The Chinese take away

The Informer met with Tarek A. Robbiati this week who, as some of you will no doubt be aware, is chief executive officer of Hong Kong's leading operator CSL. He was in town with sole supplier ZTE to sing the praises of his new HSPA+ SDR all-IP network which, he said, is good for speeds up to 21Mbps. More interesting to the Informer, though, were Robbiati's predictions about the future of the infrastructure supply market.

June 19, 2009

9 Min Read
The Chinese take away

By The Informer

The Informer met with Tarek A. Robbiati this week who, as some of you will no doubt be aware, is chief executive officer of Hong Kong’s leading operator CSL. He was in town with sole supplier ZTE to sing the praises of his new HSPA+ SDR all-IP network which, he said, is good for speeds up to 21Mbps. More interesting to the Informer, though, were Robbiati’s predictions about the future of the infrastructure supply market.

“There will be consolidation over the next three to five years and at the end of that, there will only be three vendors left,” he said. “And two of them will be Chinese”. He declined to offer an opinion as to which of the European and North American firms would be left at the end of this period to do battle with ZTE and its domestic competitor Huawei, choosing instead to dismiss Western suppliers as “too slow.” We don’t say ‘slow’ here at Informer Towers, though, we say ‘special’.

It’s by no means the first time that this type of prediction has been made, although perhaps Robbiati’s assessment is the most blunt the Informer has heard. As we’ve said before, the Chinese vendors, with access to huge manpower and R&D budgets, comparatively cheap labour and very respectable credit lines from Chinese state banks are likely to emerge from the current financial crisis in a stronger position relative to their Western competitors than they had when it began.

The World Intellectual Property Organization (WIPO) reported earlier this year that in 2008, for the first time, a Chinese company – Huawei – topped the list of applicants in its Patent Cooperation Treaty. There are caveats, of course. Patent filings don’t necessarily reflect market performance. Furthermore, the sector with the most filings was medical technology, not telecommunications, while China as a nation ranked sixth among applicants, behind the US, Japan, Germany, South Korea and France. Nonetheless the WIPO figures do highlight the surge made by Chinese vendors (ZTE ranked in the top 100 applicants).

Interestingly, despite the praise he heaped on ZTE and China in general (“In Hong Kong there is some snobbery towards mainland China. But it’s ridiculous, you only have to look at the technology that comes out of China.”) Robbiati dismissed out of hand the Chinese government’s reported aim that 20 per cent of the world 3G market be gobbled up by the nation’s home-grown TD-SCDMA standard.

“I don’t buy that because unpaired spectrum isn’t available in all geographies,” he said. Even ZTE’s CTO for Western Europe, Xiaodong Zhu, who was also present, indicated that such an ambition was optimistic at best. “We don’t believe that TDD can get a big market share,” he said. “But we believe there will be convergence between TDD and FDD.”

If Western vendors are slow in Robbiati’s judgement, then European carriers are no better. As Lord Carter – or Lord Carter the Unstoppable S3x Machine to give him his full title – stood a mile or two away delivering his plans for Digital Britain, Robbiati was trying to get a signal in a Park Lane hotel, and dismissing Carter’s recommendations as “too little, too late”. He went on: “I’m appalled by how weak the speeds are in Europe,” before claiming that his firm would be the first in Hong Kong to offer speeds up to 100Mbps. He didn’t say when this would happen, but promised: “We can do this really quickly.”

The man’s not shy.

Back to Lord Carter and his too little, too late, then. The Digital Britain white paper he delivered this week was designed to map a path for the UK’s digital economy evolution in a bid to keep us competitive with the rest of you.

The key points included universal access to at least 2Mbps broadband by 2012 through the creation of an investment fund; a £0.50 per month levy on all copper lines, which will go into the independent Next Generation Fund and will be available as a subsidy to operators willing to extend broadband coverage to the final third of homes where it is not available; the upgrade of all radio services to digital by 2015; changes to 3G licence terms, making them indefinite (Bonus!), rather than fixed term licences, which should encourage investment and deliver in building speeds of 1Mbps by 2013; and new powers for industry regulator Ofcom as well as a new requirement that the watchdog carry out a full assessment of the UK’s communications infrastructure every two years. So they’ll be busy little bees over there.

On to two stories involving the digits ‘3’ and ‘0’ now, the first of which keeps us in the UK. If Hutchison-owned carrier 3UK were a Transformer, it would be a Disrupticon, so enamoured is it of strategies designed to shake up the market. Taking cut price tariffing to its logical conclusion, the operator has now introduced a completely free monthly contract. That’s either brilliant, or catastrophically stupid.

The Sim Zero tariff is available for one month’s minimum term with a 30-day cancellation period and is a bid to attract prepay users who might like the idea of Skype-calling. Subscribers are not required to top up, although they will need to if they want to make calls and send texts. 3UK charges £0.20 per minute for all standard calls, £0.10 per text and £0.30 per MB of data on this tariff.

But all Skype-to-Skype calls and instant messaging are free and unlimited on the contract, even if the user doesn’t top up. Quite how this is different from prepay, the Informer is not subtle enough to divine. It seems that the only real difference is that the user accepts a binding agreement of at least 60 days, and presumably 3 gets their details. Apart from that, same deal.

Over on 3’s Italian network international MVNO Lycamobile has just launched its diaspora-based service. International calls are priced from €0.09 per minute, with national calls from €0.15 per minute. On-net Lycamobile to Lycamobile calls are free for the first 15 minutes, and a promotional campaign will also offer free text messages to anywhere in the world until the end of July.

Lycamobile has launched its prepaid SIM only MVNO services in the Netherlands, Belgium, Norway, Sweden, Denmark, Switzerland and the UK, with almost four million subscribers in total.

The other ‘3’ and ‘0’ has a dot in the middle and refers to the iPhone. Finally, MMS is a reality. Apparently the new software allows you to play Snake, too. It’s like The Future, but it’s here now!

Apple made version 3.0 of its iPhone software available to download on Wednesday, giving users access to 100-odd new features including: Cut, Copy and Paste; MMS; improved search; landscape keyboard; parental controls; Voice Memos; a Find My iPhone feature that works together with MobileMe; Remote Wipe; wireless downloading of movies, TV and audio programs; and peer to peer functionality.

It wasn’t a picnic, though, with hoity toity iPhone cultists in the Informer’s office bleating and whining about problems with the update. O2, the UK carrier partner for iPhone, seemed unable to deal with the level of demand for the automatic MMS configuration from these people, saying it had been hit with thousands of requests from users. Some people who updated their Apple gadgets as soon as the software became available were still waiting for MMS to be activated on Thursday lunchtime. Surely there’s something about this in the Geneva convention on human rights.

O2 said users needed to allow up to 24 hours for the change to take effect. Like, totally?

The Nokia N97 came out as well, this week, but the Informer hasn’t got hold of one yet, so there will be no elaboration.

Back to fruit-based phones, though, and Canadian vendor Research In Motion (RIM), said Thursday that it shipped around 7.8 million devices during the three months to May 30, 2009. In that same period the vendor also added 3.8 million new BlackBerry subscribers.

Net income for the quarter hit $643m, up from $482.5m in the same period last year. Revenue topped $3.42bn, up 53 per cent from $2.24bn in the same quarter of last year. The revenue breakdown for the quarter was approximately 81 per cent for devices, 13 per cent for service, 2 per cent for software and 4 per cent for other revenue. At the end of the quarter, the total number of BlackBerry subscribers worldwide was approximately 28.5 million.

iPhone, N97 and Blackberry users might be interested to read of Vodafone Portugal’s new pricing gambit, which is to charge for data by time, rather than volume. The Vita Net Light prepaid plan provides mobile broadband access for ten hours over a six month period for a top-up of €10. Data usage over that ten hour period is unlimited.

Vodafone said the plan is targeted at users who only need occasional mobile broadband access hence the six-month usage period, and is designed to eliminate any worries the user may have about the volume of data transmitted. A USB modem is available with ten days internet access for €49. But the downside of this offer is that users can only expect top speeds of 1Mbps, whereas Vodafone Portugal’s postpay users have access to speeds up to 7.2Mbps, the firm said.

In a tenuous Portuguese link, voice to text specialist Spinvox has signed a deal with Telefonica that will see the Spanish firm make Spinvox’s service available to some 125 million customers across its Latin American portfolio. Big business.

Last October Spinvox inked its first Latin American deal with Telefonica’s Chilean operation. This latest announcement extends its service to the carrier’s properties in Argentina, Columbia, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Peru, Uruguay as well as Vivo, the Brazilian operation Telefonica owns jointly with Portugal Telecom (tenuous Portuguese link: Check).

The deal gives a massive boost to the number of mobile subscribers to whom Spinvox services are available, with the firm now forecasting 150 million users by the end of this year. Currently 30 million people use Spinvox, and a spokesperson said the firm has signed more deals that have yet to be announced. Clearly, though, Spinvox anticipates huge take-up from Telefónica’s Latin American subscriber base.

Finally, this just in: T-Mobile UK has announced that it’s bringing out a new Android Handset called the Git Ouch! Oops, sorry, I mis-read that. It’s called the G1Touch. Because T-Mobile is so Web 2.0 it announced the handset on Twitter.

There’s plenty of speculation about the new device, mostly suggesting that it will be the HTC Magic, which is currently only available on Vodafone in the UK. Coincidentally, T-Mobile USA has just announced that it will be launching the Magic in the US under the myTouch 3G moniker, which may be the cause of the confusion over the G1Touch.

However, rumour has it that HTC, which made the original G1 for T-Mobile, is staging a big launch next week, and that device may be something like the G1 without the pull out keyboard. The Informer will keep you posted.

Take care

The Informer

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