LTE services have now been launched in Hungary

T-Mobile’s Hungarian subsidiary and the wireless operation of Magyar Telekom has become the first operator to offer a 4G-LTE mobile broadband service in the country.

The service was launched across ten districts of Budapest after the operator carried out a three-month extended network testing phase, involving over a hundred personal and business users. T-Mobile said that it will continue to develop its network in 2012 to provide the service to more customers in Hungary.

The operator said that it has invested heavily in the technology, and the number of 4G-LTE stations roughly tripled over the course of 2011. As of January 1, the new broadband mobile technology is available to 40 per cent of Budapest citizens, including for indoor use. T-Mobile intends to expand coverage to the whole area of Budapest in 2012.

Customers in Budapest hoping to use the service require a Magyar Telekom Net&Roll 4G mobile internet package and also an LTE-enabled T-Mobile internet dongle.

Everything Everywhere is investing £1.5bn over three years

UK communications firm Everything Everywhere, which owns and operates the British Orange and T-Mobile brands, has announced that it is to invest £1.5bn ($2.4bn) in a three-year network evolution programme. The project will accelerate the integration of the Orange and T-Mobile networks and ready them for LTE through the “implementation of 4G-ready technology following successful trials,” the firm said.

The plan represents double digit growth in network investment from 2011 to 2012. T-Mobile’s 3G network has already been merged with that of UK competitor Three, as part of the two firms’ network management joint venture, MBNL.  Orange and T-Mobile have allowed each others’ users to roam across both 3G networks since October, with 2G roaming in place since 2010.

CEO Olaf Swantee said: “With mobile data increasing 250 per cent over the past two years, we are making these investments so we can deliver on our ambition to provide the UK’s most reliable, biggest and best mobile data network.  We believe that the UK requires a 21st century infrastructure and are committed to rolling out 4G as soon as possible to support growing data use, connect parts of the country with little or no mobile broadband, and drive economic growth.”

The firm said that sometime during the first half of 2012, customer devices will automatically select the strongest available signal from the two networks.

An LTE trial conducted in partnership with BT launched in September this year. Everything Everywhere said that the trial, which focused on the delivery of mobile broadband services to rural areas, has delivered “satisfaction rates of over 90 per cent.”

The UK is lagging comparable European markets in LTE deployment. While regulator Ofcom has said that it expects LTE availability before 2013, it is expected that nationwide coverage will not be available until 2017.

AT&T has been told it may have to undergo an administrative hearing before its T-Mobile USA merger could get the go-ahead

The US Federal Communications Commission (FCC) has said that AT&T must face an extra review next year, putting a significant hurdle in the way of its planned merger with T-Mobile USA.

FCC chairman Julius Genachowski told reporters in the US that letting AT&T acquire T-Mobile USA is “not in the public interest” and that if approved, “thousands of jobs will be lost in the aftermath”.

He has therefore proposed an administrative hearing take place, which would require AT&T to present its case before an administrative law judge. The FCC would also present its own findings at the hearing.

The call for an extra hearing is unusual – it is its first such move in nine years, and a review is still pending approval by other FCC commissioners. However, if the administrative hearing takes place, it could delay the proposed $39bn merger by months.

Larry Solomon, senior vice president of corporate communications at AT&T, responded to the FCC’s action today, saying that it is disappointing.

“It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both,” he said, adding: “At this time, we are reviewing all options.”

Verizon's CFO Fran Shammo has said the carrier has no objections against the propsed merger of AT&T and T-Mobile

Leading US Carrier Verizon Wireless has no concerns over the proposed merger of AT&T and T-Mobile USA, as long as it does not result in increased industry regulation. The company’s CFO Fran Shammo made the revelation to a Morgan Stanley conference in Spain last week, according to a report by Rethink-Wireless.

Shammo admitted that he did feel that the US wireless carrier industry did need consolidation, but not at the expense of increased interference from US regulator the FCC.

The FCC is currently debating the proposed $39bn merger, and has raised the ire of other players in the market such as number three US carrier Sprint Nextel, and also the US Department of Justice, which claimed that the deal would “substantially lessen competition”.

For its part AT&T has said that if the merger goes through it would create 5,000 jobs, though Sprint has countered with a report that claimed that this was unfounded.

AT&T wants to merge with the struggling T-Mobile USA, owned by Deutsche Telecom, in order to gain access to its wireless spectrum and improve its LTE spectrum coverage. The move would make it the largest player in the US market.

Verizon Wireless currently offers LTE in 179 cities markets, covering a population of 186 million, compared to just 15 markets for AT&T. It said it plans to cover 70 million people with LTE by the end of the year.

At the conference Shammo also said that Verizon wants to see changes in the device eco-system, no doubt as a response to the growing power of the device OS manufactures, namely Apple and Google. This would mean welcoming a third player in the market, most likely Nokia’s Windows Phone powered devices, with RIM’s Blackberry struggling to retain market share.

15 US politicians have sent a letter to Obama urging him to approve merger

US President Barack Obama has received a letter from 15 US politicians calling for his administration to approve the merger between AT&T and T-Mobile.

The letter, put forward by member of congress Heath Shuler and 14 other Democrats, said that the proposed merger of AT&T and T-Mobile USA would help solve America’s job crisis by reducing unemployment, encouraging private investment and promoting new and innovative technologies that will drive job creation.

“AT&T has announced plans to repatriate 5,000 jobs that are currently being performed overseas.  In addition, a recent SITE study has shown that the merger will create somewhere between 55,000 and 96,000 new jobs to integrate the two networks and upgrade facilities,” the letter read.

It added that the merger will encourage new private investment to deploy wireless high speed internet access services to 97 per cent of the US population. Coverage of this magnitude will necessitate an additional $8bn investment from AT&T over and above its current industry leading capital investments, the politicians argued.

“Finally, the deployment of next generation, wireless broadband is the type of investment in new and innovative technology that will drive job creation for years to come,” the letter continued, adding: ”A recent study by Deloitte predicts that next generation wireless broadband buildout by the wireless industry will create 371,000 to 771,000 jobs and GDP growth between $73bn and $151bn by 2016.  AT&T’s proposed merger commitment to make available this new technology to 98 per cent of the nation’s population will be a key component of the industry buildout.”

However, Public Knowledge, a Washington-based public interest advocacy organisation, said that the deal would be bad for the US economy, consumers and technological innovation.

“We thought the issues of job creation and investment had long been settled.  It is perfectly clear that AT&T’s history has been to destroy jobs, not to create them.  The company has shed 10,000 jobs a year for the past ten years.  There is no reason to believe that the takeover of T-Mobile will do anything to change that dynamic,” said Gigi B. Sohn, president and co-founder of the organisation.

“To the contrary, T-Mobile has created jobs at the same time AT&T has cut them.  And by removing T-Mobile’s investment, the amount of money spent on improving the wireless networks will be less, not more.”

The Dutch MVNO market remains dynamic

Almost one third of mobile subscribers in the Netherlands are customers of virtual operators, according to a report published this week by Dutch analyst house Telecom Paper. The total number of MVNO subs in the market has now hit 6.6 million, or 32.8 per cent of the total subscriber base, the analyst said.

More than half of the virtual brand customers—56.4 per cent—are on MVNOs owned by the market’s mobile operators, which are gaining share. Telecom Paper said that 13.7 per cent of the total Dutch mobile market are customers of independent MVNOs, down 1.3 per cent on Q3 2010.

At the end of the first quarter of 2011 there were 56 MVNOs operating in the Netherlands, although 11 of these control the majority of the market. This number has remained the same since Q3 last year, although there remains movement in the market, with several players exiting and others taking their place since that point.

“Hi and Telfort are the leaders of the operator-owned brands and Lebara and Lycamobile of the independent MVNO brands,” the analyst firm said in a statement. “In terms of network operator usage, KPN continues to lead, although it has lost some share. Both Vodafone and T-Mobile increased market share, with T-Mobile growing the most due to its acquisition of Simpel and growth at Ben.”

Telecom Paper said that new entrants will need to innovate on service proposition and by finding niche markets, such as immigrant populations. “New players will have to differentiate themselves by offering real value-added services, and not just plain voice and SMS services, in order to survive,’’ said Alejandra van de Roer, senior analyst at Telecompaper and co-author of the report.

The deconsolidation of T-Mobile UK and plans to get rid of the US operation affected DT's results

German carrier Deutsche Telekom reported a significant drop in net profit for the first half of 2011, from €1.2bn a year ago to €828m this year. Revenues were on the slide as well from €31bn in H1 2010 to €29bn in H1 2011.

Adjusted net profit came in at €1.6bn, versus €1.7bn in the first half of 2010, prompting CEO Rene Obermann to comment on a “persistently difficult environment,” and the company also “seeing light at the end of the tunnel in Southeastern Europe,“ with particular reference to Greece.

Mobile internet continues to be a growth driver, with revenues in this area increasing by 13 per cent year on year to €1.2bn, boosted by growth in the use of smartphones, which now account for 46 per cent of all devices sold by the European national companies compared with 21 per cent one year before. There was also a significant increase in the number of smartphones on the T-Mobile USA network, up by over 50 per cent to almost 10 million within a year.

There were two major events during the first half of 2011 to affect DT’s financials, namely the deconsolidation of T-Mobile UK, which now falls under the Everything Everywhere umbrella, as well as the reporting of T-Mobile USA as a ‘discontinued operation’ due to its proposed merger with AT&T. However, the deal is presently having a tough time of it with the competition authorities.

Ovum analyst Charlie Davies commented: “These numbers and Rene Obermann’s reference to a ‘persistently difficult environment’ underline the challenge facing Deutsche Telekom and many of its peers in combating declining revenues in their core income streams. Deutsche Telekom is betting on sustained longer-term growth in South Eastern Europe to help boost flagging revenue numbers.

“Growth in markets like Poland will be even more important in light of Greece’s ongoing economic woes and the overall shaky economic climate makes this a more risky bet. This means Deutsche Telekom must also maintain progress in reducing opex in order to achieve its targets.”

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T-Mobile and Orange have taken their network sharing agreement to a new country following the UK

Orange’s Polish operation, PTK Centertel, and T-Mobile’s PolskaTelefoniaCyfrowa this week signed an agreement to share their radio access networks. The network will be managed by a new joint venture called NetWorkS! owned 50-50 by the two operators and responsible for the management, planning, support, development and maintenance.

The contract is set over a term of 15 years and is limited to technical aspects in the RAN. Orange and T-Mobile will remain respective owners of their core networks and frequencies. But through the venture, the operators will be able to eliminate duplicate basestations, serving both customer bases from a total of 10,000 installations. At present PTC has around 7,000 and PTK around 6,400.

Due to the scale of the undertaking, the implementation of the new network will take place gradually until 2014, with the first positive effects to be visible in selected regions of the country in the first half of 2012.

The most significant benefits are related to short-term acceleration of the modernisation of the entire RAN network to the most modern technology, with upfront investment in the first three years allowing the carriers to save up to 29 per cent of the total RAN cost on a longer-term basis.

“Joint management and extension of the network infrastructure of both operators will soon provide customers with tangible benefits, such as improved network coverage and network quality, as well as access to the latest technologies. Thanks to this co-operation each operator will be able to invest funds more effectively and to expand the network infrastructure faster,” said Miroslav Rakowski, CEO of PTC.

Orange is the country’s leading operator with 14.6 million subs at end-June, while T-Mobile is in a tie for second place with Polkomtel, both of which have over 13 million users.

The O2 arena in London

UK mobile broadband users accessing the web over dongles and datacards are getting average throughput of 1.5Mbit/s, according to research released Thursday by UK regulator Ofcom. But there were significant differences between the five carriers’ performance, with O2 delivering the best performance, and Orange the worst. 3UK outperformed T-Mobile, with which it shares a 3G network.

A panel of more than 1,000 consumers had software installed on their laptops by network measurement specialist Epitiro, which carried out the research on behalf of Ofcom. It was this software that yielded the 1.5Mbit/s average speed. Epitiro also set up static test instruments to mimic dongle-connected laptops in 97 UK locations in a bid to measure the networks’ performance under ideal conditions.

This element of the study, which measured the networks at points where the coverage was very good, showed higher performances. Average speed rose to 2.1Mbits/s, with O2 nearing 3Mbits/s. Overall more than 4.2 million tests were carried out across the five network operators. As well as delivering the fastest throughput, O2 also offered the lowest latency of the five carriers.

Orange and T-Mobile, recently brought together to form Everything Everywhere, were the worst performing of the five UK operators. The consumer panel research ranked the operators in the same positions as the static probe tests, according to Iain Wood, EVP marketing and product development at Epitiro.

Wood told Telecoms.com that the latency is a bigger issue for operators than the throughput they deliver. A real world average of 1.5Mbit/s is adequate for the web surfing that typifies most UK mobile broadband usage, but the latency, which Wood said averaged around 100 milliseconds, would “hamper responsive web surfing and prevent the watching of videos, online gaming and possibly VoIP usage.”

While the results will give O2, which in 2009 had to apologise to users for the poor performance of its network, some positive marketing collateral, Everything Everywhere will be smarting. In particular T-Mobile, where some executives are known to have voiced concerns over the merger of its 3G network with 3UK, will be galled to see its sharing partner outperforming it in such a study.

Ofcom’s research, which is the first study into mobile broadband speeds the regulator has published, also found that 17 per cent of UK households use mobile broadband. Furthermore, seven per cent are using it as their sole means of internet access, up from three per cent in 2009. The regulator said that it plans to carry out a similar study for smartphone use in the future.

At a time when just about every telecoms legal suit seems to involve Western companies suing their Chinese counterparts, or vice versa, Apple is taking its “Think Different” motto to its logical conclusion and suing everyone, regardless of nationality. With its announcement last week that it was going to sue Samsung for “blatant copying”, however, the Informer is beginning to wonder if the plot hasn’t well and truly been lost – after all, Samsung only makes the CPUs and LCDs for the iPhone.

According to Apple, that’s not the only point of commonality: “It’s no coincidence that Samsung’s latest products look a lot like the iPhone and iPad,” quoth Apple, before going on to accuse the Galaxy maker of “slavishly” following its lead, right down to the cardboard boxes it ships its products in (called “Trade Dress” in iSpeak).

If slavish following is indeed a crime, one can only conclude that the hordes of iSheep lining up outside Apple shops would be better off skipping the next iUpgrade. Next week: St. Steve of Cupertino sues everyone with Jobs…

In the meantime, Samsung is entering into the spirit of things by launching a countersuit. Rather than even try to suggest that its products don’t resemble Apple’s, Samsung has decided to change the subject a smidgeon, accusing its biggest customer of stealing its technology to optimise data transmission, reducing power usage during data transmission and a technique for tethering a mobile phone to a PC.  If Samsung decides to suspend production while the two lock horns in court, things could get very interesting indeed.

In a “Me Too” world, Apple and Samsung aren’t the only ones filing legal paperwork. This week, AT&T filed the official documentation for its merger with T-Mobile with America’s Federal Communications Commission (FCC). All 381 pages of it.

Predictably enough, the tome is heavy on things like how the proposed merger will solve the telcos’ respective spectrum crises and how the explosion in mobile data usages is threatening to bring their networks to a halt. Indeed, according to AT&T, in the first 5-7 weeks of 2015, it expects to carry all of the mobile traffic volume it carried during 2010, meaning that it faces “severe capacity constraints” and “cannot simply wait for the next major auction to resolve them.”

Somewhat bizarrely, the document consistently states that AT&T’s ability to offer quality services is deteriorating faster than the Informer can type. In the not-inconceivable event that the deal is blocked, how many customers will stick around to see if the network with the most dropped calls can turn a profit on dead air?

And speaking of profits, it’ll be very interesting to see if the document’s statement that T-Mobile customers will be allowed to keep their rate plans will survive the merger. If not, no worries – according to the document, “other providers already fill – or could easily move to fill – the competitive role T-Mobile occupies today.” And if you’re wondering who these alternatives might be, “Sprint has re-emerged with a combination of first-to-market 4G services, attractive devices and aggressive pricing,” while MetroPCS and Leap offer “inexpensive, no-contract service with nationwide coverage…and have won dramatic gains in total subscribership.” With that kind of free advertising, one can only assume the growth will continue.

One telco likely to be wishing that everything AT&T says in its document is true is rival Verizon Wireless. AT&T’s assertion that Verizon claims “unequalled network advantages in the provision of high-end LTE services” will come as empty praise following the collapse of America’s largest wireless provider’s LTE network yesterday. Users of the HTC Thunderbolt handset reported difficulties getting online as the telco admitted there was “an issue” with the service. At the time of writing, the service was still down, and no further details as to the cause or when services will resume were available.

Thunderbolt users are reporting that the issue appears to extend beyond simply being unable to access the LTE service; many are complaining that they can’t connect to 3G or any other service, while subscribers to Verizon’s LTE wireless access card and hotspot offerings have also been unable to connect. According to a statement from Verizon, LTE handset users will still be able to make calls but some “may experience a 1XRTT data connection during this time.” The company said it expected to see the network restored on a market-by-market basis.

For Verizon, the timing couldn’t be worse: the company was due to launch its second LTE-enabled handset, Samsung’s Droid Charge, today. While there’s been no official announcement on the subject, it seems unlikely that the launch will go ahead while services are down.

Verizon isn’t the only ones with network problems this week. Vodafone Hutchison Australia’s coverage troubles looked set to deepen, with a proposed class action suit against the telco for poor service gaining ground in the country. When the idea was first suggested at the beginning of this year, about 9,000 claimants expressed interest; that number has more than doubled to 22,000 in the past couple of months, according to reports in The Australian.

The report comes on the back of a weekend network outage that saw VHA customers unable to send or receive SMSs on Easter Sunday. Disgruntled subscribers vented their anger on Twitter and Facebook, with the former managing to make “Vodafail” the trending topic in Australia for the day. VHA apologised to customers on a blog post and offered 12 hours of free SMS services on May 1^st by way of compensation, but comments posted in response suggest that the gesture is unlikely to make much difference to increasingly negative perceptions of the carrier’s service.

Nokia’s Symbian operating system must be feeling similarly unloved, with the announcement on Wednesday of plans to outsource its development to consultancy firm Accenture. As part of the process, Nokia will also transition some 3,000 employees in China, Finland, India, the UK and the US to Accenture.

The move casts Nokia is the role of hardware developer. Under the collaboration agreement, Accenture will provide Symbian-based software development and support services to Nokia for future smartphones, extending beyond Symbian. Accenture will provide mobility software, business and operational services around the Windows Phone platform to Nokia and other ecosystem participants.

In October 2009, Accenture acquired Nokia’s professional services unit that provides engineering and support of the Symbian operating system to mobile device manufacturers and service providers, and which then served as a key building block in Accenture’s Mobility services portfolio. But the changes don’t stop there: As part of measures to reduce its Devices & Services operating expenses by €1bn for the full year 2013, Nokia will reduce its global workforce by about 4,000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the UK. The company’s research and product development sites will be hit hard, with the expansion of some sites and the contraction or closure of others.

Speaking of closure, it’s time for the Informer to wrap things up for the week and prepare for the impending nuptials tomorrow. Despite the current litigious environment, it seems that the Happy Couple are hell-bent on saying “iDo”, so it can only be hoped that the bride’s frock doesn’t look suspiciously like an iPad.

Take care,

The Informer.