For those in the US who oppose early-termination fees, I have two words: iPhone 2.0.

The retail price of the 3G version of the iPhone will start at $199 thanks to a subsidy of several hundred dollars by AT&T, which was not allowed by Apple to subsidize the first version of the device. The reason for the new subsidy: AT&T and Apple see this as a necessity to drive mass-market adoption of the device because US mobile customers have shown repeatedly that they would prefer to pay less for a device even if that means signing up for a two-year postpay contract with a costly fee for early cancellation.

Despite the obvious preference shown by mobile phone buyers for subsidized pricing, one aspect of the subsidization practice, early-termination fees, has repeatedly come under fire in class-action lawsuits and public laments by self-described consumer-advocacy groups. The FCC has received more than 3,700 complaints about the fees during the past two years. For that reason, the commission is now pondering taking action to regulate ETFs on a federal level.

During an FCC-sponsored public meeting on June 12, consumers, public-policy wonks, mobile operators and others were allowed to speak their peace regarding the application of ETFs to customers who break service contracts. ETFs go hand in hand with US mobile operators’ subsidization of handsets as an inducement to get customers to sign long-term contracts. Customers who break those contracts are charged ETFs of about $200, more or less,, though the two largest operators, AT&T Mobility and Verizon Wireless, now prorate their ETFs over the length of contract.

Alan Plutzik, attorney with Bransom, Plutzik, Mahler & Birkhaeuser, and counsel of record for the Wireless Consumers Alliance, testified that in a class-action lawsuit against Sprint Nextel, the numbers revealed that some 2 million Californian mobile customers have been charged ETFs, meaning by extrapolation that 40-50 million people nationwide have been charged ETFs.

Consumer advocate Pamela Gilbert, an attorney with Partner, Cuneo Gilbert & LaDuca, contended that ETFs “force consumers to choose between staying with a carrier that doesn’t meet their needs” or paying a penalty to end their existing contract in order to get service from another network that can meet their needs.

I agree that there were issues in the past when people signed up for mobile service only to find that it would not work in their neighborhood. I suffered that fate when I agreed to move from AT&T Wireless’ TDMA network to its GSM network, which was so full of coverage gaps and traffic issues that I hardly made a mobile phone call for a year (and I eventually switched operators because of the problems). But with major operators offering 30-day trial periods for new users, people who sign up for mobile service in the US these days should be able to get a pretty good idea of whether their mobile will work where and when they need it to before they commit to a long-term deal.

“I sincerely feel actually that we do not need early-termination fee contracts. As a country, these are not as common as the normal way of doing business. Normally you purchase a product and then you pay for service,” testified Anne Boyle, chair of the Nebraska Public Service Commission.

“What?” I said out loud when I heard Ms. Boyle’s comment (fortunately, I was watching the proceedings from my home via the Internet). Installment contracts and early-termination fee arrangements are rampant in US consumer-goods marketing. I have satellite TV service from DirecTV, and it has an early-termination fee attached to it. I think I’d have to cough up $200 if I were to cancel the service before I’ve used it for two years. Similarly, the health club contract that I signed up for a couple of years ago and, regrettably, never actually leveraged by working out, had an ETF attached to it. Even though I only worked out once in 12 months, I knew I’d be nailed with an ETF if I canceled the contract before a year was up (and I kept wishfully thinking that I’d actually make it to the gym sometime during those 365 days).

The Competitive Enterprise Institute, a non-partisan public policy group that backs free enterprise, has come up with more examples of ETF use in other industries, including apartment rentals and automobile leases. “In all of those cases, we expect consumers to figure out for themselves what is and what is not part of the contract they’re signing. As long as any potential fees are disclosed at the time of the agreement, they’re simply part of the deal,” said CEI in a press release.

So, it’s pretty clear that ETFs are not unique to the mobile industry. But that’s not to say that some of the industry’s related practices haven’t been downright sneaky. I had been off contract with my current mobile provider for a couple of years, when, in May 2007 I decided to alter my rate plan. I had the same old phone and same old phone number, I just wanted a different airtime package. Imagine my surprise when I discovered that simply changing the service plan resulted in me suddenly being on a new two-year contract. Had the salesperson at the store explained this to me? No. Not a peep was uttered. I didn’t bother to complain because I hadn’t planned on switching networks anyway, and because I had been on the network for so long, I qualified for a substantial subsidy on a new handset. So, I subsequently went ahead and bought a new subsidized handset since I’d already unknowingly locked myself into a two-year contract anyway.

However, operators are now starting to let customers change their rate plans without causing their contract terms to be extended. So, again, that problem appears to be resolved.

Speaking at the FCC meeting, Christopher Guttman-McCabe, vice president of Regulatory Affairs for mobile industry trade group CTIA, contended that removing ETFs from industry practice would also remove options for lower priced service and devices. In the absence of subsidies and related ETFs, “customers’ out-of-pocket costs are higher,” he said.

Similarly, CEI contends that long-term mobile contracts with cancellation fees “help more people afford a higher quality range of products.”

Yet Chris Murray, senior counsel, Consumers Union, argued that subsidies and ETFs don’t’ save consumer’s money. Instead, he said, they “rob consumers of the benefits” that an open marketplace would bring.

According to Murray, the average handset subsidy is only $14.33, but ETFs are more than 12 times that subsidy. Further, Murray termed the ETFs “junk penalties,” because operators bury expenses such as costs-of-acquisition, marketing costs and more in them, meaning the fees are not calculated based on the actual cost recovery related to a customer’s breach of contract.

On that note, I would argue that however ETFs are calculated or assessed, from a customer’s perspective, they’re usually cheaper than the full value of a service contract.

If ETFs are eliminated, then mobile operators in the US will probably reduce handset subsidization but continue to sign postpay customers to contracts. However, when a customer breaks such a contract, rather than making that person pay a $200 ETF, the operator would have to go after him or her for the value of the full remaining term of the contract. Let’s say Jane Doe decides to end her $50-per-month mobile service one year before her contract is up. That’s 12 times $50, or $600, that she owes the operator for the term of service. Hmmm…maybe a $200 ETF–or better yet, an even smaller prorated ETF–doesn’t look so bad after all.

Maybe it’s just me, but as a consumer, I’d rather pay $50 for a $400 handset and risk being charged a $200 ETF if I break my service contract than pay $400 for the same phone and then be hit with an even larger bill for the full term of my contract if I cancel it early.

 
 
 
 
There are lots of songs about the power of partnership: ‘It takes two’, ‘Let’s work together’, ‘I’d like to teach the world to sing’ - there’s three off the top of the Informer’s head. And any one of them could easily have sound-tracked the creation of handset OS collective Symbian ten years ago. But this week time was called on the alliance. And handset front-runner Nokia was probably rather more inclined to drain its glass of vino collapso, sling down its handbag and warble the lines from that staple of the girls’ night out, ‘I will survive’, while tracing unsteady, stilettoed circles on the dance floor.

The Finn bought out its partners - Ericsson, Panasonic, Sony Ericsson, Samsung and Siemens - on Tuesday, bagging the 52.1 per cent of Symbian that it didn’t already own. Simultaneously it announced the formation of the Symbian Foundation - which has the backing of Sony Ericsson, Motorola and NTT DoCoMo - which will make the OS available on an open source licensing model, along with Nokia’s S60 platform, Motorola and Sony Ericsson’s UIQ and DoCoMo’s MOAP solution.

The Foundation (which sounds a bit like a shadowy group of vigilantes) will be led by The Council of Ten (well, that’s what it would be called if they really were vigilantes). This comprises the top five handset vendors - Nokia, LG, Motorola, Samsung and Sony Ericsson - and five operators and silicon vendors; AT&T, DoCoMo, Vodafone, STMicroelectronics and Texas Instruments.

It made sense for Nokia to buy out the rest of Symbian, with analysts CCS Insight estimating that it laid out $250m in licence fees to its fellow stakeholders last year. But the strategy is more likely driven by increasing competition from the likes of LiMo, Google’s Android and Apple. The spread of backers in the Foundation does a fair old job of uniting the industry around a common platform - earlier this year, you may recall, Vodafone CEO Arun Sarin was calling for consolidation in the mobile OS space. And it prevents Symbian becoming a Nokia nom de plume, which might cause suspicion in the market.

CCS analyst Geoff Blaber had a few questions, though. Might management by committee prove more of a barrier than a bonus? And with the depth of Nokia’s vested interest, can the Foundation be truly vendor independent? As all journalists are taught to write on the first day of hack school: Only Time Will Tell.

In immediate response, there was consolidation within the mobile Linux arena. From the beginning of July, the Linux Phone Standards (LiPS) Forum will cleave itself unto the LiMo Foundation in a bid to unify and accelerate the development of Linux-based mobile platforms and specifications. A number of LiPS members have joined LiMo in recent times, leading the two organisations to conclude that they might be wasting resource by doubling their efforts.

In other Linux news, open source handset developer Openmoko has named the first five distributors for the consumer version of its touch screen Linux device, the Neo Freerunner. For the record, these firms are: Pulster, Golden Delicious Computers, TRIsoft, Bearstech and IDA Systems. The first three are German, the fourth is French and the last Indian.

The device uses a similar form factor to the Neo 1973, a popular hit earlier this year, with a 2.8″ VGA touch screen, A-GPS, 128MB of memory, a microSD card slot, Bluetooth and USB, as well as wifi and motion sensors and a faster 500MHz processor. It will come in two versions: a 850MHz tri-band and a 900Mhz tri-band and will ship with a basic developer platform. Subsequent software can be downloaded from the Openmoko developer site.

The Symbian buy-out not only saves Nokia a wedge of cash while defending its status as king of the smartphones, it will surely strengthen the Finn’s services strategy in the long term. A strategy that was bolstered this week with the announcement that the firm will acquire German ‘context-aware social activity service’ Plazes.

The service allows users to geo-tag a location with an invite or information, and then lets selected contacts know about it in a micro-blogging social networking Web 2.0 sort of way, further eradicating the need to actually talk to your friends. The Informer imagines a dystopian future where voice functionality on phones is considered as outmoded as the fax.

It seems likely the Finnish vendor will integrate the application with its own social networking offering, Mosh, as well as the Ovi platform. “This acquisition helps Nokia to accelerate its vision of bringing people and places closer together, in line with our broader services strategy,” blurted Niklas Savander, head of Nokia Services & Software in pristine business speak gobbledegook.

Another firm accelerating its vision this week was ISP AOL. The web giant’s UK business has announced a partnership with mobile content delivery firm WIN, which will see the ISP offer its wares wirelessly.

WIN will provide content aggregation, web and mobile portal design and ongoing service development and will also integrate mobile delivery of AOL’s instant messenger service (AIM).

Not to be outdone in the business speak gobbledegook stakes Chris Locke, director of mobile at AOL Europe, said: “AOL strives to offer our users a compelling mobile experience; we want to continue to enrich the web to mobile experience and attract new mobile users through attractive, made for mobile content.”

One firm resolutely staying out of the services space is Motorola which this week unveiled its latest device. The MotoZine ZN5 is Moto’s first camera-centric phone. The firm has teamed up with Kodak and the device supports the camera specialist’s web and PC services. Users will almost certainly resort to uploading their images at home though because the terminal is only EDGE.

Sony Ericsson must be bricking it.

Ovum’s Adam Leach and Martin Garner were upbeat though, saying: “If this is the shape of Motorola’s strategy for a refresh of its entire portfolio, then it could well be the start of its recovery.”

Why no 3G? Who knows? It is certainly bucking the trend. European 3G WCDMA subscriptions passed the 100 million mark at the end of May according to the Informer’s analyst chums. Still, there ’s a long way to go, five years after the region’s first commercial WCDMA network launch penetration only sits at 11.1 per cent.

Not surprisingly, Western Europe leads the way in terms of 3G subs. Informa Telecoms & Media reckons Central and Eastern Europe will break into double figures by early 2011.

As the makers of femtocells read this news they might want to consider packing their best Gucci and Armani power suits because Italy accounts for a quarter of Europe’s WCDMA subscriptions and has one of the highest 3G penetration rates at 28.7 per cent.

Why will they want to go to Italy? Well, because 3G in building coverage is rubbish apparently, and when it’s not rubbish outdoors so many people will want to use data hungry services that the networks will get over loaded. That’s the femto sales pitch see, the Informer knows because he went to see femto vendor Airvanna in the week.

He can confirm that watching YouTube on his phone via the femtocell yielded a first rate user experience. However, why he’d want to sit at home watching YouTube on his phone is beyond comprehension. Still, according to analysts at ABI Research, an estimated 40 per cent of European users might be making a femtocell purchase within the next year, this despite the fact that the majority of consumers would look blankly at you should you utter the word.

On Monday, femto vendor ip.access introduced a 3G Home Routing technology that connects 3G phones to a home network via a femtocell. ip.access claims the technology will make way for a new wave of applications such as streaming live video from a home media server to the handset, using the phone to browse the music on the home server and select tracks to play, or displaying a slideshow of phone photos on the TV.

All well and good for the digital home, but not all commentators think it will be that easy. Dean Bubley of Disruptive Analysis recently released a report which predicts that beyond the ‘femto 1.0′ business models, which work on the selling point that femtos work flawlessly with existing handsets, devices will need to be revised.

Bubley argued that if the phone will be used differently, it needs to be designed differently as well. “Standard phones can work with femtocells, but they are not optimised,” he notes. “The phone needs to be ‘aware’ of the femtocell, ideally both in the radio and the application platform.”

Meanwhile, back with our feet firmly on terra firma US MVNO Virgin Mobile is going toe to toe with the incumbent operators by introducing a flat rate calling plan for prepay subscribers.

The plan is called, like, Totally Unlimited. For $79.99 per month it, like, totally lets customers talk as much as they want to nationwide numbers, and for an extra ten bucks more per month, users can add Unlimited Text & Messaging. The Informer hopes for Virgin that the offer isn’t too unlimited.

Speaking of tariff-based malarkey Super-Viv’s been at it again. Commissioner Reding, the EU telecoms minister has proposed yet more measures to drive mobile phone charges “down, down, down”, as the man in black might have said. The EC has initiated a public consultation on the future regulation of mobile voice termination rates, which Viv reckons can come down by as much as 70 per cent.

Currently these charges are managed by national regulators and thus range enormously - from Euro0.02/minute in Cyprus to Euro0.18.minute in Bulgaria. Overall, mobile termination rates are nine times higher than fixed line charges. This distorts competition from country to country, Reding said, and makes for an uneven playing field for the fixed carriers. Not to mention unreasonably high costs for the blessed consumer, in whose name all of Reding’s crusades are carried out.

The Informer was due to cover a different story at this point but it was so boring that he fell asleep with his eyes open just reading it. So, instead we have the following news about The Waves!!! Dutch researchers have identified “potentially hazardous” effects on hospital equipment exposed to RFID technology. You can read the details about it here.

The thing about it that caught the Informer’s eye is that they apparently use RFID to track patients. Eh?

Surely there are only two types of patient that require RFID tracking: the elderly ones who’ve lost their conkers and think all the doctors and nurses are their children and the ones who have turned their toes up. I suppose you could use RFID to track the remains of all those people who cark it because RFID technology buggered up their life support. That would make for a neat case study.

Anyway, by way of a wrap-up, the Informer would like to apologise wholeheartedly to the Dutch nation. In this very newsletter last week he voiced his support for the Dutch football team and they promptly flopped out of Euro 2008, beaten by the Russians. This has been a theme of the Championships for the Informer. Every team to which he has pledged allegiance has been knocked out. So apologies to Croatia, Turkey and Russia as well.

So on this coming Sunday evening, having taken note of this alarming trend, the Informer will take a seat on his sofa, with a can of Becks and a bratwurst and throw his weight well and truly behind THE GERMANS!

Auf Wiedersehen

Das Informer

 
 
 
 
With mobile TV services in the flagship market of South Korea floundering and with few signs that operators anywhere else have found a successful formula for launching such services, most operator and vendor delegates at the recent CommunicAsia Summit in Singapore struggled to find enthusiasm for the fledgling industry.

The key question is which business model will work best for commercial mobile TV services, and the industry does not seem anywhere close to coalescing around an agreed model.

Some operators and vendors say that mobile TV should be subscription-based, to offer a reliable revenue stream; others say an ad-supported model is the most viable option; and still others argue that a combined pay/advertising approach is the way forward.

Figures from South Korea seem to suggest that both pay-based and ad-supported models have critical weaknesses, which would also apply in other markets in the region. A lot more experimentation and creativity from operators might be required to find the right model.

Those promoting the idea of a pay-based service say that only by charging for content can a business model work. They say operators must team up with content firms to acquire premium content - most particularly sports - that people will be willing to pay a monthly fee to view or even pay for on a per-view basis.

But this line of thinking seems flawed, given that there is a limited amount of blue-chip content for which people will be prepared to pay, most notably live sports events - such as English Premier League soccer games - or highlights of them.

The problem is, of course, that content-rights holders have become adept at exacting a premium price for key sports rights, meaning that mobile TV operators would have to recoup their heavy capital investment by charging high subscription fees.

This is a problem, since the high churn rate experienced by TU Media in South Korea seems to suggest that mobile TV subscribers are extremely price-sensitive.

TU Media subscribers pay just KRW13,000 ($12.60) a month for the service but have been leaving in droves after their initial one-year contracts finish, forcing the firm to offer significantly reduced subscription rates to keep subscribers from deserting the service.

TU Media’s experience suggests that mobile TV subscribers will be willing to pay only so much for services and that although blue-chip sports content has a crucial role to play, operators must find a way to acquire the content without paying excessive prices.

On the advertising side of the debate, many delegates at CommunicAsia argued that an ad-based strategy would work best for mobile TV platforms but that operators would have to be extremely creative in their approach.

Delegates uniformly agreed that the idea of transporting the traditional TV-advertising model to mobile was deeply flawed and that mobile TV operators would not be able to sell regular 30-second ad spots on mobile TV services, given the different nature of the platform.

One senior mobile operator executive said that he was skeptical of the ad-supported model, because mobile TV users tend to watch only 10-15 minutes at a time and it would be hard for operators to interrupt that short window with advertising without disrupting the user’s experience.

But other delegates, including those from both operators and vendors, were more hopeful that a successful advertising model could be built, though the consensus was that ads would have to be shortened to suit the mobile TV viewing experience and that they would have to be carefully targeted at specific user groups.

These are both valid points, but the elephant in the room is the fact that many mainstream advertisers are skeptical of mobile TV as an advertising model - and some might not be aware of its existence at all - meaning that mobile TV operators will need to work closely with media buyers and ad agencies to craft their message.

This might mean offering heavy price cuts in the short term to persuade advertisers to seize the unique opportunity to reach users that mobile TV advertising offers and then trying to turn these advertisers into long-term customers.

There is no magic bullet that will provide a successful business model, but there seems to be a reasonable possibility that an attractive model can be built if operators can match the largely young and technology-friendly subscribers viewing mobile TV on their handsets with advertisers desperate to reach such a market.

Intriguingly, conference delegates also discussed the possibility that broadcast-type mobile TV services might never fully take off in the region and that Multimedia Broadcast Multicast Service video streaming over high-speed HSPA and future LTE networks would dominate the market.

The debate has strong proponents on both sides. Many vendors back an MBMS approach, saying that experience shows that broadcast-style services are not what users are demanding and that the more-narrowly targeted VOD-style content being offered on HSPA networks is already proving hugely popular.

The pro-MBMS argument also runs that with HSPA/LTE networks already in place and offering voice, data and video services, why go to the expense of deploying a terrestrial or satellite-based mobile TV network, especially with the expense involved in creating high-quality in-building reception?

Although this is a persuasive argument, it has shortfalls, most notably the fact that even LTE networks will still be point-to-point networks and will be unequipped to operate as point-to-multipoint services, which a full broadcast mobile TV service would require.

The broadcast-mobile-TV lobby argues strongly that the core strengths of broadcast-based networks cannot be replicated by even high-speed mobile networks, which would not be able to support the huge demand that’s sure to arise for broadcasts of live sports and important news events.

In reality, the MBMS-vs.-broadcast-mobile-TV debate is spurious, given that both technologies are going to be on the market, and it will be users who determine which is the more successful.

At this early stage, it looks likely that subscribers and operators will use high-speed, quality video streaming for VOD-based “snacking” on content and that full broadcast mobile TV will be used for some live events, for which only a broadcast-style service can supply the quality of service required.

 
 
 
 
Telecoms professionals are split down the middle on whether increasing bandwidth demands are likely to break the internet.

According to a survey of 372 industry professionals, carried out by research firm IDC at the NXTcomm08 conference in Las Vegas this week, of the 51 per cent who see trouble ahead, one in four think it could happen within two years.

Inline with recent media coverage, video is seen by the industry naysayers as the biggest bandwidth hog, with 43 per cent of respondents believing that up to 30 per cent of overall internet traffic is video today, while 40 per cent expect that to increase to up to 75 per cent in five years.

The survey respondents speculated a similar fate for mobile data, with 50 per cent saying that video puts the biggest bandwidth demand on mobile networks today, while 81 per cent believe that will still be true in five years.

“The findings of this survey make it very plain that bandwidth is not infinite,” said Lee Doyle, group VP and general manager for Network Infrastructure and Security Products and Services at IDC. “Unless there is sufficient investment into new infrastructure, the increased bandwidth demands of new advanced services could well outstrip capacity.”

Controversially, of the 80 per cent who identified a way to deal with internet congestion, 32 per cent think providers address spikes in traffic by prioritising via packet inspection, while 24 per cent believe that spikes are better handled by charging more for excess bandwidth.

The survey was commissioned by telecoms kit maker Tellabs.

 
 
 
 
PCCW Chairman Richard Li must have been out of the business pages for at least six months, so it was only a matter of time before he came back to dominate the headlines once again.

Already well known in the region for being the son of billionaire Li Ka-shing, head of the Hutchison Whampoa investment group, Li has become one of the highest-profile investors in the region since his Pacific Century CyberWorks (PCCW) outfit paid $28 billion to Cable & Wireless to assume control of Hong Kong Telecom in 2000.

After a period of relative quiet, Li is back in the news, with a grand plan to consolidate the media and telecoms assets of PCCW into one firm, HKT Group Holdings, of which he would sell 45 per cent to new investors and possibly move toward an IPO in a couple of years.

PCCW is inviting proposals from investors interested in the 45 per cent stake, with local reports saying the deal has already drawn interest from international players, including several mainland companies, though private-equity players are reportedly shying away from the deal because it does not given them a controlling stake.

The proposed deal has already created a storm of publicity, given that Li’s previous attempt to sell a stake in PCCW two years ago created a furor and ended in abject failure.

In 2006, Li tried to sell PCCW to private-equity firms TPG-Newbridge and Macquarie Bank, only to have the deal blocked by China Netcom, which owns 20 per cent of PCCW. Netcom nixed the deal after its mainland-government backers refused to countenance the sale of PCCW to foreign owners, and Netcom was upset that Li had invited bids for PCCW without obtaining its consent.

The bad blood has almost certainly cost Li the chance to get a slice of any media or telecoms opportunities that emerge in the mainland any time soon, though PCCW says the latest deal has received the approval of Netcom’s directors.

The misery of the TPG-Newbridge/Macquarie Bank deal’s failure was compounded by the rejection by shareholders of an alternative deal, in which Li would have sold his 23 per cent stake in PCCW to long-time family associate Francis Leung for $1.17 billion.

The new deal on the table does not involve the dilution of Li’s stake in PCCW, and he has already told local press that he has “no intention” of reducing his stake in the firm.

The thinking behind the newly proposed deal seems to be that selling the stake in HKT would “unlock the value” of the firm’s assets and generate a cash pile with which PCCW could compete for any telecoms assets that became available in the international market, most notably in Asia Pacific and the Middle East.

Li has already said that the global credit crunch has reduced the prices being asked for global telecoms assets, making M&A activity more feasible for the firm.

But despite Li’s optimism, it looks like PCCW might be trying to hunt big game armed with only a pistol if it tries to take on the big boys in the cutthroat international M&A market, given that most analysts say that the 45 per cent stake in HKT would raise only about $3.7 billion.

Considering that Indian operator Reliance is having to stump up about $45 billion for South African firm MTN Group, PCCW will have to shop in the cut-price stores, not the high-class boutiques, if it wants to play the M&A game.

To be fair, PCCW does bring a lot more to the M&A table than some of the pure private-equity investors, whose cold, hard cash has limited appeal to some regional telcos on the block, which crave the expertise and brand power that an alliance with Vodafone or Hutchison could bring.

PCCW has one of the best quadruple-play offerings on the planet, with 2.6 million fixed-line telephony subs, 1.23 million broadband subs, 1.07 million mobile subs and 882,000 customers signed up to its world-class IPTV service.

The firm has built a magnificent network platform and is expert at getting the most out of converging communications networks - traits that other operators around the region would be eager to get their hands on.

However, although PCCW does have a great story to tell, it does not bring to the table the kind of market scale that other telcos, such as Vodafone, Hutchison and SingTel, can. That is where PCCW’s lack of focus on developing any kind of serious regional M&A strategy in the years just after the 2000 acquisition of HKT has really come to haunt the company.

The $28 billion megainvestment in HKT, followed by the dotcom crash and 90 per cent drop in PCCW’s share price, took the financial wind out of the company and rendered it a mere spectator as regional rivals SingTel, Telekom Malaysia and Indian operator Bharti Airtel were busy getting in on the ground floor of the regional mobile market.

PCCW has created a truly impressive product in its home country, but the limited Hong Kong market can never give the firm the kind of growth it needs to be a serious player, especially since the golden doors to mainland China treasures have remained firmly closed.

As a result, PCCW is going to have to be extremely creative if it wants to be a serious M&A player, and it might have to team up with a bigger force in the market if it wants to share some of the few spoils that are left globally.

 
 
 
 
My God, it’s been so quiet this week you could have heard a Trappist monk complaining about a pin dropping onto a sponge. “Ripe was the drowsy hour,” as Cockney-John Keats wrote; the summer lull looks to have begun a little ahead of schedule this year, with only a few entities poking their heads above the news parapet.

Sony Ericsson was one, offering a hair of the dog to anybody nursing a hangover from last week’s iPhone knees-up. On Tuesday the JV vendor sent its summer collection tottering down the catwalk, with the 8.1 megapixel C905 Cybershot leading the way. In tow was the F305 - a games-centric piece with Nintendo Wii-esque motion sensors on board - as well as a couple of entry-level Plain-Janes trying to dodge the flash-gun glare.

Still, the firm’s been bulking out at the mid- and low-tier levels of its portfolio in an effort to grow volume - particularly in emerging markets - and make a bid to reclaim the fourth spot that it ceded to LG earlier this year. And it will have double the motivation to oust LG, now the latter has lured Sony Ericsson’s global director of brand away with its Korean siren song and, presumably, a fattened wallet.

Andrew Walker is now marketing director for LG UK and Ireland and had this to say about the move: “LG [has] the potential to become a leading brand in this market. The exciting challenge of building a marketing team capable of realising that potential was too attractive to turn down. In this role, I will be looking at making our brand approach coherent and consistent - shedding the cliches of technology communication to focus on being accessible, aspirational, distinctive and relevant to people across the UK and Ireland.”

On reading this the Informer was moved to scratch his head. Perhaps Mr Walker had drunk deep from the well of irony, he thought. For how can you shed cliches and still look to focus on being “accessible, aspirational, distinctive and relevant”? It’s a bit like Gordon Ramsey calling a press conference to announce that he’s taken the decision to stop f*!%ing-well swearing.

It was testament to how sleepy a week it has been that there was significant press hoo-ha over some throwaway comments made to the Financial Times by the EU telecoms commissioner, Viviane Reding. In her latest campaign, Big Viv’s going after the termination rates that operators charge one another to complete off-net calls. True to form, some operators have privately harrumphed that they will just have to hike their call charges to compensate. On being asked by the FT whether this might lead to the introduction of a called party pays element to European pricing, Reding said it was up to the operators but that she had no objections in principle.

So it was jumped upon, and headlines screamed that Europe would be getting called party pays - where consumers have to pony up a charge to receive incoming calls. If the Informer were a gambling man he’d have a nifty fifty on the sure thing that this will never happen. If mobile operators were suddenly to announce to their customers that they were going to have to pay to receive calls there’d be uproar. There’d be outrage. It would go down, as the Informer’s dear old Granddad used to say, like a cup of cold sick.

Meanwhile, in other price fixing news, ahem, carriers in the Philippines have been fined a total of $8.3m for price fixing on text messages by the nation’s anti-monopoly agency. And those guys do love to text.

One thing the Informer has noticed as he scurries through London town is that UK operators have hit on a different way of cutting costs. It’s actually been around a while but there’s a big push on at the moment for SIM-only contract tariffs. And this week, MVNO Virgin Mobile released calculations it had made suggesting that UK consumers could save a collective total of £849m by opting for SIM-only tariffs.

The Informer spoke to Virgin and Vodafone this week after he saw this research and both operators trotted out the regulation blah about ‘choice’, ‘value’ and ‘flexibility’. But surely this is all about slashing subscriber acquisition costs by cutting out handset subsidies? Virgin reckons SIM-only is the fastest growing segment of the contract market over here in the UK but neither operator was willing to disclose the differential in acquisition costs between handset and SIM-only customers.

It could be, as Ovum’s Stephen Hartley suggested, that it also serves as a useful bridge between prepaid and full contract services, as SIM-only offerings tend to have a 30-day notice period. Hartley reckons that this could help woo commitment-shy pre-payers onto a contract from where they can be bombarded with enticements.

You’ve got to wonder what the handset vendors make of this - after all, Virgin found that 60 per cent of people surveyed would sooner keep their existing handset and bag a lower monthly tariff. If that translated into a commercial truth we could be looking at serious damage to handset shipments. Anyway, you’re going to have to keep wondering, as none of the handset vendors contacted by the Informer this week were willing to offer a comment on SIM-only and how they feel about a likely slow down in the upgrade cycle.

Nonetheless, the Informer will be looking into this a little bit more so he’d like to hear from anyone who has a view on the issue. SIM-only in emerging markets makes a lot more sense, so we’ll be focusing on the popularity of the strategy in saturated, developed markets. Is it going on anywhere near you? Let us know.

While we’re on the topic of research commissioned to prove a point, let’s have a look at a couple more items - it’s been a quiet week after all. First up, this old fluff from BT: The “latest figures” according to the press release sitting in front of the Informer show that office workers in the UK now see less sunlight each day than coal miners. This terrifying reality is being used by the carrier to urge corporate managers to let their drones work remotely through the magic of BT’s wireless hotspot network. Being outside and in the sun will make people happier and therefore more productive, says the frayed, hopelessly optimistic thread running through this release.

Let’s delve into this claim a little. First off, most British coal miners are now retired because the majority of mines were shut down by the Iron Lady. For all the Informer knows, these ex-miners now sit outside, basking all day long, so the comparison is meaningless. Second, this is the UK, people; there’s bugger-all sunshine anyway. Third, and most important of all, if you suddenly put a gaggle of UK desk-jockeys in the sun, they’ll blink in surprise for a couple of seconds and then they’ll go to a pub. Beer sales - not productivity - will go up.

Right, onto Mobyko, an online back-up facility for mobile data. The firm has created the ‘Mobilator’, an online calculator that enables anyone with too much time on their hands to generate a spurious ‘value’ for everything that is stored on their phone; contacts, text messages, pictures, audio, games and the rest. This calculator works on the following formula, devised, apparently, by a professor at University College London in conjunction with Mobyko:

X = St x T + Sv x V + Sc x C + Sp x P + Sm x M + Sg x G + Vm + W

At least Mobyko didn’t try and give any real weight to this frippery, joshing that “those of us not well versed in applied mathematics” should visit the site and try the application out for themselves. The thrust of the thing is that the firm is trying to persuade users to attach a monetary value to the content on their phone in an attempt to panic them into paying to keep it safe.

In the interests of thorough research - and because he had far too much time on his hands - the Informer tried it out, and found that there was £250 worth of content on his phone, including some unsolicited smut-spam.

(A quick aside here: The Informer’s mobile contract is up and he’s jumping ship from his current provider. On calling the operator to find out how long was left to run, and to inform a staff member of his impending departure and allow them the chance to talk him round, the Informer was made an offer. “I notice that you have a content bar on your account that stops you accessing adult material,” said the customer service monkey, before offering to remove it so that the Informer could spend the last month of his contract in bacchanalian consumption of barely discernible, low-grade bongo. How’s that for customer retention?)

Back to Mobyko, though. The funny thing about the service, if our content really is that important to us, is that even if you back it up, it’s not safe. Something could go wrong at the Mobyko end, or the firm could go out of business. Presumably, in this scenario, those users who have been persuaded that this insurance scheme is necessary would get the value of their content back? If it’s that valuable, eh? Let’s have a quick look at the Ts and Cs:

“It’s important to note that using the Internet has its dangers…We can’t be held responsible for any damage, loss or corruption of any data, information or material.

We are not responsible for any loss, claim or damage including but not limited to lost profits, lost savings or revenue, or loss or corruption of data or information or any indirect, incidental or consequential damages of any kind which arise out of or are in any way connected with your use or misuse of the Site even if we have been advised of the possibility of damage. Your use of the Site includes your use of information, products or services obtained through the Site.”

Righty-ho, then. If it matters that much, everybody, back it up yourself.

Perhaps Japanese carrier NTT DoCoMo worked out a similar formula for its purchase of a 30 per cent stake in Bangladeshi mobile carrier TM International. DoCoMo paid $350m for the stake, part of a renewed drive towards international expansion. Such strategies haven’t exactly reaped splendid reward for DoCoMo in the past but, after a period of introspection, the firm’s ready for another pop. In an interview in Singapore this week, according to Bloomberg, Toshinari Kunieda, DoCoMo’s SVP for Global Business, expressed an interest in the MEA region and revealed that early stage talks are going with Qatar Telecom, Emirates Telecommunications and Saudi Telecom.

Out in the Netherlands there’s been a party spirit this week; celebrations all round and fervent expressions of optimism. Not just because we might be witnessing the beginning of a return to the glorious Total Football that is characterised by the Dutch national football team but because, for sure, the WiMAX Forum threw its first ever Global Congress in Amsterdam. And there was more WiMAX news than you could shake a wobbly business model at.

It’s not often a keynote presenter, speaking at a trade show conference, draws widespread laughter from his audience. But this is exactly what happened in Amsterdam this week, when Barry West, Sprint Nextel’s CTO, spoke at the WiMAX Forum’s first ever Global Congress event.

With admirable comic timing, he called the claims made on behalf of LTE (the would-be WiMAX nemesis) as - and prepare to guffaw loudly - “PowerPoint propaganda”.

Picked yourself up off the floor yet?

OK, so maybe it’s not Comedy Store material but anyone who can get a laugh from a telecoms conference audience has the Informer’s respect.

West was, of course, preaching to a crowd of converted WiMAX sympathisers. LTE is the enemy and they want to laugh at it. But West had a point. LTE is only experimental at this stage and talk of 100Mbps to individual users, outside lab conditions, does sound fanciful.

The good news for WiMAX supporters is that West announced in Amsterdam that Xohm, the mobile WiMAX business unit of Sprint Nextel and flagship mobile WiMAX player, would start commercial service in September in Baltimore. Commercial launches in Washington DC and Chicago are scheduled during Q4 2008.

Xohm was originally slated to launch in April this year - a date presumably flagged up in more than one PowerPoint presentation - so failure to meet this new deadline would be embarrassing in the extreme for the WiMAX crowd. If another delay did happen, though, perhaps it would give any comedy-minded LTE supporters the chance to turn the tables on Barry West and think up some jokes about WiMAX.

How about this: What is the favourite song among WiMAX supporters? I don’t know, what is the favourite song among WiMAX supporters? Go West. (I thought it was WiMAX Love? - Ed.)

The other significant announcement at the Global Congress was the declaration by the WiMAX Forum that the first batch of 2.5GHz mobile products had been certified (which should ensure interoperability). A total of ten products from eight suppliers have received the thumbs up from the WiMAX Forum in this frequency band (which is also used by Xohm).

And there was some good news for WiMAX operators using the 3.5GHz frequency band, some of whom had been getting a bit antsy. Testing for 3.5GHz mobile products is scheduled for 3Q 2008, the Forum promised, with certification planned for the following quarter. The 3.5GHz licence holders have often felt aggrieved that the WiMAX Forum, in their opinion, has prioritised 2.5GHz certification over 3.5GHz certification. If the WiMAX Forum can deliver on its 3.5GHz schedule, then it should make future meetings of WiMAX Forum members a little more amiable.

Anyway, come on the Dutch!

Take care

The Informer

Now we know. After weeks of speculation as to when Xohm, the WiMAX business unit of Sprint Nextel, would launch commercial services, Barry West, Sprint Nextel CTO and president of Xohm, finally named the month (if not the day).

Addressing conference delegates in his keynote presentation Tuesday at the WiMAX Forum Global Congress in Amsterdam, he said the first commercial Xohm service will start this September in Baltimore. “Mobile WiMAX services will follow in the Washington DC and Chicago markets during Q4 2008,” he said. “We’re already looking at other markets to launch after that.”

West says that over 575 Xohm WiMAX base station sites are on air, with a number of devices going through its own testing labs. “It’s the only [communications] technology I know where the chipset evolution for devices is going faster than the infrastructure,” he said. Talking to telecoms.com, West added. “The access devices available at launch will include a Samsung AirCard, a modem from ZyXEL, a ZTE USB dongle, the Nokia Internet tablet [N810]”, and Intel inside laptops. Others will follow.”

The original Xohm target for commercial launch was April 2008. One of the reasons publicly cited by Sprint Nextel for not making the April launch was lack of backhaul capacity. That problem has now been resolved, says West. “As we’ve sorted out the logistical issues with site deployment, we’re getting much better at securing backhaul capacity through fibre-optic and microwave links,” he says.

West also reports that Xohm’s back-office systems, responsible for billing and customer management, are nearly ready. “I’m probably two months behind where I thought I would be [on the back-office] but we are testing the software now [primarily from Amdocs] and we are very pleased with it. We can now activate a device over the air under five minutes and set up a billing relationship with the customer.”

The distribution of non-subsidised WiMAX-embedded devices through independent outlets is a key part of the Xohm business model, as is billing for customers rather than devices (the prevalent business model in the cellular world). West wouldn’t reveal any details of Xohm tariff packages in Amsterdam other than to say they would be simple to understand.

As anticipated, West poked fun at the high data-rate claims made by LTE supporters and those that branded WiMAX as a niche technology. “If its niche then it’s a global niche,” said West, referring to the fact there are now over 300 WiMAX deployments around the world.

One of the main weaknesses of LTE compared with WiMAX, argues West, is the lack of a developed chipset ecosystem. WiMAX has 23 chipset vendors while LTE chipsets are dominated by one or two companies. “LTE could wither without multiple chipset vendors,” says West.

West believes LTE will not be rolled out in any significant volumes until the 2012-13 period as operators, who have already invested a lot in HSPA, hold back on 4G investment.

Research from security specialist Unisys suggests that consumers remain wary of using their mobile phones as payment mechanisms, driven by concerns over security. Of more than 13,000 mobile subscribers from 14 countries surveyed in March, 71 per cent said that they would not consider using a mobile device to bank or shop online.

Scepticism was highest in France, where 86 per cent expressed their reluctance, while residents of the UK (79 per cent), Australia (78 per cent), Belgium and Italy (both at 77 per cent), and the US (71 per cent), revealed themselves to be extremely cautious towards the concept of mobile payments.

The research also revealed that 59 per cent of the sample did not trust in the security of mobile device for financial services, while only nine per cent of the total base had ever made mobile transactions of this nature. This figure was lowest in the UK, where only one per cent of respondents had used these services.

The survey of German users revealed yielded a more positive outlook. Twenty-one per cent of German respondents currently use a mobile phone or personal organiser to conduct financial transactions, representing the highest percentage of any country or region included in the survey.

Survey results suggested that users are far more willing to trust banks for secure financial transactions than they are to rely on network operators and online retailers, although there were variations region to region. Italians, for example were almost twice as likely as Malaysians (72 per cent to 38 per cent) to trust a bank to secure a mobile transaction.

“Despite unprecedented growth in the number of cell phone users and the advancement of mobile technologies, telecom providers, online retailers, and financial institutions seem unable to convince consumers worldwide that a secure platform exists for conducting online mobile transactions,” said Tim Kelleher, vice president of enterprise security at Unisys. “There is a great deal of money to be made in mobile payments, but only when consumers believe that the security of the transaction meets or exceeds the freedom of using mobile devices.”

Unisys argued that these responses indicated a need for further collaboration between the financial and telecom communities. “The fact that consumers trust banks more than others to secure mobile transactions bodes well for the financial-services industry,” Kelleher said. “But banks must still find ways to work alongside telecom providers and retailers to leverage their innovation while educating consumers on the realities of mobile banking and payment security. Collectively, they must prove that conducting a financial transaction via a mobile device is as secure as doing so on a desktop computer or in front of a bank teller at a local branch.”

 
 
 
 
At a recent industry event, a number of executives trotted out the latest variation on that old maxim of the telecoms industry: “Customers don’t really care about technical details; they just care about what technology can do.” In this instance, it was applied to broadband speeds: “Customers don’t really care that our network can’t deliver 8Mbps speeds, they just care that it allows them to access YouTube, Facebook, etc.”

Unfortunately, history has shown time and again that customers really do care about the technical details, particularly when they have been mis-sold. Anyone remember the satisfaction of surfing the BT Cellnet? Were you pleasantly surprised by the first generation of 3G phones?

Yet, several years on, few operators can resist overhyping their services. As outrage over “up to 8Mbps” DSL reached its peak in the UK, several mobile operators began marketing mobile broadband services promising speeds of “up to 3.6Mbps”. Vodafone even marketed a service offering “up to 7.2Mbps”, until it was forced by the Advertising Standards Authority to drop the claim after rival operator 3 complained that the actual download speed experienced by customers was 6.6Mbps.

Even so, it seems unlikely that many customers will even be able to experience that speed. I’ve been trialling an “up to 3.6Mbps” mobile broadband service from 3 for some weeks now and have never seen speeds pass 1.4Mbps. Most of the time they linger around 600Kbps, occasionally dropping down to dial-up rates.

On one level, it is understandable that operators have a history of being slightly vague about the technical details. Long before their products reach the market, vendors are busy hyping the capabilities of the technologies the services will rely on. Perhaps after years of disappointment, the operators cannot bear to print what their services can actually deliver on their marketing material.

This is a shame, because focusing on the technical details is one area where operators can truly excel. After years of failed attempts to become content players, fixed and mobile operators should realise that their true calling is to provide quality connectivity.

That is not to say that DSL operators should radically redesign their networks or that mobile operators should build new cell sites on every corner in order to deliver the headline speeds they promised in the first place. Rather, they should be transparent and manage consumers’ expectations, because, frankly, they have set the bar far too high.

Some positive steps have already been made in this direction. I know, for example, what speeds the 3 mobile broadband service I have been trialling has delivered because it features a software client that logs them for you. The client also keeps track of how much data has been transferred over the connection, which helps users to avoid exceeding their monthly download caps.

On the fixed-line side of the market, UK ISP PlusNet enables subscribers to access an even more detailed breakdown of their usage via an online tool. The BT-owned ISP also offers all comers an insight into traffic on its network and how it is managed on its customer-support pages.

What’s more, PlusNet provides a glimpse into how more mainstream ISPs might use the concept of quality connectivity to increase ARPU and reduce churn. The ISP markets a quality-assured service aimed at online gamers, which, at £19.99 (US$39), costs twice as much as its entry-level broadband package. It is not fanciful to imagine consumers may be willing to pay more for services that bring the same level of quality assurance to online video, particularly as the resolution and frame rate of services grow.

Regardless of the future opportunities, UK ISPs have a number of pressing reasons to start thinking about how to offer quality connectivity.

First, most have signed up to a code of conduct to inform customers of the true broadband speeds they are likely to get. Second, a wide variety of groups, from hobbyists to consumer media to Ofcom, are performing their own research on speeds, using a variety of means.

Third, even BT’s own lab tests seem to suggest that services on their next-generation ADSL2+ network will disappoint, with only half of homes covered able to access the 8Mbps speeds promised by the first generation. Given that the unbundled networks of BT’s rivals use the same copper infrastructure, its seems likely we will see similarly disappointing rates from their services.

ISPs should use this period of transition to think carefully about how they can set more realistic expectations about headline speeds, while working out ways to go above and beyond the letter of Ofcom’s code of conduct. From now on, their motto should be: “Customers really do care about the technical details, because it lets them know what they can do.”

 
 
 
 
This week we’re going to play a special version of the classic TV quiz show Going for Gold. Contestants must correctly identify what the show’s guest host, the Informer, is describing: Fingers on your buzzers.

“What am I?” asks our host, “In many cases, I contain elements of the original story, often with the same characters and settings. I can lead to a series, in which key elements appear in a number of stories. Although, the differences between more than one version and a series is often somewhat arbitrary.”

BZZZZZZZZZZZ! - Ed Zander, former head of Motorola. “Are you the RAZR?”

“No. I’m afraid not Ed, it’s back to the golf course for you, you’re out of the game.

“I’m attractive to my creators because there is less risk involved in returning to a story with known popularity rather than developing new and untested characters and settings. Audiences are sometimes eager for more stories about popular characters or settings, making my production financially appealing.”

BZZZZZZZZZZZ! - Steve Jobs, current head of Apple. “Are you the iPhone 2.0?”

“No, sorry Steve, I’m shamelessly cribbing the Wikipedia entry on sequels.”

They’re a tricky business, sequels. Great sequels are few and far between, the Empire Strikes Back, the Godfather Part 2, Seriously Dude Where’s My Car? - the list, frankly, doesn’t go on. It’s tempting to revisit the success of a debut offering when serving up round two. Everyone gets exactly what they’re expecting and thanks to the original’s success they don’t disappoint at the box-office. However, they can leave people feeling a little bit cheated and ultimately a little bit bored.

On Monday this week Apple unveiled the iPhone 2.0. In fairness to Jobs et al a majority of the concerns regarding the original have been addressed. The retail price point has come down, it’ll come with both HSDPA and GPS and it will be available in 22 countries on the launch date of July 22nd, consequently it will sell like proverbial hotcakes. Even though - and as the Informer writes these words he is shaking his head like Bill Murray in Groundhog Day - there are loads of technically superior handsets on the market. (Feel free to write in to tell the Informer why he’s wide of the mark, and how the iPhone’s UI sets it head and shoulders above its rivals).

OK, you’re reading this, so you’re probably interested in telecoms, so you will have already read umpteen iPhone stories this week. If you’ve just got back home from holidaying somewhere blissfully remote, like the Moon, or have a chronic memory loss condition, you can check out the finer details about the gadget and some of Apple’s other mobile news here and for further analysis of the OEMs’ reactions to the first iPhone try this for size.

In a PR move fooling no one South Korea’s Samsung officially launched another iPhone-a-like device, the Omnia, practically 24 hours ahead of the Apple terminal’s Californian unveiling. The Omnia is sleek and shiny, it’s got a big touchscreen and it’s got a 5 megapixel camera with, get this, ’smile detection’. It’s a Windows Mobile device and if you clicked on the link above you’ll have seen that it bears more than a passing resemblance to all the other iMetoo devices on the market. In Latin Omnia means ‘everything’, while in Arabic it means ‘wish’. In English it means bugger all, because everyone will still want an iPhone.

The ‘iPhone effect’ is being thanked by some for the rise in mobile data usage. Maybe the device has helped raise consumer awareness a smidgen, but the Informer reckons, in the main, that we have dongles to thank for the rise in mobile data consumption. Last week the fortune tellers at Gartner suggested laptops would soon be shipping with embedded 3G capability, and the Informer thought we might be witnessing the dongle death knell. Thankfully, it looks like the comically named peripheral has been granted a reprieve, for now at least. Price comparison site Top 10 Broadband has been tipped the wink that operators will soon been sweetening their mobile data packages by attaching dongles to the deals. Not only that, the website suggests mobile will displace fixed line internet in just two years.

Backing up the ‘mobile broadband everywhere’ theory are some new  statistics released by mangement consultant AT Kearney. The EU’s mobile data market, excluding text messaging, grew by 40 per cent to Euro7bn in 2007. A sour note for carriers comes in the shape of a 25 per cent reduction in the cost of data for roaming for consumers. Tom Philips chief government & regulatory affairs officer at industry lobby body the GSM Association reckons prices are coming down thanks to market forces.

The Informer thinks prices for consumers will continue to fall, or at least be forced to fall, if Viviane Reding and her army of meddlesome Eurocrats get  their collective way. Which, let’s face it, they will. Speaking at a press conference after a Telecom Council meeting in Luxembourg on Thursday Reding said she was “not impressed” with the reductions so far as they equate to a drop of only on Eurocent per roaming SMS sent.

Sticking with the regulators. In the UK, Ofcom has set out proposals for how it plans to release spectrum following the switchover to digital television. The Informer thinks it would be appropriate if Ofcom decided to award the spectrum as prizes in some sort of Dragons’ Den meets Big Brother meets the Apprentice meets I’m A Celebrity … Get Me Out Of Here! reality TV series. Potential bidders could be put through their paces shamelessly prostituting themselves under the credulous gaze of couch potatoes everywhere - think of the SMS voting revenues. Far more likely though is a boring old money spinning auction.

Speaking of money spinning auctions, in the US the Federal Communications Commission (FCC) has decided to delay a decision regarding the fate of 25MHz of left over AWS spectrum. The Informer has an idea, should the Feds be reading this, rather than holding yet another auction they should perhaps have a beauty contest to find an appropriate owner(s). Though the Informer’s suggestion is likely to fall on deaf ears.

One of the more likely options under consideration by the FCC, is to auction the spectrum off with a requirement that some portion of the bandwidth is set aside to provide free wireless internet access to the US. Speculators suggest that the winner of the auction would be required to build out a network to provide free access to 50 per cent of the US population within four years and 95 per cent in ten years. The spectrum would likely be offered as a technology neutral investment and WiMAX is being bandied around as a likely platform.

If that happens we can expect to hear the sound of excitable splashing emanating from the direction of a recently erected WiMAX patent pool. This week six leading lights in the world of mobile WiMAX announced that they would be pooling their patent resources. Expect to see Alcatel-Lucent, Cisco, Intel, Samsung and mobile WiMAX pin ups of the operator community, Clearwire and Sprint lounging around the pool in Bermuda shorts, sipping Pina Coladas laughing and throwing a beach ball back and forth, but definitely not running, bombing or petting.

At an investor presentation on Thursday evening, Clearwire revealed its projections for business and revenue growth over the next ten years. The company reckons it can hit over million customers by 2009, rising to 4.6 million a year later. The target is 8.5 million by 2011 and 19.5 million by 2014.

Nortel looks like it will miss out on the possible poolside fun though. The infrastructure vending Canuck has decided to back LTE and therefore join fellow WiMAX basher Ericsson. This decision sent Nortel’s market valuation rocketing up by 13 per cent. Perhaps the Canadians and the Swedes can form a pool of their own, though come the winter it’d probably freeze over and they’d find themselves facing off over all the LTE deals coming their way.

In warmer climes East Africa’s biggest ever initial public offering (IPO) kicked off this week as Kenyan operator Safaricom began trading on the Nairobi stock exchange. The government’s sale of a 25 per cent stake in the carrier has proved popular, with the listing more than 400 per cent oversubscribed. Local reports suggest around 800,000 domestic and foreign investors had signed up to the offer. The government is raising about $833m from the sale, which values Safaricom at around $3.3bn. In the first hours of trading shares had already gained around 50 per cent.

Another organisation selling off, if not the family silver, then certainly some of the more valuable pots and pans was Nokia Siemens Networks. The monster vendor has reached an agreement to sell off its Open Transport Network (OTN) which specialises in fibre optic communications. The financial details of the deal have been kept under wraps, but the move is all part of NSN’s strategic refocus on its core businesses, as the vendor aims to realise Euro2bn annually in synergy savings by the end of 2008.

One year into its operation as a merged entity, NSN is still facing a challenging market. Competition is strong and the growth outlook is not good, as chief executive Simon Beresford-Wylie readily admits the carrier was caught on the back foot. “In 2006, at the time of the merger, the market looked like it was growing. But this wasn’t the case,” he said. He said plenty more too at a recent London press event and one of the Informer’s colleagues at telecoms.com heard it all.

Meanwhile, mobile operator O2 UK has, like a crestfallen West Ham Utd fan, been left blowing bubbles after losing a four year battle against rival 3 over the usage of bubbles in its advertising. The European Court of Justice ruled that “O2 cannot rely on its trade mark rights” to prevent the use of bubble imagery in a comparative advertisement for Hutchison-Whampoa’s UK 3G operator.

For many it’s hard to imagine anything more captivating that watching bubbles float about while listening to the dulcet tones of Sheffield’s Sean Bean. But spare a thought for the kids, for according to mobile ad firm JumpTap they’re ten times more susceptible when it comes to mobile adverts. Getting your hooks into impressionable children is not a strategy that marketers have traditionally shied away from. As the famously upstanding role model Whitney Houston opined in her epic ballad the Greatest Love of All, children are the future.

Finally, on this Friday the 13th, the Informer has been thinking about all the things that scare him: Wasps, Darleks and having to work for a living are all currently vying for the top spot. IT consulting firm Unisys though thinks one of the biggest fears out there is. mobile banking…

Unisys surveyed 13,296 consumers worldwide about their mobile-device habits and how secure they feel when conducting online transactions. The results indicate a widespread apprehension about the security of mobile devices and their ability to protect pertinent information relayed in a financial transaction.

It’s not exactly A Nightmare on Elm Street is it?

Be safe

The Informer