a week in wireless


She cannae take it, Captain

The setting: Deep space. The USS Motorola, a personnel transport vessel carries a delegation of important civilian shareholders, en route to Profitability 9, a distant star system on the far side of the galaxy. The navigator’s drunk.

On the bridge, Captain Greg Brown is locked in a fierce debate with Ambassador Carl Icahn, the leader of the civilian delegation. A terrible virus has struck that part of the ship where the walkie-talkies are kept, and many crew are infected. The virus is highly contagious and Captain Brown has sealed the infected sections of the vessel. Icahn, a pragmatist with only the safety of his mission on his mind, is trying to explain to Brown that there is only one option.

CI: You have to do this, Captain. It’s the only way we can guarantee the survival of the rest of the crew and the passengers.

GB: Goddammit Excellency, these are my people. Good people.

CI: Nobody’s denying that, Captain. But you have to think of the rest of us. You have to think of the mission. We must get to Profitability 9 – or we’re all doomed.

GB: May God have mercy on our souls…

The Captain hits the ‘jettison’ button. As it spins away into space, the portholes of the discarded capsule fill with the faces of the unfortunates within, the breath from their unheard screams fogging the glass. Brown turns from the harrowing scene, a cloud of self-doubt on his face. Icahn places a hand on his shoulder.

CI: You did the right thing, Captain. History will judge you well.

Fade to black.

On Thursday, Motorola issued a statement about its handset business which indicates that the firm could be about to follow the wishes of Carl Icahn and the recent advice of Ovum’s Martin Garner. The statement read as follows:

“Motorola today announced it is exploring the structural and strategic realignment of its businesses to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value. The company’s alternatives may include the separation of Mobile Devices from its other businesses in order to permit each business to grow and better serve its customers.”

The only method the Informer can think of by which Moto could recapture global market leadership involves an awful lot of Semtex and the address of every factory and R&D building owned by Nokia, Samsung and Sony Ericsson. Odd, too, that while Motorola speaks of “alternatives” in its statement, it lists only one option. This makes it look not so much an alternative as an imperative.

Greg Brown added: “All of our businesses have exceptional people, products and intellectual property and the ability to achieve category leadership in their markets.” Well, maybe, but Motorola certainly hasn’t been able to figure out how to do it. Whether or not somebody else will succeed remains to be seen, but listing the attributes of personnel, IP and product in this way makes the statement read like a For Sale advert for a used car.

As Motorola was considering disposals, Nokia was on the hunt once more, this week announcing a bid to acquire Trolltech, a Linux and applications framework developer from Norway. The purchase is part of Nokia’s ongoing assault on the services market, and the mobile carriers’ historical enjoyment of its control.

Trolltech’s Qt cross platform application framework will be used by Nokia and third party developers to generate web applications that function across the Finnish vendor’s handset portfolio as well as PCs. Nokia is offering $153m and has pledged to support all of Trolltech’s existing customers.

In other handset news, it seems that the iPhone hasn’t been performing as well as might have been hoped outside its home market of the US. German carrier and Apple partner T-Mobile announced this week that it has flogged just 70,000 iPhones with contracts since it launched the device three months ago. Some analysts suggested this was too slow, given how the handset has fared in the UK. The German operator reported 385,000 net adds during the final thee months of 2007, meanwhile, taking it to 36 million customers in total.

Back to the iPhone, though and UK carrier O2 has more than doubled the number of minutes and texts available to everyone who buys the Apple handset. Customers on a £35 per month contract will get three times more minutes and more than double the number of texts than before, while the introduction of a £45 tariff gives the same amount of minutes and texts as the former £55 tariff, saving customers £10. Alternatively, heavy users can go for the £75 tariff with a massive 3000 minutes and 500 texts a month.

Meanwhile, O2 is overhauling its own Active portal as it prepares to hold a pillow over the face of its long-malingering i-mode import. Back when it had just struck the deal with NTT DoCoMo that saw it bet on the Japanese firm’s portal model, it was Active that was to be phased out but it didn’t quite work out like that in the end. The new Active portal has been designed by content outfit ChangingWorlds.

If it’s on-again-off-again relationships that float your boat, look no further than indecisive WiMAX proponents Sprint and Clearwire. After a high profile split last year, word is that the two are in talks to get back together. The WiMAX community has been busy thrashing out its plans in Hawaii this week, so more may become evident in the next few weeks.

Staying in the States, there was a great story this week about US regulator the FCC proposing to slap a $1.4m fine on broadcaster ABC for allowing a bare bottom to appear in an episode of cop show NYPD Blue before the watershed – in 2003. This news promptly led millions of people to leap onto YouTube and watch the offending scene over and over again. As if that wasn’t bad enough, they watched it at many different times of the day, showing a complete disregard for the hour of 10pm, when bottoms suddenly become acceptable. It was a pert, nicely rounded piece of irony.

You wonder how many times, in the last five years, the FCC’s policy monkeys have watched the clip, just to be sure it was really upsetting.

The Informer’s a bit like the cops from NYPD Blue. He’s a renegade who plays by his own rules, but always gets results. Unfortunately for the Informer, those results tend to be financial reports from mobile firms and not blasting the scumbags out of their shoes.

Swedish vendor Ericsson put out a distress call this week, as its results were none too pleasing. It reported a 42 per cent drop in fourth quarter net income, down from SEK9.7bn (EUR1bn) in 2006 to SEK5.6bn in 2007.

Full year profits also sank 17 per cent, to SEK21.8bn, with sales for the fourth quarter and full year remaining flat and climbing just four per cent respectively.

Carl-Henric Svanberg, president and CEO, blamed the shortfall on a, “significant margin erosion,” in the networks business, largely down to new network build outs in emerging markets. However, Svanberg noted a decline in network expansions and upgrades in mature markets too.

On the upside for Ericsson, the firm announced this week that it has successfully demoed LTE in both FDD and TDD mode on the same base station platform. It claimed speeds of 90Mbps for TDD and 160Mbps for FDD

There were happier results announced, though. Vodafone, for example, put out a revenue statement this week. For the three months to the end of December 07, Voda pulled in £9.2bn – a year on year improvement of 15.8 per cent.

Data revenues were up 51.6 per cent at £558m, which looks like a small share of overall income. But Voda separates data and messaging revenues on its reports. If you factor in the messaging, the total is a shade over £1.6bn. Bear in mind that the firm’s fixed line revenues were £474m for the quarter and the share of total mobile revenues generated by mobile data looks a little more healthy; somewhere in the region of 18 per cent.

Japanese carrier NTT DoCoMo had some happy news out this week, too. Q407 profits were up 35 per cent at YEN216.5bn, an improvement based in part on its decision to cut commission to distributors. In the Middle East, Kuwaiti expansionist Zain racked up the highest annual profits in the history of the nation’s private sector with fiscal year 2007 reaping net income of US$1.13bn. Zain, of course, knows how to spend money just as well as make it and, if the firm turns in profits like that for another four and a half years, it will generate enough to cover the $6.2bn it splurged on a Saudi licence late last year.

Fellow Middle Eastern player Orascom, headquartered in Egypt and with an operation in Iraq, meanwhile, announced a new licence acquisition this week. Now, it’s more or less accepted that Greenfield openings are disappearing faster than the Informer’s stock of amusing similes. But, if you know where to look and you’ve got the stomach for it, the opportunities are out there.

Which is how Orascom fought off probably no competition whatsoever to land a licence to operate a 3G network in the Democratic People’s Republic of Korea. The Informer prefers to call it North Korea; that whole ‘Democratic People’s Republic’ thing can get a bit confusing.

The North Korean licence was granted to Orascom subsidiary Cheo, in which it holds a 75 per cent stake, the remainder being held by the state-owned Korea Post and Telecommunications Corporation. How do you think that went down in the Orascom Field Deployment team’s coffee room?

Competition will not be intense when services launch. According to Informa Telecoms & Media, there are only 5,000 official users of the GSM network that was introduced in 2003. That’s largely because the following year Kim Jong-il’s government banned its citizens from owning and using mobile phones. Today the network is used solely by government employees, although ITM reckons there is some unofficial usage in the country – you shudder to think what the punishment might be for anyone caught. People are reportedly using phones smuggled in from China, operating on Chinese networks that extend coverage some distance across the two countries’ border.

Now that Orascom’s in Iraq and North Korea, it need only branch out into Iran to be marked out by the Bush Administration as providing the Access of Evil.

Finally, there was heartwarming news this week as Nokia Siemens Networks has struck a working partnership with the World Wildlife Fund that will see the two organisations labouring to “reduce the ecological footprint of the information & communication technologies sector,” according to Jean-Paul Jeanrenaud, director of business & industry relations at WWF International.”


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