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Mobile Marketing Forum 08

“I love the new Nokia handset.”

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Barcelona day two

We’re halfway through the show and if you feel anything like team telecoms.com, it’s going to be a long two days.

The big news at the show on Tuesday was Arun Sarin’s call for less fragmentation among mobile handset operating systems. Sarin said that just a handful of device OSes need to emerge from the 30 to 40 presently available, although other commentators speaking on the same issue before have identified between 300 and 400 different platforms out there.

Vodafone has already attempted to standardise its own handset portfolio across three mobile operating system platforms. In 2006 it made a move to standardise on Microsoft Windows Mobile, Symbian/S60 and Linux. But at the time it was noted that the Big V had not factored in Research In Motion’s BlackBerry platform and the many different flavours that Linux itself is split into - which is where this 300-400 number comes from.

We also checked out a version of the Open Handset Alliance’s Android platform, running on an ARM9 processor on the ARM stand. Although the demo didn’t show us anything we haven’t seen before it still gives a feel of what Android can accomplish when deployed across older or lower tier hardware platforms.

Yahoo had an interesting announcement as well, coming out with oneConnect, a social networking interface which plugs into all the social networks available and allows users to carry out their communications through the one service. It’s a kind of obvious development but I guess the strategy is that every subscriber to a social network is also a potential subscriber to oneConnect and another set of eyes to advertise too.

Yahoo also scored a coup by replacing Google as T-Mobile’s preferred on device search partner. The company also formally rejected Microsoft’s $45bn bid, suggesting that the company still thinks it’s in god enough shape to go up against Google on its own.

Welcome to the show

Phew. Bar one or two scrapes we managed to make it to World Congress, crumpled passport in hand, just as the Fira de Barcelona threw open its doors to the heaving masses.

As ever, attendee numbers are probably up - the queue to get a badge was massive anyway, photo below. Wondering around to get a feel of the place, the air is thick with talk of femtocells, WiMAX, and of course, gadgets.

The introduction of a new moniker for the show this year, changing to Mobile World Congress from GSM World Congress, allows the trade body to adopt a more neutral and inclusive approach to its work. With an eye on the evolution to LTE, the GSMA is aware that the technology for which it was founded will not be around for ever. Some members of the CDMA community, with which the GSMA has historically been at loggerheads, are likely to move towards LTE along with the GSM camp. US carrier Verizon Wireless, part owned by Vodafone, has already pledged allegiance to LTE.

Meanwhile, mBlox has been conducting SMS polls and has revealed that 40 per cent of MWC respondents want to ban booth babes. Naturally, another 40 per cent want to keep them and the remaining 20 per cent couldn’t care either way.

Check the news section of the site for more updates throughout the World Congress experience, and don’t forget you can drop us a line either on the blog or through our voicemail box on +44 151 266 6531.

MWC

Oh Lordy

Several times in the last two weeks the Informer has been contacted by his company email administrator because his inbox has exceeded its size limit. This is because we are bearing down on the brouhaha of the Mobile World Congress, and thousands of PR folks around the world are frantically issuing press releases, briefing invitations and announcements about announcements.

The Informer has found his way on to many mailing lists and is therefore the recipient of hundreds of such messages each week. They come in too fast to be effectively processed so they just sit on the server, causing it to creak and grumble.

As you can imagine, there is a certain homogeneity to these emails; there aren’t many that stand out. There was one, though, that the Informer noticed because he thought it was a bold marketing ploy. Possibly, indeed, an incendiary one.

The teaser email implored the recipient to “come and see God” at the World Congress. Either they’ve booked Eric Clapton, the Informer thought when he saw the headline, or Rob Conway’s been promoted.

Turns out the invite was from a content company called Zlango, which will be erecting a 20 foot statue of the Heavenly Father on its stand in a bid to promote a messaging platform that uses icons instead of words.

The way things are in the world these days it takes a brave person to suggest that a giant statue of a deity which counts billions of people among its followers is a good gimmick at a telecoms trade show. Especially when some of those followers are a bit temperamental and the statue is sporting a pair of wraparound sunglasses. The Informer will let you know if any holy wars erupt that aren’t to do with LTE and WiMAX.

As for what will become of the statue at the close of next week, it’s not clear what happens to the prophets from the show.

Speaking of monies, things were looking rosy at Orange-branded France Telecom this week, which turned in profits for 2007 of EUR6.3bn, up 52 per cent year on year. The mobile arm did well, contributing revenues of EUR29.1bn to the total of EUR52.95bn. The Informer’s just this minute remembered that he used to work with a French chap - big feller, looked a bit like Eric Cantona. Once during a lunchtime trip to the pub he was asked what sort of things worried him. Without a trace of irony he replied: “I have nothing to worry about because I am a man, and because I am French.”

Across La Manche things were less agreeable. BT reported its Q407 results, revealing that profits for the three months to end December dropped 30 per cent year on year to £447m.

The UK incumbent was also forced this week to defend itself from accusations that it is to abandon its convergent Fusion offering. Launched in August 2005, the service gave users a Vodafone handset that used Bluetooth to route calls through the landline once the customer got home. Later, a modified offering that used wifi indoors rather than Bluetooth was launched.

Hopes were high at BT that it would make good on the proposition, which was a rebirth of the DECT/GSM Onephone idea that stalled in the late 90s. But Fusion doesn’t seem to have captured the public’s imagination, with BT confirming it has attracted only “around 45,000″ consumers since launch.

UK Broadsheet The Telegraph ran a story this week that BT had cooled on the offering, which was picked up and run by some industry sources. But the UK carrier told the Informer this week that the service had not been given the chop.

“BT has not abandoned Fusion. It is actively marketed to SMEs and large businesses, both here in the UK and overseas,” the firm said. “We have scaled back our marketing for the consumer product but this is because we are trialling the next generation of devices. These devices are similar to [RIM] BlackBerries and so our strategy is to make broadband more mobile than ever.”

Either way, it seems that the lure of a separate home tariff is not particularly strong. UK mobile carriers are stuffing more and more minutes into their bundles now, which negates the benefit of a low-cost voice offering from BT and, probably more importantly, there just weren’t very many handsets available on the Fusion service.

3UK and domestic competitor O2 were involved in a fusion of their own this week when they revealed the decision to merge their user generated mobile video services into a single community. Combine SeeMeTV and LookAtMe and you get EyeVibe, which while clearly a silly name, is at least less obviously designed to appeal to witless exhibitionists.

Anyway, it looks to the Informer as if the mashing up of the two is designed to protect against the mobile march of established internet UGC specialists. Both services are based on a platform developed by Yospace - which will continue to manage the merged offering - and both, if conversations that the Informer has had with some 3 types are anything to go by, consist largely of DIY naughties. We did hear that as much as 80 per cent of the content had to be filtered out by people hired to vet submissions because it was too raunchy. (How do you advertise for that job?)

The two carriers reckon 32 million downloads have been made since they launched the services and that this has generated some £800k for users, who are paid when their clips are viewed. More than 60,000 clips have made it onto the services, which if that 80 per cent is about right, means that 240,000 home-grown bongo flicks have been rejected on grounds of steaminess. Someone’s been busy.

If downloading such content is your thing and you’re an aspiring iPhone owner, you’ll be pleased to know that Apple has released a new version of the handset, with the storage capacity doubled to 16GB. Announced this week, it’s already available in the US and Europe. In the UK, O2 is knocking them out for £329, which is £60 more than the 8GB model while, in the US, it’s $100 more expensive than the first iteration, at $499.

Apple’s US distribution partner is AT&T, which this week announced that it’s going to spread the 3G love a little further, rolling out service to a further 80 cities, which will take the total to 350 by the end of this year. It’s also planning to have made an HSUPA upgrade by the summer.

The firm’s CEO, Ralph de la Vega, took the opportunity to nail his colours to the LTE mast, saying: “The evolution towards HSPA+ and LTE technologies will enable the company to continue to deliver higher speeds and capacity in the years to come.”

Earlier in the week the FCC gave its blessing to AT&T’s purchase of a bundle of 700MHz spectrum from Aloha Partners. The great thing about this spectrum is that it’s free of deployment requirements so AT&T can just put it in the fridge.

It’s still in the running for the bulky C Block spectrum being sold off in the FCC’s 700MHz auction as well. That auction’s open access rules were triggered this week, as bidding for the C Block hit $4.6bn. Speculation is that, now the rules have kicked in, Google may bow out as it effectively committed to a $4.6bn spend in order to secure open access. Total bids in the auction so far are approaching $20bn, and Verizon is a strong contender for C Block.

Further proof, if proof be need be, that the mobile world is opening up to the opportunities offered by online communities came this week in the form of two announcements by Verizon’s co-owner Vodafone.

First came the news that Newbury’s finest has employed the services of messaging firm NeuStar to help it roll out Microsoft Windows Live Messenger to customers in Portugal, Italy, Spain, Netherlands, France (via SFR), Germany and the UK. Additionally, NeuStar has also supported the launch of Yahoo Messenger in Portugal.

That was swiftly followed by the announcement that the social network site Facebook has revamped its mobile platform and Voda will debut the service in the UK and Germany, with plans to expand the platform to Greece, Italy, Spain, Ireland and Portugal.

According to Informa Telecoms & Media’s latest report: Mobile Social Networking, Communities and Content on Move, the global user base of mobile social networks nearly doubled in 2007, reaching about 57 million by year end. Informa expects the expansion of the user base to continue by 50 to 60 per cent year-on-year between 2007 and 2012.

Christine Perey, president of Perey Research & Consulting (and author of the report) wrote in MCI: “There still needs to be detailed consumer studies to unpack and understand exactly what people are doing with the mobile community platforms. But for the moment, just having a few mobile data skills such as starting an application, like a browser, composing messages, taking and finding photos to upload and browsing or searching through profiles covers the bases for most people.”

The Informer is not about to argue with his analyst friends, but having set up a Facebook profile some time ago, he has yet to derive any actual value from it. But then, since he remembers a time when there were only three TV channels and social networking involved going down the park with his mates to watch the glue sniffers, he’s not really the target demographic.

Ah, the glue sniffers. Where have they gone?

Away from the world of recreational solvent abuse, the LTE train kept a-rollin’ this week with the news that the LTE/SAE Trial Initiative (LSTI), an industry body that focuses on interoperability, announcing the completion of its latest round of tests. The LTSI confirmed the kinds of speeds that vendors have been touting around - in excess of 100Mbits/s.

In other LTE news, Californian money machine Qualcomm has revealed that it aims to ship its first multi-mode LTE chipsets in the second quarter of next year. The firm also said that Hutchison 3G, Telecom Italia, Telefonica and Telstra have all committed to trial HSPA+ tech, based on Qualcomm chipsets, later this year.

No doubt LTE will be much under discussion at the Mobile World Congress next week. The Informer’s travelling over there with his buddies from telecoms.com, which will feature the most important stories from the event. Keep an eye on it.

This year, for the first time, telecoms.com will be running a mobile service, with news delivered straight to the phone of anyone who signs up, which you can do here.

The site will also feature a voice blog function, courtesy of Spinvox. Anyone who wants to give us their feedback on the show can ring +44 151 266 6531, leave a message and, so long as it’s not too rude, it will appear in all its voice to text glory on the site.

And that’s about the size of it this week. See you at the show.

Barcelona

It’s that time of year again. The telecoms.com team is packing its suitcases and preparing to head off to Spain for the annual mega-industry-shindig that is Mobile World Congress. The editors have dusted off the travel Scrabble to keep the team occupied and prevent any squabbling over who gets the window seat, and the Informer has ensured a ready supply of Paracetamol and Alka Seltzer in anticipation of a full party-diary.

The weather forecast says the temperature in Barcelona is about the same as in England - pretty chilly - so don’t forget your coat. Telecoms.com would also like to remind you that while we’re out there, we’ll be publishing as normal, but for those of you with a diary full of meetings you can also get news and announcements straight to your mobile phone by signing up for the telecoms.com Mobile service here.

We’re also running a voicemail box, which will publish your comments on Barcelona staight to our blog, so dial +44 151 266 6531 and leave a shout out.

Have a safe trip, we’ll see you there.

Apple doubles iPhone capacity

The 16GB version of the iPhone, which Apple announced in the US on Tuesday, is also arriving on European shores.

Apple’s UK partner, O2, is already selling the beefier unit for £329, £60 more than the 8GB version, and French partner Orange is taking contact details for those interested in the 16GB device.

No word yet from German partner T-Mobile or UK retailer Carphone Warehouse on when they will have the unit for sale.

On Tuesday, Apple said that the 16GB iPhone would be made available immediately in the US for $499, making it $100 more expensive than the original 8GB model.

But will another 8GB of storage be enough to pick sales up again? We heard from the manager of a Carphone Warehouse in London that sales have dropped off since the device launched in November.

Google, Yahoo, Microsoft: pots and kettles…

In the wake of Microsoft’s $45bn offer for web giant Yahoo!, Google has got up on its high horse and is calling the potential merger a danger to the very ‘open-ness’ of the interweb.

In a posting on the company blog on Sunday, David Drummond, senior VP of corporate development and chief legal officer, said that Microsoft’s bid for Yahoo! raises troubling questions. “Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets,” he said.

Drummond continues: “Could the acquisition of Yahoo! allow Microsoft — despite its legacy of serious legal and regulatory offenses — to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts.”

Now we’re getting somewhere. It’s about comepetition. As Ovum’s David Mitchell points out, “while the combined Microsoft and Yahoo business is still likely to be a much smaller player than Google, they will have substantially improved their ability to compete. ” So is that what’s troubling Google so much?

Maybe so if you believe the other rumours that Yahoo has revived talks it held a few months ago and approached Google to get a counter offer. Would there be so much posturing about openness if the shoe was on the other foot? Then again, that’s assuming that either of these deals could jump through the antitrust hoops.

These recent events couldn’t help but remind me of the wonderful EPIC 2015 movie from the ‘Museum of Media History’. Well worth it if you have ten minutes to spare.

Have your say:

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.”

Moto tells handset unit, “We need to talk”

You can imagine the scene - Motorola, the exasperated parent who’s patience is starting to wear thin, sitting on the corner of the bed in the childhood room of the Mobile Devices business, to which the middle aged child has returned “just until it sorts things out.”

“Look, this isn’t really working. I’ve been patient but we need to get things out in the open. You’re not pulling your weight around here and really, you’re old enough to be looking after yourself.

“The number of times we’ve had to bail you out, it’s just not fair. All that money we give you and you just fritter it away on these fancy gadgets time and time again. I mean, how many versions of the same phone do you need? Even I know that really thin one isn’t even cool anymore and I’m old.

“So, look, we’ve had a chat and we’ve decided the best thing for you to do is to just go. I’ve packed your bags, they’re by the front door. I’m sorry, it’s for the best. We’ve done all we can…look, it’s just…it’s not me, it’s you.”

So it’s finally happened, Motorola has at last come out and admitted to what everyone in the industry has been talking about behind its back. The relationship between the parent company and the troubled handset division is on the rocks.

On Friday, the company announced that 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.”

One of the options is to separate the Mobile Devices unit from its other businesses. Or in other words, “pack your bags and get out”.

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