A marriage that had the potential to be one of the most influential matches in the industry has been called off, with the parents of the bride-to-be clearly unimpressed by the quality of her suitor. Indian carrier Bharti Airtel's attempts to woo African regional specialist MTN have come to nought, with the South African government, MTN's biggest shareholder, understood to have put the kybosh on the whole affair.

October 2, 2009

8 Min Read
It’s not you it’s me. Actually, that’s not true. It’s you.

By The Informer

A marriage that had the potential to be one of the most influential matches in the industry has been called off, with the parents of the bride-to-be clearly unimpressed by the quality of her suitor. Indian carrier Bharti Airtel’s attempts to woo African regional specialist MTN have come to nought, with the South African government, MTN’s biggest shareholder, understood to have put the kybosh on the whole affair.

Bharti announced on Wednesday that it was withdrawing from discussions as the third exclusivity period came to a close, following two extensions. Analysts suggested that the South African government is uncomfortable with MTN – seen very much as a national champion – coming under foreign ownership.

The deal would have been one of the biggest Indian overseas investments, and the largest ever investment into South Africa. Bharti hasn’t given up hope altogether, revealing in a statement the forlorn hope that “the South African government [might] review its position in the future and allow both companies an opportunity to re-engage.”

You shouldn’t stick around where you’re not wanted though. There are, after all, plenty more fish in the sea. The Informer suggests that Bharti has a look at Zain, instead. Zain gives the impression of being a little more, how shall we say… available.

Sticking with companies bidding for others’ affections, Telefonica O2 has got ’em lining up, the dopey suckers. The Spanish carrier dropped its silk handkerchief this week, rolling out LTE test projects in six countries, with six different suppliers, in a bid to choose the most suitable partner. Alcatel-Lucent, Ericsson, Huawei, NEC, Nokia Siemens Networks and ZTE are all on the quest for the Latin Lovely, which will take six months, and involve installations in Spain, the UK, Germany, the Czech Republic, Brazil and Argentina.  The vendors had better find out the name of César Alierta’s favourite brand of cigar.

Meanwhile, Hutchison’s Austrian 3G arm has revealed that it’s to start rolling out HSPA+ and LTE upgrade kit from Nokia Siemens Networks later this year.

One man who will no doubt be put in front of Alierta and other carrier CEOs is Matt Bross, who was unveiled this week as Chinese vendor Huawei’s new CTO. Bross held the same position at BT until this announcement. It’s a big deal for a company like Huawei, closely controlled by exclusively home-grown talent – and more than a little intertwined with the Chinese government – to hire a Westerner to such a senior position. It’s the latest in a series of moves clearly designed to enable Huawei to dispel perceptions that it is culturally incompatible with customers outside its home market. The Informer would argue that the firm has made more than significant headway in this area, but the arrival of Bross can only smooth its path all the more. Bad news for the firm’s Western competitors.

In other Chinese news, South Korean carrier SK Telecom announced this week that it is bailing out of China Unicom, having lost money on its original investment of 3.8 per cent of the Chinese carrier. Unicom itself bought SK’s shares, for HK$10bn. The news might have been worse for Unicom had it not recently struck a deal with Telefónica that saw the Spanish firm’s stake in it rise to eight per cent, with an investment of $1bn that was reciprocated by Unicom.

Despite the extent to which all vendors will no doubt be slashing their prices in a bid to win business, figures released this week by network optimisation outfit Aircom suggest that migration to the fourth generation ain’t gonna be cheap. Aircom reckons a tier-one US carrier, by way of example, will be staring at a bill for $1.78bn in the first year of upgrade. It will be less expensive in other parts of the world, Aircom reckons, with a bill of $880m in Europe, $337m in the Middle East and just $232m in Asia Pacific.

Aircom’s predictions came in the wake of a similar warning from Mike Roberts, principal analyst at Informa Telecoms & Media, and author of the Future Mobile Broadband: 3rd Edition report, in which he stated that the effects of the global downturn have boosted HSPA+ deployments but slowed LTE.

Roberts said that virtually all major mobile operators vocal in their support of LTE have also quietly admitted that the downturn and other factors have delayed their LTE rollout schedules by several years. “WCDMA/HSPA operators are now focusing more on HSPA+ upgrades, which will bring major improvements in capacity and data speeds, at a much lower cost than deploying LTE,” he said.

ITM forecast that by the end of 2013 3GPP systems will account for 72 per cent of global mobile broadband subscribers, 3GPP2 systems for 22 per cent and WiMAX 6 per cent.

One vendor that will not be cashing in on the LTE rush, of course, is Canadian player Nortel, which continues to hack at its own limbs in its piecemeal exit from an industry in which it was once a giant. The latest division to go under the hammer is the firm’s GSM and GSM-R (GSM for railways) unit. Anyone interested needs to get their offers in by November 5th, with the auction scheduled for four days later.

Apple this week threw off its pall of monogamy, with a handful of UK announcements revealing that the iPhone will be offered by a far wider range of operators. Orange will be offering the handset before the end of this year, while Vodafone will have it from early 2010. This could mean a little iPhone price war in the UK from next year; it could also, The Informer suspects, demonstrate Apple’s belief that its hold on consumers of high end handsets could be threatened by recent products based on rival platforms. IPhone exclusivitiy deals remain only in the US (with AT&T) and Germany (with T-Mobile).

In the UK, the proposed merger between Orange and T-Mobile could be of importance as it’s thought that the move would give the new entity a data optimised network to better handle all that extra iPhone traffic and compete on Quality of Service rather than pricing.

All this is bad news for Telefónica’s O2 UK operation, which has undoubtedly enjoyed the rewards of iPhone exclusivity. It must have been aware that time was running out when it lavished the remainder of its handset subsidy budget on the Palm Pre, which it will be making available from the middle of next month, at a price point identical to the one it set for the iPhone. Will people sign two years of their lives away for the Pre? We’ll see.

Vodafone’s decision to offer the iPhone seems somewhat at odds with its recently announced 360 programme. This initiative is all about positioning the carrier at the centre of the services environment; it’s a strategic safeguard of a play. But the iPhone reduces the carrier to bit-pipe player, since users can only buy apps from the Apple App Store. Clearly all bases are being covered.

The European operators will probably be glad of a device that promotes such heavy data usage, after a key legal advisor to the European Court of Justice said that the EC’s caps on roaming rates were entirely appropriate.

Vodafone, Telefónica O2, T-Mobile and Orange had challenged the validity of the EC’s Roaming Regulation before the Court of Justice, but in his assessment on behalf of the European Court, advocate general Miguel Poiares Maduro confirmed that the EC was entitled to adopt the Roaming Regulation. “The differences in price between calls made within one’s own Member State and those made while roaming could reasonably be regarded as discouraging the use of cross-border services such as roaming,” he said, with the result that it was “expedient and appropriate for the Community to regulate retail prices”.

Back to device news, US silicon vendor Broadcom is believed to be following rivals Qualcomm and Intel into the netbook space, after it licensed ARM’s Cortex A9 multicore processor this week. Under a major licensing agreement, the firm said, it will integrate the Cortex A9 processor technology into “next-generation mobile, wireless and other consumer electronics applications”. In addition, ARM will also licence its Neon SIMD (Single Instruction, Multiple Data) technology to Broadcom, allowing the firm to provide acceleration for advanced, feature-rich multimedia, gaming and compute intensive applications on portable devices.

ARM claims that a single core Cortex A9 processor is capable of delivering twice the performance of today’s smartphone processors, and can be scaled up to exceed the functionality of high-performance embedded devices while consuming significantly less power, with each processor containing up to four independently configured, but fully coherent cores carrying out multiple tasks on each one in parallel.

Qualcomm, meanwhile, has been having a rumble in Japan, where it’s in dispute over licensing arrangements with Japanese handset vendors. The Japanese Fair Trade Commission has issued an order that alleges “Qualcomm forced Japanese licensees to accept cross-license provisions without compensation, and to accept a provision under which the Japanese licensees agreed not to assert their essential patents against other licensees that had agreed to a similar provision.  The order directs Qualcomm to eliminate these provisions from its license agreements with its Japanese licensees.”

Hands up who can guess Qualcomm’s response? Yes – you, with the glasses at the back… Absolutely right! The Californian firm is to contest the order.

“Contrary to the allegations in the JFTC order, none of our Japanese licensees were forced to enter into license agreements with us.  The provisions at issue were the subject of extensive arms-length negotiations with sophisticated parties, are common in technology licensing agreements, and generate enormous benefits for the wireless industry and consumers.  These provisions promote ‘patent peace,’ and reduce transaction costs and licensing fees.  In addition to Qualcomm, many other industry members throughout the world, including handset and infrastructure manufacturers as well as wireless operators, have relied on these provisions in business planning,” said Donald J. Rosenberg, executive vice president and general counsel of Qualcomm.  “If Qualcomm were to eliminate these provisions, there is a risk that some Japanese licensees may attempt to assert their previously licensed patents against Qualcomm, its customers and its licensees.”

And the lawyers get richer…

Take care

The Informer

Read more about:


You May Also Like