From selling to celling

Over the years, the Informer has heard staff from various operators say what a great employer they've got. Vodafone, Orange, Virgin, Telefonica, 3, Zain (especially Virgin, though; it's almost as if it's a condition of employment), the list goes on. Now that he comes to think of it, though, he's never heard it said by anyone from T-Mobile. Nobody's suggesting T-Mobile's a bad place to work, of course, just that none of its employees has ever volunteered information to the contrary in the Informer's direction.

November 20, 2009

9 Min Read
From selling to celling

By The Informer

Over the years, the Informer has heard staff from various operators say what a great employer they’ve got. Vodafone, Orange, Virgin, Telefonica, 3, Zain (especially Virgin, though; it’s almost as if it’s a condition of employment), the list goes on. Now that he comes to think of it, though, he’s never heard it said by anyone from T-Mobile. Nobody’s suggesting T-Mobile’s a bad place to work, of course, just that none of its employees has ever volunteered information to the contrary in the Informer’s direction.

Not that some T-Mobile employees are averse to volunteering information, it turns out. Nor are those employees particularly loyal to the mothership. The German firm’s UK operation was named and shamed this week as the carrier at the centre of a data selling scandal. Names and numbers of T-Mobile subscribers nearing the end of their contracts were sold to external buyers, enabling a wave of cold calling from T-Mo’s competitors offering enticements to leave.

There’s no suggestion that T-Mobile itself has behaved indecently, and the firm is understood to have co-operated fully with the Information Commissioner’s Office, even keeping shtoom at its direction because of prosecutions that the ICO was planning. Once the news was out that one of the UK carriers had been breached, though, T-Mobile was outed by its competitors’ denials.

We don’t know exactly who bought the information and the deal – which the ICO said involved “substantial amounts of money” –  is somewhat shrouded in legal mists. It’s clearly against the law to sell the data, but is it just as naughty to buy it? Technically, yes. But, according to a legal contact of the Informer’s who is so close to this particular situation that they’ve actually started to smell of industrial espionage, the only requirement on the part of the buyer is that they ask the seller whether or not the data is offered for sale legitimately.

So, even if the buyer suspected the data might not be kosher, simply asking the question covers their back. It’s hardly a cast iron guarantee, is it. It would seem unfair if the buyer escaped censure but the ICO has not yet indicated whether it will go after the people that played the johns to T-Mo’s streetwalkers. What is clear is that the ICO wants to use the case to push for harsher sentencing for crimes of this nature even though the data sold in this case isn’t really that sensitive.

“We are considering the evidence with a view to prosecuting those responsible and I am keen to go much further and close down the entire unlawful industry in personal data. But, we will only be able to do this if blaggers and others who trade in personal data face the threat of a prison sentence,” said Christopher Graham, UK information commissioner.

Back home in Deutschland, the German incumbent is more concerned with the (re)merging of its mobile and landline businesses. The firm has found those customers who take both fixed and mobile service to be the most loyal, said chief executive Rene Obermann. Alas, only 20 per cent of Deutsche Telekom’s customer households have both services. If one per cent of the remainder were to take the service they don’t have (and DT has 29 million customer households in its home market), the carrier could boost its annual revenues by as much as €100m, he said.

A financial boost is something Middle East and African specialist Zain could use, after it reported a 53 per cent collapse in profit, year on year, for the third quarter. Zain opted to publicise results for the nine months to the end of September, however, which painted things in a rather more favourable light. The ol’ lipstick on a pig trick.

In this more positive light, customer growth year on year ran at 28 per cent, with the firm now counting almost 72 million subscribers among its base. Revenues increased by 24 per cent to $6.2bn and EBITDA by 37 per cent to $2.6bn. Even the nine-month strategy couldn’t hide the downward trend, though, with net profit – the only financial indicator that really matters in the end – down 17 per cent to $677m.

To make matters worse, the kybosh has been put on Zain’s merger deal with Palestinian operator Paltel, originally tabled in May this year. The deal would have seen Paltel merged with Zain Jordan in a share swap that gave Paltel 100 per cent of the new firm and Zain 56.53 per cent of Paltel.

Not now, though. The official statement from Zain’s chief comms officer, Ibrahim Adel, ran as follows: “Zain management confirms that the merger agreement between Zain and Paltel announced earlier this year will not take place, because Zain did not receive the required government approvals that were condition precedent to concluding the deal.” At the time of writing there’s no more detail, but keep an eye on – we’ll fill you in when we know more.

Rubbing it into Zain’s current woes is the rather better performance (in terms of improvement over time) of regional competitor, Egypt’s Orascom. Q3 net income was up six per cent year on year to $365m, which represented a 62 per cent increase sequentially. The company’s total subscribers hit 89 million at the end of September, an increase of 12.1 per cent over September 2008. Revenue was down year on year, though, by just under two per cent to $3.8bn.

If it ain’t broke, fix it – that’s the operational motto at Orascom, and the firm announced this week a shake-up of its management team. Chief operating officer Khaled Bichara graduates to the position of group chief executive officer. He’ll report directly to Naguib Sawiris, who will now take the position of executive chairman and will continue to direct the group’s growth and expansion strategy.

Sawiris still has the hump at Canada’s objections to Orascom opening up shop in North America. Orascom has an investment in AWS spectrum licensee Wind Mobile Canada, previously known as Globalive Wireless, which the Canadian regulator has said is not eligible to operate in Canada.

The CRTC objects to launch of Wind, saying that it is in breach of foreign ownership rules, a move which may put the brakes on Wind’s proposed launch of early December.

Let’s have a look at some handset news now and there are suggestions in the industry that Motorola’s new Droid handset could give the firm’s malingering handset unit a much needed boost. A new mobile application analytics firm called Flurry released an estimate this week that Verizon Wireless may have shifted a quarter of a million Droids during the phone’s first week of availability. The Droid launched on November 6th.

Flurry monitors usage of over 10,000 applications on the iPhone and Android platforms and claims to track apps two thirds of unique iPhone and Android handsets in the market, including over 15,000 million user sessions per day.

To estimate first week sales totals for the myTouch 3G (HTC Magic), Droid and iPhone 3GS, Flurry detected new handsets within its system, and then made adjustments to account for varying levels of Flurry application penetration by handset.

Apple sold approximately 1.6 million 3GS units over its first week of sales, the device was simultaneously launched across eight countries, while the Droid launched only in the US.

Moreover, the iPhone commanded an installed base of over 25 million at the time the 3GS launched, including six million first generation iPhone users who were expected to upgrade to the 3GS. Taking this into account, Droid sales of 250,000 units during its first week from a standing start and in just one country, look like a strong result for Motorola and Verizon.

Flurry’s statistics also show that the average Android session length is four minutes versus two minutes for iPhone apps, leading one wag to speculate on that Android phones may just be much slower.

Meanwhile the Open Handset Alliance this week released the source code for version 2.0 of the Android platform, which is what’s running on the Droid. Version 2.0 is has been dubbed Éclair, leading the Informer to worry that the OHA might be running out of cakes to name its software after. They’ve had Cupcake, they’ve had Donut. What have we got left? Android Danish? Android Puff? Android Battenberg? Android Chocolate Cornflake Bites?

Anyway, Éclair includes new features such as support for multiple accounts, quick access to contact information, support for Exchange, search functionality for SMS, flash support for the camera, digital zoom, support for a virtual keyboard, with an improved keyboard layout, support for double tap zoom and a refreshed interface for the web browser along with support for HTML5 .

Gartner analyst Roberta Cozza was telling the Informer this week that, while the firm believes Android could have a strong future, the platform is still lacking a decent central marketing strategy. Android owner Google, she said, has shown little interest in trying to push the Android brand’s awareness, preferring to leave the publicity generation to the handset vendors and operators. They, of course, have conflicted interests and, says Cozza, may not be motivated to do the job.

Google’s got its own conflicts, though, this week releasing preview code for its new platform Chrome to developers ahead of the platform’s official launch in 2010.

Chrome OS is all about the web and all applications running on the platform will be web apps, with the entire experience taking place within the browser. “This means users do not have to deal with installing, managing and updating programs,” Google said. This approach should also make things more secure, Google argues, because every application will be sandboxed. And speed is also of the essence, with Google specifying hardware components the OS will run on, such as solid state memory only.

When it was announced, Sundar Pichai, VP of product management at Google, described Chrome OS a lightweight operating system that will initially be targeted at netbooks. The OS is designed to be fast and lightweight and get users onto the web in a few seconds where most of the user experience takes place, with a minimal user interface.

Google has already won support for Chrome OS from a handful of key players in the netbook and mobile computing spaces, including Acer, Adobe, ASUS, Freescale, Hewlett-Packard, Lenovo, Qualcomm, Texas Instruments, and Toshiba.

Take care

The Informer

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