the future of wireless ISSUE 185 OCTOBER 2014
Featuring
Leaks, Litigation and Liability Are telcos walking through a legal minefi eld?
Mobile for Everyone We examine how mobile is breaking down social and economic barriers.
OTT or not OTT? How can telcos realise the potential of partnering with digital players?
ARMING THE WORLD ARM SILICON IS FOUND IN NEARLY ALL MOBILE DEVICES. WE SPEAK TO CEO SIMON SEGARS TO GET SOME OF THE SECRETS OF ARM’S SUCCESS.
OFC_MCI185.indd 3 03/10/2014 09:21 News, Analysis and Opinion for the global telecoms industry
Telecoms.com is the leading provider of news and analysis, combined with in-depth features, exclusive interviews, industry reports, and much more. Telecoms.com keeps over 80,000 unique monthly users up to date in touch with the latest global technological advancements and market trends, addressing the key business and technology issues facing the industry.
Telecoms.com offers an extensive range of Whether you are looking to reach senior decision commercial solutions through different channels makers within operators or vendors, our highly- such as webinars, TV interviews, newsletters, print targeted media solutions and vast industry database products, list rentals, events and custom-made will ensure that your marketing message reaches opportunities. the right people.
www.telecoms.com For more information please contact Tim Banham on +(0)20 701 75218 or email [email protected]
telecoms.com_house advert.indd 1 28/05/2013 09:52 Front
Editorial 02 contents october14 News Analysis 04 The ever accelerating growth of data traffic and how to best deal with it is a continuing topic in the industry. Telcos, vendors and government bodies have all been offering opinion on the issue. Meanwhile, the UK mobile retail landscape changed as one of its longest standing businesses close Enterprise Cloud its doors amid accusations directed at its former News and analysis operator partners. for IT professionals I NterVIEW
Business Cloud News helps senior Found in nearly all today’s mobile devices, ARM’s 06 IT professionals and business leaders technology has been instrumental in the mobile navigate the next frontier of infomation Internet revolution. But this is no Silicon Valley technology innovation by providing behemoth, rather a UK company situated on the original news and analysis, edge of Cambridge. We speak to CEO Simon Segars commentary and in-depth feature to get some of the secrets of ARM’s success. content exploring cloud, mobile, big data and the Internet of Things. F EATURes Visit: www.businesscloudnews.com Leaks, litigation and liability 10 The telecoms inudstry is one of the most litigious in the world, and as numerous patents can be associated with one device it is easy to get caught in a war over copyright or end up with a lawsuit | Global Events 2014 thrown at you. Mobile for everyone 12 The lack of a network connection is not only an AfricaCom inconvenience but causes divide between those 11-13 November 2014 who have and those who don’t. But mobile Cape Town International Convention Centre, Cape Town, South Africa technologies are also providing revolutionary africa.comworldseries.com/ solutions that are shaping lives across the world.
AfricaCom is Africa's premier 375+ exhibitors and 9000+ Is it the destination or the journey? 16 communications congress and attendees, AfricaCom is your As OTT service providers have carved their place exhibition. This year’s programme essential destination for networking, within the industry, telcos are starting to get over will cover a host of new topics learning and business development the first shock and realise the potential of the new affecting companies in Africa’s – no other emerging market market where both can coexist. digital market. With 300+ speakers, communications event compares. TRHE INFO MER
LET North America Cloud Asia Moans 4u 20 18-20 November 2014 24-26 November 2014 It is a hazard of the journalistic trade to be Intercontinental Hotel, Dallas, Texas,USA The Sheraton Hotel, Hong Kong persistently lied to. Most are pretty benign americas.lteconference.com/ asia.cloudworldseries.com/ lies, or not even that – merely half-truths and exaggerations. OTT TV World Summit T elecom CEM World Congress 17-20 November 2014 3-5 November 2014 Millennium Gloucester Hotel, London, UK Thistle Marble Arch, London ottworldsummit.com/ www.cemcongress.com
The leading source of news, Subscribe to MCI today! analysis and opinion for the Email: [email protected] global telecoms Industry www.telecoms.com/magazine/ Visit www.telecoms.com 12 Mobile Microfranchising
Mobile Communications International | First for news, best for business 01
01_MCI182.indd 1 02/10/2014 14:32 EDITORIALOCTOBER14
The wide, wide world of mobile
nyone reading this magazine is likely Conversely, mobile also enables a lot of HEAD OFFICE Mortimer House, 37-41 Mortimer Street, to already have a pretty fi rm grasp on positive activity around the world. In our London, W1T 3JH the nature of the mobile industry, but look at some ways in which mobile technol- Tel: +44 (0)20 701 75000 A Fax: +44 (0)20 701 75647 sometimes the sheer scale of it is worth refl ect- ogy has helped overcome social challenges ing on. A mere generation ago mobile phones (page 12) we travel from rural Britain to EDITORIAL were the size and shape of bricks, and the Indonesia to fi nd ways in which connectivity Please send all press releases to [email protected] preserve of yuppies. Now most of the world has is empowering individuals. Editorial Director Scott Bicheno smartphones in its pocket and connectivity is Finally we come back to a familiar challenge, Email: [email protected] fi nding its way into the most unlikely places. but one which remains unresolved: how can Tel: +44 (0)20 701 75201 The headline interview (page 6) in this issue telcos and internet players, otherwise known as Senior Writer Tim Skinner of MCI is with Simon Segars, the CEO of UK OTTs, coexist in a mutually benefi cial way? The Email: [email protected] chip designer ARM. His company’s IP is found traditional narrative is that OTTs are eating the Tel: +44 (0)20 701 75835 in nearly all mobile devices, covering compo- telcos’ lunch, but it’s precisely tradition that Senior Writer nents such as the CPU, the baseband processor needs to be confronted if that’s not to remain Auri Aittokallio Email: [email protected] and the countless sensors now standard in the case, as we explore in our analysis of OTT Tel: +44 (0)20 701 77462
smartphones, so Segars has a great perspective opportunities on page 16. The Informer on the whole industry. The scope of the mobile industry continues [email protected]
In a wide-ranging interview, Segars dis- to expand and evolve at a dizzying pace, which ADVERTISING cusses his fi rst year in charge of the UK’s is generally a positive thing. New areas such as Sales Manager most successful tech company, refl ecting on IoT, the digital home and the connected car con- Gary Brown Email: [email protected] the unique doors his position opens for him. tinue to expand the size of the overall market, Tel: +44 (0)20 701 75601 While stressing he has no desire to reinvent while new uses for existing mobile applications Sales Manager the wheel, Segars also discusses ARM’s plans are found every day. It’s only by embracing this James Miller to diversify, focusing especially on the op- change that we can benefi t from it. Email: [email protected] Tel: +44 (0)20 337 73986 portunities presented by IoT and the evolving network topology, and looks forward to the DESIGN & PRODUCTION Design & Production Manager next few years. Joanne Lowe We can only hope the future for mobile is Email: [email protected] slightly less litigious than the past few years Tel: +44 (0)20 701 75604 have been. With patent fi ghts, crusading regula- MARKETING / LIST RENTAL tors and data protection minefi elds to contend Head of Marketing Sophie Egan with, mobile players need to keep their legal Email: [email protected] wits about them, so we explore some of the [email protected] Tel: +44 (0)20 701 75461 issues they need to be aware of on page 10. twitter.com/scottbicheno Marketing Executive Nicole Ramson Email: [email protected] Tel: +44 (0)203 377 3493
PUBLISHER Tim Banham Email: [email protected] Tel: +44 (0)20 701 75218
SUBSCRIPTIONS/ CUSTOMER SERVICES c/o Mobile Communications International Mortimer House, 37-41 Mortimer Street London, W1T 3JH, UK Email: [email protected] Register online at: www.telecoms.com/magazine/ FREE SUBSCRIPTIONS Subscription enquiries should While every care has been taken to be sent to: ensure that the data in this publication WEBSITE Mobile Communications are accurate, the publisher cannot www.telecoms.com c/o Mobile Communications accept and hereby disclaims any liability International is a controlled Mobile Communications International is published by circulation quarterly magazine International to any party to loss or damage caused available free to selected personnel Mortimer House, 37-41 Mortimer by errors or omissions resulting from negligence,accident or any other cause. at the publisher’s discretion. If you Street London, W1T 3JH, UK All rights reserved. No part of this wish to apply for regular free copies publication may be reproduced, stored then please register online at: Email: [email protected] in any retrieval system or transmitted © 2014. All rights reserved. (ISSN 1352-9226) www.telecoms.com/magazine/ in any form electronic, mechanical, Informa UK Ltd registered offi ce: photocopying or otherwise without the Mortimer House, 37-41 Mortimer Street, prior permission of the publisher. London, W1T 3JH, England.
02 Mobile Communications International | First for news, best for business
02_MCI185_editiorial.indd 2 03/10/2014 10:00 telecomstraining.indd 1 03/10/2014 13:28 NEWS Analysis [email protected]
Amdocs reacts to EC report
Earlier this year, the European Commission released its latest since 2013, but because of new applications being report on the state of the telecommunications market through the deployed, we’re seeing a huge growth in data consumption,” said Neil Coleman, Director of Network continent. The findings of the report did not make for particularly Solutions Marketing at Amdocs. startling news and the official conclusion drawn was, literally: As the myth goes, a fish will grow to the size of its “data traffic is growing quickly”. surroundings, and Coleman likens this to a potential reason for the continued expansion of mobile data use. “Congestion is one thing, but the data is only able to hile traffic is on the rise, as we are all aware, double because the operators keep putting extra capacity the report did find that European industry in,” he says. “As soon as operators put the capacity in, Wrevenues are on the decline. When compared to that capacity gets used. Voice calls ran up an extra 10% or our counterparts in the USA, apparently, overall prices in so, but data doubled. Apps nowadays are becoming more Europe remain high; whereas data consumption with US passive in their data usage; an additional load is being operators trumps those from Europe. As a consequence, added to the RAN just by apps running in the background, telecoms revenue in the US is on the rise and declining even while the phone is in the pocket.” in Europe. Consumers are often none the wiser to the fact that their Vice-President of the European Commission, Neelie devices are streaming data into the phone even whilst it’s not Kroes, identified a lack of cooperation from the operator being used. Increasing amounts of storage being integrated community in assigning the 800MHz spectrum band as a into new handsets, as well as in the cloud, means that more primary reason for the slowed roll-out of 4G mobile across apps are being downloaded. And with more apps comes more the EU. Kroes is the face of the Digital Agenda for a single passive data streaming. It is a scenario that is contributing to digital market in Europe, and concedes that a more unified the generation of high density data traffic in limited space. approach between European regulators and operators “What we’re seeing a lot on mobile networks is the 80/20 is required. “We are clearly still a long way from a real rule. In a typical city area, about 80 per cent of the traffic is single market. We need to cut red tape and we need more carried in about 20 per cent of the locations, so it’s highly consistent regulatory action at both national and EU levels localised. Likewise, and probably subsequently, we’re also to build up that single market,” she said. seeing that 80 per cent of dropped calls and failures are occurring in 20 per cent of locations,” Coleman explains. The reality is that the main issue for capacity is Roughly 80 per cent of mobile failure is down focused on trying to get as much as possible into to the radio access network. That air gap confined areas, and 4G is a potential aid in mitigating some of the pressure away from existing mobile between the cell tower and your phone is the infrastructure. Spectrum allocation, carrier aggregation source of most problems, and that’s where and LTE Advanced are longer term options, but small cells remain compelling for managing dense traffic in there’s been a lot of investment to get that localised areas in the present. fixed. The pace and demand for this is not Wi-Fi offloading presents a strong option for mobile network operators, but largely depends on their strategic slowing down. ideals. Hotspot 2.0 is a new approach for operators managing growing traffic issues, and an aggregation of access technologies can help to provide a seamless Wi-Fi The Commission’s disappointment with the current roaming experience for the consumer. This seemingly position of the telecoms market aside, the report did customer-centric initiative also has a self-serving motivation raise a very good point about how telcos can better which is, to put it simply, to alleviate the demands put on manage radio networks and increase capacity for data mobile infrastructures. transfer. Faulting network connections, for data and voice, leads A report from Amdocs recently analysed the busiest square to missed revenue opportunities for telcos. At present, the kilometre of the RAN on eight tier 1 mobile networks in Europe RAN is largely responsible for poor mobile experience. and North America. The results showed a startling rise in data “To put all of this into context, roughly 80 per cent of traffic in the 12 months leading up to January 2014, more than mobile failure is down to the radio access network. That air 110 per cent growth in total. Incidentally, smartphones released gap between the cell tower and your phone is the source in 2013 now contribute more than seven times more data of most problems, and that’s where there’s been a lot of generation per subscriber than those in 2009, and 40 per cent investment to get that fixed. The pace and demand for this more than handsets released in 2012. The iPhone is responsible is not slowing down, and the emerging M2M field will only for 51 per cent of network traffic surveyed, so with September’s add to it.” warns Coleman. announcement of the iPhone 6, 6 Plus and Apple Watch, it’s As the EC’s report states, mobile revenues have been on an ominous sign which points to another sharp rise in data the decline in Europe for the past 3 years, and the trend consumption potentially in the offing. has to be bucked. Bringing the discussion full circle, the “We’re not talking about emerging markets here pressure for operators to optimise the RAN is growing, where smartphones are getting off the ground. There’s and not only to help alleviate the pressure on the network been no significant shift in smartphone penetration applied by data growth. n
04 Mobile Communications International | First for news, best for business
04-05_MCI185_analysis.indd 4 02/10/2014 14:36 [email protected] NEWS Analysis
Phones 4u collapse sparks blame game
UK mobile phone retailer Phones 4u recently put itself into “We were told by the Phones 4u management team administration. In the ensuing PR campaign its owners pointed that they had little commercial flexibility due to their debt repayment obligations, but that they had a number the finger of blame squarely at operators Vodafone and EE for of alternative strategies in place if we couldn’t reach an leaving it in the lurch. agreement with them. So when we terminated our contract earlier this month, we made it clear that we would honour our s Phones 4u decided to call in the administrators existing contract, which runs until February 2015, to give them over one weekend closely following decisions by sufficient time to finalise one of those alternative strategies. Aboth Vodafone and EE not to renew their contracts It is now clear based on the events that have transpired that with the retailer, the company was quick to share its opinion there were no viable alternative plans in place.” on what it thought had led to its dire situation. The company Of course positioning the debt, rather than the operators, published a press release entitled “Decisions by Vodafone as the baddie would have been less appealing if the and EE force Phones 4u to seek Administrator’s protection”, objective was to deflect culpability for the situation, since in which the company stated: “Phones 4u has been informed the debt was accumulated on the private equity firm BC by EE that it will not be renewing its current contract, due to Partners’, Phones 4u’s owner, watch. end 30 September 2015. This decision by EE, which quickly It seems Phones 4u found it better to focus the follows a similar recent one by Vodafone, means that Phones public’s attention on scheming operators and doe-eyed 4u is suddenly in a position where it will be without a mobile employees before solemnly handing the whole mess network partner when the current contracts expire.” over to administrators. The defining feature of nearly all Phones 4u’s public statements on the matter has The defining feature of nearly all Phones 4u’s been overwhelming concern for the welfare of the 5,596 public statements on the matter has been employees who stand to lose their jobs, coupled with a concerted attempt to pin it all on the operators. overwhelming concern for the welfare of the Stefano Quadrio Curzio of BC Partners was quick to flash 5,596 employees who stand to lose their jobs, his philanthropic credentials. “Our overriding concern is for all the dedicated hard-working employees of Phones 4u at coupled with a concerted attempt to pin it all a time of uncertainty for the company,” he stressed, before on the operators. joining in the finger-pointing. “Vodafone has acted in exactly the opposite way to what they had consistently indicated to the management of Phones 4u over more than six months. In the eyes of an outsider, the news seemed to follow a Their behaviour appears to have been designed to inflict regular pattern as O2 had too jumped ship at the start of the the maximum damage to their partner of 15 years, giving year, but according to Phones 4u the decisions by Vodafone Phones 4u no time to develop commercial alternatives.” and EE came as “a complete shock”, having apparently Even John Caudwell, the founder of Phones 4, who sold received recent indications from both that “they saw the company to another private equity group for a cool £1.5 Phones 4u as a long-term strategic partner.” Phones 4u also billion way back in 2006, apparently still felt he had a stake pointed out the company had revenues in excess of £1 billion in the game. While some residual affection for the company last year and was still “profitable”, but since Vodafone and he founded is understandable, you would think eight years EE accounted for over 90% of the connections made by and a billion quid would have mellowed his paternal ire. To Phones 4u, its position had suddenly become untenable. be fair he did also have a go at BC Partners, but he made Vodafone and EE seemed less than impressed at sure to tweet: “I am sickened and saddened for nearly 6000 having been made scapegoats for Phones 4u’s move into wonderful employees who made @Phones4u into a great administration. Vodafone was understandably somewhat business. #ruthlessvodafone #ruthlessEE”. defensive in its response, essentially saying that many The operators, for the most part, kept their own counsel months of negotiations with Phones 4u had produced no while having all this emotive mud thrown at them, but they agreement on how to proceed. It seems the two parties must have been quietly seething. The continual references were a long way apart when it came to business terms to the Phones 4u employees seemed designed to put the and that Phones 4u’s negotiating position was severely operators in the most awkward PR position possible, while constrained by the amount of debt (at least £430 million) doing nothing concrete to assist the people they were the company had to service. apparently so concerned about. “We are saddened to read that Phones 4u have gone Nobody likes to see companies go out of business, into administration and the impact that will have on their especially ones that employ thousands of people, but all employees,” Vodafone said in a statement. “However, these press releases claiming to represent the interests of we strongly reject any suggestion that we behaved the Phones 4u employees are at best disingenuous. There inappropriately at any stage during our negotiations with appears to be concerted pressure from a number of parties Phones 4u. The outcome was the result of a transparent to force Vodafone and EE to resolve a problem that was negotiation over many months. Phones 4u was offered not of their making. The kind of business model Phones 4u repeated opportunities to propose competitive distribution had, leaves a company entirely exposed to the whims of its terms to enable us to conclude a new agreement, but was operator partners, but it’s absurd to expect them to keep unable to do so on terms which were commercially viable doing business with any other company when it is no longer for Vodafone in the current UK market conditions. in their commercial interest to do so. n
Mobile Communications International | First for news, best for business 05
04-05_MCI185_analysis.indd 5 02/10/2014 14:37 interview ARM
Arming the world
Found in nearly all today’s mobile devices, ARM’s technology has been instrumental in the mobile Internet revolution. But this is no Silicon Valley behemoth, rather a UK company situated on the edge of Cambridge. We speak to CEO Simon Segars to get some of the secrets of ARM’s success.
By Scott Bicheno
hen you arrive at ARM’s Cambridge You get to meet phenomenally interesting associated with ARM are typically con- HQ it isn’t necessarily what you people; the business card gets you places trasted to those of chip giant Intel. Where Wmight expect of a global tech giant. you couldn’t ordinarily go. I was having Intel makes money from manufacturing To put it bluntly, it’s next to a field. One minute, lunch at Number 10 [Downing Street] the and selling its own hot, powerful proces- cutting edge silicon design, the next minute, other week with a whole bunch of CEOs sors, ARM sells its technology to enable crops. But once you get to know the company and I was really impressed. I reached the others, such as Qualcomm and Mediatek, you realise this is entirely appropriate. ARM ‘shaking hands’ moment and David Cam- to make low-powered ships. As you would has become a huge success precisely because eron said: ‘Oh, this is Simon Segars and expect, Segars isn’t about to get drawn it’s content to stay in the background, enabling he runs this company called ARM, and into directly addressing his competitors, other companies to hog the silicon limelight, so their chips are in all these smartphones.’ but he’s happy enough to address the a healthy measure of British understatement He just knew that.” broader competitive environment. is entirely appropriate. But apart from meeting the great “Our innovation is magnified by the ARM CEO Simon Segars is the per- man himself, what have been the other innovations of our licensees so you get sonification of his company, not just highlights of the last 12 months? “The a very diverse range of products in the because he’s the boss but because, like his business has done great over the last end-user space,” says Segars “If you con- predecessor Warren East, he is an entirely year; we’ve had very strong licensing of sider that against just one semiconduc- unpretentious, down-to-earth, straight- the technology we’ve been working on tor company, regardless of the technol- talking person. Even being based in the US for a long time, such as Cortex A,” says ogy it’s based on, the more people you’ve west coast for many years doesn’t seem to Segars. “We’ve been developing version 8 got innovating around this common have sent him down the hyperbolic path of the ARM architecture for a number of architecture the better. apparently considered obligatory by so years now, where we introduced 64-bit “A huge milestone for ARM and the many of his tech industry contemporaries. processing. A lot of algorithms around ARM partnership was going through the It’s been around a year since Segars networking, for example numerical algo- 50 billion mark of ARM-based chips being took over from East at the helm of ARM, rithms that run in the cloud, all assume sold by licensees, cumulatively. That is so we commence by asking how that first there’s a 64-bit number to play with, so a phenomenal achievement and the rate year has gone. “It’s been great – I’ve really it has enabled the ARM architecture to has been increasing pretty comfortably. It enjoyed it,” says Segars. “As you know get used in many more places and it’s was 10.4 billion ships last year and eight I’ve been with the company for a very broadened the market for our customers. or so billion the year before that, and if long time and helped define it for the last “64-bit definitely has a role in mobile you extrapolate the first half of this year 20-odd years, but there is a difference be- too. You look at high-end devices, they we’re on for 12 or so billion this year, so tween being part of the management team are approaching the limit of how much around 20% growth year-on-year. and actually being the CEO and it’s hard memory you can put in them, and the way Only half of the ARM-based chips to really put your finger on what that’s we architected version 8 is very clean, very shipped last year appeared in mobile going to be until you’re in the chair. pure, so we’ve been able to produce a very phones, and this diversification is a cor- “I’ve spent my last 12 months talking efficient 64-bit architecture as well.” nerstone of ARM’s forward strategy. One to people in the business and outside it. The role, business model and products trend ARM has been very keen to promote
06 Mobile Communications International | First for news, best for business
06-08_MCI185_ARM.indd 6 02/10/2014 14:40 ARM interview
ARM CEO Simon Segars holding a Cortex A57 test chip and 2mm2 Freescale microcontroller
has been the Internet of Things (IoT), so having in other markets represents a big for the task with the networking and the we ask Segars to give us his view on how opportunity ahead of us. storage interface, and having something that’s progressing. “IoT is still in its very “If you look at mobile in terms of ap- smaller, lighter and much lower powered.” early days, but the combination of a chip, plication processors, it’s a $13-14 billion While grabbing some server share some wireless connectivity and a sensor, silicon market today, growing to around from Intel would obviously be satisfy- put together in a really small package, $20 billion in the next five years. If you ing, networking seems a more obvious can be embedded in almost anything for look at enterprise, which for us means market opportunity for ARM. “Networking almost no money,” says Segars. network infrastructure and cloud serv- is changing; with the growth of mobile “And then you create this enormous ers, that again is worth about $13 billion devices you’re getting ever more data network and probably of interest to your of silicon today, growing to about $20 moved across the internet,” says Segars. readers is how the data that comes from billion in five years’ time. Our targets “With the growth of IoT, again you get that then gets into the network infrastruc- for server share are quite modest, these more data, and that data has very differ- ture. IoT is all about gathering that data things will take some time to ramp. I ent characteristics. Systems are designed and the money to be made from IoT is all think we’ll see some first production to support the volumes of data associated about how you extract value from that systems this year, but probably grow to with smartphones, but with the Internet data. But you’ve got to move it from where something like a 10-15% market share of Things there may be 100 times more de- it’s sensed up into the cloud and obviously over the next five years.” vices that only have a very small amount that’s where the network comes in.” Looking to grab a 15% share of the mas- of data very occasionally. That creates sive server market from a standing start a very different load on the network, so What next? actually seems like a pretty aggressive the network is going to have to evolve. It While any well-run company needs to target, so what makes Segars think this requires customisation, scalability, it’s plan for the future, that can’t be at the can be achieved? “Obviously the Internet going to need to be quite flexible. expense of paying the bills, so how does already works fine, but it’s all based on a “And the third big growth opportunity Segars achieve this balance? “When I standard system architecture in the data- for us is in embedded, where the really took over from Warren, it’s not like ARM centre which, as workloads change in the small, really low-power processors have was broken, and having worked here for cloud, doesn’t look optimal,” he says. been licensed really widely – we’ve got so long and been part of Warren’s team, “If you take storage, for example, photos over 200 licensees of Cortex M now – to what we’ve got is partly due to what that get uploaded to social networking companies you’ve never heard of, who I’ve done,” he says. “So it’s not like we’re sites tend to get looked at for a relatively are off innovating in different ways look- suddenly going to move into making fizzy short period of time, but then stored for- ing at this IoT opportunity, and that’s drinks and jeans just because I’m now in ever. So if you’ve got some big server box why the volumes are growing to 900 mil- charge. I think the opportunity ahead of sitting there managing a disk drive that’s lion in the last quarter. It’s going to be us is to grow large market shares in mar- not actually getting accessed very often, really interesting to watch that innova- kets outside of mobile. Our 95% market that’s very inefficient. There’s a much tion play out, and again from a silicon share in mobile has been achieved over a better solution to that, which is about perspective each chip might not cost long time, but all that success we’ve been integrating a processor that’s the right size very much, but it’s around a 13 billion »
Mobile Communications International | First for news, best for business 07
06-08_MCI185_ARM.indd 7 03/10/2014 13:39 interview ARM
be a huge area for wearables. The medical systems of the world are geared up to deal with acute illness – you go in, your leg’s hanging off, please fix it – but as the popu- lation gets older and less healthy chronic illness is the problem, and managing that is a huge issue. So to track your wellbeing and to have communication going on with your healthcare provider, such that if you need to come in they’re going to tell you, and there’s a bunch of data that’s really relevant about your state of health, all represents a real opportunity. “On the networking side, with the evolution of the network topology, you’re going to get small cells, wifi offload, and that drives more embedded processing, so there’s a big silicon growth opportu- ARM sees Enterprise and Embedded as its growth markets going forward nity there for us aswell. “People might not realise there is some dollar silicon market today, moving to develop that really utilised the relatively growing momentum behind the deploy- around 20 billion in the next five years. high performance of the network. ment of ARM-based silicon into network- An easier way to keep the share price “And I think we’re also in a period where ing equipment. As people look at NFV and moving in the right direction might be to there is experimentation going on in terms SDN and the evolution of the network and just charge more for licences and royalties. of what other sensors you put in a phone network topology I think there’s a huge After all, what’s the point in dominating a and what they talk to. At the moment it’s place for ARM in that. We’ve been getting a market if you can’t exploit it, right? “A very relatively easy to put a bunch of sensors in lot of interest from networking vendors and common question I’ve had in the last 12 a phone, but there’s not much for them to it’s because they look at ARM’s business months is: you’ve got such a high market talk to. I think you’re going to see an evolu- model and think they’d like to do software share in mobile, why don’t you just quad- tion of the things they’re going to talk to, development, but have choice in supplier. ruple your royalties?” says Segars. “We such that ultimately this device that you “If they focus all their software exper- could, and it would generate more money carry around is the controller for every- tise around one architecture, then they’re in the short term, but that’s not the way to thing else you’re interacting with. making a major long-term commitment build a really long-term business. “There might be location-based services to it. If you do that with ARM you can get “We’ve got 95% market share in mobile that spring up because you walked into chips from a number of suppliers in this and there’s no reason why we can’t have your local supermarket that you go to eve- space, which has big benefits. Everything similarly large market shares in these ry week and suddenly the phone realises that made us successful in mobile turned other markets, but if our customers that and then the supermarket will present out to be useful in lots of other places.” think ARM’s just fleecing everyone it’s offers based on your personal shopping There’s that ARM business model again never going to happen. So, we’re about history. The handset is going to evolve – doing the hard work on the silicon side volume, we’re about growth, we’re about such that it’s very personal to you.” so other tech players can focus on what total size of the market and evolving into Talking of personal, the hot new mobile they do best, whatever that may be. To opportunities in the future that nobody category right now is wearables, espe- conclude we ask Segars to give us his part- can think of today. It seemed ridiculous cially since Apple decided to get involved. ing thoughts on the industry his company that ARM processors would be in servers And, as you might expect, Segars is a fan. plays such a prominent, if discreet, role in. some time ago, but our licensees are now “Wearables, again, are at a very early “It’s easy to get bogged down by the dif- looking at that as an opportunity.” stage,” he says. “To me this [gestures to ficulty of transistor manufacture and so on, the Pebble smartwatch he’s wearing] is but when I look at the opportunities for de- The state of the industry really useful. For this to beep when my ployment of chips with processors in them As the CEO of a company that partners next meeting is about to happen, or buzz I can’t see any slowing down of the demand with so many other tech players, Segars on my wrist when there’s a phone call for silicon in my career,” says Segars. has a privileged perspective. So how does coming in because by phone’s in the bag “Also, because of the innovation drive he view the current state of play in the on silent, I find incredibly useful, and I do coming from things like kickstarter and mobile industry? “I think we’re at quite an genuinely wear it every day. the availability of all these chips, we’re early stage of LTE, globally,” says Segars. “I appreciate I don’t represent a typical going to see a phenomenal amount of “Things do go in cycles, so when 3G rolled consumer when it comes to adoption of innovation, and it is just down to what out you had handsets that could make new technology, but these things are going ideas people can come up with and how phone calls and send SMSs really quickly, to find a use that does resonate with a lot quickly they can deploy them. So I’m very and it took a while for applications to of people, and I think health is going to optimistic about the next few years.” n
08 Mobile Communications International | First for news, best for business
06-08_MCI185_ARM.indd 8 02/10/2014 14:42 Untitled-4 1 01/10/2014 14:39 feature telcos and the law
Leaks, Litigation and Liability In London, the adage goes that you’re never more than six feet from a rat. In telecoms, the adage could be that you’re never too far away from a lawsuit.
By Tim Skinner
n 2014 alone we’ve seen various calls of ers, who is a partner at law firm Arnold & voluntary agreement on the Creative Con- governmental “spying”, patent wrangling, Porter, says there are two distinct threats tent UK alert programme,” says Stothers. Icyber security leaks, hacks and more. facing telecoms companies, which leads to “However, there appears to be a growing Allegations have been made against govern- these legal challenges. appetite for content owners to seek and ment agencies; Apple has had to endure the “Quite aside from the cost of protect- obtain injunctions against telcos as in- apparent celebrity iCloud hack; AT&T have ing their own innovations internation- termediaries to block pirates. This brings sued Cox Communications; four Hong Kong ally, telecoms companies face two major with it cost, management and reputa- telcos were targeted in a global hacking effort; threats. Firstly, there are the ‘patent wars’; tional implications for telcos, which face Microsoft sued Samsung, Apple sued Samsung being competitors who seek to block use of criticism from vocal user groups if they and Samsung sued Apple back as their love- their patents, or at least paint a picture for are seen to cooperate too much.” triangle of litigation goes back and forth. the public that the competitor is the real But how can an operator responsibly The telecoms industry is one of the most innovator. Secondly, you’ve got the ‘patent comply with the copyright demands of litigious industries in the world. James trolls’; who are non-competitors seeking to content owners, as well as fairly and neu- Tumbridge, who is a partner at law firm be paid for use of their patents, typically trally manage the use of its network for Pillsbury, believes that economic and com- leveraged with the threat of expensive users? File sharing sites are, technically, petitive intensity is largely responsible. litigation and/or injunctions damaging perfectly legal; illegality occurs through “It’s a result of the fact that no modern product offerings.” the sharing of copyright protected con- device is wholly made with the compo- As well as patenting considerations for tent. As a consequence, a blanket ban nents of one entity anymore. As a result, the telecoms community, it appears as approach to such sites is on the rise. when a mobile phone has multiple compo- though telcos are beginning to bear the BT is one of the UK operators to im- nents protected by multiple patents, busi- brunt of responsibility for copyrighted pose a ban on a number of high-profile nesses see using litigation as a legitimate content being pirated through the net- torrent websites, such as The Pirate Bay. business tool to modify the licence fees work. In the UK, certain internet service BT explained to us how it ensures neu- they are paying, or to attack their competi- providers have completely blocked ac- tral management of web traffic. tors whose patents might otherwise allow cess to a number of high profile torrent “In the UK, BT operates under a number them to monopolise market share,” he says. file-sharing websites to users. of Codes of Practice (CoP), those being Intellectual property and patenting have “We now know that in the UK there the Open Internet CoP and the Traffic both led to a raft of warning shots being won’t be piracy warning letters under Management Transparency CoP. These fired between competitors in the telecoms the Digital Economy Act 2010 (following commit BT to treat all traffic consistently, space in recent years. Christopher Stoth- challenges by various telcos), after the regardless of its source, and being fully
10 Mobile Communications International | First for news, best for business
10-11_MCI185_Telco_law.indd 10 02/10/2014 14:44 tel cos and the law feature
transparent about any types of traffic we yet effective methods to help keep the may manage in order to minimise net- Interestingly, a recent study hackers at bay. work congestion,” the operator said. by BT revealed that British “Ensure that passwords are strong and BT also shared its views on the wider all software is kept up-to-date. Hackers net neutrality debate in the context of business leaders place less are increasingly using companies’ own the EU’s Digital Agenda. It would be fair servers to host cyber-attacks and having to assume that BT isn’t the only operator importance on cyber security weak cyber security systems leaves an or- in the UK and across Europe to disagree than their US counterparts. ganisation exposed. However, simply hav- with the proposals for competitive regu- ing anti-virus software is not enough and latory reform in Europe. Only 17% of UK business may lull organisations into a false sense of “The text agreed by the European Par- security,” he says. “The recent “Heartbleed” liament Plenary in April 2014 is overly leaders rate cyber security attack is a good example of how important restrictive as well as creating legal it is to be aware that even the software it- uncertainty, which undermines invest- as a priority, the equivalent self can have its flaws which cyber pirates ment and puts the EU’s Digital Agenda figure for the US is 41% can exploit to their advantage.” objectives at risk and we have proposed Alarmingly, and perhaps the reason a number of amendments designed why the UK government is putting more to preserve the principle of an open data by operators and what measures obligation on the telecoms sector to take internet while allowing operators scope are being taken to protect their sensitive cyber security more seriously, Snade to meet customers’ demands and public information from hacking,” says Jonathan highlights the disparity between how UK interest objectives,” said BT. Snade, partner at telecoms law firm Thomas organisations view cyber security, com- Mike Ryan, a Partner at law firm Arnold Eggar. “The risks for failures include fines pared to their counterparts in the US. & Porter, has observed a noticeable in- from regulators and actions from affected “Interestingly, a recent study by BT crease in regulatory pressure on op- customers, as well as reputational damage revealed that British business leaders erators in the last few years. “The list of and negative press with consequential place less importance on cyber security issues that attract regulation has steadily potential impact on share prices.” than their US counterparts. Only 17% of expanded and now includes matters as Regulators in the telecommunications UK business leaders rate cyber security diverse as net neutrality, operators' data sector aren’t necessarily as heavy-hand- as a priority, the equivalent figure for the retention obligations, and operator coop- ed with fines and punishment as their US is 41%,” he says. eration with security authorities,” he said. counterparts in finance; however the With recent frailties in iCloud security Moving away from the maintenance reputational and subsequent negative raising more than just eyebrows, Daniel of a fair and neutral internet, one of impact on share prices alone should act Hedley, a solicitor at Thomas Eggar, ex- the most well documented and heavily as significant motivation to tighten up plains how the leaks may have pertinence regulated challenges that exist within the network security measures. to telcos and which simple steps can be telecommunications sector today relates So what avenues are available to telcos implemented. to information security. to prevent falling foul to cyber-criminals? “While it is true that businesses will, In a report commissioned by the Depart- “Under the Communications Act, tel- quite rightly, not generally choose a ment for Business Innovation & Skills, ecoms companies are already under an consumer-focused cloud service such as and conducted by PricewaterhouseCoop- obligation to ensure that the networks iCloud, in this age of staff using their ers, 20% of organisations of national and services they provide are secure. own devices for both work and personal importance to the UK rely on externally However, companies can seek to obtain use, it is very easy for confidential busi- hosted services. Furthermore, 77% of large the recently introduced Cyber Essentials ness data to end up being uploaded to organisations store confidential or highly accreditation, which is a self-assessed these services,” he says. “Businesses can confidential information in the cloud. and independently verified compliance control these risks, while still maintain- With third-party storage of data and audit scheme, to assess and demonstrate ing many of the benefits of cloud storage services becoming an integral part of security compliance,” says Snade. services and bring your own device mission-critical strategies for a large He goes on to explain that the non- (BYOD), by deploying a combination of percentage of businesses; pressure is obligatory stance on Cyber Security technical measures preventing unauthor- mounting on the telecommunications accreditation is soon to change. From ised uploading of business data and user sector to ensure the security and confi- October this year companies will be education.” dentiality of such information. obliged to achieve accreditation in order With the recent celebrity iCloud hacking Customers of both a commercial and to win government contracts involving saga dominating headlines and putting personal standing are increasingly con- personal or sensitive data. Vodafone were cyber security firmly back into the public cerned with how their data is being used the first to achieve “Cyber Essentials Plus” eye; telcos and cloud service providers are and stored by operators. Undeniably, the accreditation. under mounting pressure to shore up their stakes are being raised. Aside from ensuring responsibility networks. This adds yet another bump “Customers are increasingly concerned over password protection; Snade also to the broader legal landscape facing the as to the use and storage of their personal recommends some simple to implement telecoms community today. n
Mobile Communications International | First for news, best for business 11
10-11_MCI185_Telco_law.indd 11 02/10/2014 14:44 feature social mobile
Mobile for everyone Operators are under increasing pressure to bring coverage even to the remotest areas, and with mobile technologies penetrating almost every aspect of modern life, access to or the lack of a network connection can have profound social implications. By Auri Aittokallio
ast year on a family trip to Cornwall the heavily tech-reliant world we live in, I kept myself entertained in the car this can be detrimental. with my mobile phone – until I lost “Some parts of rural Britain have just one the connection, which was probably or two of the mobile phone networks avail- notL loo long after we got off the M4. As soon able, or in some cases none at all, which as we arrived at the lovely Cornish cottage, means those living there are left without three of us ventured out to look for a mobile any wireless service,” says John Spindler, connection, which, as we discovered, could VP Product Management at TE Connectiv- be achieved by climbing a large rock on the ity. “Mobile operators are therefore under peninsula and then performing an impression growing pressure to provide ubiquitous of the Statue of Liberty. 4G network services, while at the same The problem was that with the wind time keeping costs in check. A big problem blowing from the sea, it was difficult to is that operators will need to increase the hear anything even if you managed to make number of cell sites by 300-500 per cent a phone call. This is not a unique situation. in order to support 4G services, thereby Up and down the country, as well as in con- dramatically increasing their costs.” John Spindler, VP Product Management tinental Europe there are numerous areas In June the UK Culture, Media and at TE Connnectivity where getting a mobile connection is often Sport Minister Sajid Javid announced that challenging to say the least. he wants to introduce a national roaming “By joining forces with other operators Solving the issue of not being able to scheme, which would mean operators and sharing mobile infrastructure using get a mobile connection in rural areas sharing their networks to ensure better small cell architecture technology, specifi- is of course a much bigger issue than customer service and more widely avail- cally Distributed Antenna Systems (DAS), tourists not being able to check Facebook able mobile connection as people would operators extend their coverage and capac- and email at all times while enjoying be able to switch to a different network ity into areas they normally couldn’t reach, their country holidays. A lot of people as and when needed. However, at the time and they can do so at far lower cost than have to deal with a bad connection or no of writing not all operators were too keen deploying traditional macrocells,” John connection at all on a daily basis, and in on the scheme. Spindler says. »
12 Mobile Communications International | First for news, best for business
12-14_MCI185_social media.indd 12 02/10/2014 14:46 Untitled-1 1 02/10/2014 10:41 feature social mobile
The Mobile Microfranchising Programme helps create entrepreneurships in Jakarta Mobile technologies are used to access social applications
As expectations of Network sharing would certainly Dan Sutch, Head of Development make mobile broadband more available Research at NominateTrust, a UK-based operators’ services in many more areas than it currently is organisation funding social technol- but it would still not solve the problem ogy ventures, says: “There are so many continue to rise, both entirely. According to statistics from examples of mobile technology helping a wireless networks performance and to solve huge challenges. The ubiquity, within and outside coverage data sourcing company Open- connectivity and power of mobile de- rural areas, it’s likely Signal, which has analysed data from vices means they provide an incredible 40,000 users of the service, the average opportunity to address an issue in ways the benefits of sharing mobile user has no connection for 15% unimaginable only a few years ago.” of the time and this would be reduced One of the examples Sutch is referring infrastructure will ‘only’ by half through network sharing to is WeFarm, a solution developed by increasingly appeal to as network blackspots would still exist. the Café Direct Producers’ Foundation, Some have also argued that network which allows users across continents operators- and their purse sharing would de-incentivise operators to share information and knowledge via from investing in building new net- local SMS messaging. WeFarm then uses strings work infrastructure, especially in much the internet and its own peer transla- needed rural areas. tion system to share the messages again John Spindler, however, argues that through SMS with other members, thus network sharing is not only useful for avoiding any extra charges associated remote areas, but for urban vicinities too. with international texting. “It also makes sense to do this in towns To use the application only a mobile and cities where there simply isn’t room phone is required, even the most basic to add more infrastructure. As expecta- kind works. WeFarm is currently used by tions of operators’ services continue to about 250,000 smallholder tea, coffee and rise, both within and outside rural areas, cocoa farmers across East Africa, Latin it’s likely the benefits of sharing infra- America and Asia. “Supporting some of the structure will increasingly appeal to op- poorest farmers, this tool helps them to be erators- and their purse strings,” he says. more productive by learning from others – Looking at the issue of not having something that would be impossible with- access to a broadband connection in a out the connectivity of the internet,” says global context, the ITU (International Such. “These farmers don’t have access to Telecommunication Union) reckons over the web but they do own mobile phones. 60% of the world’s population still don’t WeFarm gathers their SMS messages have internet access. This lack of access sending them online to farmers across the has created a need for technology in- world, who receive them as local SMSs.” novation designed to help communities In Jakarta, the capital of Indonesia, tackle social problems in new ways. one of world’s most populous nations,
14 Mobile Communications International | First for news, best for business
12-14_MCI185_social media.indd 14 02/10/2014 14:48 soi b c al mo ile feature
mobile technology has been “The Mobile Microfranchising initiative, utilised to enable residents and later AppLab, saw mobile tech- to set up new businesses nologies as an opportunity for rural through a programme called entrepreneurs to access high-value Mobile Microfranchising, social applications and increase their a venture set up in coop- income,” says Covell. “There are many eration with mobile chip technologies available today to connect vendor Qualcomm’s social people, but we think advanced wireless initiative Wireless Reach, technologies are the best solution for as well as US-headquar- connectivity for remote and rural geog- tered charity organisation raphies because they are fast, afford- Grameen Foundation and able and prevalent.” Jakartan social enterprise These are just some examples of Ruma. Despite being one of technology companies getting involved the poorest countries in the in creating social change. Qatar-based world, the number of mobile telco Ooredoo Group has been running subscriptions in Indonesia mobile health clinics in Indonesia, of- is higher than the size of the fering free advice and services, includ- Mobile technologies are used to access social applications population, and although ing medical checks, nutritional advice some of the subscriptions and vitamin distribution. So far the probably are so called one-off sub- clinics, which are run in partnership scriptions as operators try to entice with the Leo Messi Foundation, have new customers by giving out free SIM seen some 600,000 people in Indonesia, cards with a small amount of credit on and the plan is that the programme them, the fact remains that almost eve- reach two million people across Indo- ryone in Jakarta has a mobile phone. nesia, Myanmar, Tunisia and Algeria by “The simple fact that mobile subscrip- 2016. H.E. Sheikh Abdullah Bin Mo- High Power DAS Remote 3_TE Connectivity tions exceed the total population size hammed Bin Saud Al Thani, Chairman made mobile phones the perfect solu- of Ooredoo Group said: “These mobile tion,” says Shawn Covell, VP of Govern- health clinics are an investment in the Mobile technologies are ment Affairs at Qualcomm. future of the communities we serve.” The Mobile Microfranchising pro- In a world more connected than ever, literally breaking down gramme allows small-business entre- it is important to help those who are barriers: geographic, preneurs to purchase a pre-packaged currently not enjoying all the benefits mobile phone kit through a microfinance of technology. On the other side of the socio-economic, loan and then resell the airtime minutes coin there is of course the benefit for to others in their communities. “Mobile operators and vendors in doing so as educational and cultural, technologies are literally breaking down these communities are the future target barriers: geographic, socio-economic, audience of new services and products. that have historically educational and cultural, that have his- With the emergence of the low-cost obstructed progress in torically obstructed progress in develop- smartphones such as the Mozilla Firefox ing countries,” says Covell. “To illustrate, device, it is clear technology is more developing countries through a smartphone and an internet available even at very low price-points, connection, children in sub-Saharan but to enable real progress all the pieces Africa can access the same educational of the jigsaw need to fall into the right materials as students in New York City.” place: infrastructure, price, knowledge A related initiative by Qualcomm and people’s ability to invest in and Wireless Reach, the Application Labora- learn how to use devices. tory (AppLab) has established a multi- “Even with the launch of devices such tier suite of data services to boost the as Mozilla’s £20 phone there’s still lots entrepreneurs’ income, most of them to do to ensure everyone who wants ac- women, while the involvement of Ruma cess, has the opportunity to have a voice, has ensured long-term support for to have the tools to create, share and them. The idea is that the mobile phone speak up. Challenges that still need to works as a platform for additional be addressed include tackling the digital applications and services, launched divide, accessibility and how easy it is through a mass-market channel, which for everyone to use these tools,” says Dan directly supports the entrepreneurs. Sutch from NominateTrust. n
Mobile Communications International | First for news, best for business 15
12-14_MCI185_social media.indd 15 02/10/2014 14:49 FEATURE OTT OPPORTUNITIES
Is it the destination or the journey? The once comfortable journey of the well-established, high capacity, but slow to adapt network operators has been disrupted by younger, more nimble players keen to pick customers off their slower moving rivals. But in order to survive, it’s looking increasingly likely that they will have to collaborate.
By James Middleton
t the beginning of the 20th century, rail- parts of their business. What's most important ers that they were willing to pay the premium. ways were the fastest and most cost to today's consumer is the destination, not the Moreover, the growing numbers suggested that Aeffi cient means of land transportation journey and there are plenty of application someone had already delivered if not the killer and even the fi rst mass produced automobiles alternatives that can get the end user exactly data application, then something pretty close were only used for local transportation in where they want to go and in more style than and Facebook's $19bn valuation of the fi rm suburban areas. Yet as highways expanded, what their network can offer. only lends credence to this argument. medium and long distance transports were One of the best examples in recent history Facebook has a long history of working relocated to the roads, forcing the closure of is WhatsApp, a US startup founded in 2009 with mobile operators, especially through some rail routes. Indeed, the future of the by two ex-Yahoo employees that was snapped its Internet.org initiative, designed to bring railway looked doubtful. up by Facebook for an eye watering $19bn in internet access to developing markets. These Yet over 100 years later, the railway is February. Claiming over 600 million active partnerships have only increased since the still going strong. Some innovations have users as of August 2014, WhatsApp is capable WhatsApp acquisition. The company is claim- maintained their relevance to the consumer of putting a sizeable dent in traditional person ing rapid growth of WhatsApp in countries but where then excel is catering to business to person messaging offerings such as SMS. like Brazil, India, Mexico, and Russia, and as and industrial use. Although the railway has Indeed, analyst group Ovum forecasts that the of May claimed its users were also sharing a higher investment and operating cost than impact of social messaging cannibalisation more than 700 million photos and 100 million the road, it maintains a lower volume-distance of SMS revenues will grow from $32.6bn in videos every single day. transport cost, making it the preferred choice 2013 to over $86bn in 2020. In India WhatsApp claims some 50 million for moving large scale or bulk cargo. WhatsApp has seen phenomenal growth, users, supported by carrier deals in place with In the 21st century, wireless network op- almost from day one. In fact the decision to Reliance Communications, Tata Docomo, Bharti erators face much the same dilemma as the move from a free to a paid for service was taken Airtel and Uninor, featuring mobile data pack- railways did. While clinging on to ownership, in 2009, when the company had 250,000 users, ages tailored to WhatsApp usage. Subsidised or at least involvement in, every part of the in order to stop it growing too fast. But what application access is a key driver for over the top service experience, the operators have been this move really showed was that constant services in India and saw Twitter move in with out innovated and out manoeuvred in various connectedness had become so essential to us- a similar deal with Reliance Communications
16 Mobile Communications International | First for news, best for business
16-18_MCI185_Telco Opps.indd 16 02/10/2014 14:57 OTT OPPORTUNITIES FEATURE
The deals in question see the carriers provisioning extra capacity for Netfl ix sub- scribers and fl y in the face of Netfl ix's long standing arguments against paying operators for improved quality of service. The internet video fi rm publishes an index informing users what their experience will be like on various networks around the world and the US experience has languished at the lower end of the spectrum even since the peering agreement came into play. So the move seems surprising, given that in March, co-founder and CEO of Netfl ix, Reed Hastings, said that sharing costs with internet services providers “makes no sense” for the fi rm. In a blog posting Hastings criti- cised the nation’s larger ISPs for charging “potentially escalating fees” to OTT service providers to ensure quality of service on ac- cess networks. He noted that ISPs often cite the burden that OTT service providers place on their networks, but argued that it is not rational for OTTs to supplement ISPs’ costs. “ISPs sometimes point to data showing that Netfl ix members account for about 30 per cent of peak residential internet traffi c, so the ISPs want us to share in their costs,” said Hastings. “But they don’t also offer for Netfl ix or similar services to share in the ISPs revenue, so cost-sharing makes no sense. When an ISP sells a consumer a 10Mbps or 50Mbps internet package, the consumer should get that rate, no matter where the in 2013 to effectively subsidise data access for the bundle. WhatsApp has become a prepay data is coming from.” a limited period of time. MVNO and even the top up interface features “Revenue share” is a phrase that crops The key point here is that the change in the company's own branding, suggesting that up time and time again in relation to net attitude already seems to have taken place. E-Plus recognises the infl uence of the OTT neutrality discussions and many pundits Operators are now actively trying to work brand among not just its customers but also believe it is a viable business model for with OTT service providers, whereas at one its rivals, whose customers might be tempted operators as well as another positive ar- point they were trying to keep them out of to churn away from. rangement for all concerned, according to the value chain. However, there is still a lot of But the driving force here must be in the Darren Ball, General Manager for EMEA at “ignorance” about how to go about this, accord- form of a kickback from the application pro- Emagine International, which specialises in ing to Thorsten Trapp, Co-Founder and CTO of vider to the network operator for carrying its customer experience management for the messaging and interaction specialist tyntec. traffi c. Nowhere has this concept been so hotly operator community. “It's not as easy as giving free access and debated than in the USA, where net neutrality “Take YouTube as an example,” Ball says. then seeing monetisation follow,” he says. “No is considered almost sacred. “Currently, many tariffs are set up on an one buys a data bundle outside of Facebook The discussion would fi ll several lengthy average data usage assumption - great for after enjoying free access to Facebook. But articles on its own merit but the key and the video addicts out there but in effect we have seen carriers test the model with most recent development is that Netfl ix, one penalising those who rarely or never use SMS, with companies buying SMS messages of the most vocal defendants of net neu- the service. By offering specifi c data bundles to push users online.” trality and one of the biggest critics of the that don't include a high capacity service Trapp highlights new and more innovative aforementioned kickback, has for all intents such as YouTube and using a real-time be- models, such as that WhatsApp's recent foray and purposes buckled under pressure. The havioural monitoring solution leveraging big into the MVNO space. In April the company internet video player struck its third peering data analytics, operators are able to monitor partnered with E-Plus Germany to deliver agreement with a US carrier in May and is the services customers want to access, ping- a WhatsApp branded SIM which included now confi rmed as paying for better quality of ing them an SMS at the point at which they unlimited usage of the application regardless service for its customers using the networks access YouTube with an offer that is tailored of the voice, SMS or data allowance left in of AT&T, Verizon and Comcast. to their consumption needs.” »
Mobile Communications International | First for news, best for business 17
16-18_MCI185_Telco Opps.indd 17 02/10/2014 14:57 feature ott opportunities
But this is where the business case becomes alternatives. “It's just something that's never a technology case and the much discussed and The players who understand really marketed properly,” he says. much needed overhaul of legacy carrier BSS to be a pure LTE network But something has to give, according to and OSS tools once again rears its head. The Trapp of tyntec, who sees the situation for proposed solution requires deep analysis of and data pipe will win a lot foxed and wireless operators going the same the data on a carrier's network rather than just way as ISPs over the last decade. Where data usage in order to determine appropriate of customers and will have a once they tried to manage the entire expe- offers and relies on real time identification and good price point. And if you rience from content – like AOL – to email communication in order to allow the customer addresses, whereas now they just provide to take advantage of the deal on offer. hold back the OTT players pure connectivity. Technological issues aside, “by striking “Cannibalisation of their existing busi- a revenue share with YouTube (or any other then they will just go all IP ness is the main fear but if they hold on to OTT player) for this kind of set up, both the the legacy for too long they will lose all of it. operator and the OTT provider stand to gain, and destroy you. But these The disaggregation of the value chain is the whilst the customer also gets better value. OTTs can't run services same as it was for ISPs,” he says. Moreover, the operator maintains control of “The fear of cannibalising their own busi- the relationship with the customer rather over the network for free ness models is so high that all innovation fails, than being cut out of the equation, and even especially when politics come into play,” he stands to strengthen that link as it offers a anymore, they need to share adds, making reference to the handful of failed valuable and personalised service,” says Ball. the revenues operator initiatives such as Lync and Joyn, that Indeed, Beau Atwater, Director, Head of relied on the operators agreeing to and then Strategy and Business Intelligence, for Ericsson jointly creating rival offerings to what the OTT Business Unit Support Solutions, agrees that “it their reference from average revenue per players were already successfully delivering. takes a lot to keep a customer loyal these days.” user (ARPU) to average revenue per account But he maintains that something the operators Users are ready to switch service providers at (ARPA) to take into account the fact that many still provide, the unique number associated the least dissatisfaction. To retain subscribers users now buy a pipe that they may share with a subscriber, will always have a place in and increase the amount they spend, opera- with their household to a run a multitude of the ecosystem and when virtualised in line tors have to provide a constant stream of new, applications. And what's clear is that con- with technology trends will make it more rel- innovative services, at speeds previously un- nectedness is so important the people will evant as it will work over any access medium. imaginable and with near-perfect execution. pay a premium for access.” “The players who understand to be a pure And this is where partnerships between Chris Halbard, VP and International President LTE network and data pipe will win a lot of operators and OTTs can enable an explosion of at Synchronoss, which offers cloud services customers and will have a good price point,” new content, applications and innovation to meet running on the operator's network, believes Trapp says. “And if you hold back the OTT the needs of both subscribers and enterprises. that in order to nurture high value partner- players then they will just go all IP and destroy “Content can be created by exposing operator ships with recognised brands such as Netflix, you. But these OTTs can't run services over the assets to third-party partners, thus drawing operators must build out their own ecosystems network for free anymore, they need to share on the creativity of the entire ecosystem. When and facilitate a developer-type environment as the revenues.” they leverage their assets in the ecosystem and a way to bring additional services to the table. Over recent years, much has been said provide an agile service creation environment, Doing so in a way that firstly, leverages existing about the need for carriers to fight back operators increase their competitiveness and platforms and billing systems, and which also against OTT encroachments but the industry revenue by providing more and compelling makes these brands and their services available as a whole, from the carriers to the OTTs operator and partner content,” Atwater says. to customers in familiar environments and themselves, actually seem to be coming Or rather, the meat of the eating is not in interfaces at attractive subsidised rates. around to the idea that there is an opportunity the more attractive content itself, but more “This will in turn drive usage and subscriber to find a better way to work with third par- in the actual delivery, or so says Stefan Zehle, retention,” he says. “The onus is on operators ties, generate additional income and create a CEO of consultancy Coleago, who argues that to encourage adoption and drive engagement more positive relationship with the customer. all the investments the carriers have made for these services. We’ve found that cloud Just like the highways and railways have are to do with shifting data and supplying services offered under the operator’s brand come to co-exist, OTT players stand to benefit connectivity and not with supplying services. drive faster adoption and continue being used from unique operator characteristics that only “As a result, there is a clawback going on,” by subscribers ahead of competing OTT ones.” the largest names in their field could otherwise Zehle says, but adds that the US is actually Interestingly, Coleago's Zehle thinks the hope to achieve, mainly through robust cus- one of the most forward thinking markets in OTTs may be missing a trick by not putting tomer management systems and processes, as this respect. Not just with regards to Netflix's a positive spin on their carrier alignments. well as the ability to move large chunks of data willingness to pay for service transport but While this might not work so well in the case to their customers. Meanwhile, the OTT players also in the way operators are now billing for of Netflix in the US, where network quality offer attractive brands, unbridled creativity, connectivity. “AT&T for example introduced still leaves something to be desired, he pon- rapid development cycles and the ability to more innovative packages focused on data ders why companies like Skype don't play cater to the consumer long tail, by managing not voice connectivity some 18 months ago,” up the much improved quality on fixed line the destination, not the journey. While the train, he says. “And operators have even changed networks like BT in the UK, versus the mobile it seems, will keep on rolling. n
18 Mobile Communications International | First for news, best for business
16-18_MCI185_Telco Opps.indd 18 02/10/2014 14:57 Untitled-3 1 01/10/2014 13:04 the informer
Moans 4u It is a hazard of the journalistic trade to be persistently lied to. Most are pretty benign lies, or not even that – merely half-truths and exaggerations.
hen it takes on the form of their own agenda and brief them accordingly. advertising and other such This is clearly what has been happening Join the debate Wmarketing activities everyone during the whole sorry Phones 4u saga that A round-up of recent reader comments from knows where they stand. With the exception played out this week. To paraphrase Churchill, the industry-leading website Telecoms.com. Get of the young, the naïve and the drunk, never in the field of public relations was so involved in the discussion at everyone understands that when a TV ad says much of an agenda conveyed to so many by www.telecoms.com/join-the-debate/ something’s great, it’s not a statement of so few. There almost certainly have been empirical, scientifically verified fact. Rather even greater examples of people trying to Agree that white spaces haven’t achieved we’re getting the opinion of a group of people appropriate the media for their own ends, but meaningful lift off to date. But that’s not whose living depends on selling the thing this is nonetheless a prime example. to say it won’t be effective in increasing they’re advertising. Aside from that, the spectacle of hardened spectrum efficiency in future (though it might When we hear something on the news capitalists publicly moaning about how unfair still be second choice to just more efficient however, or read it in the papers, or on it all is that a business arrangement has gone allocation…). But what’s the link between white the Internet, published by a trusted third sour on them is frankly embarrassing, and space and the IoT or even M2M? These are three party, we tend to take it a lot more literally. it happens all the time. Remember when different things surely. This message is being conveyed to us by a Facebook had its IPO and the shares initially Rob B. on radio white space and why its star has neutral with no vested interest in swaying our went down in value? The wailing and gnashing seemingly faded despite a lot hype on the matter opinion. The job of the journalist, we assume, of teeth from pin-striped Wall Street types is to bring us the facts, the word on the street, was deafening amid their claims that the One topic overlooked by the article is the the TRUTH. initial price of Facebook shares had been too availability of spectrum vs the ever increasing Imagine, then, how appealing the prospect high. If that was the case then why did they hunger for bandwidth. To provide better of conveying an advertising message through buy them? performance (defined for sake of argument as this trusted, independent channel must be Operators themselves are far from immune higher average throughput per user) for more to marketing professionals. So appealing, in from this kind of self-serving indignation. simultaneous users you need more bandwidth. The fact, that they devote a significant chunk of There was a time when barely a day went by surest way to achieve this is by adding more cells their time and resources to doing just that without some telco exec or other publicly and/or adding more bands (ignoring other options and have even given this discipline its own moaning about how much their company like higher MIMO schemes, etc). Most countries name: public relations. was having to spend on subsidising handsets. or regions will have a combination of bands The relationship between journalist and Again, why do it then? The answer is that available for mobile use, combining some fairly PR professional is an intriguing one. As subsidised handsets are a significant way of generic bands with one or more country specific the gateway to a sympathetic audience attracting subscribers. End of. ones. So even if a global band were available, the the hack is all important to the flack. An additional moan was brought to the performance while roaming is likely to be well Consequently a significant perk of the attention of the Informer today in the form below the typical user experience at home where profession is the almost surreal desire of a press release issued by one Athanasios carrier aggregation of country specific bands is of complete strangers to take you out to Papistas, the founder of the Mobile Trade quickly becoming common place. Instead why not lunch, on exotic trips and to subsidise the Stores retail chain in Greece. He sees echoes turn to a band already in use globally by many copious drinking on which all truly great of the demise of his own business in Phones users for much of their online time? WiFi may be journalistic careers are based. 4u and is touchingly concerned that others the ugly duckling of the mobile world but with On the flip side, journalists also rely should not share his fate. Oh yes, and for VoWiFi functionality developing right alongside heavily on PRs to help them do their the Phones 4u employees of course, mustn’t VoLTE it could very well be the global band that job. Not just for the unceasing torrent of forget them. you are looking for in the article. Granted, plenty press releases that dominate the typical “I am saddened that many people in of technical issues to solve in terms of power journalistic inbox, but for access to sources, the UK are facing a very uncertain future consumption, QoS and so on but the band is right background briefings supporting collateral because of the decision by the Vodafone there already including the devices. and many other things that enaable them to board to cancel its agreements with Phones Nan van Unen on the topic of LTE ‘world phone’ and the do their thing. In other words it’s a symbiotic 4u,” said Papistas. “My business in Greece possibilities that VoWifi could offer alongside VoLTE relationship which, when it works well, is experienced exactly the same scenario when based on mutual respect. we operated Vodafone franchises in Greece. This one was more than just the highlight of my Not everyone sees it that way though. It’s time the consumers across Europe Friday! it is the thing to print and have it on the desk Some journalists abuse their exalted status stopped buying Vodafone products and here where they don’t allow having personal effects! with diva-like behaviour and accommodating learnt how this corporation has no regard Lo on the Informer’s quick memo’in the Week in the them is one of the less attractive aspects for its partners or customers.” Definitely no Wireless series, which offers a satirical view of the of the PR profession. Conversely some agenda there, then. And he somehow forgot week’s events every Friday individuals and companies seem to consider to mention that he sued Vodafone for over a hacks to be merely tools for the pursuit of billion quid earlier this year. n
20 Mobile Communications International | First for news, best for business
20_MCI185.indd 20 02/10/2014 14:59