Sales up, but not by much

Third quarter results from Ericsson and Nokia show that mobile network sales continue to grow moderately, fuelled mostly by emerging market needs, and to a lesser extent by mobile broadband demand.

Nokia made 27% more in sales (EUR1.8 billion) from its networks division in the 3rdd quarter 2006 against 3Q 2005, but recorded operating profit for the division down 17%. Mobile phone sales were up 14% year on year for the quarter, and it multimedia division’s sales were up 45%282

Ericsson’s mobile network sales were up 5% quarter on quarter at EUR 3 billion (SEK28 billion), and down 9% on the second quarter of this year. Mobile networks sales are up 8% overall for the first nine months of 2006 compared to 2005. Fixed networks sales are up 121% on the quarter year on year and 138% up on the nine months to date year on year – much of which was accounted for by the Marconi acquisition.

Ericsson’s Western Europe sales were up by 19% compared to the same quarter last year. It said that growth has been primarily driven by strong services sales and high demand for transmission and fixed broadband access. Mobile systems sales were flat, although the company said HSPA, is “gaining traction”.
 
In Central and Eastern Europe, Middle East and Africa sales grew by 24% compared to the same quarter last year. Countries in Africa and the Middle East are showing strong growth, primarily in GSM, driven by the need for cost efficient coverage. But there is also a growing demand for mobile broadband, Ericsson said.

Nokia said that most of the growth in its network sales came from emerging markets, and that growth into the fourth quarter would be at a lesser rate than prevous years. Overall, the company expects only moderate growth in the mobile infrastructure market in 2006.

It said it is still on course to begin operating as a merged entity with Siemens Networks in January 2007.

As for handsets, the company says it thinks device volumes across the market will grow by 15% or more in the fourth quarter sequentially, with Nokia holding on to its current market share. Nokia expects the mobile device market volume will be approximately 970 million units in 2006, while its estimate for 2005 was approximately 795 million units.

Initiative set to offer guidelines for integrating high-speed 3G in laptops

Mobile broadband connectivity via HSDPA will soon become a standard feature of notebook PCs, following the publication of guidelines developed by a GSM Association-led initiative that prescribe a common approach for PC manufacturers to fully integrate 3G functionality in their product ranges.

HSDPA is a software upgrade for 3G that delivers up to four times the speed of standard 3G or W-CDMA, and in some markets as much as eight to ten times, with faster speeds expected as the technology evolves. Of the 123 commercial 3G W-CDMA mobile networks live in 55 countries; more than half are HSDPA-enabled across 40 countries.  In total, 121 networks have committed to deploying HSDPA.
 
At the 3GSM World Congress earlier this year, the GSM Association and Intel Corporation announced an initiative to facilitate and drive the adoption of the GSM family of technologies in notebooks. The programme is said to have since become an industry-wide initiative.
 
Participants in the initiative include leading mobile operators: Cingular Wireless,  O2, Orange, TeliaSonera, TIM, T-Mobile and Vodafone as well as major manufacturers and suppliers of mobile, software and PC equipment; Check Point, Dell, Fujitsu, Gemalto, Intel, Lenovo, Microsoft, Option Wireless, Novatel Wireless, Qualcomm, Sierra Wireless and Sony Ericsson.
 
“Through the combined efforts of operators and vendors, the unique advantages and pervasiveness of the mobile platform can now be enjoyed by notebook users,” said Rob Conway, CEO of the GSM Association. “As the roll-out of HSDPA accelerates rapidly across the world, 3G broadband enabled notebooks with embedded, seamless connectivity will give customers the opportunity to enjoy the many benefits of a multi-communications device with global mobility and secure authentication.”
 
The guidelines – unveiled at the 3GSM World Congress Asia in Singapore today – cover the essential elements of 3G integration from the functionality and features to security aspects, compliance and testing. The detailed guidelines are also said to address the issue of the physical location of the 3G modem and the SIM that will enable automatic connection to global mobile networks.
 
According to the GSMA, the implementation of the guidelines will bring the full power of the GSM family of technologies to notebook users, including GSM, GPRS, EDGE, W-CDMA and HSDPA. HSDPA delivers a host of unique benefits to users such as rich multimedia and web browsing anytime, anywhere with global roaming and seamless billing functionality.
 
By addressing the needs of all of the key stakeholders (e.g. operators, vendors and end users), the guidelines are said to be key to ensuring that PC manufacturers can quickly and easily incorporate these unique capabilities in their offerings to customers around the world, with a single, common approach.

Ex-cto and “IP” guy to leave

Vodafone is reorganising again. This time it is deconstructing its New Business unit, which it only instituted earlier this year, and getting rid of Thomas Geitner, who was asked to run it.

The new business unit at Vodafone was the one responsible for all the “Mobile Plus” stuff the operator has been getting excited about — ie fixed broadband and IP services.

But now the mobile plus strategy will be delivered within Vodafone’s European Region and operating companies, rather than by the separate New Business unit. A separate Group Strategy and New Business function is being created to identify new business opportunities and partnerships.

Geitner has a role in neither of these, so he’s off. There is no word yet from Vodafone on who will lead what remains of the strategy unit.

From the outside, it looks as if the operator has decided that it has now got to the stage where enough development has been done on its Vodafone At Home, Vodafone Office and Broadband products, and it is now time to start delivering them through its operating companies.

That’s the positive interpretation, anyway.

We’re number one in 3G, says Alcatel man

Alcatel’s siging of a global framework agreement with Vodafone can be attributed to its increased scale, according to Marc Rouanne, president of Alcatel’s mobile division, and is evidence the company is now a serious global player in mobile infrastructure.

As there is no direct revenue against this announcement, perhaps it might be fashionably cynical to say that as yet the deal is not that significant. But Rouanne has told Mobile Europe that the point is that Alcatel is now clearly regarded as a serious player in mobile by Vodafone, and that the agreement would facilitate future business. 

“There are four global radio suppliers and we are going to be one more, and that at a time when the previous ones are merging or disappearing,” Rouanne said.

“The global framework agreement is recognition that we are a global player,” Rouanne added. “The key questions we were asked by Tier One providers like Vodafone is what was our future, would we be around in 10 to 15 years, and that was especially true in mobile. Vodafone was not convinced we had the critical size in mobile.”

The second clincher for Alcatel, Rouanne said, was the scope of Alcatel’s reach in access technologies – from DSL and WiMax to CDMA and UMTS 3G. Both the scope and the scale of Alcatel’s business have been changed by the (not yet completed) Lucent merger and Alcatel’s acquisition of Nortel’s UMTS business, Rouanne said.

It was that change of scope and scale that had convinced Vodafone to add Alcatel to its list of reference companies, Rouanne said. Clearly the addition of Nortel, which is an existing Vodafone partner, had also heped greatly.

Not being on the list had previously cost Alcatel opportunities, because even though certain in-country operations might have wanted to work with Alcatel, they were prevented from doing so as Alcatel was not a global Vodfaone reference customer.

Rouanne said that with Lucent and Nortel under its belt, the company would be number one in 3G globally, number three in UMTS and number one in CDMA. The company also had “technology leadership” in WiMax, he said.

Netcracker sweet on NGN potential

Mobile operators are focusing on a limited number of key strategic partners as they transform their network and operational infrastructures, meaning there will only be a few winners in each market, according to ex-Yankee Group analyst Sanjay Mewada.

Mewada, who is now vice president of strategy of strategy at OSS vendor Netcracker, said that instead of dealing with a clutch of vendors to develop point solutions for each area of activity, operators are now looking to deal with just a handful of trusted strategic partners.

“Carriers are now making big bets with vendors,” Mewada said, “and in the areas of fulfilment, assurance, CRM, networks and systems integration they are moving to a few strategic partners on their transformation projects.”

Perhaps unsurprisingly, Mewada claimed that this has been good news for Netcracker – with (he said) the company winning nine of the biggest ten contracts awarded in fulfillment this year.

But Mewada also said that there will increasingly be an inevitable blurring of the boundaries between the service fulfillment area (in which Netcracker works) and service assurance, in which he currently thinks Vallent has the best play in mobile, with perhaps IBM-Micromuse the heaviest hitter from the fixed side. In the billing side, he named Amdocs and fancied Oracle in the CRM side.

Although Amdocs has added inventory specialist Cramer to its capability, Medawa said that he still viewed Amdocs as a billing company, rather than a big competitor in the service layer.

“They’re a $2 billion billing company,” he said, “but only an $80 million OSS company.”

As for Telcordia, which has been making a great deal of itself as a fulfilment expert for next gen services, Medawa said the company had great strength in TDM-   “that’s their pedigree” – but asserted that his greatest competition is operators’ internal IT.

Medawa said that operators have been concentrating on the next generation of their network layers, and of their customer layer (the billing and CRM piece) but they have not yet been making similar investment sin the service layer, which sits between the two.

But operators need to create a unified service layer if they are to reap the true benefits of NGNs, Medawa said, because its only by having that service infrastructure that operators can differentiate.

“We see IMS/ SDP sitting between the network and service layers as a hybrid, and as a validation of our emphasis of where that differentiation will be created,” he said. “After investment in CRM and networks, we’ve got to the point where investment in OSS is critical. You’re now seeing that all the major operators all have OSS transformation projects in hand.”

The momentum for that has come from the need for operators to reduce integration and failure costs, Medawa said, as they seek to open up their service creaion and delivery capabilities. Accordingly they have put pressure on the market to deliver interoperable and open standards, which would ultimately enable them to create unified service infrastructures, Medawa said.

Alcatel has announced it has signed a Global Framework Agreement with the Vodafone Group, which will see it supply an end-to-end portfolio of product and service solutions to Vodafone operating companies worldwide.

According to Alcatel, the new partnership will help Vodafone to achieve its  strategic  goals  by  providing  Vodafone operating companies with the option to leverage Alcatel’s products where there is a strategic fit.

Detlef  Schultz,  Global  Supply  Chain  Director  of  the  Vodafone  Group commented: “In order to realise new business opportunities across the Group in  a  co-ordinated  and  focused way it is often important to put in place global  agreements that our operating companies can leverage. Technology is no  exception  and  will  play a key part in delivering our strategic aims. Alcatel’s  global  reach  and  its  competitive,  diverse  portfolio across various  technologies, will help us to maximise our networks’ potential and deliver  on our customers’ future and current needs right across the Group.

Marc  Rouanne,  President  of  Alcatel’s  mobile  communications activities stated:  “To  receive  such prestigious recognition from the Vodafone Group reinforces  Alcatel’s  position  as  a  key player in shaping the future of telecoms networks.”

Compatible handsets now said to be key ingredient

After years of thinking video would be the ‘killer application’ for 3G, a new survey from In-Stat has revealed that existing and potential 3G customers are much more interested in high-quality mapping and navigation services. However, 3G carriers that want to capture that market will have to expand the availability of compatible handsets.

“Expanding the number of Global Positioning Satellite (GPS) or Assisted-GPS (A-GPS) handsets from today’s levels will be an important step for 3G carriers to provide the applications their customers really want,” says David Chamberlain, In-Stat analyst. “Unfortunately, technology choices left over from the 1990s make this difficult but carriers and handset vendors are starting to provide an increasing flow of products that better meet the 3G customers’ needs.”

In addition, the In-Stat report “3G and Mobile Multimedia,” based on a survey of over 1,000 mobile users, found the following:

– Current 3G users are very enthusiastic about the service, which is in marked contrast with other customers who have expressed dissatisfaction with premium applications.
– Customer awareness of 3G is not particularly strong, with over half the respondents indicating they don’t know whether their carrier offers 3G.
– Almost half of respondents indicated that they would consider changing carriers in order to get 3G

The research covers carrier initiatives and marketing of 3G services in North America, Europe and Asia, and includes the results of In-Stat’s survey of North American mobile phone users. The report explores the survey’s results to gauge users’ awareness of 3G, particularly their own carrier’s 3G plans; Uptake of 3G services, both to the handset and using a 3G wireless modem with a laptop computer; and Interest in a variety of applications that have been considered important to 3G’s future.

High cost and undesirable price plans to blame for lapsed 3G users, reveals TNS Global Technology Insight study

Despite mobile phone providers’ best efforts to recruit 3G customers, third generation technology remains a low priority for mobile users across the globe – and cost is the overriding factor. The annual Global Technology Insight (GTI) study by market information company TNS has identified little increase in 3G technology usage amongst consumers, who see the offer of mobile TV and surfing the net as ‘costly and unnecessary services’.

At a global level, almost a quarter of people cite cost as the main obstacle to them using 3G (23 per cent); a further 22 per cent say cost puts them off using Wi-Fi technology.  A fifth of people (21 per cent) are not downloading songs to their mobile primarily because of the expense, and 23 per cent choose not to surf the internet on their phone because it costs too much to do so.

With technology providers promising better-than-ever quality viewing and faster connections, it’s perhaps surprising that 3G and Wi-Fi capabilities have fallen close to the bottom of the mobile phone feature ‘wishlist’.  In fact, fewer people today aspire to have these facilities than they did a year ago, according to the TNS study (7 per cent of those surveyed in 2005 listed 3G as a priority feature to have on future mobile phones, compared with just 4 per cent in 2006).

And although more people now have 3G phones than ever before (20 per cent of mobile users worldwide) less than half (9 per cent) are using their 3G capability.  Of the 26 per cent of people who have Wi-Fi access through their phones (including Smartphones and PDA phones), just 11 per cent are using it – and mobile TV is no more popular, with only 9 of the 21 per cent of people with mobile TV-capable phones actually using this service. 

Despite widespread publicity about cost-effective service packages, mobile providers are still not giving their customers what they want – and people are having to purchase 3G packages that don’t suit.  The TNS study found that by far the most popular methods of payment for 3G and Wi-Fi enabled services are buffet-style price plans – either ‘pay once for unlimited use’, ‘fixed monthly sum for unlimited use’ or having the service bundled as part of the overall contract.  However, many customers are being forced into paying per kilobyte used or paying each time a service is used – which is not popular amongst consumers, says TNS.

Hanis Harun, Global Director, TNS Technology, comments; “Given that cost is such a key obstacle to the adoption of more advanced mobile services, mobile operators must provide pricing regimes which are fixed for unlimited use, transparent and affordable.  We also see some acceptance towards paying by time of use for mobile music and mobile TV services, pointing towards streamed services as a possible solution.  As other sources for mobile services open up, such as side-loading and pod-casting, backed by the high interest in Bluetooth connectivity that we are seeing, it is getting ever more critical for service or content providers to peg their services competitively.

While the TNS study found that other elements such as speed of the network, battery life, screen size, image quality and memory can also be obstacles for many services, their impact pales in comparison to that of cost.

Hanis adds: “Cost is the quick fix and should provide fast usage uplift especially amongst those services already found interesting by consumers, such as songs downloads and realtime TV.”

Largest expenditure forecast to be in Europe

In its latest report, Juniper Research has forecast that the annual growth rate for expenditure on new convergent mobile prepaid/postpaid solutions will average 30% per annum to 2011. And, expenditure is forecast to grow from $299m in 2006 to just over $1.1bn by 2011 as operators strive for competitive advantage and improved operational efficiency.

Juniper says that the largest expenditure during the 2006 to 2011 period is forecast to be in Europe – due to the complex legacy charging environments installed in most established operators.
 
This equates to over 350 deployments of convergent mobile prepaid/postpaid charging solutions around the world in the period 2006 to 2011, with the fastest growth in the period up to 2009, says Juniper. There will also be good opportunities for solution suppliers in the developing markets, particularly at the smaller deployment end of the market.
 
Convergent prepaid and postpaid charging has tremendous potential benefits for mobile operators and for mobile subscribers and are now a rapidly growing segment of the telecom BSS/OSS market, following a rather subdued period.
 
“This is a tremendous opportunity for solution vendors and systems integrators to boost their sales in the telecom BSS/OSS space, provided they have the right products and skills,” commented Bruce Gibson, Research Director at Juniper Research.

“Convergent prepaid/postpaid charging for mobile services has been discussed for a number of years, but there have been few operational deployments. We believe that this is about to change. There have been a small number of high profile deployments for larger operators and a larger number of small deployments for smaller operators, or for sections of an operator’s customer base. The technology works and the benefits are there for all to see. As operators approach critical points in their OSS/BSS replacement cycles the pace of operational deployment will increase dramatically.” 

Option says that it has carried out the first demonstration of live HSUPA (High Speed Uplink Packet Access) data card calls
reaching a wireless uplink transmission rate of 1.3 Mbps and a wireless downlink of 2.7 Mbps at application level. The test calls were carried out at Nortel’s research campus in Chateaufort, France. Commercial availability of “HSUPA-Ready” and full HSUPA products from Option are planned for the first half of 2007.

Whereas HSDPA (High-Speed Downlink Packet Access) enables users to receive large data files across the “downlink”, HSUPA increases the speed at which users can send large data files
across the “uplink”, to a theoretical maximum of 5.7 Mbps

The demo used a laptop, fitted with an Option HSUPA data card (category 3 in uplink, cat 6 in downlink) based on Qualcomm MSM7200™ chipset, and commercial HSDPA/HSUPA network equipment from Nortel.

The companies completed an initial series of tests deploying a number of applications such as: uploading a 15 MB file onto a server, sending and receiving e-mails with large attachments, demonstrating the  simultaneous HSD (High Speed Downlink) and HSUPA capabilities and video conference over IP. In addition, the HSUPA and HSDPA calls were also conducted in a car while driving at 50 km/h.