a week in wireless


Nice day for a wireless wedding

AWIW436

Marry in haste, repent at leisure, as the Informer’s old gran used to say. And while no one could accuse on-again, off-again would-be couple T-Mobile and Sprint of rushing to the “I dos” it’s fair to say that this pair have made it to the altar more times than Katie Price or Elizabeth Taylor. Only without the massive gold and pink fairy carriages.

This week, with shares rising on the back of speculation of a T-Mobile/Sprint merger in the US, the Informer can’t help feeling that we’ve all been here before. The only real difference being that, unlike some couples who insist on sharing the fine detail on a daily basis for at least six months prior to the impending nuptials, Deutsche Telekom is displaying Teutonic schtum on the matter. CFO Tim Hoettges has, so far, declined to comment on “rumour and speculation” saying only that the company is “open to all options” and that it is “flexibly positioned.” Given that Katie Price is, once again, on the market, they might wish they’d kept that last detail to themselves.

Sticking with the Katie Price theme, many observers see any impending merger between T-Mobile and Sprint as a wireless train-wreck in waiting. The union of America’s third-and-fourth largest mobile operators might relieve some of the pressure they’re under from rivals AT&T and Verizon, but the fact that the couple run incompatible network technologies (T-Mobile uses GSMA, Sprint CDMA) has led some to speculate on the wisdom of the match.

Sprint’s superior coverage needs to be weighed against the reality that T-Mobile is operating on the more popular global standard. In the meantime, both operators are haemorrhaging customers like it’s going out of fashion. Those in favour of the union are pinning their hopes on the matchmaking powers of LTE, making the probability of a Vegas-style quickie extremely unlikely. T-Mobile’s distinct lack of spectrum makes it likely that the whole shindig will rely very heavily on Sprint’s plans in the LTE department.

Then there’s the issue of Clearwire, very much the ginger stepchild in this scenario. This week the WiMAX carrier’s CEO called time on his efforts to make a go of the troubled operation, which is cutting weight in a bid to stay aloft, and flew the coop, citing personal reasons. Chairman John Stanton will take over in the short term while the company looks for some unsuspecting soul to wonder along and take it on.

China Mobile, meanwhile, is determined to get her man in Cupertino. Chairman Wang Jianzhou has been telling anyone who will listen that Glorious Leader Jobs is “very interested” in developing an iPhone that meets their TD-LTE standard. So far, it seems that Apple is playing hard to get, making no comment on the matter. China Mobile has a bit of previous when it comes to being left at the altar: Jianzhou told Reuters that the company had been in talks with Apple for two years regarding the possibility of developing an iPhone that would work on its 3G TD-SCDMA standard. For all the talk, the fact remains that rival GSM operator China Unicom is the only one so far to successfully woo Apple, if not the customers. Even with the iPhone offering, China Unicom continues to lag behind its biggest rival in the subscriber stakes, with 169.7 million subscribers to the as-yet-iPhoneless  China Mobile’s 589.3 million.

Closer to home, the UK’s smallest operator 3 is harbouring fears of becoming a perennial mobile bridesmaid unless UK regulator Ofcom gives it a fair crack of the whip at the LTE spectrum mart. CEO Kevin Russell has said that, unless caps are imposed on allocations below 1GHz, 3UK runs the risk of being squeezed out of the market. With the UK’s spectrum auction due to be held in the first quarter of 2010, 3UK is worried it will lose out to Vodafone and O2, both of whom have bigger dowries .

Earlier this year, Russell criticised Ofcom’s decision to allow competitors to reallocate spectrum from basic 2G services to 3G offerings. With both Vodafone and O2 already owning 900MHz of bandwidth, Russell is concerned about 3’s ability to secure a slice of the 800MHz and 2.6GHz bands in 2012. “There is a risk of a strategic premium being bid to squeeze 3 out of the market place,” said Russell. “If 3 is blocked out of spectrum…there will be consolidation in the marketplace.”

3UK recently bucked mobile data pricing trends with the announcement that it would continue to offer unlimited data plans to prepaid users, starting at £15 a month. Globally, almost all the major operators have moved away from all-you-can-eat offerings in search of new billing models designed to cope with a significant surge in mobile data uptake.

With a small subscriber base, 3UK has the capacity to spare, while its competitors are dealing with congestion issues that are, in some cases, very serious. The larger carriers have argued forcefully that unlimited data use is economically unsustainable but 3UK appears to have no such concerns. With the UK market looking like its settling into a three-way fight between the bigger players, how easy it will be for 3UK to keep a toehold remains to be seen.

The firm’s trump card is undoubtedly its half share of MBNL, the firm that runs the 3G network on which 3 and T-Mobile operate. With the Orange network set for integration into this project, 3 may yet still have sway in the market that is disproportionate to its size.

The Chinese Anti-Monopoly Bureau, meanwhile, has adopted the role of wedding crasher, coming over all Joan Collins to interfere with the happy union of Blake and Krystle, sorry, Nokia Siemens Networks and Motorola. Initially planned for the first quarter of this year, the acquisition has been delayed by the Anti-Monoploy Bureau’s taking longer than anticipated to complete its review of the process, which was set in motion in July last year. NSN is now offering “no further guidance” on when it may be finalised, stressing only that it remains committed to the acquisition.

This latest delay is set against a backdrop of conflicts between Chinese state and industry and Western counterparts. Chinese vendor Huawei has won an injunction against Motorola relating to the NSN sale, requiring proof that intellectual property that Huawei licensed to Motorola does not transfer to NSN as part of the acquisition. Huawei itself was recently forced to withdraw from its proposed acquisition of 3Leaf by the US Committee on Foreign investment.

This prompted the firm’s deputy chairman to write an open letter to the US authorities challenging them to present proof that Huawei has links to Chinese military and intelligence services – accusations that have dogged the vendor as it seeks to build its business in the West.

In February the European Commission published findings suggesting that Huawei and compatriot vendor ZTE are state-controlled and receive cheap government loans that give them an unfair advantage over European competitors. This prompted China to warn of retaliation if the findings were acted upon, with the allegations that EU subsidies for European vendors breach WTO rules.

With so much talk of nuptials, it’s inevitable that somebody, somewhere will bring up the topic of divorce and this week it was independent application store GetJar. Despite the massive popularity of the Opera Mini mobile browser on its site, GetJar is dumping it on the grounds of infidelity. Opera launched its own Mobile Store on March the 8th, having developed it in partnership with white label app store player Appia.

Despite the fact that Opera has been a “longtime favourite”, with more than 30 million downloads, GetJar has said that repeated efforts to salvage the marriage had come to naught, leaving it with no choice but to change the locks and move on. In a letter expressing regret to the developer community, GetJar said that although it didn’t have any issue with it “in principle”, in practice, it wasn’t interested in an open relationship: “it means that consumers might start using this app store instead of visiting GetJar to get their favourite apps.” Indeed. Quite how the practice differs from the principle isn’t entirely clear here.

Neither is GetJar’s insistence that it welcomes competition, which grates somewhat with its statement that Opera Mini “robs GetJar of traffic and therefore of the advertising necessary to keep our service free for the more than 25 million consumers that use GetJar.” With some observers questioning the wisdom of banning Opera for launching a paid-for application store when GetJar itself offers only free apps, one can’t help but wonder whether this isn’t a classic instance of a jealous partner shooting itself in both feet before jumping on a rake, but that’s relationships for you.

And that’s about it for this week.

Take care

The Informer


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