a week in wireless


Their darkest hour

Black clouds were thick on the horizon this week, as a certain manager looked on in horror, watching helplessly as the universe conspired against him and his team. Yep, it was Ericsson’s annual investors’ conference in New York and while England was mourning its darkest hour since losing the World Cup qualifier to Holland in ’93, the Swedish kit vendor was mourning its darkest hour since announcing its Q3 financials last month.

Ericsson’s newly installed chief finance officer, Hans Vestberg, had something of a baptism of fire at the investors’ meeting, revealing yet more doom and gloom for the Swedish firm. The crux of the message was that fourth quarter revenues and profits would likely come in at the lower end of expectations as poor market conditions prevail.

Various newspapers reported that another 11 per cent was wiped off Ericsson’s market value on the back of the news and the Informer can’t help but wonder that Karl-Henrik Sundstrom, the previous CFO who quit Ericsson last month, knows exactly how Steve McClaren feels. And he’s probably gutted that he didn’t hold on for a few weeks longer, when he would probably have been given the boot and a whacking great payout as well.

In what might be referred to as the ‘understatement of the year’, Ericsson’s president and CEO, Carl-Henric Svanberg, uttered: “There are slightly more worrying signs than encouraging signs.”

Which is exactly what the PR chap for Ericsson’s handset joint venture with Sony said, as he pointed to the gathering storm clouds atop Table Mountain, Cape Town. Yes this week, the Informer has been attending the AfricaCom conference in South Africa and it’s been glorious weather. Or it was Sunday through Tuesday and again on Thursday when he flew back to Blighty, but on Wednesday night Sony Ericsson had plans to host a party on the top of Table Mountain to watch the sun go down. However, that was the one day it was chucking it down with rain and blowing a gale, while the top of the mountain was hidden from view by some of the biggest, nastiest, storm clouds ever seen in Africa.

It never rains but it pours, doesn’t it?

As it happens, Africa was hogging the telecoms headlines even before the conference kicked off mid-week, as the World Radiocommunication Conference, which took place in Geneva, wrapped up with the adoption of an international treaty to increase the spectrum available for mobile broadband services.

The International Telecommunication Union adopted a proposal led by African Governments to identify a swathe of UHF spectrum for the provision of mobile broadband services in developing countries and rural areas of the developed world. Now that the rest of the world is on board with the idea, industry watchers are calling the move an important step towards closing the digital divide between those with access to broadband and those without.

This was a central theme of the conference but Stephane Boyera of the W3C Mobile Web Initiative raised a valid and interesting point during his keynote – arguing a vision for the mobile web in Africa and other developing countries that should work on the lowest level phones and on a GSM network.

“I personally don’t think that people in rural areas would pay to access the web like the one we are ‘consuming’ for entertainment, for pleasure, for networking, because of the cost that would be considered as wasted. However, if the point is to access content and services that help them, then this is no more a cost, this is an investment,” Boyera said.

All well and good but as any infrastructure vendor knows all too well, that’s not where the margins are. However, taking a part complimentary and part contradictory stance to this view at the event, the GSM Association announced that the mobile industry plans to invest more than $50bn in sub-Saharan Africa over the next five years to provide more than 90 per cent of the population with mobile coverage.

The investment will be used not only to extend the reach of GSM mobile networks but to enhance them with GPRS, EDGE and HSPA technologies and “provide a rich suite of mobile multimedia services, including internet access”.

While, taking an even more contradictory stance was pan-African carrier MTN, which announced that it had signed kit vendor Redline Communications to build a 12 city WiMAX network in Cameroon. A fitting place for MTN’s first WiMAX deployment as Cameroon is where the ITU Working Party 8F convened in January of this year to establish a timetable to recognise WiMAX as an IMT-2000 technology.

Making mobile services more affordable meanwhile, was another pan-African operator, Celtel International, which extended the reach of the ‘borderless’ One Network, giving almost half of the continent’s population the ability to make calls at local rates across 12 countries.

Celtel extended what is known as the borderless mobile network, to Burkina Faso, Chad, Malawi, Niger, Nigeria and Sudan, joining the Republic of Congo, the Democratic Republic of Congo, Gabon, Kenya, Tanzania and Uganda, which were part of the initial launch of the One Network in September 2006.

And from the most unconnected continent on Earth to the most super connected – interweb book shop Amazon has gone back to future and is seeking to rekindle an interest in the electronic book, with an ugly retro looking device called ‘Kindle’.

The interesting thing about Kindle, which is basically a big, expensive ($399), internet terminal with a big screen and some ebook software, is that it has an always on connection to Sprint Nextel’s EV-DO 3G network so users can download new content anytime, anywhere.

The cool thing is, the thing works out of the box with no subscription model. A typical best seller or new release will cost around $9.99 and should be downloaded in less than a minute with no additional data charges, Amazon claims.

On the face of it, it looks like Amazon has followed in the footsteps of the BBC and is covering the cost of the access itself – the BBC has made its content available for free at wifi hotpots in the UK – but then you realise the company will charge you $0.10 a pop to send your own files to the device and another subscription fee for stuff like blog updates, which are free anyway. At this point, the wheels pretty much fall off the model and the electronic book concept goes back to the ’50s from whence it came. Who reads 200 books at once anyway?

Finally, what would a week be without an Apple iPhone story? Peaceful, the Informer would imagine, a state of mind far from the reach of Steve Jobs this week, as his personal Zen was shattered by the brick of Vodafone’s legal team.

Germany’s exclusive iPhone carrier, T-Mobile, has been forced to sell unlocked Apple iPhones after Vodafone Germany won an injunction based on a German law, which states that ‘exclusive’ products tied to another product or service – such as a mobile contract – must also be made available on a standalone basis.

The situation is very similar to the one that Apple has already encountered in France, where the iPhone launches on Orange later this month. And it looks like these pesky competition laws are going to crop up in more European countries, such as Finland and Italy, where Apple might be thinking of selling its wares.

Nevertheless, Germany is unlikely to spawn a healthy grey market in unlocked iPhones as T-Mobile is flogging the thing for the princely sum of Eur999 without a subscription. Achtung baby!

So with Vodafone raining on Apple’s parade and the Informer down on terra firma once again, we’re all back to where we started. The jet lag’s kicking in, the gin and tonic’s wearing off and the rain is coming down, time to wrap up and wrap it up for this week.


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