Cisco Cuts Mid-Term Growth Target

Cisco cut its three- to five-year revenue growth target to a range of 3%-6% per annum from 5%-7%. Cisco blamed a downturn in emerging markets, conservative customer spending and stalling growth in its core business of network equipment. source: Reuters article

Can Crowdsourced Wi-Fi be Made to Work?

This post is sponsored by the Enterprise Mobile Hub and BlackBerry

In a perfect world, BT WiFi, a crowdsourced Wi-Fi service, would be a great. Developed by Madrid-based start-up Fon, the concept that underpins BT WiFi is both innovative and elegant. You subscribe to BT’s broadband service and you get to use the Wi-Fi connectivity of millions of other BT customers across the U.K. In return, you make a ring-fenced slice of your own hotspot available to other BT customers.

I have heard senior figures in the U.S. tech industry enthuse about this concept, arguing that crowdsourced Wi-Fi could be a serious competitor to the LTE networks provided by the major carriers.

Unfortunately, they are misguided: BT WiFi isn’t a great service. It is undermined by its reliance on unlicensed spectrum and a cumbersome authentication process. In the places where you really want to use it, such as a central London cafe or train station, BT WiFi can leave you frustrated.

Fighting for bandwidth in a London cafe

First of all, the branding is confusing – your computer might see networks named BT WiFi, BT Openzone and BT Fon. Which one to choose? Even when you have singled out the right network, the BT signal is often crowded out by another Wi-Fi network.  On a Mac, you get a message along the lines of: “The Wi-Fi network BTWiFi could not be joined. Try moving closer to your wireless router. Alternatively, run Wireless Diagnostics to troubleshoot. “

If you are sitting in your car outside a house in suburbia, it is probably a different story. But how often are you going to be doing that?

Automatic authentication required

On those occasions when your device does force its way on to a BT WiFi hotspot, you have to go through a log-in process that can be clunky on a smartphone.  A BT WiFi app can streamline this step, but then you need to remember to open the app to make the connection.  Clearly, the challenging economics of public Wi-Fi have made it difficult to build a business case for the automatic authentication delivered by the subscriber identity module (SIM) on mobile networks.

But that’s not the only issue. If you leave Wi-Fi on your smartphone switched on, your handset will try and connect to BT WiFi hotspots all over London, draining your battery life and over-riding your mobile data connection. The upshot is that emails don’t come in and apps don’t update – they are either waiting for the device to actually connect to the BT WiFi hotspot or they are waiting for you to manually log in. In essence, smartphones can be pretty dumb about when to use Wi-Fi and when to use 3G or 4G.

Once you actually connect to a BT WiFi hotspot, the throughout can be sluggish – most of the capacity is understandably reserved for the hotspot owner, so you may be sharing the left-overs with other nomadic BT customers in the vicinity. It is usually fine for chat, email, calendar synchronisation and other un-demanding apps, but it may not be reliable enough to sustain voice over Wi-Fi calls or other real-time services.

Fixed mobile convergence

BT WiFi’s failings are not just an issue for BT. Many other telcos have been seduced by the concept of crowdsourced Wi-Fi. Fon lists its partners as Belgacom, Deutsche Telekom, Hrvatski Telekom, KPN, MTC, Netia, Oi, SFR, Softbank and ZON, as well as BT.

This illustrious list reflects the fact that telecoms operators around the world are trying to combine mobile and Wi-Fi networks into a coherent, converged offering.  As data traffic soars, mobile operators, such as Vodafone, are buying up fixed assets to shore up their network capacity and ease the pressure on their precious wireless spectrum. I really hope they manage to meld mobile and Wi-Fi into a seamless offering, but it is going to take some pretty good algorithms.

Although the advent of Wi-Fi in the 5GHz spectrum band should, at least, temporarily, help services like BT WiFi, demand for connectivity is so high that these hotspots are also likely to become congested in busy urban areas.

The fundamental problem is that Wi-Fi services aren't generally underpinned by a robust business case. There is no way round the fact that wireless spectrum, like Mediterranean beaches or British road networks, is going be heavily congested unless people pay to use it. 

It ain’t a perfect world.

This post is sponsored by the Enterprise Mobile Hub and BlackBerry

Vodafone Invests Despite Headwinds

Vodafone said its group service revenue fell 4.9% year-on-year on an organic basis in the quarter ending September 30, driven down by a 15.5% fall in southern Europe and a 4.9% decline in northern and central Europe. Vodafone blamed regulated cuts in mobile termination rates and a fall in enterprise service revenue brought about by "intense price competition across a number of our markets." Outside of Europe, Vodafone's organic service revenue climbed 5.7%.

Planning to invest more than 19 billion British pounds (30.6 billion US dollars) by March 2016, Vodafone reported that 56% of its 3G footprint in Europe now operates at peak speeds of 43.2 Mbps, up from 29% one year ago. It has launched 4G services in 14 markets and now offers "next generation unified communications capability" in 12 markets. source: Vodafone presentation

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Line Approaching 300 million Users

Line Corp. of Tokyo said its free messaging and voice calling service now has 280 million users worldwide, and has the largest market share for messaging apps in Japan, Thailand, and Taiwan. It reported revenue of 9.9 billion Japanese yen (100 million US dollars) in the third quarter, primarily from "in-game purchases, sticker purchases and other areas such as official accounts and sponsored stickers." That suggests Line's monthly ARPU is approximately 12 US cents. source: Line statement

Turnaround in the USA Lifts DT

T-Mobile US' performance (Metro PCS was consolidated from May 2013)

Deutsche Telekom said its revenues rose 2.4% on an organic basis in the third quarter to 15.5 billion euros, lifted by a "turnaround" in its U.S. unit, which experienced a "deluge of more than a million new customers" in the quarter. Also boosted by the acquisition of Metro PCS, T-Mobile US saw its service revenue rise 21% as it continued to pursue its "Un-carrier" strategy.

Deutsche Telekom says the "Un-carrier" strategy "includes not operating fixed-term contracts, offering attractive options for switching cell phone, good value roaming rates, and - introduced just at the end of October - completely new offers in relation to tablets and the launch of the Apple iPad."

T-Mobile US has revised its forecast upwards for the second half of 2013. The company now expects to gain 1.6 million to 1.8 million "branded contract customers", instead of the previous estimate of 1.0 million to 1.2 million.  Deutsche Telekom also said T-Mobile US's LTE network covered 202 million people at the end of September and "the merger with MetroPCS is bringing greater synergies than originally announced."

In Germany, however, the group's revenues fell 1.2% year-on-year, dragged down by a decline in core fixed revenues and wholesale services. source: Deutsche Telekom presentation

Microsoft Gains Smartphone Share

Android and iOS maintained their share of the global smartphone market in the third quarter of 2013, while Microsoft increased its share to 4%, according to Canalys. The research firm said Microsoft increased its shipments by 185% year-on-year to 9.2 million units, which helped to place it as the second biggest operating system in 19 countries, most notably Finland, with a 39% share; Vietnam, with 16%; Italy, with 15%; Thailand, with 11%; Turkey, with 11%; and Russia, with 8%. source: Canalys statement

Smartphones Provide Glimmer of Hope for Sony

Sony said its operating revenue fell 9% in constant currencies in the quarter ending September 30 to 1.776 trillion Japanese yen (18.1 billion US dollars), as sales declined in most of its units. However, Sony said: "In mobile, sales continued to expand as smartphones such as the “Xperia Z”, which has been well received since its launch in February, ranked in the top three in approximately 20 countries by revenue." source: Sony presentation

News Feed Ads Fire Up Facebook

Facebook said its revenue rose 60% year-on-year in the third quarter to 2.02 billion US dollars, boosted by rapid growth of revenues from adverts embedded in users' news feed.

However, David Ebersman, Facebook CFO, warned: "Our best analysis on youth engagement in the U.S. reveals that usage of Facebook among U.S. teens overall was stable from Q2 to Q3, but we did see a decrease in daily users specifically among younger teens. We won’t typically call out such granular data, especially when it’s of questionable statistical significance given the lack of precision of our age estimates for younger users, but we wanted to share this with you now since we get a lot of questions about teens." source: Facebook earnings collateral

3G Bolsters Bharti Airtel

Bharti Airtel said its revenue in the third quarter of 2013 rose 10% year-on-year to 213.2 billion Indian rupees (3.34 billion US dollars). Revenues in India rose 6% to 140.8 billion rupees, while revenues in its international operations climbed 18% to 74.8 billion rupees (the growth was just 4% in US dollars). Revenue growth in Africa was 2% in US dollars.

Sunil Bharti Mittal, chairman of Bharti Airtel, said: “Mobile internet is now a major engine of growth for Airtel across all geographies. Our sustained investment in this segment will further enhance customer experience and seamless coverage. The revenue growth in Africa reflects the inherent potential in the world's most promising continent. I am also pleased to see the evolution of Airtel Money into a significant service in geographies which are relatively under-banked.”

However, the company's capital spending was down 43% year-on-year at 21.4 billion rupees (just 10% of revenues). But Airtel said: "With 26,616 3G sites, Airtel has the largest 3G network in India. Further backed by inter-city and intra-city fiber networks and seven sub-marine cable systems, the company has been able to provide a superior internet experience to its customers. This has resulted in the data usage per customer increasing by 72.9% from 133 megabytes per month to 231 megabytes per month over the last twelve months. The data traffic grew significantly by 111.8% to 33.6 billion megabytes, while realisation has been stable at around 30 paise (0.5 US cents) per megabyte. Consequently, the data ARPU has increased from 43 rupees in the corresponding quarter last year to 70 rupees (1.1 US dollars) during the quarter." source: Airtel statement

Google Claims Surge in Google+ Usage

Vic Gundotra, the Google executive in charge of social networking, said the number of monthly "active" users on Google+ has risen from 390 million in May to 540 million, according to the Financial Times. However, he also said the number of people who look at content in their Google+ “stream” increased from 190 million to 300 million over the same period. The newspaper did not explain the distinction between this group and the aforementioned active users. Google has also said that people upload 1.5 billion photos a week to Google+, according to the FT. source: Financial Times article

Nokia Continues to Shrink

Nokia reported a 18% year-on-year decline (at constant currencies) in sales in the third quarter to 5.66 billion euros. Sales in the devices and services division, which Nokia is selling to Microsoft, fell 16% (at constant currencies) to 2.9 billion euros, while sales in NSN (the networks business) were down 21% to 2.59 billion euros.

Device shipments were down 22% year-on-year to 64.6 million units in the third quarter. Nokia said that sales of its Lumia smartphones, which run Microsoft's Windows software, increased to 8.8 million from 2.9 million in the same period of 2012. source: Nokia statement

iPhone Moves the Needle for Apple

Apple said its revenue rose 4% year-on-year in the quarter ending September 28th to 37.5 billion US dollars. Although iPad, Mac and iPod-related revenues all declined, revenues from iPhones and accessories rose 17.5% to 19.5 billion US dollars.

Apple said it expects revenue in the current quarter to be between 55 billion and 58 billion dollars, up from 54.5 billion dollars in the same quarter of 2012. That implies a year-on-year revenue increase of between 0.9% and 6.4%. source: Apple statement 

Samsung's Smartphones Still Surging

Samsung Electronics reported a 25% year-on-year increase in IT and mobile sales in the third quarter to 36.57 trillion Korean won (34.5 billion US dollars).  By way of comparison, Apple generated sales of 37.5 billion dollars in the same quarter.

Samsung said that total shipments of smartphones were up quarter-on-quarter led by increased sales of mass-market models. Shipments of high-end smartphones were flat quarter-on-quarter "driven by solid sales of current models with Note III launch." Tablet shipments increased sharply "due to enhanced product line-ups with Tab3 expansion." source Samsung presentation

AT&T Sees Steady Sales Growth

AT&T said its consolidated revenues rose 2.2% in the second quarter to 32.2 billion US dollars, fuelled by a 5.1% rise in wireless revenues and a 2.4% increase in wireline consumer revenue. However, AT&T said total revenues from business customers fell 2.6% year-on-year to 8.8 billion dollars.

AT&T reported that its high-speed wireline broadband service, U-Verse, now has 10 million subscribers and is generating 1 billion dollars a month. source: AT&T presentation

Orange Stuck in Reverse

Orange said its revenue fell 4% year-on-year in the third quarter on a comparable basis to 10.16 billion euros, dragged down by a 5.6% decline in France and a 7.9% fall in Poland. In France, Orange's mobile services revenue fell 9.4% and in Spain 11.1% (all figures on a comparable basis). The only real bright spots were a 11.5% rise in fixed service revenues in Spain and a 3.7% rise in overall revenues in Africa and the Middle East, which now accounts for approximately one tenth of group revenue. 

Still, Orange continues to invest. It said capex in the first nine months of the year is up 2.6% at 3.75 billion euros (12.2% of revenues). Orange Chairman and CEO Stéphane Richard said: "I would like to highlight our investment initiatives, especially in 4G and fibre, which place Orange in an ideal position in these crucial growth sectors.” source: Orange presentation 

Are We Driving Towards a Productivity Boon or a Dangerous Distraction?

This post is sponsored by the Enterprise Mobile Hub and BlackBerry

This week, I heard a senior executive from a major automaker say he isn’t sure that autonomous cars will become commonplace in his lifetime. The executive is in his mid-forties, so either that is a pretty gloomy verdict on his health prospects or the future of self-driving vehicles.

By contrast, Nissan recently promised to “bring multiple affordable, energy efficient, fully autonomous-driving vehicles to the market by 2020," according to an article in the Wall Street Journal.

Who to believe?

Self-driving cars still have to clear some major technological, societal and regulatory hurdles, according to a leading (and objective) robotics expert. This expert said this week he expects them to become commonplace in the 2020s.

New meaning for enterprise mobility

All-seeing self-driving tech (image from Nissan press office)

In any case, cars' growing autonomy needs to be factored into an enterprise’s mobility policy today. Self-driving cars don’t have to be fully autonomous to have a major impact on people’s lives and, potentially, the productivity of employees working in the field.  In-car automation appeals to digital natives, in particular, as they are accustomed to posting status updates whenever they feel like it.

And many sales reps would welcome the opportunity to work on a presentation on their way to meeting the client, rather than the night before. 

Already, cars are at a stage where there need very little human oversight in specific segments of a journey. High-end vehicles can be equipped with sensors that slow the car down if it gets too close to the vehicle in front, meaning cruise control requires less human oversight. Sensors can also be used to determine when it is safe to change lanes. In time, vehicle-to-vehicle communications technology could also make it easier for cars to avoid hitting each other. Cars can now be programmed to follow other vehicles. Tesla has said that its cars could be in compete control for 90% of miles driven within three years, according to a Financial Times article.

But will all this technology enable a mobile productivity boom or will it encourage drivers to take too many risks? When will an employee be able to take his or her eyes off the road to do some work? That’s going to be a really tough call.

The answer will depend heavily on how sophisticated the self-driving technology is and how fast the driver can get back in control, the traffic conditions, the road conditions and the kind of work the driver is trying to do.

Growing automation equals rising temptation
As vehicles are equipped with ever more driving aids and ICT, inevitably people will take more chances.  Advances in voice recognition technology will increase the temptation to dictate emails as your car flies along a motorway. As more cars ship with LTE connectivity, drivers will be able to create a high-speed Wi-Fi hotspot and replicate the office environment in the car. 

In the enterprise domain, the onus will be on CIOs to define safe in-car behaviour – as the legal framework is unlikely to keep up with advances in technology. For example, as cars become more autonomous, it should be okay to participate in a conference call while your car chugs along at 20mph through heavy urban traffic. But watching a video will be incredibly risky – at least for the next decade. Similarly, a driver negotiating a winding country lane probably shouldn’t be talking to their boss about a pay increase.

A dummy takes his life in his hands. (Image from Nissan press office)

Trials and test-beds
Completely autonomous cars are likely to be deployed first in clearly-defined areas, such as industrial estates, ports or university campuses where the road network can be blanketed with 4G or another wireless technology providing dedicated bandwidth for autonomous vehicles.

These test-beds should help enterprises understand the potential impact of self-driving cars on productivity and how to keep their people safe.  They will also highlight the need for an entirely new etiquette. For example, how does a self-driving car signal interact with other drivers?  Today, we tend to rely on eye contact with another driver to establish who should go first. How will we know if a self-driving car has “seen” us?

We have a lot of learning to do. 

This post is sponsored by the Enterprise Mobile Hub and BlackBerry

Rapid Revenue Rise for China Mobile

China Mobile said its operating revenue rose 12.6% year-on-year to 159.9 billion Chinese yuan in the third quarter.  It added approximately 32 million 3G customers in the quarter, taking its total 3G customer base up to 169.5 million out of a total customer base of 755 million.

However, the group's profit slipped and China Mobile warned: "In the first three quarters of 2013, the group experienced severe difficulties and challenges arising from increasingly complex competition in the information and communications industry, greater impact from over-the-top (OTT) products on the traditional communications industry and more intense horizontal competition due to the continued increase in mobile penetration." source: China Mobile statement

Google Growth Curbed by Motorola

Google reported a 12% year-on-year increase in revenues in the third quarter to 14.89 billion US dollars. Google's own sites generated a 22% increase in revenues. But sales at its Motorola devices division declined 33% to 1.18 billion dollars. Larry Page, CEO of Google, said:  “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”  source: Google presentation 

LTE Lifts Verizon

Verizon, one of the big two telcos in the U.S., said its revenue grew 4.4% year-on-year in the third quarter of 2013 to 30.3 billion US dollars. Wireless service revenues were up 8.4% year-on-year driven in part by continuing strong uptake of LTE - Verizon said it activated another 6.8 million LTE devices in the quarter, taking the total number of LTE devices on its network to 36 million. source: Verizon presentation

Twitter's Revenue Growth Accelerates

Twitter said its revenue in the third quarter of 2013 was 153 million US dollars, up 123% on the same quarter in 2012. That implies Twitter's growth is still accelerating - in the second quarter, revenue was up 113% year-on-year.  Twitter said it had 232 million monthly active users in September 2013, up from 218 million three months earlier. source: Twitter IPO filing

Twitter's Revenue Set to Double in 2013

Social network Twitter said it generated  254 million US dollars in revenue in the first six months of 2013, up 108% from the same period a year earlier. In the second quarter, advertising accounted for 87% of the 139 million dollars in revenue. The rest came from licensing data.

Twitter said it had 218 million average monthly average users in the second quarter, a 44% increase from the same period the year before. In the second quarter, 75% of the monthly average users accessed Twitter from a mobile device, including mobile phones and tablets, and over 65% of Twitter's advertising revenue was generated from mobile devices. Twitter said that the proportion of active users on, and advertising revenue generated from, mobile devices, will continue to grow in the near term.

Twitter also said its users create approximately 500 million Tweets every day. source: Twitter IPO prospectus

Apple Set to Grow This Quarter

Apple sold more than nine million new iPhone 5s and iPhone 5c models in the three days after the launch of the new models on September 20. Apple now expects total company revenue for the quarter ending September 28 to be near the high end of the previously provided range of 34 billion to 37 billion U.S. dollars. The upper band would represent a year-on-year revenue increase of 2.9%. source: Apple statement

Apple Sees Sustainable Advantage from Silicon

Tim Cook, CEO of Apple, sees his company's expertise in semiconductors as a source of sustainable advantage. "Now, we’re well beyond just the surface level of design of hardware and software," he told Bloomberg Businessweek. "We’re deep in the guts. This week you saw the A7. You saw our new M chip. Well, these are only possible because many years ago we elected to start building our own silicon team, and now we have many, many people designing silicon.

"And you saw us go to 64-bit. Well, why are we able to do that first? It’s because we’re at that level of being vertical. Does anybody—do these other three companies* have silicon expertise? You can answer that. Maybe they have something that I’m not aware of, but in terms of the depth of it …

"So it will be interesting in the next round, the next wave, to see what happens there. What do people do? When we looked at it, we concluded we needed to do our own stuff because we were dreaming of products that couldn’t be done with silicon that you could go buy. So we designed our own and built an incredible team." source: Bloomberg Businessweek article

*He appears to be referring to Google, Microsoft and Nokia or BlackBerry. 

China Throws Money at Broadband

China plans to invest 2 trillion Chinese yuan (323 billion US dollars) to improve its broadband infrastructure by 2020 with the aim of bringing almost the entire population online, a vice minister said on Wednesday. In an interview published on an official website, Shang Bing, a vice minister at the Ministry of Information and Industry, said the government is aiming to boost the average broadband speed in Chinese cities to 20 Mbps by 2015 and to 4 Mbps in rural areas. source: Reuters article

Europe’s Net Neutrality Time Bomb

This post is sponsored by the Enterprise Mobile Hub and BlackBerry

There is a fundamental contradiction at the core of Neelie Kroes' new telecoms package, which she billed as "the single biggest thing the European institutions could finalise in 2014 to boost growth and jobs."

Announcing a raft of so-called net neutrality measures, Kroes, vice president of the European Commission, said: "We want to support a thriving app economy and possible new Internet industries in Europe. Therefore, companies are still able to provide “specialized services” with assured quality (such as IPTV, video on demand, apps including high-resolution medical imaging), so long as this does not interfere with the internet speeds promised to other customers."

While the business world should be applauding the fact that telecoms operators will be able to offer customers different tiers of service, how can that be done in the cellular sector without impacting the quality of other people’s Internet access? Radio spectrum is a finite resource, so if you give more to one customer, there is less for other customers. It is a zero-sum game.  And in Europe, there isn’t a great deal of mobile bandwidth to go round (see separate post).

As you dig into the detail of the proposed package, it becomes clear that the net neutrality proposals are somewhat circumspect. The European Commission’s “plain language guide” says “those specialised services must not impair in a recurring or continuous manner the general quality of Internet access.”

Passing the buck to national regulators

How do you define recurring and continuous? That buck has been passed onto the national regulators.  The guide says that national telecoms regulators should “ensure that Internet access continues to be available without discrimination with quality that reflects advances in technology, and that specialised services do not impair other Internet access. They should monitor this, and the impact on cultural diversity and innovation.”

The proposals do offer the regulators a stick to help them enforce net neutrality, saying “national regulators can require that internet providers offer a minimum quality of service.” However, a minimum quality of service is going to be very tough to police in a mobile environment – if an individual’s internet connection drops when they stray into a black spot not covered by the local base station, will the mobile operator be deemed to have failed to provide a minimum quality of service? How do you measure a subjective user experience?

As reliable and quick Internet access becomes ever more crucial to businesses, mobile operators are inevitably going to have to make tough choices about how to allocate bandwidth in busy cells.  As the “Internet of Things” takes off, cars, heart monitors, CCTV cameras and a host of other machines are going to be competing for mobile bandwidth with smartphones and tablets.

The Chinese approach

Europe isn’t the only region grappling with these issues. Densely-populated East Asia is in the same boat. Presumably with the blessing of the government, China Mobile, which now has more than 27 million machines and 700 million people connected to its networks, has established a centralised and dedicated network for the Internet of Things. European mobile operators may have to take a similar approach, but it is not yet clear how national regulators would react to valuable radio spectrum being cordoned off for machines.

China Mobile is also making extensive use of Wi-Fi hotspots, putting the unlicensed technology on a par with its 3G and 4G mobile networks (see graphic). Europe will also need more fixed mobile convergence to achieve the European Commission’s delicate balancing act.

To the Commission’s credit, the telecoms package does make some encouraging noises about Wi-Fi and small cells. Its plain language guide says:

• The Commission supports the use of RLAN / Wi-Fi access points without the need for individual authorisations.
• There should be no restrictions on private users sharing their RLAN / Wi-Fi with the public.
• In addition, unnecessary restrictions to deploying and interlinking RLAN access points should be removed; the public should have more access to the RLAN "hotspots" of large companies, public bodies etc.
• The EU should set out technical specifications for deploying and using low power small-area wireless access points...to encourage wider use without unnecessary individual planning or other permits.

But the Commission’s net neutrality proposals are less helpful. They simply signal that Europe wants to have its cake and eat it, leaving national regulators with the tough job of deciding exactly when specialised services have degraded the general quality of Internet access. And, in all likelihood, the 27 different national regulators in the EU will each take a slightly different approach depending on how they balance corporate demand for rock solid enterprise mobile solutions and the needs of start-ups who can’t afford to pay for a higher quality of service.  The Commission’s stipulation that the quality of the public Internet “reflects advances in technology” leaves a lot of room for interpretation.

In the most densely-populated parts of Europe, the battle for bandwidth could be bloody.

This post is sponsored by the Enterprise Mobile Hub and BlackBerry