A Week in Wireless 76
01-NOV-2002
There's been some joie de vivre of late about the way French President Jacques Chirac has been strutting his stuff on the European stage. Having made crème anglaise out of Tony Blair at last week's EU summit, Chirac went on to issue a statesmanlike appeal on behalf of the telecommunications industry, demanding that the European Commission take action to ease the sector's continued suffering. This was really another thinly veiled 'J'accuse' for the attention of the brow-beaten Blair, not to mention the German Chancellor, whose governments Chirac blames for endangering France Telecom with their scandalously expensive 3G licence auctions (not that they forced FT to take part, mind you).
While such heavyweight intervention will have been welcome in some quarters, Chirac failed to come up with any ideas as to what should actually be done to get the industry back on track. He did, however, instruct the Commission to find some answers before the next EU summit comes around in five or six months' time. It was a little bit like saying: 'Something must be done; just don't ask me what.' But then Tony Blair, for one, probably wasn't about to.
Gladly for France Telecom, things appeared to be looking up. Revenues have risen nine per cent over the first three quarters of the year, FT reported, thanks largely to the strong performance of Orange. The mobile arm itself conceded that its 15 per cent growth target for 2002 was unlikely to be met, but sugared the pill by announcing a breakthrough in its UK ARPU figures, which rose by 3.2 per cent to £258 for the year ending September 2002. 'Falling' has become such a standard ARPU epithet that FARPU might be an acceptable amalgamation, and the fact that Orange UK has succeeded in halting what was a four-year decline should come as a relief to operators everywhere.
Encouraging inverse FARPU is, of course, the purpose of Vodafone's new Live! service and, once last week's post-launch hangovers had abated, analysts began to weigh up Live!'s prospects. Forrester Research was in generous mood, enthusing that "Vodafone Live! will rock European mobile." Its main criticism was that the service is overpriced, but that was really the only black mark on an otherwise glowing report. Vodafone will not be alone in reaping the rewards of Live!, Forrester argued, with Europe's i-mode operators also well-placed to ride the waves of its popularity. ArcChart took a different view, however. "Vodafone dead!" began its assessment of a service which it considers doomed before it has even got off the ground. "While Orange's SPV is an example of 3G services over a 2.5G platform," the ArcChart rubbishing continued, "Vodafone is using its 2.5G network for a 2G business model." Orange and Microsoft have probably printed that bit out and framed it.
Having ushered Live! out into the big, wide world, Vodafone once again found itself occupied with the ongoing battle to wrest control of Cegetel from Vivendi Universal. Vivendi this week suggested that its 44 per cent Cegetel stake was worth more than the E6.77bn that Vodafone had offered. Basically, Vivendi does not want to sell at all, and it headed for the courts in an attempt to buy itself more time to put together a counter-bid for the Cegetel shares owned by BT and SBC, for which Vodafone has already offered E6.3bn.
Also curious in the context of the Vodafone Live! launch were reports that SK Telecom has been in discussions with Vodafone, Telefonica and other European operators about the possibility of exporting its mobile internet platform. In the same way as Vodafone, Telefonica already has its own mobile internet plans, having licensed i-mode from NTT DoCoMo, so it would be interesting to see what part SK thinks it has to play. Like DoCoMo, SK Telecom is clearly beginning to harbour global ambitions. What is less obvious, though, is how easy it would be to engineer a link-up with European GSM players.
SK Telecom had more immediate problems at home, however, as did rival operators KT Freetel and LG Telecom. It emerged this week that the national regulator, the Korea Communications Commission, has decided to ban all three operators from taking on new customers - SK for 30 days, KTF and LG for 20 days. All three have consistently flouted the laws banning the subsidising of new subscribers, ruled the KCC, which added that, as it happened, it was letting the miscreants off rather lightly. It could have banned SK, the worst offender, for up to nine months. It's certainly tough luck for anyone who was planning to get a new phone in Korea over the next few weeks.
A lean month appeared in store for Korea's operators, then, but for the country's leading manufacturer, Samsung, there was once again little but positive news. The US is the latest market that Samsung is taking by storm, the firm itself said, claiming a 45 per cent market share in higher end phones costing $150 or more. Samsung is far from attaining that kind of dominance with mass-market devices, though, and there was also a new rival in the high end market to worry about, as Palm released its first converged PDA/phone. Perhaps even more than Samsung, RIM and Handspring will be feeling the threat from Palm's new Tungsten W GPRS device, which is targeted at the enterprise customer. There is also a non-converged variant, the Tungsten T, with Bluetooth capability. A CDMA 1x version has not yet been announced, but is expected to follow.
In Sweden, the regulator PTS was looking to take a softer approach than its Korean counterpart, as operators continued to gripe about that problematic 99.98 per cent 3G coverage requirement. Now it's one thing when Orange and Vodafone complain, but when the eternal optimist Hutchison tells you that something can't be done, it's probably time to take notice. Sure enough, after Hutchison joined the other three Swedish licensees this week in asking for a change in the licence conditions, PTS evidently decided that it was time for a re-think. A roundtable discussion with the operators is now being arranged.
Arguably the week's most momentous discussions, however, had been going on in China, where the government has finally agreed to back the home-grown TD-SCDMA 3G technology. Domestic vendor Datang and Siemens, which jointly developed TD-SCDMA, will be doing somersaults at the prospect of having the world's largest market at their disposal, but the door has not been closed on WCDMA and CDMA2000 by any means. TD-SCDMA is not expected to be ready until late 2004 and, as is the way with these things, hold-ups would come as no surprise. The other technologies will therefore have a considerable head start, which will give plenty of hope to US and European vendors, and to Nokia especially, which has invested so much time and effort in spreading the WCDMA gospel in Chinese circles.
Ericsson, too, will have been following developments in China with close interest, and the same has apparently been true of various 'firsts' claimed by rival suppliers over the past few weeks. No sooner did A Week In Wireless report that Logica and Rocket Mobile had demonstrated MMS interoperability between GSM and CDMA than the Informer received several polite reminders from Ericsson representatives that they had in fact pulled that one off back in June. It was the same story with Lucent's CDMA2000/ WLAN hand-off announcement, our friends at Ericsson, who've been able to do that for ages, explained.
And with those various records straightened, that's it, I'm afraid -- the fun's over. For all you unreconstructed males out there, the days of admiring attractive women on billboard adverts are a thing of the past -- at least they are if you want to avoid having Patricia Hewitt, the UK Trade & Industry Secretary, on the nation's case. It was just such an advert for the Birmingham Motor Show (and a pretty tame one, it has to be said) that Ms Hewitt chose on Monday to brand as "pathetic...old-fashioned rubbish". Shamed car-lovers up and down the country averted their collective gaze. And it's probably not too hard to predict how she would have reacted to the news that 'the WorldCom Women' - read the 12 most photogenic WorldCom women out of 300 applicants - have done a deal with Playboy for a tasteful, 'glamour' shoot. Pathetic rubbish or not, it seemed good on the WorldCom girls that at least they, unlike virtually everyone else, have managed to come out of the whole fiasco with some money to show for it.
The Informer
telecoms.com
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