3-D and mobile data offloading can use some 'standardisation'

Some new technologies or applications need standardisation before mass market adoption can take off. Apple is a famous example of an exception: it uses its own proprietary technologies and walled gardens and gets away with it. For such diverse things as 3-D and mobile data offloading, some form of standardisation seems to be necessary.

3-D: Prospective buyers are probably well informed and early on in their decision making are confronted with three different solutions:

• Active glasses; a standard for this version is under development at Panasonic and XpanD.
• Passive glasses: Philips has a set.
• Glasses-free 3-D: Nissho Electronics and Dimenco have launched a set in Japan.

Innovators may move in, but even early adopters may remain on the sidelines until the dust settles.

Mobile data offloading. Options are manyfold and operators the world over are making different decisions, but many appear to be on the sidelines - while data traffic explodes. Is there any operator that really knows which option is best? This is not about standardisation, strictly speaking, but consensus on what the best network architecture is, would be nice. The options:

• WiFi: either free from restaurants/hotels; free for mobile and/or broadband subs; for-pay (e.g. Boing); free/shared (FON).
• Femtocells, picocells.
• Rely on 4G and the right spectrum (Real Wireless for Ofcom: 230-450% efficiency gain; TeliaSonera at Investor Day: 8x more efficient). LTE-Advanced is poised to offer speeds up to 1 Gb/s.
• All new wireless architectures from Alcatel-Lucent (lightRadio), Ericsson (Antenna Integrated Radio), NSN (Liquid Radio).
• TD-LTE to roll out a cheap data network.
• Network sharing, possibly even with a wholesale-only partner (such as LightSquared in the US, or perhaps UK Broadband in the UK).

Government participation in FTTH: the bad and the good

Here is a worthwile read on government intervention in telecoms. I agree with much of what Tristan Ewins says, but at some point he just completely loses it. What does it mean: re-socialising Telstra?

He juxtaposes competition and the natural 'public' monopoly (NMP). According to his definitions, public means: government-owned (contrary to the usual dichotomy of private versus public, where private means not listed and public means traded at the stock exchange).

Anyway, here are his main points (that is, what I make of it):

1. Competition may lead to duplication, a NMP prevents waste.
2. Competition leads to frustrated incumbents, that are restricted to such a point that they stop functioning like true market participants. A NMP prevents abuse, which a 'private' (non-government owned) monopoly would be inclined to.
3. Competition will only serve the masses. A NMP will serve minorities and rural areas too.
4. Competitors are only accountable to shareholders. A NMP is accountable to the government only, i.e. to all the citizens.

Here is my point by point criticism:

1. There seems to be little consensus on duplication. I think everybody would agree that in-building networks should not be duplicated. Excessive duplication should be avoided, but what does that mean? Fundamentally, I believe in the highway parallal: who needs two highways? This is exactly what IP brings us: all we need is one fiber. However: building separate networks is sure to bring proper competition and would benefit employment and the telecom vendor community.
2. Incumbents are frustrated, that's true. My solution would be to structurally separate them and manage the passive infrastructure much like water and power networks. If they are government owned, they may have fewer incentives to abuse their power. But they will have to be incentivised to create value for their wholesale customers. A 'Government Business Enterprise' soounds great, but please: not as a commercial service provider. Futher: we have regulatory agencies to prevent/punish market abuse.
   
3. Good point.
4. Not a very good point. Bottom line, value needs to be created. Even by non-profits, mind you! So, it remains to be seen who is better suited for oversight: shareholders or citizens.
   

Here is my view on government participation:

One aspect that should be included in planning an FTTH network, is government participation - on several levels:

• Financial: subsidies and tax breaks may apply, esp. under current stimulus packages or funds for rural development. Note that these efforts may not only be aimed at network owners, but at prospective customers as well; by granting the latter subsidies for switching to FTTH, the new networks are guranteed a certain level of business.
  
• Regulatory: builders need clarity, esp. on open access requirements and compulsory sharing of ducts, in-building networks, etc. in order to prevent excessive network duplication.
  
• Legislative: to get speedy (i.e. sans red tape) access to rights of way, such as sewers and sidewalks.
• Strategic: get government agencies, including public schools, to sign up and become anchor tenants.

To achieve this, simply point them to the benefits of taking part:

• Grab the advantages: by allowing consumers and businesses to exploit all the benefits (economic, social, and environmental) of the network.
• Save on ICT expenses: by becoming an anchor tenant.
• Happy citizens: by preventing excessive network duplication.

Vodafone and 3 Australia: why no network sharing?

Vodafone Australia and 3 Australia are merging into a 50/50 joint venture VHA, apparently to better compete with Telstra and Optus.

Three comments:

• Mobile markets worldwide seem to disagree on the number of players required for just the right amount of competition. In Germany, calls have been heard for years for a merger of the #3 (E-Plus) and #4 (O2) operators to merge. In the Netherlands, the market went from 5 to 3 players, but now the competitive level seems to have dropped below the ideal level; a fourth player could enter once more, once 4G spectrum is auctioned off. France is a comparable case.
  
• Why not do a full network sharing deal, for both passive and active (RAN) elements? Vodafone and 3 would vastly improve their cost base and could still market their own products and services. Vodafone has a solid position in the prepaid market, 3 has more data-centric postpaid subs. The venture is going with the Vodafone brand, so 3 is effectively getting out of the market, in exchange for a 50% share. Migrating 3's subs to Vodafone may cause an incredible headache.
• Are more deals in the making? Rumours have been going around about 3 giving up its position in Italy and the UK. Vodafone comfortably has a position in those countries as well. Australia could be a testing ground for 3 to quietly get out of the mobile business altogether.

Network sharing: government interference done right

Network sharing is gaining (a little) momentum in several places. Two recent ones stand out (below), also in light of Benoit's post on government involvement.
On the one hand, there is the traditional capitalist view of seeing every government involvement as negative. These s#%$bags screw up all the time. They should sell to the public, so that WE shall be in control, etc.
On the other hand, infrastructure investments require a long term view, which investors do not habitually seem to foster.

Forced or stimulated network sharing is one way for governments to get involved - even passively, without any dear taxpayer dollard/euros coming into play:

• Switzerland: the regulator calls upon the mobile contenders (sunrise, Orange) to join forces by sharing their networks, in order to create stronger competition against Swisscom. In other words, governments can help by providing regulatory clarity, and by allowing companies to not take spectrum license conditions too literally (regarding sharing, trading, technology).
• France: the government considers forcing MDU owners to fiber up their buidlings. In-home networking is a bottleneck in the (stalling) FTTH roll-out in France, so this could be helpful. (The next logical step could be to force municipalities to sink ducts in every single street they open up for any kind of repair work.)

I still believe there is scope for sensible government subsidies. New Zealand (or Singapore) may be a prime example, if the NZI gets its way.

Outsourcing leads to sharing (a single infrastructure)

Here is an interesting read on a case of outsourcing. CTO Don Price of Bharti Airtel acknowledges to having been an avid opponent ("I was screeming the loudest about not outsourcing"), but now he sees all the benefits:

What happened immediately was that rather than me getting 30 messages an hour relative to network performance, sites being down, trouble tickets being raised, with my phone ringing off the hook, that was all happening to my managed services partner. We were having dinner together, my phone was relatively quiet and he was on the phone constantly. And I'm saying this model is great!'

There are many interesting topics. As you will see, outsourcing leads to network sharing, even to a single infrastructure! That obviously leads to separation and open access. There you go - all my favorite topics.

• Managed capacity (equipment supply) v. managed services (planning, operations, maintenance).
• The motivation is efficiency ("I have a group of roughly 200 people who are managing a subscriber base of more than 60 million and a base station count of roughly 70,000").
• "When I was building sites I was building 400 a month, now my partners are building 3,000 a month."
• "There's one argument that says your managed services partner should be vendor-agnostic, because he will bring you the best in breed kit. Then there's another argument that says there's nobody better to operate and maintain the network than the guy who designed and manufactured it. But as an operations person having done this for a number of years, I would tend to say go with the latter, because there are benefits."
• About not outsourcing: "The things you would want to retain are things like market planning. I want my business guys to draw my cloud for me in terms of where they need coverage. I wouldn't just leave that up to a third party because ultimately they have to deliver a P&L."
• "This is the most difficult part of the entire exercise because people feel that network is their core competence, their key differentiator."
• "... first of all, the network is important. But if you look at the relative importance today versus a few years ago, it's changing. A few years ago network was a potential delight factor. Somebody got their phone, they pull it out of the box, they make their first call and they are absolutely thrilled. Now if they pull the phone out of the box, pop the SIM card in it and if it doesn't work in the parking garage in the basement, they get pissed off. So network has moved form a delight factor to a dissatisfaction factor because expectations have increased."
• "As a network person I can do very little do drive the top line but I can certainly do a hell of a lot to drive cost out of the middle. So therefore I believe things like passive network sharing, site sharing, co-building of sites and ultimately even the active network sharing is the right path to go down. If you and I are competing in the same market, it doesn't make sense for both of us to do the build out. We have an expense that we can't reduce, you're left with an expense that you can't reduce. You're on the left side of the highway, and I'm on the right side of the highway. What did we do? We crossed the finish line six weeks apart. So as we go forward in the industry, as a network community, let's build one highway, one common infrastructure and let the sales and marketing guys compete on the cars."
• "If you are a managed services partner, you have a business of trying to drive growth in terms of your revenues and profitability. You're getting a fixed amount from me for services. But beyond that you're somewhat limited. So what do you do? You try and figure out ways that you can take cost out of the middle as well. So you start outsourcing to other agencies. So you get double and triple hop outsourcing. All of a sudden I come into a meeting, look across the table at the other people. They're not my guys, they're not NSN guys, they're a third party. The guy's been out of school six months. He can barely spell RF and he's designing my network. (...) But at the same time a part of me says that as long as you're meeting my KPIs and SLAs, why should I be bothered? But the guys I work with, it's an emotional thing, it drives them absolutely crazy. I have to pull them back and say: "Are the KPIs better? Are the site deployments better? Is the customer satisfaction better?" If the answer is yes to all three then there's really nothing to discuss."

Interesting read and event from STL (Telco 2.0)

STL Partners (who trademarked the Telco 2.0 term), the firm of Simon, Martin, Keith et al, plan to do another brain torturing event in April. I was lucky to get a view of the accompanying report (they will also present some entirely new research). Their concepts are thought-provoking, highly original and totally worthwhile for anybody in the industry, or even with an interest in business models in general.

I will not try to replicate the report, or even give a summary, but I do wish to put anybody interested on the right track, as the report (165 pages) is quite a challenging read. I also recommend the STL blog to come prepared.

In short, the message is that new wholesale is telco's salvation.

The building blocks of their views may be presented as follows:

1. All-IP is a given. STL is specifically looking beyond it (for which in itself they may be applauded, because most people are still trying to get to grips with NGNs per se) and sees the broadband incentive problem, the problem of all-you-can-eat pricing, as well as the threat for operators to be reduced to dumb pipes. Of course there are several ways out of this: fix the flat-rate or all-you-can-eat pricing (see Benoit's post), embrace the dumb pipe (if you wish to forego a big revenue opportunity), or follow STL (design new business models). Obviously, STL is presenting itself as the sector's saviour.

2. Hence, new business models are needed (or rather: revenue models). STL's answer involves the two-sided business model (see from slide 47 of this Arvetica presentation), implying operators should view themselves as logistics services companies, making use of their specific strengths. I suppose the cable industry could be an example too, where upstream partners (networks) are teamed with and shared revenue with. Networks should be seen as platforms, where operators, upstream (content and application providers, ecommerce, payment systems, advertising (cf. Project Canoe in the NYT ) etc.) as well as downstream (device and set-top box makers) meet. It also involves breaking-up and re-assembling the value chain. Effectively, the BSP (broadband services provider: ISP + apps) is born. Focus of the report is on exploring new wholesale opportunities and partnering in all its manifestations (co-op, sharing, outsourcing).

3. Also, STL give a top-down market approach, estimating the global telecoms market (at the retail level). It is set to double from 2006 to 2017 (from GBP 680 to 1300bn), with the share of the largest 12 countries dropping from 50% to 40% (from GBP 341 to 514bn). This implies a 3.9% CAGR (same as during the 2001-2006 period). However within the numbers (they asked me to be a little discreet about them) are big variances: access is very low growth (esp. mobile), the platform thing (and wholesale to a lesser extent) is where future growth opportunities are. Keep in mind however that these numbers are the results of STL's assumptions, not the other way around, and therefore they are basically the result of reverse engineering.

4. Input is mainly STL's own qualitative research about distribution systems. They see both parallels (mainly in shipping) and early movers (such as Amazon). Further, STL use a large-scale survey among industry workers, consultants and analysts.

Telefonica: no open access obligation to FTTH

Among this year's main themes, I believe, is sharing. So far we had a few announcements, spanning a wide range of network assets:

• Mobile in Spain: Orange and Yoigo (TeliaSonera) in transmission infrastructure.
• Mobile TV in Hungary: T-Mobile and Vodafone.
• Fiber-to-the-business in the Carolinas: Charter and TWC.
• Duct sharing in Spain: Telefonica has to open up, according to new CMT plans (see also this remarkably readable Google translation).

As to the latter, I have noticed quite some resistance (revulsion is perhaps a better word) against governments getting involved, either through regulation or through direct investment. My personal view is that there is nothing a priori wrong with government bodies taking part, especially when you do not see them as intrinsically bad. They can afford a longer horizon, when public companies cannot. Add to that the view that open access is the way forward, allowing network operators to maximize utility rates of their networks.

By way of reality check: what if you really want to insist on the market taking care - in this case: of building FTTH?

All you have to do is drop one of the two basic assumptions (FTTH = end game; 1 network should suffice). Obviously, it would be the second. This would mean that we would potentially end up with perhaps 3 fibers entering our homes: one telco, one cableco, one (or more) altnet. This is pretty much what CMT (the Spanish NRA) seems to be aiming at, if I interpret the Cinco Dias story on the current market consultation correctly:

• "(...) want competition in infrastructure, not only in services".
• "(...) the abandonment of the idea of a single Spain (...) two types of areas, the competitive and the non-competitive." Alas Ms. Reding: fragmentation seems unavoidable.
• "Telefonica will not be obliged to open its network to rivals whenever a new pure fiber infrastructure that reaches households."
• "But Telefonica rivals have achieved a victory and that the network of copper will maintain its existing regulation. But it is a pyrrhic victory, because this infrastructure is doomed to disappear, and they know it."
• "More real is the obligation imposed on (...) Telefonica to open their rivals pipes - the conduits through which the (fiber runs)." This is the duct sharing part of the CMT plan. In other words, CMT seems to consider the duct network the only real dumb part of the physical layer.
• "(...) encourages investment from Telefonica, which will not have to share its new network with the rest, and force rivals to develop their own infrastructure. (...) But it is a gamble that can go well or not. In the worst scenario, operators alternatives not considered profitable investment and reduce its presence in Spain, or go entirely, which would strengthen Telefonica."
• "Have you ruled out functional separation of the network of Telefonica? (...) remedy of last resort."
• "The rules will not be ready before mid-2009."

UPDATE: see also Quinta's assessment.

FTTH: Amsterdam v. Singapore

Just a few short postings.

First, I added a few noteworthy documents in the right hand column. Go down to 'Favorite Articles'.

Second, another WSJ story on the Amazon Web Services. Outages will be tackled and QoS added, so large corporates can buy the services also. What makes it so interesting to me, is the strategy of trying to maximize utilisation rates of Amazon's hardware. In telcoland, it is called embracing wholesale services.

Third, a thought on subsidizing broadband: Amsterdam v. Singapore. Assumptions: FTTH is the end game and nobody needs two fiber networks. Here is the reasoning:

1. Politics will put broadband on the agenda for its GDP, environmental and social benefits. As long as (public) companies are not ready to commit, governments will get involved.
2. States could participate (honoring MEIP), which is the basis of many munifiber projects such as Amsterdam.
3. Governments could choose to subsidise a regulated (natural) monopoly, implying separation and sharing. This is what is happening in Singapore.

Key questions:

1. Will Amsterdam put copper and coax based networks out of business? Many are skeptical. Check out these stories on the UTOPIA initiative in Utah, refuted here.
2. Will the NetCo monopoly in Singapore be incentivised to invest?

Back on the grid: FTTH and OA

On my way back from Australia, I had a chance to read the Straits Times, which reported on the next stage (an RfP for the NetCo layer), of the Singapore Next Generation National Broadband Network plan. The leading front page story on that day, mind you. Justice finally to this eminently important issue.

This is what I found in my mailbox and around the net on FTTH:

• Algeria, neatly covered by Blues Brother Benoit. Another case of an emerging market leapfrogging ‘the west’.
• Singapore, which didn’t escape Brough’s attention. Very interesting, as it mirrors approaches seen in Amsterdam and Sweden: a network in 3 layers, and Singapore is adding structural separation.
• Amsterdam itself, finally approved by the EC (see Benoit’s coverage).
• Cisco announced a Reggefiber deal. Interesting wording in the press release: Deventer, Almere and ‘another city within the next few months’; ‘speeds of 100 Mb/s initially, and up to 1 Gb/s in the future’; ‘Reggefiber has plans to offer FTTH-based broadband services to the majority of residents in the Netherlands’; ‘Reggefiber has the ambition to make broadband available to everyone in The Netherlands’.
• Network build-out in Almere has now started. KPN and Reggefiber joined forces, which apparently extends to datacenters.
• More Dutch initiatives: BreedNet in North Holland and schools in Frisia (which successfully tapped Kabel Noord, a small MSO that I have learned to know as a frontrunner in cable country). Many MSOs still resist FTTH, apart from the well known Numericable, which is expanding.
• FTTH appears to be part of the FTTx plans of seven Greek towns, that contracted Ericsson.

‘FTTH’ is linked, via ‘natural monopoly’, to topics like ‘open access’, ‘wholesale’ and ‘sharing’. Still, not everyone is convinced, as can be read here (in relation to the Singapore plans). Still no Telco 2.0 points yet for Belgacom either.

But now, it is spreading to the mobile realm:

• Network sharing is gaining traction. No longer just Vodafone, but T-Mobile and 3G as well.
• E-Plus (the German subsidiary to Telco 2.0 champ KPN) is looking ahead to a time where all-IP implies commoditisation on one side and a quest for new revenue streams on the other side. Very interesting, as Apple, Google, Nokia et al seem to be planning along the same lines. KPN itself is taking the services-only path in Spain.

See also my updated FTTH database.

Behind the end of OEN and Sprint/Clearwire

Here is an interesting story on why OEN (Optical Entertainment Network, a FTTH company in Houston) folded. Apparently there were management issues, but it seems to have boiled down to a tech matter: PON (gear from Alloptic) v. active ethernet (gear from PacketFront). The company couldn't decide. "It was a group of engineers getting together and having a serious case of vendor love."

(PON is cheaper to deploy and has a shorter reach. Active ethernet requires more active electronics, a fatter backbone and therefore looks more future-proof, but it comes at a 15-20% premium.)

By the way, look out for France where FT is a supporter of PON, v. Iliad and Neuf favoring active ethernet.

Which brings me to another (so-called) demise: the end of the intended Sprint/Clearwire partnership in rolling out WiMAX. A new ABI Research report (I haven't seen it, just the abstract) justly points to the fact that it wasn't a contract but an LoI only. I agree with Phil Solis of ABI that the parties may still come together, but I believe they need a different approach, preferably full network sharing.

And: communicating a little better with the investment community.

Demand drives FTTH drives separation

FTTH and separation are probably the most important trends in telecom right now. They are also linked.

I believe demand for bandwidth and nations competing for a larger share of the worldwide GDP pie will drive investments in FTTH networks. Telcos feel the heat and are preparing investors for a large capex round.
At the same time, realisation builds that there is value in both networks and services. Telcos are leaning toward the latter, and are preparing for their new roles by introducing sharing, outsourcing and separation.

Below I elaborate on these issues.

1. Drivers

1.1 Demand

Demand growth remains high. Statistics from internet exchanges, IPTV, the rising popularity of YouTube, monitoring services, etc. are used to corroborate this point. Add to that the following. As long as there is no true end-to-end connection and bandwidth is shared at some stretch (either on the open internet or in the last few yards), bandwidth should be redundant. So, if you need let’s say 30 Mbps, you really need peak performance of 100 Mbps. Check out Dean’s remarks.

1.2 Competition among nations

A valued reader suggested that there is a race going on between nations. Already, eastern European countries leapfrog places like Germany by building FTTH networks. If you want to maintain your share of the world’s GDP, you better not stay behind. Places ranging from Chattanooga (Tennessee) to Malaysia acknowledge this. No wonder Italy is weighing a massive investment into Telecom Italia’s network, once the company is separated. No wonder also why Ofcom launched a consultation, apparently aimed at paving the way for FTTH.


2. Future proof solution: FTTH

This point hardly needs any back-up, even if your long-term view is that the last few feet will be wireless. You better bring fiber at least to the doorstep of all the places where people like to hang out.
As I have written before, telcos are actually preparing investors for the big plunge.


3. Sharing

I believe sharing is going to gain popularity. Right now it appears to be concentrated in areas where demand or scale is limited. You can find examples in such diverse areas as mobile TV (German operators jointly building a single network), WiMAX (look at this consortium in Malaysia), FTTN/VDSL (altnets in both Australia and Germany) and 3G (in the UK, for instance).
The question remains: which part are you willing to share? The passive (dumb) layer is an obvious candidate, but you want to remain in control of traffic and services. The Vodafone/Orange UK example takes (tower and antenna) sharing one step further than sharing deals elsewhere (including the Sprint/Clearwire deal), which are mainly focused on extending coverage to rural areas. For Vodafone and Orange, sharing means: separating the network from the services. It implies that the network must be redundant (so there will not be an issue over who gets how much capacity), and also that the days of network coverage as an USP are behind us.


4. Outsourcing and separation

4.1 Outsourcing

The next logical step seems to be outsourcing. If you decide to sacrifice full network control, why not let some third party handle the network?
KPN is a case in point, since it started outsourcing many tasks in its fixed network to a whole range of IT providers. To be sure, I do not believe that KPN will save on costs. We all know the ways of IT companies. There will be lots of talk and writing policy documents. I counted at least 7 IT companies involved. IBM will be the lead integrator, but I am unconvinced that this structure will save KPN any opex within the next 3 years. I believe the move is designed to sharpen the focus on services, perhaps even pave the way for more (i.e. core network outsourcing and structural or even ownership separation).

4.2 Separation

The new focus on services opens the gates to (further) separation. In fact, it is already amongst us. First of all, let’s not forget that selling the tower business by mobile operators can be viewed as a form of separation, even if this only sets site sharing apart (and not antenna sharing or any activities ‘higher up’).
But there is much more. In Switzerland, Swisscom Broadcast received a DVB-H license, but it must provide equal access to all operators. Shortly before, TeliaSonera took the unusual step to create a separate infrastructure/wholesale unit in Sweden. Another voluntary action comes out of EchoStar, which proposed to split its satellite fleet (with wholesale operations) form the service provisioning unit (the Dish Network).

Telecom New Zealand will be split along the well known BT Openreach lines, creating a unit in charge of the access network in order to jumpstart LLU.
It remains to be seen if this effectively creates a new stumbling block on the road to FTTH, as the new structure focuses on LLU and therefore on maintaining ADSL(2+). It would be my preference to try and leapfrog intermediary technologies as much as possible and go straight to FTTH.

Some companies are obviously atttracted by the wholesale business model (the NetCo part of the business, as opposed to the higher valued ServiceCo units), providing a ‘natural monopoly’ and ditto cashflows. Consider such diverse players as Reggefiber (the FTTH company in the Netherlands), Frontline Wireless (plans a national safety network in the US, stresses the importance of wholesale access to the new 700 MHz spectrum in order to foster new entrants) and even Gaiacomm International (whose proposed VLF/terahertz network would not compete with exiting service providers).

Will mobile network sharing lead to separation?

This news from Thailand again brings up the matter of separation in wireless networks. Thai Mobile seems to volunteer the building of the nation's first 3G network, to which it will offer open access to all operators.

Other recent news around mobile network sharing:

• Vodafone UK and Orange UK plan RAN sharing (3G and 2G) to reduce capex and opex by 20-30%.
• Hutch Essar and Bharti plan infrastructure sharing, to be supported by the regulator.
• Nokia's solution is expanded to supporting up to 4 operators.
• Yoigo (TeliaSonera) and Telefonica Movistar plan antenna sharing.

(Now, it is important to realise that sharing may be done at different levels: sites (towers), antennas, RAN, backhaul.)

Some observations, beyond the obvious cost savings target:

• Similarly, operators are teaming for mobile TV (be it a shared DVB-H network, wholesale access to Qualcomm's MediaFLO or any other technology). So, why not for 3G as well - or for that matter: for 2G (not to mention 4G)? As in fixed, sharing and separation make a lot of sense in an IP-based world.
• Differentiating by touting network coverage (as Verizon Wireless still does) will become a thing of the past.
• So, operators will need to make sure they can differentiate on the services and applications level.
• If network operations are to be separated, a new (natural) monopoly will arise. As long as existing service providers are deemed to have SMP (significant market power), this may give rise to new open access obligations at the network operator. On the other hand, the rise (not the fall) of MVNOs could preclude this (what will the difference be between MNOs and MVNOs anyway)? However, spectrum will always be much more of a scarce resource than anything equivalent in the fixed world (duct access, access to sewers, etc).

Network operators give limited clarity

Network separation as well as sharing are gaining momentum, but several operators provide limited clarity on their long-term strategies.

• Sprint Nextel: having several networks (iDEN for P2T, CDMA for voice and data) already, it is ready to add WiMAX (for 4G) to the mix. The iDEN networks needs investments for maintaining a certain quality level, while the CDMA network is being upgraded continuously (Rev A, B, C). The company appears to be looking for a partner in WiMAX. Will all networks converge one day?
• Deutsche Telekom: outside Germany and Eastern Europe (where it owns PTTs), the company has a mobile-only strategy (with WiFi). However, buying Orange NL would add an LLU operator. OK, that can be sold on, but to whom?
• France Telecom: selling Orange NL makes sense, given weak market positions in both wireless and LLU. However, the company owns many wireless operators and yesterday added Austria. So far, triple play offerings are limited to France, Poland, the UK and Spain (as well as fixed/BB in several smaller countries). What about the mobile-only operations, like Austria - will they add LLL or BB?