Separation round-up

In March, the Dutch NRA (OPTA) declined to separate network and services at incumbent KPN. OPTA said it didn't have the power to do so. It added that cable competition, as well as open access to the KPN network (be it wholesale, LLU or bitstream) were sufficient to guarantee a competitive market.

However, Viviane Reding seems to be on collision course, aiming for a European effort at separating PTTs.

I suppose this issue will produce a lot of nois.

What has happened since?

• Italy seems most advanced, preparing a legal basis.
• New Zealand is pushing forward as well. In response, Telecom NZ has its own plans.
• Sweden has commissioned a report from its NRA, PTS, due June 15.

Does anybody want to compete in the Netherlands?

As I've written before, LLU is coming to and end in the Netherlands. France Telecom yesterday in a way referred to this, meandering on its strategy regarding Orange NL.

The consequences of the next stage in copper-based competion:

• KPN thinks it's so clever, forcing the competition out of the market. Only a player like KPN can afford to build a FTTC + VDSL network ('All-IP'). However, the plans could backfire: OPTA could go the separation route; OPTA could allow UPC to merge with @Home to form an MSO with near-national coverage (and create a duopoly US style); altnets could band together Australian style (the G9 consortium, proposing a FTTN network of its own).
• OPTA, the local NRA, together with all market participants, is studying a Full Alternative for LLU. Could it be SLU (FTTC + unbundling from the street cabinet)?
• Altnets have invested very little over the past two years or so. Coverage of their ADSL-networks has not expanded.
• Municipalities are cleverly moving in, building FTTH. There seems to be kind of an arms race between KPN (also buying up ISPs) trying to get involved and Reggefiber (the Dick Wessels company).
• Orange NL was put up for sale in February (rumours, but I had them sort of confirmed). Then in March, at the final 2006 results, it was denied. Now, at the Q1 results, France Telecom acknowledges all options are open. The same happened to Telecom Italia subsidiary bbned: for sale, and then all of a sudden it wasn't. This can only mean one thing: FT and TI want out, but they can't. And with market regulator NMa still studying the KPN takeover of Tiscali NL (report due May/June), KPN is no longer a buyer.

No potential buyers and LLU coming to an end - do I hear monopoly? Is duopoly the simplest answer to this? Or can altnets overcome their cultural differences and build a joint G9-style network?

Another free paper - but bringing quality content

The freesheet industry is getting an interesting twist in the Netherlands. Free newspapers aren't new, but 'De Pers' (yes, this would be 'the press' in English) adds something new. It bills itself as a 'quality' newspaper.

The paper launched in January and since doubled circulation (to 500k) and added a news website. It distinguishes from the usual free fare with its expanded distribution - not just via public transporation stations but at retail, petrol and office locations as well. Last week they started a home delivery trial.

Obviously, the Spits (owned by Telegraaf) and Metro freesheets will get hurt as they will have to share their section of the advertising market with the #3 player. The Wegener titles (regional newspapers) and the Telegraaf flagship newspaper (let's say, 'low brow' fare) seem to be pretty much insulated from this effect by virtue of their content. Privately owned PCM (producer of a range of 'quality' newspapers) seems to be at risk, especially the nrc.next paper after which 'De Pers' may have been modelled.

Still, I think 'De Pers' needs to expand some more to really have an impact: add a weekend edition; produce several editions a day (how about an evening edition delivered by email for workers to print out at the office and read on the train). I also believe an evening edition could be more worthwile for readers to bring home and share with family members.

Anyway, the focus on making a quality newspaper (for free, with expanded distribution) seems quite unique. Contrast that with this article, which states: "... that traditional newspapers will live or die based on the quality of their content -- an authoritative perspective that free papers cannot provide."

WiFi gearing up

This article contains the timeline for 802.11r, the WiFi standard enabling handover and thus mobility. The IEEE targets certification early 2008.

The interesting thing to me is that by adding mobility, WiFi could take away even more traffic from cellular networks. Wireless operators embracing WiFi could use this to stave off potential competition from WiMAX networks.

Telecom Italia starts SLU trial in the Netherlands

Telecompaper reports that bbned, the Dutch wholesale internetprovider owned by Telecom Italia, is starting a VDSL trial in three Dutch towns in the Amsterdam area. For now, it appears to be a technical trial.
The infrastructure exists of fiber connected street cabinets, in which bbned installed VDSL gear. In other words, it uses SLU (sub-loop unbundling), instead of the more traditional LLU (running from MDF locations).
InterNLnet and SURFnet will retail the service. Speeds are 40/10 Mbps.
Bbned is also involved in munifiber projects.

Some remarks:

• As KPN is planning and building it's All-IP network (including nationwide FttExchange + VDSL2 by 2010), bbned appears to be the most committed altnet. This comes as no surprise. Orange (which denied being for sale, much like bbned itself) and Tiscali NL (which will be bought by KPN if the competition regulator NMa allows it) are on the sidelines. Tele2/Versatel is committed as well.
• When it comes to VDSL services, bbned is actually beating KPN. KPN is targeting a May launch, which is questionable now that the telecoms regulator OPTA is reviewing the All-IP plan and the market's response to it (due June). However, a bbned launch could support the case for an early KPN launch, as this shows that SLU is viable after all.
• Talking of which; Analysys produced a report which all but ruled out SLU conducted by altnets for lack of scale. In other words, as LLU becomes unavailable (when KPN closes and sells MDF locations), SLU may be realistic after all. This will make matters much easier for OPTA, which has to come up with an alternative to LLU.

NextWave adds IPWireless to its portfolio

NextWave Wireless, the opportunistic wireless operator of yore, has acquired 4G contender IPWireless, known for both its 4G technology (TD CDMA or UMTS TDD) and its mobile TV technology (TDtv). Telephony Online has a good piece addressing NextWave's strategy.

It is interesting for two reasons: instead of focusing on WiMAX, NextWave it is building a much broader portfolio; and instead of opting to be a carrier or a vendor, it travels both paths in order to spur adoption.

To me it sounds unconvincing because NextWave lacks the scale and power to really make a difference (even if they just raised $355m). I would have preferred a focus on really cool technology. IPWireless doesn't seem to be a winner, with the majors focusing on WiMAX (Sprint, Intel, Motorola), LTE (Ericsson) or UMB (Qualcomm), or some homegrown technology (Samsung, Nortel, NTT DoCoMo, Chinese 3G and McWiLL). Also, the NGNM (next gen mobile initiative) of most of the major operators seems to focus on either LTE, WiMAX or UMB.

Possibly, NextWave is really attracted by IPWireless' patent portfolio, its mobile TV technology (which however seems niche) and some existing contracts. Besides, NextWave doesn't exactly position itself as an attractive takeover candidate.

With Flarion bought by Qualcomm and IPWireless acquired by NextWave, interest may now turn to xG Technologies (xMax), ArrayComm or even CSIRO's technology.

UPDATE: Trial partner IPMobile is exiting the Japanse market. Adjust that earn-out downwards.

More corporate action to trigger the telco sector

Continuing on this post, I dug up some more ongoing business dealings.

Operators for sale:

• Alltel
• Pipex (and C&W?) in the UK; possibly Lycos Germany, Jazztel (Spain), and PT's PT Multimedia unit
• FastWeb (Italy) could attract a counterbid (next to Swisscom's).
• Telefonica not only has Endemol up for sale (late March), but Airwave (UK) as well.
• Deutsche Telekom is shopping Ya.com (Spain) and Club Internet (France) around.
• TDC's owners are looking for buyers for HTCC (Hungary), sunrise (Switzerland) and Talkline (Germany).
• Both Lebanon and Libya are selling two state-owned mobile operators.
• Stakes in state-owned PTT's may change hand: OTE, TI, DT, PT, TeliaSonera, as well as the operators of Bulgaria, Uganda, Botswana and Algeria.

IPOs:

• Infamous Versatel (Germany) and Flag Telecom may re-enter.
• Several wireless operators: MetroPCS, Colombia Movil, GrameenPhone, Safaricom and Spice Telecom.

Licenses:

• Fixed line, SNO: Saudi Arabia and Kenya.
• Wireless (2G and/or 3G): Iceland, Germany (2008), France (2008), Canada (2008), Russia (2007 and 2008), Vietnam, Norway (2007), Sweden (2007)
• WiMAX: Ireland (2007), Italy (2007), Portugal (2007), Sweden (2007), UK (2007).

Product/service launches:

• DT will launch a secondary brand in Germany, aimed at the youth market (summer 2007).
• Handsets: Apple's iPhone (June) and perhaps news around the 'Google Phone'
• FTTN may come to Australia.
• FTTH in Paris will be launched by Neuf and Iliad.
• MVNOs from KPN and BT may come to Spain.
• Wireless VoIP tests at Vodafone (Starfish) and StarHub (pfingo) may have some impact.
• Breaking down the wireless walled garden at Hutchison 3G (X-Series) will be followed by Amp'd Mobile's launch of the MOTO Q (with Sling and Orb).

Regulation:

• EC on international roaming (June)
• EC v. Germany regarding DT's FTTN/VDSL network (any day?)
• OPTA on KPN's All-IP network (June)

StarHub trials pfingo, a WiFi service

TeleGeography reports StarHub, the #2 telco and #3 mobile operator in Singapore, is trialing a new platform, dubbed pfingo, among 30 users for 3 months.

Pfingo is open to subs from SingTel and MobileOne as well and works on any handset. Users receive a new number and for a fixed monthly fee are allowed unlimited on-net voice minutes (pfingoTALK), as well as pfingoACTIVE (not sure what that is) and pfingoMAIL.

Pfingo uses WiFi connectivity.

Comment: Given the size of the nation and the state's broadband targets, it looks like pfingo's WiFi network will have full coverage. At a decent pricepoint, it will not only cannibalize StarHub's own voice revenues, but possibly those of its competitors as well. It could signal a new round of pricing pressure. Of course it remains to be seen how well it works and how it deals with full mobility (handover). I wonder how it is supposed to work on any handset. It looks like the service's purpose is to offload data traffic and free-up some capacity for StarHub's voice services.

Update (March 23): Check out this post. StarHub is taking Vodafone's 'Starfish' quite a few steps further.

Some short-term triggers

Here are some possible triggers for short-term movement, before the new reporting season starts:

• Telefonica: to decide on the sale of its 75% Endemol stake (late March). Mediaset and John de Mol are candidates.
• OTE: Greek state to sell 20% stake (late March). This could be the chance for Telefonica or DT to step in.
• Vodafone: investor day on UK and Germany in London (March 30). Time for bullish news to turn those businesses around. When will topline growth return?
• AT&T, Verizon, Qwest, Sprint Nextel: US government to award Networx Universal contract (late March). The second part, Networx Enterprise, will be awarded late May. Together, they are valued at $20bn over 10 years. Looking at the partners each brings, my bet is on AT&T.
• KPN: investor day on new structure (April 4). The company will no longer report along the Fixed/Mobile line, but along Consumer/Business. Wholesale & Operations contains the physical infrastructure and a fourth division is devoted to IT services in the Netherlands.
• Yahoo!: hiring new CFO and Audience Group CEO (weeks away?).

Vodafone launches innovative web phone in Portugal

Vodafone Portugal launched 'Vodafone web phone'. It's a download to your PC, which is assigned a mobile number. Through it, you can IM, voice/videocall, SMS and MMS.

Some of it looks new to me:

• Vodafone essentially launching a Skype/MSN/AIM-like VoIP-service.
• Allows calling to and from mobiles, the PC mimicking as a mobile phone. Interesting in countries where SkypeIn is not offered (such as the Netherlands; SkypeIn so far is offered in just 15 countries). Tariffs of course are mobile tariffs.

I'm not sure what the technology is (most likely Microsoft). On-net and PC-to-PC calls are free of course, as any non-Portuguese speaker can understand from the demo.