- SMS with Attachments: a text message is sent, after which the phone rings and a multimedia message is played. Launched by China Unicom and China Mobile (technology from NMS Communications, built by ChannelSoft).
- Voice over SMS: short audio messages. To be launched by both Comium (in Liberia and Sierra Leone; technology from Apliman Technologies) and Comcel (in Haiti, technology from Kirusa).
- Ads over SMS: pushing location-based ads. Launched by StarHub in Singapore.
- Payments over SMS: Launched by Rabo Mobiel (a Dutch MVNO on the KPN network).
Thursday, October 30, 2008
One of the early real-life deployments was in Manassas (Virginia), but now the city has taken over the network, with a good chance of reducing it to a Advanced Metering Infrastructure (AMI) system. Earlier this year, a Dallas network run by Current Communications (which attracted funding from Google) and DirecTV, was sold to the city's utility.
It looks like BPL has no chance between the entrenched DSL/cable networks, and the inevitable rise of FTTH. (But then of course there is UETS ...)
First of all, the question (how many infrastructures do we need?) relates to access networks, be it fixed or mobile.
Next, it requires a sort of high-level view of competition. OPTA says "two is not enough", referring to a telco/cableco duopoly. So then, how many networks will suffice? Or will just one do (and share it, to avoid capital destruction).
To round off: to support the case for four: Swisscom decided to roll out FTTH with four strands of fiber to each home (see slide 3 in this presentation), for easier competitor access (now of course things get complicated: is this one network, or four?).
Pick your gut feeling!
Tuesday, October 28, 2008
Poor incumbents (united in ETNO)! So now they want protection, not only from us, but from their competitors as well. After all, wasn't regulation invented to lower prices, enhance service levels and increase choice? So now they relaunch their extortionist speak: we will lower investment levels.
Last time I checked, however
- the European telecoms markets were still heavily skewed toward the incumbents. BIPT, the Belgian NRA is ordered by the EC to see to it that Belgacom lowers its fixed line voice rates; and VATM showed (slide 15) that Deutsche Telekom still controls 78% of the German fixed-line market.
- the EC was pushing for mobile termination rates to come down from irrationally exuberant levels, but still above cost (1-2 c/min), if things go as Arcep proposes (to about double that amount in 2010).
- NGN investments are supposed to help stimulate GDP growth.
Monday, October 27, 2008
But now (well, the patent was filed in 2005) we have UETS (Universal Ethernet Telecommunications Service), as per Jose Morales Barroso's paper in the IEC Ocober newsletter. A interesting read!
To be sure, this is neither BPL nor 'just' a new business model (marketing a bundle of broadband and power, as Bill St. Arnaud proposes). This is much more profound integration. Let's wait and see how it develops.
1. UETS in general terms: the Intelligent Grid
- "The total integration in only one shared physical infrastructure (e.g., towers, poles, conduits, wires), with copper cables for electric power and fiber optics for telecom, would be an exceptional improvement. The information and communications systems need the electricity, and the electric power grid of the future needs the information andcommunications technologies (ICT). Hence, the advantages of integrating them in a single infrastructure are very, very clear."
- "A baseline technology, the Universal Ethernet Telecommunications Service (UETS), is proposed for converged services delivery over a single 'intelligent grid', a central role in meeting the world’s growing electric power demands and broadband adoption."
2. Whence UETS: to save energy
- "The telecom technologies that form the Internet waste a huge amount of electric power, and that amount grows exponentially with the number of users and their transmission speed. At the same time, clients and servers increase in size and performance, consequently increasing the consumption. In the United States only, all electronics expend no less than 250 TWh per year, equaling more than 180 million tons of CO2, roughly equivalent to 35 million cars. (...) The practice of leaving PCs and workstations 'always on' consumes yearly 19.8 billion kilowatt-hours in the United States, enough energy to power 1.9 million homes. Individuals, institutions, and companies can help minimize wasted electricity, save money, and reduce CO2 emissions by as much as taking 18 million cars off the road!"
- "... the net efficiency for the entire electricity path: from the grid to the final information process is smaller than 0.6 percent, and from power sources is less than 0.2 percent. This means that each watt employed for the information process needs more than 500 watts from primary energy!"
- "We live in a kind of illusion, thinking about diverse 'achievements' (e.g., social, technological, political) when the crude reality is very different: we are consuming, in an outrageous and unjustifiable way, the planet’s resources and, at the same time, destroying
our environment. We cannot have endless growth in consumption, wealth, goods of all types, or anything in a limited system as planet Earth: it is unsustainable."
- "Connecting renewable and cleaner small-scale local power generators distributed throughout the grid will become more economical, taking stress off the grid, improving energy efficiency, reducing the need for transmission capacity, and providing secure regional power supplies."
- "(...) an advanced telecom service would move information instead of people or things, drastically reducing the need for transportation."
- "To manage power demand, the new intelligent meters report moment-to-moment power usage digitally to the utility, through the UETS network, and cycle up and down appliances in response to grid needs and signals. This enables variable pricing, providing economic incentives to shift power use between high- and low-demand periods. Home appliances containing onboard intelligence reduce demand when receiving signals that the grid is under stress or activate appliances when power rates are lower. That can take pressure off overloaded grid infrastructure and power costs."
- "A very interesting application is the connection of hybrid electric cars to the electric network - a product known as plug-in hybrid electric vehicles (PHEVs) - and making them an integral part of the grid, a concept known as vehicle-to-grid (V2G). (...) Smart management systems could provide additional reliability using the storage capacity of the PHEV by reversing the power flow from the battery to the grid during peak periods, using the battery’s stored energy to provide power back to the grid in order to meet peak demand, rather than adding new generating capacity. It is even possible to start the combustion engine 'in a stopped car' in critical moments of consumption to supply energy during blackouts or complement the conventional generation."
- "Telework (...) means the death of distance. Work is not a place; teleworkers drive information, not cars, to work, saving lives in traffic accidents; reducing transportation, fuel consumption, and pollution; increasing work/home life balance; and reducing stress."
3. Comparison: simpler, better
- Instead of a more traditional form of layering (physical, data, transmission, presentation, applications, etc.) UETS collapses the internet into 3 layers: 802.3, the IEEE standard for ethernet is the primary medium (PHY/PMD); 802.3 and 802.2 for the next one (MAC and LLC); and finally internet applications. The technology involves Banyan networking for interconnection. Further explanation of the protocols is here.
- The technology is ethernet-based. Switches replace routers. "... evolution from 'computer networks' to the 'computer on net.' When the network is as fast as the computer’s internal links, the machine becomes a special purpose appliance across the Net."
- "... opens up possibilities for micro-grids that supply DC power instead of AC, a tremendous energy and cost saver since digital equipment, which typically runs on DC, contains expensive, energy-wasting power conversion equipment. DC–powered systems waste less electric power, generate less heat, enable more electronic equipment density, and can cut power losses by 50 percent."
- "This system is the proposal for the convergence of computers, Internet, broadband, mobility, and telephone networks into something extremely simple, much faster, and less costly, with more capabilities and integrated services over a shared, unique network infrastructure."
- "The bandwidth offered is symmetrical, up to 10 Gb/s today and 100 Gb/s in the near future."
Several towns, districts and countries presented either their broadband (Malta, Trikala) or their FTTH plans (Almere, UTOPIA, Seltjarnarnes).
We had some pretty good discussions with people such as Paul Larsen (UTOPIA), Thomas Martin (Cisco), Bart Nieuwenhuis (Exser, to be launched December 18) and Vassiliki Apostolopoulou (Telecompare). They covered quite a wide spectrum of FTTH related topics:
- Technology, topology, protocols, standards
- Comparison to DOCSIS
- Cost (opex, capex)
- Digital divide
- In-building wiring, network sharing
- Open access
- Regulation, separation
- Dark fiber, bitstream access, unbundling, wholesale broadband access, IP access
- Usage v. availability, Nielsen's Law
- Net neutrality
- VAS: internet access, IPTV, VoIP, e-learning, e-health, gaming, video conferencing, surveillance (Ericsson's Crister Mattsson quoted the case of Sweden, where he identified 242 services types (slide 22), and Stockholm, where 155 service providers are active (slide 17 of this presentation, earlier this year in Greece as well)).
But then you can ask the question: don't all these BSPs want a choice of wholesale operator? And so the question goes down all the way to the physical layer.
Which brings me to my new Poll: How many infrastructures do we need?
It's the perennial question, and nobody really seems to have the answer. Now, the answer probably doesn't exist, but I would very much like to see how people feel about this question in a very general sense. Let me provide some food for thought:
The case for 1:
- It's a dumb pipe anyway.
- It's expensive as it is (FTTH), so let's just build one and share it. Once operator X puts a network in place in any town, the chance for operator Y to replicate it is near zero.
- Even in mobile are operators starting to share more and more of their infrastructure.
- For those of you who think that the US is a healthily competitive market: this is a telco/cableco duopoly. Put differently: intermodal competition (truly infrastructure-based) is what regulators should aim for. There is no long-term point in intramodal competition (such as LLU).
- OPTA's slogan (the Dutch NRA) is: 'Two is not enough.' In other words, the telco/cableco duopoly doesn't work. Adding compulsory open access to the telco network (LLU etc.) leaves the market asymmetric, so now OPTA is aiming for cable open access as well. But is intramodal competition truly a form of infrastructure-based competion, or is it in fact more of an enhanced form of services-based competition?
- In Germany, investors have been speculating about the options for the #3 (E-Plus) and #4 (O2) operators to merge, in order to create a viable competitor against T-Mo and Voda. Many other mobile markets, including the Netherlands, have three players.
- SingTel is opposed to structural separation on the grounds that there would be enough intermodel competition: telco, cableco, 4G.
- The British mobile market had four players for a long time, until 3 UK launched. However, many remain skeptical about Hutchison's chances in the long run.
- The US mobile market has four more or less nationwide operators: AT&T Mobility, Verizon Wireless, Sprint Nextel and T-Mobile USA. In addition, there is a choice of one or more regional operators, but it looks like these will be absorbed by the national players in the long run.
- ARCEP, the French NRA, is very keen on issuing a #4 mobile license in order to increase competition levels. The same goes for Portugal, Albania, Hungary, Bulgaria, Slovakia and South Africa.
- In rare cases are regulators trying to get as many as 5, 6 or even 7 mobile operators to build out networks (Burundi, Ghana, Sierra Leone).
Wednesday, October 22, 2008
Monday, October 20, 2008
The topic gets a lot of press these days, mostly in New Zealand, Australia and Italy. Check out this Arcep document for an introduction to separation.
Here is why we believe in structural separation.
- In a world of intramodal competition on the telco network (and intermodal competition between copper and coax) there will never be full equivalence between all players (incumbent, unbundlers, resellers, etc.). As much as PTT's want symmetry between telco and cableco competition (i.e. open access to cable networks), they should also allow for symmetry on the copper network. There will never be true symmetry if one service provider also owns the network, and the others don't. No matter what they say, the incumbent will always be at an advantage.
- Look at it from a synergy point of view. The incumbent reaps all the synergy benefits stemming from owning both the network and a service provider. These advantages should be equal and shared. And hence, all incumbents cry foul when confronted with the threat of being structurally separated. But that's the whole point, brothers and sisters: the regulator should focus on simply making PTT's smaller and creating long-term competition from viable altnets.
- KPN has successfully staved off structural separation. On the one hand, this is due to its full portfolio of wholesale services and a certain co-opetitive stance toward resellers. On the other hand, the world is facing next-generation access investments (i.e. FTTH), which are not only expensive (to be carried by a company the size of the incumbent only) but also create huge regulatory uncertainty. In the Netherlands, hardly anybody is left to consider serious and long-term competition (apart from cable). Orange Broadband is now owned by T-Mobile and put up for sale; bbned and its sisters can hardly be taken seriously because parent company Telecom Italia has a lot on its mind; and Tele2 seems to be withdrawing from western Europe altogether.
- Only when structurally separated can the telco appeal to the right investment communities: the dividend aficionados can buy the network, retail minded investors can focus on service providers (higher risk/return profile), etc. Also, only in this way can the network attract subsidies or create public/private partnerships. In a way Telstra acknowledges this: if it is structurally separated, it will not bid for the National Broadband Network contract and subsidy (AUD 4.7bn). But once separated, the network company will surely bid for the contract; I will eat my hat if it doens't!
To round off, we want to share some fun related to the topic - unless it brings you to tears, of course.
Telecom Italia is one of those companies that may face structural separation and it will come as no surprise that Tiscali is all in favor. FastWeb takes a different position: they think it's a bad idea! Functional separation would suffice. But wait a second: isn't FastWeb 82% owned by Swisscom, another PTT?
With hindsight, that calls for a round of applause for Optus (the Australian subsidiary of SingTel). It openly called for structural separation of Telstra, even if it's parent company was fighting the same fate in Singapore. Or is it the other way around: was SingTel being a hypocrit?
Friday, October 10, 2008
Keep reading, if you want to know why I personally think this box, traditionally regarded as an element belonging to the fixed-line telecom world, should perhaps appeal to ... mobile operators most of all!
(Full disclosure: I have no personal interest in this company or product.)
Daily Media: A Closer Look
Last week I paid a visit to the UCD headquarters in Wijk en Aalburg, a small town in rural Holland. UCD, United Content Distributors, is the company behind the Daily Media set-top box (view our complete coverage here). It was very enlightning, all the more because 'yet another box' is a hard sell, not least because of the difficulty of explaining how and what it is in the first place.
The current state of the economy is not really helpful right now, but I am impressed by the capabilities of this box, its ease of use and its revolutionary business model. So, here is follow-up review, expanding on my first one. I really hope it will grab some attention, because I am convinced it can be a great tool for both users and potential partners with a strategy reaching beyond today's turmoil.
Personally, I am most intrigued by the possibility of UCD teaming up with a mobile operator. No quad play mumbo jumbo, but a move away from commodity access services. Anyway, here are my findings from my conversations with executives of the company. Read on!
1. What is Daily Media?
The shortest way of describing the box is to say that it is a media center for place-shifting internet (broadband) content from the PC to the TV. But there is much more to it. It would be served better by putting it this way: On the input side, the box combines broadcast TV with broadband internet content. In the process, it adds interactivity, targeted personalized advertising (please, no in-program stuff), a payment system and several (non-core) add-ons. It is controlled by a 'multi-apparatus' remote control and menus on the TV screen. It doesn't have a hard disk, but all sorts of hardware can very easily be connected (there are many output slots), including your hifi.
As to the broadband content: this consists of standard video stuff (like YouTube), and also includes pay-per-view VOD content from multiple sources and a range of narrowcasting channels (such as Rabo TV provided by AAA-rated Rabobank). Importantly, the highly popular VOD content Uitzendinggemist (catch-up TV, comparable to BBC iPlayer or Hulu), provided by Netherlands Public Broadcasting, is freely accessible as well as access (pay-per-view) to live (incl. sports) events. Further, broadband TV channels make up a total of some 500 available channels.
You can think of it as an hourglass, with Daily Media sitting in the center (thanks for making this picture, Thomas!):
How does one get a box like Daily Media into the homes of millions of consumers, i.e. the target of the Wijk en Aalburg-based company? Not an easy task. It appears that UCD has made a number of smart decisions in paving the way for successful mass distribution:
The box is free to consumers.
From a content point of view, it really adds 'happiness' to the consumer's life. More content, no more trips to the video rental store, being able to pay-per-program instead of paying yearly subscriptions, etc.
It really is a plug & play tool and the menus are straightforward.
So far so good. I expect consumers will be quite happy to receive and utilize the Daily Media media center. However, that shifts the problem (i.e. the cost of the box) to any potential partner. Remember, UCD is the platform provider and others will have to carry the financial burden (the production cost for the box is approx. EUR 150).
I believe UCD has produced a great product that should enable many potential partners to find the budget for this strategic tool.
It is a great marketing tool for partners, especially for companies who have subscribers and feel the need for a churn-reducing or loyalty-stimulating tool. Markets are opening up to competion, which makes the availability of Daily Media very convenient. Think about it: there are a lot of companies out there who have subscribers, members or even just loyal customers: (health) insurance companies, utility companies, video stores, pizza delivery chains, car drivers associations (such as ANWB in the Netherlands, AA in the UK, or ADAC in Germany), newspaper and magazine publishers. Or even gas stations, grocery stores and other retailers (who all have their own loyalty programs). In the Netherlands, public broadcasting companies can be added to the list because they actually have members.
It allows existing video providers to enhance their product offering. UCD very carefully avoids becoming a competitor to your local cableco, satco, IPTV or DTT operator in case of retransmission (this story also contains an instructional video for hooking up your PC to your TV, but then of course you miss out on all the Daily Media fun).
It allows new entrants to add video to their existing bundle of services. I haven't mentioned mobile operators so far, but think of the trouble they are going through in becoming a LLU operator and trying to enter the IPTV market (such as Orange UK). Forget about all that. Broadband and broadcast TV are commodities, right? So why not leave that up to the consumer and position yourself at the next higher level in the value chain: inside the box, where you will get the chance to access a whole range of new revenue streams.
It allows content providers to establish a more or less direct relationship with consumers. This is possibly the most eye-popping characteristic of the box. The value chain is collapsed considerably and the payment system (a virtual wallet) allows consumers to directly access your content.
3. How is Daily Media different from other boxes?
The one feature that distinguishes Daily Media from competitors such as Sony, Apple, Sezmi, My Broadband TV and others is its business model: the box is free to consumers and UCD will only take a cut from the content it adds. It's a platform for sharing with all sorts of partners. It offers a payment system (through co-branded Visa-card provider LaSer Financial Services, which also brings potential partners to the table, most notably several 'tier 1' retailers in the Netherlands). Further, it uses a multi-server model; certain content is streamed from UCD's own datacenter, and most of the “partnered content” is streamed from their own servers.
4. What's new?
Several things were added to the Daily Media story, since my first review. In this sense, it reminds me of Sling Media and its Sling Box, which maintained a good level of innovation after the first product launch (see this story: "We need more companies like Sling Media.").
Preferred available bandwidth for a proper viewing experience is 1.5 Mb/s (previously 540 kb/s).
They built in a DTT tuner (just like I suggested, making the box a good fit for KPN's Digitenne offering, whose growth is leveling off (see results October 22) and could use another stimulus).
Several pilots have started (at OZB, the Rotterdam munifiber network; at Kabel Krimpen, a small MSO; and at a Van der Valk branch, a nationwide hotel group).
UCD has signed an agreement with LaSer (see above) to distribute multiple thousands of boxes, starting in the coming months. A similar agreement was reached with Holland’s largest video rental chain ERG to distribute (sell) Daily Media via their nationwide network of video stores (such as Videoland and Moviemax)
5. What's next?
Of course, lots of developments are in the “cooker” over in Wijk en Aalburg:
Premium (pay-per-view and subscription) broadband channels. I understand that UCD is aiming for very generous revenue sharing deals in this area.
A search engine, in combination with an EPG, for personalized media recommendations, built into the TV menus for an easier way of finding channels.
A virtual DVR, storing content on web-based servers, since the box has no hard disk (that rings a Cablevision bell).
Several add-ons, including a 'butler service' (already available on the internet: Eileen.nl) and Daily Care (which aims to be a 'switchboard', connecting all players in the national healthcare market).
Real-time energy metering through an on-screen display. Consumers can keep direct track of the actual level of energy consumption, at any given moment. Wouldn't that be a neat tool for your utility company, as they intend to make us consumers more and more energy conscious?
6. And more?
Daily Media is an intriguing product. I can see several other applications.
Hardware v. software. Daily Media is a hardware platform, but I can't see why it couldn't be a software platform. Such a transition could simplify the 'Invasion of the Living Room', even more than including a DTT tuner (see above). After all, bundling the platform into an existing set-top box would allow Daily Media to sail into the living room on the back of an existing cableco/boxco relationship. ActiveVideo Networks, seems to be just that, and forged a deal with Time Warner Cable to enter Hawaii.
Femtocell. If UCD succeeds in partnering with a mobile operator, the next step I would expect is the inclusion of a femtocell in the hardware. Femtocells offload traffic to the subscriber's broadband connection. Why not do some more piggybacking on the provider of the dumb pipe?
Tuesday, October 07, 2008
Obviously, OA in a science publishing context has very little to do with open access to telecommunications networks, but there is an interesting parallel here. It's kind of like KPN buying - well, what should I fill in here?
What's more: it remains to be seen if the move is a step toward OA, or a way to bury OA alive. It wouldn't be the first time to see interesting start-ups be swallowed whole and never be heard of again ...
Monday, October 06, 2008
- Separation. First of all, the Telecom New Zealand AGM rejected the election of the 'two Marks', put forward by Elliott International, to the board. They were in favor of structural separation, whereas Telecom right now focuses on operational separation and FTTN. A disappointing day, leaving the share price at a 16-year low ... However, good news related to functionally separated BT. The Register reports that it is considering outsourcing Openreach, putting the unit at an even longer arm's length. With Ben Verwaayen's departure to Alcatel-Lucent, it will come as no surprise that his new company could be a candidate for taking care of the job ... Finally, in Australia some people seem to be getting closer to structural separation as well, such as senator Minchin.
- FTTH. Julio Linares, COO of Telefonica, spoke at Broadband World Forum Europe. Here are some quotes from Total Telecom: "We will have to measure content in zetabytes. It is difficult to identify future services, but ultra-broadband will facilitate more video, high-definition and 3D content, and more. Consumers are going to need more bandwidth. Demand for bandwidth on fixed and mobile networks will multiply at least by five in the next three years. To support this zetabyte era, we are going to need new infrastructure, we are going to need networks. We need new technology, but technology is not going to be the constraint. Investment is the constraint. To build fixed broadband across Europe, we need to invest €250 billion, but at present the industry is averaging investment of €50 billion per year. It will take 20 years to build just the fixed part of the new infrastructure. Do you think we can afford it? (...) of course, no. (...) We need to speed up. At this time of economic crisis, it is very important to take into account the weight of our industry on the whole economy."
- 3-D. Philips has demonstrated 3-D VoD ('2D-plus-depth') at the IBC conference last month, branded WOWvx. It doesn't require special glasses, it's what they call an 'autostereoscopic display', basically consisting of an LCD display plus a lot of lenses covering the pixels. Both Deutsche Telekom and Orange have trialed the system. Even more recently, Philips showed its new Quad Full TV (thanks dear readers!), basically using the same technology but with everything brought together in a prototype TV.