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Cable operators must embrace mobile, says Liberty Global

Liberty Global's Diederik Karsten

Liberty Global’s Diederik Karsten

Cable operators will increasingly find it hard to compete if they don’t offer mobile services, according to Liberty Global executive Diederik Karsten.

Speaking at Cable Congress in Amsterdam, Karsten, who is Liberty’s executive vice president of broadband operations, said that mobile is now an important part of the firm’s service portfolio and “makes our product complete.”

“I find it hard to name a market in Europe where a cable operator could be successful, continue their success over the next 10 years, [or] try to compete with a relatively strong incumbent, without a mobile product.”

In 2012 Liberty Global signed Mobile Virtual Network Operator (MVNO) partnerships in six markets – Germany, the Netherlands, Belgium, Austria, Poland and Hungary.

However, in general terms, Karsten admitted that the “jury is still out” on this model of licensing spectrum from another operator in order to offer mobile services.

“If you look back at the MVNO model, some people say it has never proven itself. At the end of the day you always get into a margin squeeze between the operators and the exterior economics due to the managing of the network and the retail,” said Karsten.

He added that mobile operators do not always welcome potential MVNO partners as friends. “It’s well known to all the others [within the mobile industry] that we can take quite a big chunk or revenue out in a period where revenue is eroding – that’s also a reason why we are being cautious.”

Speaking on the same panel, titled Cable Challenges Across Europe, former Virgin Media executive and current executive chairman at Sweden’s Com Hem, Andrew Barron, said that mobile is “an absolutely fundamental piece over time of what we all will be doing.”

However, he said that layering an MVNO offering on top of Com Hem’s existing services was not something it was pursuing as part of its current growth strategy.

“If you don’t have mobile as a cable operator, it doesn’t make you a bad company. Com Hem doesn’t have mobile. Com Hem has huge growth opportunities, I believe, but mobile needn’t be the one we lead with,” said Barron

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Federal agencies must embrace IP-based communications; Verizon makes it easy

Federal agencies must move from legacy analog telecommunications systems to IP-based services. The General Services Administration (GSA) has already said they will phase out traditional systems over the next few years. Virtual Communications Express for Government, Verizon’s new unified communications solution for the federal sector, is specifically designed to help federal agencies migrate from traditional voice systems, including Verizon Centrex, to IP-based communications as part of the GSA’s mandate. Click here for more.

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Tech Professionals Say if a Job Vacancy is Open for 67 Days, There Must be Something Wrong With It

Employers need to fill job vacancies within 67 working days (14 working weeks) before tech professionals assume it’s a job no one wants, according to research carried out by Randstad Technologies. Click here for more.


UK welcomes new LTE brand; now rivals must step up

EE CEO Olaf Swantee at the launch event

In the removal of 18 letters from its brand name, EE has catapulted the UK’s mobile operator community out of a Prisoner’s Dilemma, and is leading the country’s 4G charge.

Out of the dust cloud raised by infighting between the UK mobile fraternity, EE has emerged with what looks like a 12 month head start in the LTE market. The company has clearly put the groundwork in to prepare its network for a 4G deployment that will see commercial LTE services available in 16 cities in the UK before Christmas.

With an investment of £1.5bn, EE has stepped up to the plate and made a greater commitment to LTE than its rivals, which according to Ovum analyst Matthew Howett, significantly weakens their protests.

“For a time there was a lot of cynicism and nobody really wanted to invest, instead they were just kicking it back to the courts to delay the point at which they had to put up money,” Howett said.

But it is now clear there was enough incentive for one operator to break away from the pack and invest and as a result to reap the rewards of the early mover advantage. But this also makes protests against EE’s move look overzealous as Howett believes Ofcom would green light deployment of LTE in the 900MHz band for other operators in much the same way as it has for EE in 1800MHz.

“There’s clearly an ecosystem available as well,” said Howett. “If you look at the five devices available: Samsung’s Galaxy S III, HTC’s One XL, the Huawei Ascend P1, and Nokia’s Lumia 820 and 920, at least two are available on LTE 900MHz too – the Galaxy SIII and Lumia 820.”

But what about the strong hint from EE CEO Olaf Swantee that there are more LTE1800 devices to be announced in the near future – something that strongly suggests Apple will support the frequency with its next iPhone, to be unveiled on Wednesday? Apparently this is something Ofcom considered before it gave EE clearance.

“Ofcom dedicated a whole annex in its recent report to what benefit O2 got from its exclusive iPhone deal and decided that it wasn’t that great and that the deal didn’t have a significant impact on the market,” said Howett. So it seems that the same argument would be true in this case, if EE had an LTE1800 iPhone 5 available in the UK.

Perhaps unsurprisingly it’s understood that the rest of the UK operators will not be taking any legal action, despite their strongly worded protests about Ofcom’s stimulation of the 4G market through EE’s concessions. In fact, with EE exclusively offering LTE and fibre under its own brand, the company has introduced another player into the market and set the stage for the removal of Orange and T-Mobile as brands once the migration of the customer base from 2G and 3G to 4G is completed in the distant future.

All operators will have a difficult job selling the benefits of 4G to consumers and businesses after the marketing disaster that was 3G, so EE’s decision to make its own brand the go to one of a ‘bigger, better and faster’ experience will distance LTE from previous technology generations.

According to Mark Newman, chief research officer at Informa Telecoms & Media, it’s a good time to be launching a new mobile brand in the UK, and while EE will, to all intents and purposes, be a new network, crucially it will be one which has excellent coverage to compete with the existing players.

“There will be some confusion about where the new brand sits alongside T-Mobile and Orange. But by introducing a dedicated new brand on its 4G network EE will be able to position itself as a premium service and, it hopes, migrate customers onto the new network. Over a period of time EE will come to be viewed as the service for heavy mobile internet users while T-Mobile will be the brand for cost-conscious prepaid customers and Orange, the brand associated with offers such as Orange Wednesdays,” said Newman.

Moreover, the use of the EE brand for fibre-to-the-home services is also interesting because it immediately positions Everything Everywhere as the provider of fixed broadband services with the largest retail footprint in the UK. “Over time we expect EE to develop services and capabilities that bring together its fixed and mobile businesses into single, integrated offerings,” Newman said.

The initial LTE1800 lineup – telecoms industry news, analysis and opinion

Telenor must continue JV to stay in India, rules court

Telenor has been told that it may only bid for spectrum in India as part of its Uninor JV

A court in India has ruled that Norwegian operator group Telenor may only bid for spectrum in the country’s upcoming 2G auction if it does so as part of its joint venture with Indian real estate firm Unitech. The auction is now set to be held in January 2013, after the Supreme Court of India granted the government another deadline extension.

The operator has sought to cut ties with its Indian partner, after losing the 2G licences it won in the country’s 2008 spectrum auction.

However, the District Court of Gurgaon, has now upheld an injunction from Unitech to prevent Telenor from “participating, negotiating, engaging in or financially being interested in the auction processes conducted by the government/government agencies for fresh allotment of licenses/spectrum, other than through respondent no.1 (Unitech Wireless)”.

Tor Odland, VP for group communications at Telenor, told that the operator is appealing the decision.

“There’s a hearing set for September and we aim to continue arguing our case,” he said.

“Our objective remains to potentially bid with a new company, and as such, we deem the partnership with Unitech to be over. We are currently scanning the market for potential partners.”

Telenor had already invited interested parties to bid for assets owned by the JV, called Uninor, of which the operator owns 67 per cent, but Odland said that it is awaiting a final decision from the courts as to whether it will be able to.

“There has been no decision on that – it’s a matter that has been challenged by Unitech.” – telecoms industry news, analysis and opinion

Social improvement must be focus for ICT says Japanese regulator


Japan is among the world’s most advanced communications market

The most important function of ICT for Japan in the future is its role in addressing social needs, according to Charley K. Watanabe, deputy director-general of the Information and Communications Bureau at Japan’s Ministry of Internal Affairs and Communications (MIC). Watanabe, who was speaking at Ericsson’s Business Innovation Forum in Tokyo, pointed towards the requirements of Japan’s ageing population as well as the need to manage key resources with greater efficiency as two areas where ICT could be used to drive social improvements.

Japan is among the world’s most advanced communications markets, with one of the largest LTE subscriber bases, and 95 per cent mobile broadband penetration. Watanabe said that Japan is also one of the leading markets of the world in terms of investment in fiber deployment. Three strong mobile operators and a thriving wifi carrier market are meeting what Watanabe described as the “constant need for high speed internet” but he argued that, thus far, there has not been sufficient focus on the use of the country’s advanced ICT infrastructure for civic and social improvements.

“Now we are motivating ourselves to use ICT to solve social issues,” Watanabe said, adding that Japan, which has the most rapidly ageing population in the world, needs to become a leader in this field. Other nations will face similar problems in the future and Watanabe was keen to stress that Japan wants to drive international participation in the use of ICT for social improvements, offering Japan as the ideal test bed for trial programmes.

City authorities will become increasingly dependent on their populations to drive efficiencies, he added. Applications and services that allow citizens to alert authorities to specific issues that need attention, road repairs for example, would enable governments to deploy resources more effectively. But mass deployment of sensors and automated utility infrastructure will also be necessary to address problems like water leakage and transport flow. Tokyo will be hosting the Olympics in 2020, so the MIC has a compelling medium term deadline by which to demonstrate evidence of its progress.

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Cellular News

Banks and telcos must partner for the long haul

Partnerships between financial institutions and other firms such as telcos offer a chance to bring new services such as mobile banking and payments to millions of customers. But innovators should be prepared for the long haul, according a panel of senior industry representatives speaking this week.

“Way back in 2006 in Barcelona, it was announced that an Indian mobile payment system would be in place within a year,” said A.P. Hota, chief executive at the National Payments Corporation of India. “In fact, it took six years to realise that idea. That wasn’t because of resistance from the regulator – the rules to allow it have been in place since 2008. The truth is it’s not an easy job. Mobile banking requires far more than just technology.”

The classic example of banking innovation is M-Pesa, a mobile payments service that has some 15 million users in Kenya. Established by Vodafone subsidiary Safaricom, the service allows users to send and receive payments on their mobile handsets.

Drawing on the relatively high rate of mobile penetration in Kenya, coupled with the low uptake of traditional banking services and undeveloped infrastructure, the service gained success, effectively banking millions of ‘unbanked’ customers who had previously dealt solely with cash.

Financial services firms have been seeking to find ways of expanding similar services around the world in the past five years. However, Alice Zanza, senior payment systems specialist at the World Bank, suggested that many innovative technologies, including mobile payment services, do not make a profit in the first three to four years of operations. Instead, they succeed due to long-term planning.

“You need to be aware that you’re not going to make any money if you’re going for a quick buck,” she said. “M-Pesa was sustainable because someone was funding it. The Kenyan Government also invested in making the project work. That story needs to be put into perspective – yes it is a success, but it didn’t happen overnight.”

In India, several banks offer mobile banking services. In addition, independent services such as My Mobile Payments offer customers the ability to use a mobile wallet, in which the handset can be used to make retail payments using NFC contactless technology. But according to Hota, any new service must be simple, widely available and easy to use if it is to succeed globally.

“Almost everyone in India has a mobile, but not everyone who can open a mobile account actually does so,” he said. “If the application has to be downloaded, that’s too cumbersome. Customers should be able to dial star-nine-nine-hash on their mobile handsets to access their mobile accounts. That’s the kind of solution we need.”

Other observers agreed with Hota, but also cited factors behind adoption of new financial services. For Gil Gadot, president at electronic payments provider Fundtech, simplicity of use should also be combined with ubiquity and availability for an innovation to achieve mainstream success.

“You need to be able to go anywhere and within three or four clicks complete a payment,” he said. “SMEs need to send money, view their payments and understand their balance. If you don’t have services available over the weekend, the customer will go elsewhere to transact.” – telecoms industry news, analysis and opinion