Pipe dreams

The Informer is just back from sunny Amsterdam, having spent two days learning about pipes. No, not those kind of pipes, data pipes, or more accurately, the next generation of. We’re talking LTE here people!

May 21, 2010

7 Min Read
Pipe dreams

By The Informer

The Informer is just back from sunny Amsterdam, having spent two days learning about pipes. No, not those kind of pipes, data pipes, or more accurately, the next generation of. We’re talking LTE here people!

In fact, as Disruptive Wireless’ Dean Bubley pointed out, the LTE World Summit was held in a part of Amsterdam known as ‘de Pijp’, so the Informer actually spent two days inside the pipe, talking about the pipe, even surfing the pipe (from an LTE-connected car). You can’t get closer to the pipe than that.

TeliaSonera‘s vice president of system development and business area mobility, Tommy Ljunggren, has a lot riding on the 4G pipes and was certainly talking a good game. As you know, the Nordic operator is leading the charge with LTE, having recently launched two metropolitan LTE networks in Stockholm and Oslo.

Perhaps understandably, Ljunggren was bearish about going it alone with regard to 4G, telling the auditorium that he wasn’t sad about not having a partner for the LTE deployment. As if it wasn’t humiliating enough failing to win a 3G licence during the auctions in 2000, Telia was forced to partner with Tele2 on a 3G network buildout in order to get access to a licence. But the two companies “don’t share the same vision for 4G,” Ljunggren said. Indeed, Bengt Nordstrom, of analysis firm Northstream, recently told the Informer that competition in Sweden will get even tougher with the advent of 4G, and Telia needed to move away from giving its competitor a network advantage by going it alone, because, “network coverage and quality of service will always be the top differentiators,” Nordstrom said.

But Ljunggren also had another agenda. He spent some time getting summit attendees all fired up with calls to abandon trials of LTE technology and “Just do it. Just go ahead with commercial deployment.” Given the mess of spectrum being used for LTE trials and deployments at the moment (700MHz, 800MHz, 900MHz, 2.1GHz and 2.6GHz have all been touted) Ljunggren probably hoped to get the LTE ecosystem moving along a bit with a view towards consolidating those bands and getting some devices in production. The Informer’s not holding his breath however. When Moray Rumney, lead technologist at testing firm Agilent Technologies stood up to ask such a question of the operator panel, he didn’t get much of an answer.

There was much holding of breath going on Tuesday night though, at the inaugural LTE Awards, and the Informer extends his congratulations to the winners: Agilent/JDSU, Ericsson, TeliaSonera, Huawei (twice), picoChip (who looked like they had the most fun), WinAfrique, and Nokia Siemens Networks employee Antti Toskala.

Ken Wirth, president of LTE and 4G networks at Alcatel-Lucent, wasn’t up for an award, but he was breathless with exasperation at an industry that can’t live with or without flat rate data tariffs. “If you don’t give consumers flat rate they won’t use the services, but if you do give them it, they abuse it,” he said.

It’s certainly a tough one, and the problem, according to Wirth, is exacerbated by the fact that we also “Have to get away from charging on a per bit basis, because consumers are unable to judge data consumption, and the problem is that flat rate tariffs are deployed everywhere. So what we need is a willingness to pay that maps to the infrastructure and operator assets.” Telecoms.com reader Adrian Gurr offered a suggestion to this conundrum in the form of a widget in which the network sets the per bit rate and charging period and sends it to the subscriber where a gauge sits on the user’s screen and tells them how much data they’ve used this month.

That might be useful if Google has its way. The web giant ran across the playground and poked its finger in the eye of yet another sector this week, proposing to take on the TV broadcasters with the unveiling of Google TV. At the Google I/O conference in San Francisco, Google chief Eric Schmidt, outlined a vision that aims to merge the worlds of the web and TV, by making it easier to find interesting content and deliver it as a higher quality more TV-like experience.

When the web guys talk about ‘content’ though, the Informer now knows that they really mean smut. This was in evidence during the live demo of Google’s smart TV when the search box autocompleted “Mother’s Day MILF”. Still, the concept has legs. Giles Cottle, senior analyst at Informa Telecoms & Media, notes: “The ability to seamlessly search for, flick between and personalise web and TV content is something that consumers have been crying out for years, and something the pay TV industry has largely failed to deliver.”

Google got the chance it needed to demonstrate the power of web TV, when YouTube celebrated its fifth birthday with the announcement that the site is now racking up two billion video views per day. Google acquired YouTube for $1.65bn in 2006, but like many social networks, questions have been asked about its revenue generating potential. By way of answer, YouTube said that the average user spends 15 minutes a day on YouTube, and the company manages to monetize over one billion video views per week globally. But out of a total of about 14 billion views per week, the numbers don’t seem too impressive. Perhaps that will all change now.

You’ve got to take the rough with the smooth and Google’s bit of rough this week was the failure of its phone shop. When Google launched the Nexus One in January, the only place to buy the phone, either unlocked or on the T-Mobile network, was from the online Google store. The moved raised many eyebrows and the most accepted explanation was that Google was not convinced enough handset vendors and operators were pushing its in house flavour of Android, despite the fact that Android in its open source form has been well received by the industry.

“We launched Nexus One in January with two goals in mind: to introduce a beacon of innovation among Android handsets, and to make it quick and easy for people to buy an Android phone,” said Andy Rubin, VP of engineering at Google. But, “While the global adoption of the Android platform has exceeded our expectations, the web store has not. It’s remained a niche channel for early adopters, but it’s clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from,” Rubin said, confirming plans to close the online store and instead use it to showcase devices.

Vodafone had some bad news of its own. Despite turning in a set of financial results showing encouraging performance – headline revenue growth for the year ended March 31 was up 8.4 per cent – India is starting to look expensive. According to Emeka Obiodu, senior analyst at Ovum: “There is still the $2bn tax bill emanating from Vodafone’s takeover of Hutchison Essar in 2007. If and when that is finally resolved, further charges may need to be applied to the business. Secondly, the regulatory environment in India is hardly encouraging to companies operating in the market. Continuous addition of new players into an already intensely-competitive market is imposing a huge burden on players.” The Big V also paid out £1.74bn this week to secure 2×5MHz of 3G spectrum in nine circles in India as the 3G auctions finally reached its conclusion.

After what seems like years of waiting for it to start, and weeks of bidding, India’s 3G licensing auction closed with the biggest winner being the government. The G raked in more than $14.6bn from the auction, which lasted 34 days in all and took place over 183 rounds. Vodafone, Bharti and Reliance were the big spenders, securing licenses in Mumbai and Delhi, while Tata, Idea, Aircel and STel focused on more rural areas. State owned operators BSNL and MTNL were already allocated 3G spectrum in 2009, giving them a substantial head start over 3G rivals.

The money was going the other way for a number of the industry’s biggest silicon manufacturers however, as the European Union handed out fines totalling €331m to a cartel including Samsung, Infineon, Hynix, Elpida, NEC, Hitachi, Toshiba, Mitsubishi, and Nanya for price fixing. Another company, Micron, won immunity for blowing the whistle, despite being involved in the shenanigans.

Who says crime doesn’t pay.

Take care

The Informer

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