DD A Week in Wireless #189
1st July 2005
(From an email I receive from Fiercewireless.com)
This week, Dutch incumbent KPN agreed to buy the third-biggest mobile network operator in Holland, Telfort, for some €980 million. This deal brings another 2.4 million customers to KPN, and removes one of five competing operators in the highly competitive Dutch market. Despite the obvious implications, the Dutch authorities were expected to approve the deal. Telfort has now been handed down like a pair of old clogs and sold three times in three years, and failed last year in a bid to buy out the UK's third-biggest carrier O2.
Speaking of O2, the operator was the toast of the London Stock Exchange this week, as its shares reached an all-time high on persistent speculation of a more successful takeover bid in the offing. O2 denied that any bid existed in a statement issued to news agency Reuters, but nothing would dampen the market's appetite for O2 stock. Deutsche Telekom and various private equity bidders were rumoured to be interested. On Thursday, O2 shares rose 2.6 per cent, in a powerful performance from the UK telecoms sector: Vodafone was up 1.4 per cent and Virgin Mobile 3.8 per cent higher.
In another small European country practically overrun by mobile operators, Austria, KPN also got into this week's headlines when it took back an offer for fourth-biggest (and highly profitable) network Tele.ring. Financial sources in Vienna were surprised by the move, as KPN had until then been the clear favourite. The remaining candidates are a group of private investors and the third-biggest operator, One, a division of the German electricity company E.ON. A rather byzantine scenario doing the rounds of the German-speaking press suggests that E.ON, bizarrely, is buying Tele.ring in order to sell its shares in One. The argument is that on its own, One is not big enough to interest major carriers. A merged group, the second-biggest operator in Austria, would be easier to sell or float.
What no-one seems sure of is whether the private investors - the funds Permira and Apax Partners - are part of E.ON's Machiavellian scheme or whether they are in it to win Tele.ring. The operator is valued at around €1bn; either Apax or Permira could find the money. Just to render the chicanery even more intriguing, some sources say the financial bidders are warming to the idea of a Pacman defence, in which Tele.ring would launch its own bid for One.
Confused yet? You will be. KPN's decision came after the deadline for binding offers ran out without anyone showing their hand. The deadline was then extended in recognition of the fact that the state of Lower Austria took this moment to impose a tax on base stations. A major political row broke out, with opposition politicians demanding to know how this could be reconciled with the roll-out of high speed data service to the countryside. The Austrian federal government is considering overruling Lower Austria, which could mean a constitutional crisis. However, it seems the European Union might yet come to the rescue by ruling that the legislation is incompatible with free trade in the EU, which would save face. Whether the federal government, the Lower Austrian parliament, the courts, or the EU kill the legislation, it looks like the governor of Lower Austria is going to be hung out to dry. That's if Vodafone doesn't send out large men in dark suits to make him "look like an accident" first.
Still in Austria, discount MVNO Yesss!, whose heavy use of the letter "s" hasss ssseen it covered by AWIW ssseveral timesss in the passst, won a court case against T-Mobile defending its right to publish links to websites offering cheap phone unlocking services. Yesss! alleged that T-Mobile was illegally trying to impose its terms and conditions on customers even after the expiry of its contract with the operator. T-Mobile accused Yesss! of incitement to a crime. A Viennese court ruled in Yesss!'s favour in the first instance. Whether T-Mobile will appeal or not remains unclear.
Back at T-Mobile headquarters in Germany, this week saw a highly significant decision. The carrier announced it would offer unrestricted access to the internet, using monster search engine Google as a homepage. At first, the offer is only on high-end handsets such as the Nokia 6680, Sidekick II and such; it's not clear what will become of the t-zones portal. Users of the service (to be entitled "Web'n'Walk". Yuk.) will be offered a flat rate data tariff, one of the first in Europe. For €10 a month, one will get 20MB of download over either UMTS or GPRS, which is handy because downloading 20 megs of data over GPRS would probably take a month. T-Mobile's US division has already been offering a similar package, but now it's crossed the pond. The message would seem to be "We're a bit-pipe - and proud of it!", especially in light of T-Mobile's support of numerous MVNOs. It's a bold and pragmatic move the Informer strongly supports. Users in Germany and Austria will go first, followed during 2005 by Brits, Czechs and the Dutch. What's the betting that the much-trailed Motorola Skype phone will turn up not a million miles from T-Mobile's network?
The Skype Journal reported this week that VoIP gadgetco Mplat.com is offering a USB-Flash softphone for $46.90. The gadget consists of a USB stick loaded with the Skype client and various DSP and sound kit, as well as a mini-headset. You insert the device in a USB Flash driver, and Skype away. Well, you could if your phone has a USB port, which is unlikely. (I wonder why that is?) It should come as no surprise, then, that researchers at research firm Analysys think that by 2010, mobile and VoIP will account for over 60 per cent of voice spend in Europe.
One new gadget this week that does have a Flash driver is Hewlett Packard's new PDA/phone, the iPaq hw6500 series. As well as quad-band GSM/GPRS functions and Windows Mobile, 312MHz of processing power and 64Mb of memory, it also packs in a 1.3 megapixel camera and an integrated GPS receiver. Vodafone will be offering them.
Meanwhile, it's no go for the Blackberry clone known as the Ogo, a data-only device that Cingular will no longer offer. Its presence at Cingular was always anomalous, being a hangover from AT&T Wireless. Cingular this week became the first network operator to break ranks over the controversial Motorola/Apple iTunes phone, as Reuters reported that anonymous sources in the company had promised that the device would ship first on the US's no.1 network. Operators have not been keen on the gadget, fearing that their users would fill it with songs at home rather than paying through the nose to download them over-the-air. As if on cue, Apple launched version 4.9 of its popular music download software, and bloggers were quick to discover apparently secret mobile functionality buried in the code.
A resource file in the Macintosh version called "Localized.rsrc," it seems, contains multiple references to mobile phones, including functions to "Set up your mobile phone," "Automatically choose songs for my mobile phone," and "Configure phone preferences." Before leaving the subject, we will note that Moto also chose this week to launch the first phone using its new JUIX user interface. Features: Tri-band GSM/EDGE, 1.3 megapixel camera with flash, Bluetooth, TransFlash, and MP3 playback.
British handset firm Sendo was effectively bought out by Motorola this week, transferring 200 engineers and some 90 patents to the American manufacturer. No financial information was given, but the rest of the company is to close. Sendo made the world's first Windows-capable smartphone, but its brief history has been marred by near-constant litigation. If your core business is making Windows devices, falling foul of Microsoft is not a good idea. And if the devices are phones, falling out with Ericsson about GSM patents probably isn't very wise either. But Sendo managed to do both, and hence joins Psion handhelds, Marconi, hovercraft, DNA sequencing, Concorde, tilting trains, nuclear power, and much more in the long history of British engineering innovations that failed dramatically once they reached the market.
And Sprint announced it was planning to begin trials of WiMax wireless broadband in the 2.5 GHz spectrum, using Motorola equipment for the "emerging" 802.16e standard. The test campaign is to begin this year and continue into 2006.
Philips announced this week that it was working on a sub-$20 handset for the developing world. This goes quite a bit further than the current GSM Association challenge in this field, and fits nicely with Vodafone boss Arun Sarin's sizable article in the Financial Times on Thursday expounding the benefits of mobile telephones for the poor. Motorola, of course, was the winner of the GSMA emerging-market handset competition.
Motorola Networks also invited the Informer to a secret underground cavern this week, so see the Spotlight for more Moto-Madness.
Nokia's high-spec N90 phone, it was announced this week, will be delayed by several weeks. No doubt the manufacturer will give some sort of half-baked techie excuse, but experts consulted by the Informer suggest it's more likely that Nokia is suffering from a bitter labour dispute in the Finnish paper industry. It's now six weeks since the paper mills that produce the 25 per cent of Finnish exports that Nokia doesn't have worked, as one of the longest strikes in Finnish history drags on. And Finland is now facing a menacing shortage of toilet paper, after panic-buying stripped the supermarkets of their remaining stock.
Perhaps that's why the traditional bombardment of Nokia press releases let up somewhat this week?
British police have been called in to investigate a malicious voicemail threatening to "kneecap" mobile users in the Hertfordshire area. This seems to be a retread of the rather hackneyed "revenge" services that used to ring people up with a message along the lines of "My daughter's pregnant!" in the early 1990s.
In other news relating to scum, the heavily-hyped CommWarrior virus actually seems to have infected someone's phone without a publicity-hungry security consultant being involved. A British woman noticed that credit on her pay-as-you-go phone was mysteriously vanishing as the little beast sent MMS copies of itself to all her friends. Apparently, the infection, like so many, was picked up during a Mediterranean holiday.
British authorities were on something of a mobile clean-up campaign this week: as well as the police investigation mentioned above, the premium-rate service regulator Icstis announced it was looking into the marketing practices of Jamster, the ringtone firm that brought us the widely despised Crazy Frog. Somewhat to the Informer's surprise, the investigation is to focus on complaints that the Frog's owner fails to make it clear that buyers of the infuriating noise are also agreeing to receive further text messages offering ringtones. Each message is charged at £3. Our first thought had been that they were looking into how the accursed amphibian came to be marketed in the first place. But it turns out that it's not so much a Crazy Frog as a Trojan Frog.
Returning to the positively po-faced world of mobile enterprise applications, Nokia and IBM execs made a joint appearance at JavaOne 2005 to encourage Java developers to get cracking on business applications for mobiles instead of games'n'ringtones. Craig Hayman of IBM's Software Group suggested a new Java API would "put the power of the server in the handset". The key is Java Specification Request (JSR) 232, which is meant to make IBM's favourite idea, Service-Oriented Architectures, possible on mobiles.
But if you think the developers are going to listen when they could be playing with electronic frogs, you're a fool...
They do these things better in Japan, as with massage and trains, and NTT DoCoMo this week announced a joint-venture with a Slovenian firm called ULTRA to sell its US-based mobile asset management software, Telargo. Mobile asset management, by the way, basically means using mobile comms technology to track fleets of vehicles, workers or stock. Is that serious enough yet? Anyway, NTT is paying some $28.6 million for the deal.
What mobile fleet management is to men in high-visibility vests, push email is to besuited executives. And, if it's not a Blackberry, it's not the real thing. Some golf clubs are said to refuse entry to persons carrying the wrong wireless email device these days: almost as bad as wearing brown shoes with a suit. Blackberry manufacturer Research In Motion had first-quarter results out this week, boasting of revenue up 12 per cent on the previous quarter and 68 per cent year-on-year, fuelled by 24 per cent growth in subscribers in the quarter. Net income was reported at $132.5 million, 67 US cents a share, before a $6.5 million charge for legal expenses relating to RIM's patent dispute with NTP. Rival email-to-suit provider Visto Corp announced the opening of a new R&D centre in Tianjin, China.
Microsoft announced a deal with Vodafone to achieve world domination...whoops, to launch an IM (instant messaging) service that works between MSN Messenger and Vodafone Messenger users. Several European countries should see a launch before the end of the year. Alternatively, the well-dressed young exec might prefer CommonTime's new mNotes software - a client for Symbian OS phones that hooks up to an enterprise Lotus Notes installation and claims to offer "a full Notes groupware experience".
Verizon Wireless, though, bucked the mood of seriousness when it announced that a music download service would be available within the next six to eight months, probably using the LG VX1800 phone. But France Telecom stood up to the temptation of such frivolity, suggesting that its users will soon be able to monitor a "home surveillance service" from their phones. CEO Didier Lombard told a strategy session that the giant telco's fixed-line and internet operations outside France are going to be rolled up in the current mobile brand, Orange. French press reports had suggested an even more radical move was in prospect, with the entire group in line for a fruity makeover, but this did not materialise. He promised a €1 dividend per share this year and stated that debt would continue to be paid off. Rumours, meanwhile, were rife in London that France Telecom might be a bidder for Cable & Wireless.
British regulator Ofcom has published its Spectrum Framework Review into how radio spectrum allocation should work in the future. Apparently, spectrum trading is on the cards for up to 70 per cent of the available frequencies. And the answer to whether or not TV over mobile is actually TV for the purposes of Britain's TV licensing legislation (and hence subject to the tax that finances the BBC) is in. Apparently, if the broadcast is viewed at the same time as it is sent, it's telly: if it is downloaded and then played back, it's not. Anyway, the TV licence fee covers all TV devices in a household that are powered by an internal battery in addition to the main TV, so it's unlikely anyone will pay more.
Lucent Technologies' European president Dave Poticny has been shifted to the Developing Markets group, in what a spokesman said was a move intended to "take some of our big guns into the new markets and grow our business." However, Lucent said that this was not a company policy, and the spokesman knew of no other similar personnel moves. It sounds very much like a demotion for Poticny, and a source (and frequent critic) told the Informer that Poticny was being "run out of his job" after a colleague was fired without his knowledge. Lucent refused to comment on the sacking.
Telefonica of Spain surprised the world this Friday by announcing it was taking a stake in China's second-biggest fixed-line operator (and unofficial mobile operator) China Netcom. Strict government restrictions limit foreign involvement in Chinese telecommunication, but apparently the deal has been structured so as to avoid this. Netcom, which is widely expected to be chosen to launch a 3G network, may be seeking expertise in 3G from Europe.
The Informer
Send your feedback to: theinformer@mobilecomms.com
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SS9173
AI
