president of mobility services at TeliaSonera, and responsible for the firm’s mobile operations in the Nordic and Baltic regions and Spain, TeliaSonera stole a march on the rest of the industry purely to prove technological prowess to its customers. “LTE gives us the opportunity to give our customers high quality access and to really prove to our customers that going with TeliaSonera is a future-proven choice,” he says.

You can’t showcase something that people can’t see, so TeliaSonera all but gave away the modems and the first six months’ service for free to attract early adopters. But the prices are set to rise soon to a level more commensurate with the service that’s being delivered. Users in Sweden will be charged a monthly subscription of SEK599 (€62.27) for the data-only service. And that’s quite a jump.

Dahlström doesn’t believe it is excessive, though. “For this marvellous service, this is still a very good bargain,” he says. “It’s SEK300 more for the 4G service than the 3G service and that gets you much higher access speeds and much lower latency. The latency is just as important as the throughput speed because we all hate waiting,” he says.

So exactly what kind of service will that SEK599 be buying? Dahlström concedes that current performance is not necessarily a perfect means of predicting speeds from loaded networks in the future but argues that all the signs are positive. “”Since it’s a shared medium, performance depends on what’s around you,” he says. “In Stockholm we have a few hundred base stations and, if you take the average in that network, the user is getting 20 – 40Mbps today. Some customers are experiencing speeds up to 80Mbps. But we’re still in the initial phase of the network build-out. “

Dahlström says that he sees unchecked thirst for bandwidth in his markets and elsewhere, which means that LTE in itself is unlikely to address the capacity crunch driving some operators to deployment. This is an increasingly prevalent view throughout the industry and is largely responsible for the realisation that flat rate pricing is an unsustainable model. It is widely held that LTE will usher in a new era of dynamic, tiered pricing strategies but Dahlström says that TeliaSonera has already set off on this path.

“Flat rate is not the way forward,” he says. “Already with 3G we are differentiating the prices based on the speed of the access we provide to the customer and the volume that they consumer. That’s something that we’ll continue with and my understanding is that we have acceptance in the market for this. On 3G networks you get average speeds around 6Mbps. If they’re getting ten times that, then I think that customers understand they should pay a premium,” he says.

In Sweden a government sponsored portal allows users of fixed and mobile broadband services to get a real world assessment of the speeds they are receiving from their service providers. It’s a popular site with users, who have become accustomed to holding their service providers to account, says Dahlström. He is hoping that users of the LTE service will use this portal to verify the high speeds afforded by the service and that TeliaSonera will prove more attractive and more sticky to customers as a result.

At this early stage, Dahlström says, it is difficult to derive any meaningful data on consumer behaviour in an LTE world. It has yet to become a mass market service and when it does the user profile will probably evolve. Technically, though, he claims that: “It’s been no more complicated adding 4G than it was adding 3G, although there’s still a long way to go before we can say that the 4G network is integrated in our mobile infrastructure in the same way as the 3G network is.”

Among the technical challenges that TeliaSonera has yet to solve is handover between LTE and the 3G network. This has not been an issue so far, given that the modems available on the new network have been single mode. But the firm is expecting to take delivery of dual mode 3G and 4G modems before the end of the second quarter, with the equipment arriving in large volumes during Q3. So there will soon be a greater urgency to enable handover.

However, with dongle-enabled laptops, usage is nomadic rather than mobile, leading Dahlström to judge handover as “not mission-critical”. He says the firm has a timeframe for introducing handover into the network, but will not be drawn on what that timeframe is.

It is not currently popular among mobile operators to focus on providing transport more than on the carrier’s role as a brand and developer and provider of a consumer facing portfolio of services and applications. So it is revealing when Dahlström describes TeliaSonera’s LTE network as a “killer application”.

People are addicted to the internet, he says, and improving their access to it is among the stickiest services a carrier can provide. “We see unlimited demand for bandwidth for our customers and it becomes more and more important for them how they access the internet and use data services,” he says. “We are a telecom operator and our ambition will always be to be a telecom operator. Access is our core business and we see that LTE gives us the opportunity to give our customers access of the highest quality.”

While starting in the major metropolitan areas will be a strategy almost universally embraced by carriers for LTE deployment but users outside of those centres still need to be provided with services that will enable operators to retain their custom. TeliaSonera has advanced plans for the expansion of LTE coverage in the two countries where it has launched so far. “During this year we will roll out to the 25 largest cities in Sweden and the four largest cities in Norway, including Oslo,” says Dahlström. “So by the end of the year quite a big portion of the population will be able to use this service in both Norway and Sweden.” The firm has not yet publicised plans to deploy LTE in any of its other markets.

Pioneering can be a lonely business and being the first in any technical evolution can, in hindsight, provide significant learning benefits to competitors who follow in your footsteps. So it remains to be seen just how much LTE will benefit TeliaSonera in the ongoing battle for customer retention. But the firm’s rollout does demonstrate at least that the technology works at launch, which could not be said for 3G services when they were initially deployed.

Dahlström remains convinced, however, that his firm’s success in stealing a march on its competitors, and in so doing planting the Nordic flag in LTE territory, will prove to be a winning decision. “For us 4G is an excellent opportunity to help our customers enjoy different kinds of entertainment and services as consumers and to improve their way of working and increase their efficiencies in their professional lives,” he says. “The LTE launch was a milestone for us; we have shown the market that we have leadership in this part of the world and we will keep it.”