Life of the party

This week the The Informer’s phone has been ringing off the hook with event invitations, gossip and briefing opportunities for Mobile World Congress; he's been fielding more phone calls than Findus.

February 15, 2013

11 Min Read
Life of the party

By The Informer

This week the The Informer’s phone has been ringing off the hook with event invitations, gossip and briefing opportunities for Mobile World Congress; he’s been fielding more phone calls than Findus.

There is a new trend to try and beat the rush of news at the monster mobile event and Swedish vendor Ericsson this week made a host of announcements ahead of the show. Its advice to operators seems to be: if you want something done right, whatever you do, don’t do it yourself. It announced two major deals this week to take care of the network operations of Russia’s VimpelCom and India’s Reliance.

The vendor’s staff will certainly be busy for the next five to eight years. VimpelCom’s five-year managed services contract sees Ericsson managing Vimpelcom’s network operations at more than 10,000 Russian sites, and is Ericsson’s first such deal in Russia. 400 VimpelCom employees spread over 41 locations across Siberia and the Urals will have to amend their business cards and email signatures to read Ericsson, in April 2013.

In addition Ericsson will perform field maintenance for network components of the operator’s mobile, fixed and transport networks, and oversee more than 10,000km of optical transport cables and an extensive fixed network across Siberia and the Urals in Russia.

Its contract with Reliance Communications is set to last eight long years. The managed services deal is worth $1bn and will see Ericsson assume responsibility for the operator’s fixed and wireless networks in North and West India. Reliance signed a similar deal with Alcatel Lucent—also believed to be worth $1bn—covering East and South India in January.

This latest deal, announced February 11th, covers 11 of India’s telecom ‘circles’—the geographical regions into which the country’s telecoms market is divided. Reliance will transfer 5,000 employees to Ericsson, which will manage field maintenance, network operations and operational planning for Reliance Communications’ 2G, CDMA and 3G mobile networks.

Ericsson has also signed a deal with compatriot operator group Tele2 to expand and upgrade the group’s mobile backhaul network throughout Europe. The infrastructure vendor will provide Tele2 with its Mini-Link series of microwave radio solutions as well as professional support services and training.

One billion Euros might sound like a lot but it don’t impress ‘Steely’ Neelie Kroes much. The European Commissioner for the Digital Agenda is not impressed that the 27 member states of the EU have agreed to reduce the EU’s budget by three per cent to a paltry €908bn for the next seven-year period, because of the impact it will have on her plans for regional broadband deployment. Evidently, this is another thing we can blame on UK Prime Minister David Cameron, after he warned that the EU’s original proposals for spending cuts “did not go far enough”.

The Connecting Europe Facility, which aims to fund the rollout of fibre-based broadband to rural areas across the continent, is being whittled down to just €1bn from nearer ten. Kroes warned that the EU’s existing broadband targets of 30Mbps and above broadband for all citizens by 2020 will now be “harder to reach”, and indicated that the €1bn which has been secured will be used exclusively for digital services such as eProcurement and eInvoicing.

Meanwhile, citizens in Japan are likely to be somewhat irked to hear the news that their country’s LTE service offers the slowest experience in the world, according to data collected by OpenSignal, a crowd-sourced coverage mapping startup funded by Qualcomm Ventures, O’Reilly AlphaTech Ventures & Passion Capital.

Japan has traditionally been a pioneer in technology, but its operators offer average LTE download speeds of just 7.1Mbps to subscribers, OpenSignal said. The US is not faring much better, with an average of 9.6Mbps  Meanwhile Sweden, home of the first commercial LTE network, has maintained a crown with the fastest experience at 22.1Mbps on average.

LTE services are set to account for 31 per cent of all mobile service revenues by 2017, another report revealed this week . Juniper Research forecasts that, by 2017, global LTE  revenues will exceed $340bn compared to $75bn in 2013 and nearly 70 per cent of this will be generated by the North America, Far Eastern and China markets. Consumer take-up will exceed that of businesses by 2015 the report said, and will account for half of all LTE revenues.

While the US may not be setting the world alight with lightning-fast LTE speeds, it’s doing a pretty good job of making money from fixed line services. In fact, the global fixed broadband market generated service revenues of $188bn in 2012, up seven per cent from 2011, and is set to continue growing to reach $251bn by 2018, according to US firm ABI Research.

Last year, fibre broadband had its strongest ever year in terms of service revenues (up 24 per cent), while DSL and cable broadband revenues rose two per cent and six per cent respectively.

News from Down Under now, as Australians and Kiwis, in their efforts to become good neighbours and good friends, appear to be growing tired of paying a premium for their mobile phone calls while visiting each other.

New Zealand’s Ministry of Business, Innovation and Employment (MBIE) has teamed up with Australia’s Department of Broadband, Communications and the Digital Economy (DBCDE) to conduct a report on trans-Tasman roaming services, in a bid to make prices more closely tied while home and away. The report recommends increased powers for regulators in both countries to intervene in the market.

The two bodies propose that their respective governments introduce legislation to require operators to provide their telecoms regulators with wholesale and retail traffic and revenue information on roaming between the two countries, and for the regulators to report publicly on this.

Another proposal is for the two governments to empower the New Zealand and  Australian regulators when investigating trans-Tasman roaming services, to be able to choose from a wider range of regulatory measures, should the regulators determine that intervention is warranted.

“Requiring the regulators to collect and report on pricing trends could “name and shame” operators (as a group) into more competitive offerings,” the report stated. “It would also provide the regulators, and potentially the governments during a review of the effectiveness of the regime proposed, with information they could use to decide whether consideration of further (or less) intervention is necessary.”

It happens in all offices – colleagues that just don’t get along, or business units that take conflicting views about how to grow the business, but it has emerged that cultural issues represent the greatest obstacle to the introduction of centralised BSS strategies for network operators. According to data from the Intelligence Industry Survey 2013, internal politics and conflicting business cultures between a group operator’s HQ and its individual opcos was given the highest rating of severity by 21.6 per cent of respondents and rated severe or very severe by more than half.

Operational risk ranked second overall among the list of challenges, but had nowhere near as high a rating at the top end of the scale, with only 12.5 per cent of respondents giving it the highest level of severity.

Other findings from the survey have been filtering through, including the observation that operators feel unlikely to generate a significant return on investment from cloud services in the short term. Unsurprisingly, large enterprise customers remain the focus for mobile operators worldwide when it comes to deploying cloud services. On average, respondents believe that around 33 per cent of cloud revenue will come from this segment. But SMEs were identified as the next most lucrative segment for cloud services; over 50 per cent believe the segment will account for between 11 per cent and 30 per cent of operators’ cloud revenue until 2015.

The countdown to the release of the report is nearing its end – and will be available on Monday February 18. You can register for it here.

Mobile money looks to be a hot topic at this year’s MWC – and prior to the show, India’s Aircel has announced the launch of a mobile financial services offering using payment provider Visa’s hosted platform solution. The platform aims to make it easier and more cost-efficient for mobile operators and financial institutions to offer mobile financial services to consumers.

Aircel’s offering is the result of an equal partnership with local bank ICICI and the operator said it chose Visa’s platform because of the payment provider’s reach and experience.

“Their experience of over 10 years in mobile banking combined with their processing capabilities makes them an ideal choice for gateway partner for this enterprise,” said Geoff King, head of mobile banking at Aircel.

He said that the other advantage of partnering with Visa is its acceptance at over 600,000 merchants and over 30 million ATMs in India. Aircel and ICICI Bank will “share all risks and rewards” of using the platform, King added.

Elsewhere, a bank in Indonesia has developed the first mobile payments service for Canadian handset maker BlackBerry’s Messenger service (BBM). PermataBank has teamed up with British mobile banking solutions provider Monitise to roll out a commercial pilot of BBM Money in the country ahead of a full launch.

BlackBerry users will have the option to access a Mobile Money account from their smartphone and make secure real-time payments from within BBM to their contacts who are also signed up to the service, check balances, buy mobile airtime credit and transfer money to bank accounts.

Monitise group CEO Alastair Lukies believes that by launching the BBM service in Indonesia, which has the fourth largest population in the world, job opportunities in mobile payments will open up in Britain. Last year, Lukies met with UK Prime Minister David Cameron and Britain’s Trade and Investment Minister Lord Green in the South East Asian country.

In other news, white space startup Neul has released what it hails as the world’s first transceiver chip to make use of white space spectrum. The chip, called Iceni, will be used for machine-to-machine (M2M) connections as well as consumer wireless broadband applications.

It is capable of providing long range wireless, non-line-of-sight connectivity across the entire UHF TV white space spectrum; from 470MHz to 790MHz.

Iceni uses white space radio to access UHF spectrum that has become available by the transition of television from analogue to digital broadcasting.  The firm said that by utilising license-exempt spectrum, Neul’s technology reduces the costs associated with running a communications network.

And as emerging markets deploy and expand their LTE networks, it has come to light that national regulators are gravitating towards the 700MHz band to provide spectrum harmonisation internationally.

This week, Chile’s telecoms regulator Subtel outlined its proposals for the expansion of LTE services in the country. Subtel plans to auction the 700MHz spectrum band for LTE services, which is also used for the Asia Pacific Telecommunity (APT) band plan. Under the plan, frequencies in the 703MHz-748MHz range for uplink are paired with those in the 758MHz-803MHz band for downlink.

The spectrum will be freed by the country’s move from analogue TV services to digital, and allocated a licence by a public tender to cover the whole of Chile. With Subtel’s announcement, Chile follows in the footsteps of other nations in the Latin America region, such as Argentina, Bolivia, Colombia, Costa Rica, Ecuador, Mexico, Panama, Uruguay, and most recently, Brazil, which have also opted in to the APT 4G scheme.

Brazil’s Minister of Communications Paulo Bernardo last week officially sanctioned the use of the 700MHz band for mobile broadband services, and regulator Anatel has begun formulating how to define and allocate the frequency band for LTE.

Over in Thailand, mobile operator True Corp is taking quite the unprecedented step over skipping 3G deployment and going straight to LTE, while its rivals are expected to debut their 3G services.True Corp plans to launch 4G services in the 2.1GHz spectrum in Bangkok in April, before even launching 3G services, according to local reports.

A True Corp source told Thai newspaper The National that the company had already ordered imported 4G network equipment and plans to launch the LTE service in a few commercial areas in Bangkok. The operator has a technology-neutral licence and can utilise any technology on the band.

And finally, statistics revealed this week show that the number of mobile phones sold globally has declined year on year for the first time since 2009. Gartner released figures for 2012 that showed 1.75 billion handsets were sold during the calendar year, a 1.7 per cent decline on 2011.

Smartphones continued to drive overall mobile phone sales, and the year finished well with smartphone sales reaching 207.7 million units, up 38.3 per cent from the same period of 2011.

Demand for feature phones remained weak with sales totaling 264.4 million units in the fourth quarter of 2012, down 19.3 percent year-on-year, and Gartner expects feature phone sales to continue to fall in 2013.

And that’s about all for the week. Take care.

The Informer

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