a week in wireless


Anti mast campaign takes new turn

We’re all familiar with campaigners who think that cellular network masts are pumping diseases into their heads and lobby against the towers being placed anywhere near them. But it takes the Taleban to really grab the issue by the throat. This week the fundamentalist insurgents from Afghanistan threatened to blow up masts in the war torn country.

The group claimed it had something to do with a belief that cellular networks are being used to track its members, but the Informer prefers the idea that they’re all curtain-twitching Nimbys who read the Daily Mail.

If carriers in Afghanistan were concerned by the Taleban’s threats – which came with the demand that the networks be shut down overnight, every night – they will be gladdened by the news that the whereabouts of self professed ‘bullet magnet’ Henry Windsor have now been revealed. Turns out that Henry, a young soldier and top-flight binge drinker, who happens to be third in line to the throne of Great Britain and is more commonly (as in, among the commoners) known as Prince Harry, is in Helmand Province. This news will probably generate some debate within the Taleban as to which targets ought best to be prioritised.

They’d better be quick about it, though, as Harry’s to be flown back to the UK amid ‘fears for his safety’. But aren’t there fears for every soldier’s safety out there? What with it being a war zone and all…

In a more figurative kind of firing line this week are 2,100 Nortel unfortunates whose jobs are about to disappear up the Swanee as the Canadian firm revealed this week that its Q4 loss for 2007 grew tenfold year on year from $80m to $844m. Another 1,000 jobs are to be shipped to cheaper climes as the vendor struggles to plug the hole in its coffers. Full year revenues were down four per cent at $10.95bn, while the Carrier Networks division saw the top line drop nine per cent to $1.35bn, in part due to the fire sale of the firm’s UMTS business to Alcatel in September 2006.

Posting some fairly hefty shortfalls of its own this week was US carrier Sprint Nextel. The third placed player in the US market, Sprint Nextel posted a Q407 loss of $29.5bn. The firm took a $29.7bn write down on the acquisition of Nextel by Sprint in 2005, but has also been troubled by subscriber defection in its wireless operation – which saw declining profitability in 2007.

Net adds for the 2007 at Sprint totalled just 700,000, taking the firm to 53.8 million wireless customers across its CDMA and iDEN platforms. This is not unexpected news from Sprint, which gave CEO Gary Forsee the old heave-ho last October. Poor subscriber growth and wrangles over the planned deployment of the firm’s Xohm national WiMAX network have plagued the carrier in recent months and these results will do nothing to bolster confidence.

“The fourth quarter financial results reflect the challenges facing our Wireless business,” said Dan Hesse, Forsee’s replacement. “Given current deteriorating business conditions, which are more difficult than what I had expected to encounter, these changes will take time to produce improved operating performance, and our near-term subscriber and financial results will continue to be pressured.” More difficult than he’d expected? Perhaps they hired him because of his cheery optimism, which has now presumably disappeared.

Another operator in the doghouse this week was UK carrier O2. It seems the firm, owned by Spanish incumbent Telefonica, has been putting off until tomorrow what it should have done today in regard to its 3G network deployment. As part of its WCDMA licence terms – a licence for which O2 paid more than £4bn – the firm was supposed to have provided 3G coverage to a minimum of 80 per cent of the UK population by the end of last year.

Alas it managed just 75.69 per cent of the population; close, but no cigar. In fact, that 4.31 per cent equates to some 2.5 million people. So UK regulator Ofcom has spanked O2 with a warning that, if it doesn’t meet the requirement by June this year, it will find its licence term pruned by four months. This would see the licence end on August 31 2021, instead of December 31 2021.

This threat has less teeth than the Informer’s 93 year-old grandmother – and she has trouble chewing soup. The actual punishment is thirteen years away for a start, which is hardly the most effective way of admonishing a firm whose crime has been one of procrastination. Ooh, no, says Ofcom. That four months is equivalent to £40m. Well, is that £40m today, or £40m in 2021? Because, by then, $40m will probably be the price of a damp one bedroom flat in London’s roughest suburb.

If Ofcom wants to punish O2, it should slap the fine on it now, not fanny around with idle threats. Besides, given that all four of O2’s competitors have met the 80 per cent rollout target, O2’s effectively punishing itself by not being able to compete for those 2.5 million people. Or at least if would be if there was a genuine opportunity for it in that segment of the market.

The people that run these operations aren’t stupid. It almost certainly makes more financial sense for O2 to delay its rollout than to meet it, otherwise it would have met it. It’s a bit like the US carriers who ignored the FCC’s 911 location directive because the fines were cheaper than the cost of implementing the technology.

Let’s have a look at something else from the future: Nokia’s nanotechnology-based devices concept that the Finn has dubbed ‘Morph’. This week the concept, which is a joint effort by Nokia’s Research Centre and the University of Cambridge, went on display at the Museum of Modern Art in New York. It suggests that In The Future, as well as moving round the cities on escalator walkways and sporting one-piece silver jump suits, we will all be carrying mobile devices that are stretchable and flexible, allowing us to transform the shape of the device depending on our needs. Sort of a phone version of Plastic Man.

The belief is that nanotechnology will pave the way for transparent electronics and flexible materials. The earliest elements of Morph could make their way into Nokia product in seven years’ time, Nokia said this week. Just imagine the first one arriving at O2 HQ. All the execs would be playing with them at the board meeting. Item one on the agenda would be that 3G rollout fine thing, which would get rapidly shelved because they still had another six years to worry about it.

In other handset news, sector analyst Gartner released its terminal market figures for Q407 this week. Guess who’s at the top?

By Gartner’s reckoning, there were 1.15 billion sales of mobile phones to end users in 2007, a 16 per cent improvement on 2006. Q4 sales hit 330 million units. The firm expects growth to slow going forward, dropping to about ten per cent as super saturation in mature markets becomes more widespread. But the massive potential in emerging markets will protect the handset industry from the risks of any economic recession in the US and Western Europe, Gartner analyst Carolina Milanesi said.

At the top of the billboard, there are no surprises. Nokia’s still number one, and Gartner confirmed Nokia’s estimation that it had bust through the 40 per cent barrier, while Q4 saw second-placed Samsung gain a couple of per cent to take it to 13.4 per cent.

Plummeting through the charts like an annoying novelty song is Motorola, down to 11.9 per cent from 21.5 per cent for the same period in 2006, while Sony Ericsson is a non-mover at four, with the power ballad Nine Per Cent.

Sony Ericsson has long been mooted as a third place replacement for Motorola, but the Swedish/Japanese JV having gained no market share, you might want to keep an eye on Korean vendor LG instead, which picked up 0.8 per cent year on year, to take it to 7.1 per cent. The ‘Others’ section also picked up steam, growing to 18.2 per cent from 15.7 per cent.

In the past people more or less ignored The Others but Q4 last year saw some new additions to the leader board, according to Gartner. ZTE, Apple and Research In Motion all made it into the top ten for the first time, which is interesting because they all play in particular niches. “On one hand, we have aggressive pricing and a focus on emerging markets (ZTE), and on the other, RIM with targeted functions and Apple with brand and design,” said Milanesi.

Apple, meanwhile, missed its February commitment for the release of the iPhone software development kit. Steve Jobs has promised that it will be unveiled on March 6th, though.


One comment

  1. Robert Allan 29/02/2008 @ 3:38 pm

    Advertising works – right…

    Instead of fining O2 in the year ‘government + 2’, why not insist that O2 proudly boasts it has the smallest network in the UK and boldly display to users that they can’t go to XX as there is no coverage. This should sufficiently rile enough people to effectively fine the company by reducing the chance of getting new customers.

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