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The Informer spent a few days in Barcelona this week, sniffing around the LTE World Summit. The default setting in the LTE sector is positive and forward- looking but a frank, challenging opening keynote from Orange Spain CTO Eduardo Duato at the event this week spat rather effectively in that soup.

May 25, 2012

8 Min Read
Full disclosure

By The Informer

The Informer spent a few days in Barcelona this week, sniffing around the LTE World Summit. The default setting in the LTE sector is positive and forward- looking but a frank, challenging opening keynote from Orange Spain CTO Eduardo Duato at the event this week spat rather effectively in that soup.

Duato wasn’t pussyfooting around, claiming that operators in Europe “can’t make a success of LTE unless we change the way we roll out networks.” With mobile broadband revenues falling faster than the cost of provision, Duato said Orange Spain was “unable to come up with a solid business case for LTE” if it was required to deploy a standalone network.

The technology itself is not the problem. Duato said that LTE “holds the promise of the future”, and noted that it offers twice the spectral efficiency of 3G, and a 30 per cent improvement on TCO. These improvements don’t make the numbers add up, though, especially as existing second and third generation networks have to maintained at the same time, he said.

The answer as far as Duato was concerned is to move into deeper RAN sharing to further slash the cost of deployment. As it stands, he said, “you have to do a massive  investment to make money from LTE”.

He compared Europe, with 100-odd operators, to the US, which is a comparable size and has only a handful of carriers with pan-regional networks. “It doesn’t make sense to have this many networks [in Europe], we have to move to LTE network sharing,” he said.

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.

It would be interesting to see what the group comms guys at Orange made of Duato’s take on the industry.

Over in Kenya, you might remember, Safaricom recently threatened to pull out of a JV LTE deployment if the government went ahead and mandated the use of spectrum in the 2.6GHz band. Safaricom wanted to be able to use 700MHz spectrum, which offers significant benefits in coverage and in-building penetration.

This week the Kenyan government told Reuters that the deployment would go ahead, whether Safaricom is involved or not. Deployment is due to start next year, when the Ministry of Finance has approved the $500m budget submitted by the Ministry of Information and Communication.

In other network sharing news, Everything Everywhere, which runs the UK arms of T-Mobile and Orange, said this week that it has completed a signal sharing project, dubbed Smart Signal Share, that allows for seamless movement of devices between the two networks, depending on which signal is the strongest at any point.

Smart Signal Share is part of a £1.5bn network evolution, with £1.4m being invested every day, the firm said. It added that HSPA+ 21, now reaches 95 per cent of the UK population. But if no 3G coverage is available, all Orange and T-Mobile devices will seamlessly switch to 2G signal and back on to 3G when either network comes back into range – even if a customer is browsing the internet. Customer charges remain the same when using the other network’s signal.

Everything Everywhere is also host to a new UK MVNO from China Telecom. CTExcelbiz, which CT said was the first service launch by a Chinese operator outside of China, will cater to the UK’s Chinese population with  Chinese language services and unlimited, on-net free calls.

Ethnic MVNOs have been one of the few niches to find success in the UK market, with Lebara and Lyca among the pace setters in the space.

Meanwhile, in a story of such interest that the level of traffic it was getting actually knocked Telecoms.com over this morning, EE has announced a mobile ticketing partnership with UK transport service provider StagecoachGroup. A trial is already underway in Cambridge and, subject to its success, EE and Stagecoach could deploy nationwide on selected services next year.

Nipping back to Eduardo Duato, he also told LTE World Summit this week that, when Orange Spain held it’s first ever call with Apple about securing a deal to offer the iPhone, Apple insisted that the call take place at 1am Spanish time. To the Informer this is a perfect snapshot of Apple’s approach to the mobile operator community, going out of its way to set its status from the outset.

That said, a couple of the Informer’s Twitter chums have pointed out at 1am is a perfectly sociable hour in Spain, and that perhaps Apple was just trying to be culturally sensitive to the notion of the siesta. Draw your own conclusions.

In any case, Yankee Group this week put forward evidence that offering the iPhone improves an operator’s rep among its customers. While US operators “uniformly report hits to their profit margins due to the device,” Yankee said, “carrying the iPhone immensely improves customers’ overall impression of the operator brand.” Yankee noted that brands such as Android and Samsung did not have the same effect.

Still, customers’ overall impressions won’t put food on the table.

Android may not have the same cachet as Apple, but that’s not putting Google off and the search giant this week rounded the last bend in its race to acquire Motorola’s handset division. The final stumbling block has been the Chinese competition authorities, which had similar concerns to the EC over whether or not Google would try and limit other vendors’ ability to deploy Android in a bid to give preferential treatment to Moto.

It’s difficult to imagine Google doing this, but the Chinese authorities wanted to make sure and so set down a list of requirements for Google. These include: Providing Android on a “free and open basis” for at least five years; treating all original equipment manufacturers on a non-discriminatory basis; and complying with Motorola’s current fair, reasonable and non-discriminatory patent obligations. Google must also commission an independent trustee to monitor fulfilment of these obligations, the Chinese authority said.

The deal should now close over the weekend. Moto’s CEO Sanjay Jha will not be around to see how things progress, as he’s been replaced by Google insider Dennis Woodside, who has managed the acquisition from Google’s side. While Jha will hang around until the integration has been completed, it falls to Woodside to build a new team for Motorola Mobility.

Woodside said that he aims to focus Motorola Mobility’s “remarkable talent on fewer, bigger bets, and create wonderful devices that are used by people around the world.” Woodside has already lined up a number of new execs, including former director of DARPA Regina Dugan, former supply chain VP at Amazon Mark Randall, former CFO of Marsh & McLennan Vanessa Wittman, former head of HR at Visa and Nvidia Scott Sullivan, and former Google VP of consumer marketing Gary Briggs.

“Motorola Mobility has many outstanding leaders, including people who were behind the original RAZR in 2004 and recent successes like the Droid and RAZR MAXX,” said Woodside. “Our colleagues joining the team come from varied backgrounds, from DARPA to Amazon and NVIDIA, but they all share a track record of leading innovation at speed, and a great deal of excitement about the mission ahead.”

One of Google’s biggest successes has been its browser, Chrome. Now there is another contender in the market, as Yahoo has decided to pitch its hat into the ring. Axis, a new browser aimed at iPhones, iPads and desktop PCs is, like all new browsers, designed to improve the user’s experience of searching the web. Yahoo claims it enables users to see and interact with visual search results without having to leave the search page. It also allows users to continue their browsing journey from device to device, the firm said.

Meanwhile Microsoft is making moves into the social networking space, targeting students with a new product called So.cl. The idea is that So.cl will help students share education-related information (hahahahahaha) and Microsoft is not looking to take on Facebook, apparently.

We started with LTE this week and we’ll come back to it in conclusion. Bharti Airtel has agreed to acquire 49 per cent of Qualcomm’s Indian BWA spectrum holdings for $165m. Qualcomm bought BWA spectrumin four Indian states in 2010 for $1bn, with the express intention of blocking the deployment and uptake of WiMAX services. It’s lost a bundle on the spectrum, but secured future revenues in the country when TD-LTE services are deployed.

Bharti is acquiring its stake by purchasing a 26 per cent share held by two Indian partners in the Qualcomm broadband venture, Global Holding Corporation and Tulip Telecom and by subscribing to fresh equity. Once commercial operations are launched, subject to certain terms and conditions, the plan is for Bharti to assume complete ownership and financial responsibility for the BWA entities by the end of 2014.

Qualcomm’s aims have been met where AugereWireless is concerned, at least. The aspiring WiMAX operator fronted by former Orange and LightSquared CEO Sanjiv Ahuja has said it is leaving the Indian market, and disposing of the spectrum licences it holds in Madhya Pradesh and Chhattisgarh, according to local press reports.

And that’s about it for this week.

Take care

The Informer

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