Monday, April 27, 2009

Spectrum auctions - the Finnish start

There's something about the Finns, that means they always have to do things differently from everyone else. Rethink Wireless puts this down to a 'progressive' regulator, but you could also say that they're just a bit contrary. Not only have they been the first to auction off spectrum for LTE, but they've gone ahead and gone for a freequency different from what the rest of Europe looks like standardising on.

In many ways, this shouldn't be a surprise. Afterall, this is the same country that in June 2005 allowed Digita to deploy FLASH-OFDM in 450Mhz spectrum. FLASH-OFDM, remember, was the technology from Flarion* (and subsequently acquired by Qualcomm) that really defined what mobile broadband should look like ... the only downside was, EU regulations meant it couldn't be deployed in the licenced spectrum as that was reserved for WCDMA.

There's an interesting parallel in the recent Finnish decision around LTE spectrum (not least that OFDMA, the technology to emerge out of the ashes of FLASH-OFDM is fighting to be part of of the LTE standard). The driver for both decisions around spectrum was the need to deliver a rural mobile broadband coverage (afterall, when the Finns go to their summer houses by the lakes in the of the country, they still want to be able to watch their SlingBox!).

Of course, the major advantage of 1.8Ghz over 2.6Ghz is the fact that the cell size will be bigger, so it's marginally more suited for rural areas ... though truth be told, still no where near the cell sizes delivered by 450Mhz.

The choice of spectrum, and whether the regulator will define the technology that must be deployed in it, is on of the big debates that will define the industry over the next two years.

What is a 'fair price' for the spectrum? What technology is best? Will the world end up with patchwork quilt of spectrum that means 'global' LTE roaming will be well nigh impossible? And what will all this mean for the services being deployed?

All big questions. This year we'll see not only 2.6Ghz spectrum auctions for LTE, but also the refarming of 900mhz spectrum. With HSPA+, LTE and (still just about) WiMAX all fighting for their market share, there are some political, rather than technology, decisions that need to be made. Oh, and add in the matter of mobile TV and the battle between DVB-H, DMB, IMB and MediaFLO and the regulators are going to be getting alot of calls from interested parties... but more on Mobile TV later.

* Flarion was an AxiCom client until its acquisition by Qualcomm

Thursday, April 23, 2009

EU cuts roaming charges, but subscribers still need more

Yesterday's decision by the European Commission to impose a cap on roaming charges for data and SMS will force mobile operators to cut their roaming charges ahead of us heading off for a bit of sun, sand and sangria.

As EU Telecoms Commissioner Viviane Reding put it: “Today’s vote marks the definite end of the roaming rip off in Europe. Thanks to the strong support of the European Parliament and the Council, the new roaming rules were agreed in the record time of just 7 months. Just in time for the summer holidays, European citizens will now be able to see the single market without borders on their phone bills.”

However, while cutting the roaming charges is certainly welcome from a subscriber perspective, it's still only going part way. What the charges are still remain a mystery to most of us.

Talking to mobileip, Openet's CMO Mike Manzo explained. “The EU’s decision to introduce a cap for roaming texts/data is going to be welcomed by consumers planning their holidays, especially those that have previously been surprised by a bill after returning home from abroad. But that is only part of the issue - today consumers have very little visibility into charging and usage.

"Consumers don’t want nasty surprises, they want to know how much they are paying for services and what their balance is. That means that operators need to shift from the traditional post-billing model to offering real-time visibility to subscribers. While it is great for consumers that their roaming charges in the EU are going to be lower, the operators that are going to be the real consumer champions will be the ones that give their subscribers the knowledge and power to control their mobile bill.”

The EU has made a valiant attempt to give citizens a bit more information, with a list of what the roaming charges will be in each country.

In a nutshell, you can't afford to go on holiday if you're a T-Mobile customer! Their roaming charges are nearly double those of both 3 and O2. Which if you happened to be visiting Germany on Tuesday would have been fine, as the network was down so you couldn't have made calls anyway, but otherwise makes it an expensive choice of operator.

So, much as it pains me to say it, good work EU. But come on operators, don't stop there. Don't hide behind confused billing and poor advice of charge to milk subscribers.

Actually, thinking it through, if you switched from T-Mobile to O2 and sent just 10 SMS messages on holiday, you've probablly saved enough for an extra Sangria!

Wednesday, April 22, 2009

T-Mobile Germany network in nationwide collapse

40 million Germans were left with no mobile phone coverage yesterday when the nationwide T-Mobile network in Germany collapsed leaving them with no voice or SMS service.

Coming on the same day that Deutsche Telekom slashed its earnings forecasts for 2009 and saw its share price tumble by over 7%, the network failure has been blamed on a ‘software glitch’, according to an early Reuters report. Emerging details suggest the HLR (the database that holds every subscribers number and location and so is critical to the ability to make and receive calls) was the problem, reports suggesting that two of the three HLR servers fell over suggesting that it was a load issue that pushed the software beyond its tested scalability limits.

Although details are still emerging, it seems likely that this complete network collapse could have been at least minimised, if not avoided, if early warning signs had been spotted. With a typical tier 1 network generating over 10s of terabytes of network data in a single day, the sheer volume of information network engineers have to process makes it increasingly difficult for them to separate the terminal problems from those that are just an irritant.

As T-Mobile grapples with the challenge of bringing its nationwide network back to life, they will have to process massive amounts of network data just to be able to ensure even a basic service is resumed. The problem of identifying, prioritizing and solving network status issues is only going to be even harder as they race to restore full service.

It's also worth bearing in mind that the last time there was a major HLR failure was 2005 and it was Bouygues in France that suffered ... or more accurately, Tekelec after the operator sued them for 'economic damages'. Based on T-Mobile Germany's annual turnover, you could probably make a gu'estimate that yesterday's network collapse has cost them in the region of $100 million in direct call losses. Not the sort of news you need when you've already had to lower your profit forecasts.

The lawyers will be rubbing their hands ... as will Vodafone ;-)

UPDATE: It's now been confirmed that it was NSN's HLR that crashed. NSN acquired Apertio (who developed this HLR) in January last year for $206 million.

Unstrung quotes Chris Larmour, chief marketing officer at Actix*, who believes the severity of T-Mobile's network outage yesterday could have been limited: "Some of this could have been avoided. It went wrong and no one was able to manage it. It took them four hours to figure it out. It will take them months to get back to normal."

* Actix is an AxiCom client

Monday, April 20, 2009

Oracle / Sun - ironic or perceptive?

OK, so it's not really the focus of this blog, but I did think this was an unfortunate error message for the Oracle press room to have when I went to check out the statement on its acquisition of Sun!

Picking a Winning Technology

The telecoms industry, along with the wider technology industry, is littered with great ideas that failed, seemingly pointless technologies that have somehow managed to find a use and become irreplaceable, and vociferous debates as interested parties battle for their technology to become the 'standard'.

But what makes a winning technology? The Betamax v VHS story is perhaps a bit long in the tooth these days, but still incredibly relevant. Indeed, this month Nokia has tried to dismiss WiMAX as a "wireless Betamax" and that while it will linger around, it will be LTE (the "VHS" in the analogy) that will win the standards war and dominate the market. However, as the article in the Financial Times goes on to correctly qualify, while VHS dominated the consumer market, Betacam was generally recognised to the the 'better' technology and indeed became the standard used by broadcast professionals.

Fundamentally, what this argument comes down to is not which is the better technology. Sadly, that seems to have naff all to do with it. In fact, it comes down to something called the 'Social Construction of Technology'. To boil it down to one key point, it's not a case of which is the 'best' technology, but rather who is saying it's the best technology. It comes down to the stakeholders, the social momentum behind the technology that determines the 'winner'.

So, VHS beat Betamax, BluRay beat HD DVD ... go far enough back, and the chain-driven 'safety bicycle' eventually dominated while the Penny Farthing was consigned to history and AC beat DC as the standard for electricity generation.

To win a standards war, therefore, it's not enough to win the technology battle. Technology does not exist in a vacuum - technology that exists for the sake of technology invariably fails, while the technology that solves a problem, that actually does something is the one that survives and thrives. Understanding the context of a technology is critical to being able to pick a winner ... choices about technology are shaped by the society in which it exists.

So, look at the LTE v WiMAX battle from another perspective - not in terms of which is the 'better' technology, but rather which has the weight of special interest groups and social momentum to define the rules of the battlefield?

Wednesday, April 08, 2009

OFCOM on how to save money on your mobile abroad - don't use it!

The holiday season must be kicking off ... OFCOM has just released a video with consumer advice on how to save money on your mobile phone bill when travelling abroad ...

View the video here.

Is broadband a utility? (part 2)

Back in March, I posed the question as to whether broadband should be considered a utility and, as such, whether the UK government should backroll the construction of a nationwide NGN infrastructure. At the time, Ed Richards, the OFCOM CEO, had said that there were no regulatory obstacles in the way of companies investing in 'super-fast broadband' and that, in effect, they should just get on with it.

However, with the current credit crunch still biting, the idea that companies are going to willingly bury billions under the ground is a bit of a leap so instead, the UK ends up falling further behind and very infrastructure that could help the UK economy find its way out of recession remains a pipe-dream.

So, news today that the Australian government is going to just do it themselves and spend A$43 billion on building a national broadband network is a major step. The route taken by them is to create a new company, with the government as the major shareholder, not just connecting the whole country to a 100Mbs network, but also creating 25,000 jobs.

And it's not like there aren't other broadband alternatives in the country ... through Telstra's HSPA+ network, they already hold the Guinness world record for the fastest national mobile broadband network!

So, is there a lesson here that other countries need to look at? At economies have to realign themselves and find new areas of comparative advantage, it is clear that underpinning it all will be a communications infrastructure that really can cope with the challenges of the modern global economy. While I suspect not many governments will want to stump up the cash that the Australian government is lavishing on a nationwide super-fast broadband network, they have certainly thrown down the gauntlet to other governments and economies to invest and build, or wither and stagnate.

Monday, April 06, 2009

Is Skype finally challenging operators' voice revenues?

The news that there has been over 1 million downloads of Skype to iPhones in just two days is challenging mobile operators to face up to the fact that their voice revenues – which for better or for worse are still the bedrock of their financial health, despite all the talk of data services – may be truly coming under threat at last. While consumer advocacy groups (and VoIP providers) are arguing for operators to open up their network (so called ‘net neutrality’), mobile operators are looking to block Skype in the name of ‘network efficiency’ and ‘non-compliance’ of the application with their network.

The VON Coalition Europe (a group that includes Internet giants like Google, Microsoft, Skype and Intel) claims that operators are blocking or degrading of content, services or applications “for motives that extend beyond efficient traffic management.” With a typical Skype call normally only using 8 to 20kbps, which can be compared to the download of an average web page, Skype in many respects is considered a low bandwidth application. However, make a Skype video call rather than a basic voice call, and the impact on the network could be very different…

With so many claims and counter-claims flying around on the true impact of services such as VoIP on a mobile network, it can be hard to see what the true picture is. Are operators justified in blocking Skype because of the impact on their network? Or is this just a cover for their deep rooted fear that Skype is about to slay the sacred cow of voice revenues?

It perhaps takes companies like Actix* provide real insight into what the real impact of services such as Skype on a mobile operator’s network performance. Working with tier one operators in North America, Europe and Asia, Actix is at the heart of operators’ network status management systems, processing over 1 terrabyte of data every day on a typical tier network.

While there is a certain inevitability about VoIP as operators look towards LTE and an all-IP network, data loads are increasing over 3G (and more so with HSPA), pushing the cost-per-bit for ever higher. With the advent of LTE, mature operators will be left with at least three overlaying Radio Access Networks (RAN) to manage - 2G, 3G and 3.9/4G networks. With a large portion of the delivery cost of every bit being RAN-related, the challenging economics of mobile broadband will enforce the need for a much sharper focus on delivery cost per data bit if operators are to remain profitable.

So maybe both sides are telling the truth ... operators are fighting a rear-guard action because they fear the impact of opening up their network to yet more data which they cannot directly monetise, while VoIP advocates are right in pointing a figure at operators' basic revenue concerns as the real motivation for their opposition.

* Actix is an AxiCom client

Thursday, April 02, 2009

Putting GSM out to grass?

The decision of the European Parliament to amend the GSM Directive on what technology can be used in the 900Mhz band of spectrum seems to have passed unnoticed by much of the media. The reality is, however, that after years of lobbying, it is a potentially a very significant decision that deserves more attention (and I don't often say positive things like that about EU decisions!).

The GSA has gone on the record as saying that "this groundbreaking spectrum agreement in Brussels enables more Europeans to benefit from mobile broadband services. It is a clear signal to all regulators to prepare the path in their respective markets for a new wave of HSPA deployments in the 900 MHz band." 'Spectrum refarming' as the policy is known will finally enable the rollout of mobile broadband to rural and semi-urban areas because (and excuse my idiot's attempt at physics), the lower frequency of the 900Mhz waves mean they travel further, and so the cells are bigger.

So it's all good news right? The digital divide is going to be bridged.

Well, yes and no. Look at the GSMA site and you'd think all is hunkydory. According to the GSMA, spectrum refarming has a number of potential benefits more mobile operators, including changing the economics of rural mobile broadband, stimulating capital investment (like operators are keen on CAPEX right now) and improved in-building penetration.

Oh, that's right. Weren't femtocells meant to solve the problem of poor in-building coverage with 3G? Well, at 900Mhz, it's not a problem any more. But that's ok, because there's still LTE femtocells...

Or maybe not. The GSA and GSMA both predict a new wave of HSPA deployments in the 900Mhz band ... it begs the question, with HSPA deployed at 900Mhz, the CAPEX has got to be lower than rolling out LTE. Sure, LTE maybe more efficient but if you can deliver mobile broadband services in two bands, the crunch point in capacity where LTE becomes a no-brainer is pushed further out.

The decision over spectrum refarming is important. But the ramifications are perhaps more far-reaching than some are admitting and the law of unexpected consequences will still hold true.