TELECOM CHANGES TACK ON MOBILE

UPDATE: A more in-depth Herald piece looking at the implications of Telecom's shift in mobile strategy and my cHerald comment piece here. The Sunday Star Times business editor Tim Hunter explains the mobile roaming revenue Telecom can expect to tap into when it has a foot in the GSM/UMTS camp.

Juha's scoop gives some interesting details of Telecom's decision to spend $300 - $400 million on a GSM/UMTS network, confirming rumours that Telecom has been looking to extricate itself from CDMA.

I blogged about it in detail my Herald blog early this morning. So far, no official confirmation of the leak from Telecom and its shares are not on a trading halt, which is unusual given a development that is so material to Telecom's business has been revealed. There'll be lots of angles to this story. For instance:
- What will it mean for the newly flush New Zealand Communications which is set to build a GSM network itself? Maybe it's a good thing as it will open up GSM roaming options.
- What about TelstrsClear? Will it exit the 029 arrangement with Vodafone in favour of some wholesale deal with Telecom?
- What about the hybrid network model Juha talks of, where CDMA is kept for high-speed data. How will this work for customers? Will they need dual-mode handsets to talk and use data? Will
EV-DO be restructed to PC data cards?
- What will Telecom do with its Hutchison 3G partnership? How will it leverage H3G services over here?

A few comments via the Herald:

From Keith:
Interesting comments about Telecom going GSM. I have been a Telecom mobile customer since 1989. I take a bit of an exception to your comment about CDMA being a bad choice. I have found call clarity and connections generally to be better with 025/027. In the early days 025/027 was far superior. Admittedly that may have changed in more recent times. Equally, my reading of the mobile data situation was that the Telecom products have offered better speed. Perhaps the only bad part of the decision is that the rest of the world went with a different standard. Had they gone CDMA then Telecom's choice would have looked inspired!

As for a better selection of handsets. So what! It may be important for geeks and fashionistas but the rest of us get by with the Telecom selection (currently I have a Treo 600). I also have a work 021, a very nice and expensive Nokia, which I like. As for the Motorola RAZR phones, my previous experience with Motorola phones and modems including cable modems is that they are hopelessly unreliable. This was confirmed very recently when the boss "upgraded" to a Motorola RAZR which managed to die just prior to his overseas trip. I wouldn't touch Motorola gear, no matter how nice it looks. I've also managed to persuade my kids to avoid it as well.

Telecom didn't really have much choice by the looks of it, but for most of us it comes down to price and service, not technology.

Of course, with number portability maybe none of it matters. Not that the networks are saying much about that. Where is it at?

From Mark:
Interesting story on Telecom NZ move to GSM. I left NZ in April 1996 and went to work in Vietnam, where GSM mobile phone connections outnumber landlines by a considerable amount. I quickly realised (as you do when you work outside NZ) that a good proportion of the rest of the world also used it, and on my first trip back six weeks later gave my 027 phone to my wife and have been a Vodafone customer ever since. Interestingly, at the same time a good friend of mine owned (and still does) a Telecom franchise in New Plymouth and had no qualms telling me that CDMA would take over the world and texting would never take off. I could never convince him at the time that I thought Telecoms was a poor choice and that the rest of the world was moving in a different direction. I now own a triband Smartphone and use it in the US, Europe, the Middle East and SE Asia, roaming all of the time on Vodafone. It even worked in Brazil!

From Olga:
Your article is interesting but to share another aspect with you, as it happens Vodafone are erecting a tower & base outside my house today. This is despite my cries to Auckland City and Vodafone to move over it over the road where there are no houses.

So possibly this explains their hard stance with me.
There are bigger more powerful reasons, e.g. Telecom using the same facilities? Who cares about the safety (traffic concerns as base box obscures road & frequencies of units etc) of people when theres more profit to be made. Maybe the next time we read the glowing reports in the business section of the papers, you can highlight that the real price is being paid by a handful of affected people sacrificed for the sake of profit. What do you think??

3GSM WRAP UP: 4G, MOBILE TV AND THE NEXT BILLION

Just back from 3GSM in Barcelona...well I was back for a day then off to the Gold Coast, where I am now. It's great here. I'm sitting on the 10th floor balcony with the warm breeze blowing in off the ocean. Some kind soul in this building or a neighbouring one going under the SSID Netgear has also decided to share their wireless internet access, which is great, bcause the fibre connection in the apartment I've rented isn't working.

The jetlag is wearing off (going to Europe for four days was a bad idea). But I've good memories of 3GSM - it wasn't as well put together as the show I went to a couple of years ago in Cannes, but the advances in handset design and mobile services made this one more interesting.

I didn't manage to get to the Sagrada Familia (see picture), the half-finished Gaudi cathedral, such was the hectic schedule of the conference. I'll certainly be heading back to Barcelona for more Tapas and a more leisurely look around that gorgeous city...

10 impressions from 3GSM 2007:

1. The new imate HSDPA smartphones look great - this company is going to play a bigger part in the mobile industry going forward. I've used their i-mate smartphones in the past and they've been okay. But they've cranked things up a notch in terms of design - things are loonig good for them.

2. Telecom is going to have to move to the GSM/HSDPA/LTE path in the next couple of years and leave cdma behind. With Telstra turning off its cdma network in January, Telecom customers are going to be in an awkward roaming position when going to Australia and the economics of being in the cdma camp aren't going to get any better as the GSM mobile base grows. It's not looking good for cdma and frankly, from a consumer perspecctive, having one technology underpinning all the networks is better.

3. The LG Prada is a smart move by LG, as is the Shine, which is far better than the clunky Chocolate.

4. Mobile TV looks lke a fizzer already. Except for big one-off sports events, I just can't see people subscribing to it. Still, there's a big commuter culture in Europe, the US and Asia, so maybe there's hope for it taking off the way it has in Korea.

5. Everyone in the mobile world is afraid of the iPhone. Noone seems to know exactly how seriously to take the threat of Apple, but due to the exclusive nature of the operator deals Apple is seeing, there's a fair amount of cynicism from Cingular's competitors in the US who have remarke that the deal with Apple is less that visionary. As a T-Mobile executive pointed out - exclusivity limits your product's growth potential and breaks from the typical Apple formula for success.

6. 3GSM needs sort out ts shit wen it comes to wireless internet access. For one, they were CHARGING for it! Second, the wi-fi in the press room was hopelessly slow, as was the Vodafone 3G data access they laid on.

7. Nokia seems to be falling further anf further behind in terms of handset design. The Asians, in particular, LG and Samsung are producing better phones these days

8. The Chinese want a piece of the mobile action - Huawei and ZTE were at 3GSM and while they get faint praise from the likes of Ericsson chief Carl-Henric Svanberg, they're generally disliked by the traditional players. That's because they've quickly learnt to do what the Europeamns can but cheaper. They'll be a big force in mobile in the next few years.

9. India is the next big moble market and more people will be accessing the internet from mobles than regular computers by 2010.

10. The Blackberry still deserves its "Crackberry" nickname. Just about every suit at 3GSM had one and was reaching for it constantly

Here are links to my Herald stories on mobile TV and the mobilisation of Web 2.0, the two hot topics at 3GSM.

Here's a story about moves underway by mobile equipment makers to power mobile networks in the developing world with biodiesel...

TOMORROW’S WORLD

Between technical talks on the future of the mobile industry and glitzy launches of new mobile phones at the 3GSM World Congress in Barcelona last week, was the odd session on mobile’s prospects in the developing world.

Telecoms operators talk with eagerness about the “next billion subscribers” that are expected to join the mobile world by 2010. The mobile industry needs these new entrants to keep up the high pace of growth the industry has experienced in recent years.

In developed nations, where mobile phone penetration is often approaching 100 per cent, the mobile players are looking to fancy new services like mobile TV and internet to boost revenue.
But much of the overall growth will come from the developing nations in Africa and Asia and in India.

Vodafone boss Arun Sarin expects India’s mobile subscriber base to grow from 180 million today to 500 million by 2011. He has just spent US$11 billion buying a stake in fourth-ranked telco Hutichison Essar to try and secure a piece of that burgeoning market.
But in tapping Indian mobile subscribers he and other mobile operators face one major obstacle. Three-quarters of India’s population lives in rural areas, off the power grid and definitely off the mobile network.

The big challenge is getting power to the mobile base stations that will push wireless voice and data services out into remote areas.

One possible answer is the use of biodiesel to power mobile base stations. At 3GSM, Swedish mobile equipment maker showed off a biodiesel manufacturing plant that’s small enough to fit on the back of a truck.

The plant is designed to extract oil from a wide variety of crops – from sunflowers, hemp and soybeans to coconuts, peanuts and even cotton plants.

The idea is that a developing country can use its abundant cash crops to power their mobile networks. Some crop extracts, such as palm oil aren’t being pushed as suitable biodiesel fuels, in case doing so would encourage deforestation.

While many rural mobile networks in the developing world are currently powered by conventional diesel powered generators, biodiesel has the important advantage of being biodegradable so is less polluting that petroleum-based diesel. Using those plentiful crops as the base ingredient also makes it much cheaper to produce.

The conversion process is fairly simple and takes up to eight hours. The plant and nut oil is combined in a vat with alcohol, usually methanol, and a catalyst, typically sodium hydroxide or potassium hydroxide, which is dissolved in the methanol. The “reaction mix” is heated to just above the boiling point of the alcohol for several hours. After the glycerol, a type of sugar alcohol which has its own industrial uses, has been separated from the biodiesel, excess alcohol is tapped off. The biodiesel can then be diluted with petroleum diesel or run in its purest form,

Ericsson says a thousand litres of pure biodiesel can power up to 40 mobile base stations for a day. It has a pilot scheme running with Indian mobile operator Ideal Cellular using seeds of the Jatropha tree as a base ingredient and is also running trials in Nigeria. The irony is that farmers in developing nations could soon be growing a sizeable portion of their crops not to feed their communities but power the mobile networks that bring them into the communications loop.

Also below is a story I wrote up for the Telecommunications Review that wasn't publshed as it was done to death in the magazine's online publication The Line, which is a subscriber publication so would only have been read by the industry anyway...

TELSTRA CELL RANGE REACHES 200KM
by Peter Griffin
Telstra has deployed new long range cell network technology to extend broadband further into the outback as it beds in its high-speed NextG data network and prepares to pull the plug on CDMA.

The Australian operator has completed successful trials of long distance, high speed data transfer, upgrading the software in mountain-top base stations to extend site coverage from 50km to 200km.

The Extended Range software provided by Swedish equipment maker Ericsson, allowed Telstra to achieve data download speeds of 2.3Mbps (megabits per second) at a range of 200km during the trials.

“It’s a major leap from the normal 50km cell range. It’s particularly important for bringing high-speed networks to remote locations,” said Ericsson chief executive Carl-Henric Svanberg who revealed the results of the trials at the 3GSM World Congress last month in Barcelona.

Ericsson is effectively shut out of the New Zealand mobile market with the decommissioning of Telecom’s aging 025 network. After months of furious tendering in 2004, Nokia won the contract to upgrade Vodafone’s GSM network to wideband CDMA and its mobile broadband successor HSDPA and Lucent has completed a similar evolution for Telecom.

But Ericsson’s technology and mobile-based range extender services offered by other vendors, could become a viable access technology for areas of rural New Zealand, which are currently served by fixed wireless and satellite broadband.

Ericsson had upgraded 5000 of Telstra’s base stations to support high-speed HSDPA services in just 10 months, covering 98 per cent of the population using 850MHz spectrum.
“Every skilled electrician you can find in Australia was working for Ericsson at some time last year,” said Svanberg.

Even as Telstra starts testing 7.2Mbps data cards on its network, which now supports maximum download speeds of 14.4Mbps, Ericsson has developed an early version of the next evolution of mobile technology, so-called Long-Term Evolution.

Ericsson’s live LTE demonstration at 3GSM tested applications at peak transfer rates of between 100 and 144Mbps using 20Mhz of channel bandwith in the 2.6GHz frequency.
Ericsson’s vice president of systems architecture, Hakan Djuphammar, said MIMO (multiple in, multiple out) technology had allowed Ericsson to achieve similar transfer speeds using existing HSPA technology, but that was confined to carriers using 5MHz blocks of channel bandwidth.

“If you want to get to peak rates of 100 – 200Mbps, you have to increase the bandwidth of the system,” he said.

“HSPA can’t do that. LTE is more geared towards cases where you can access large chunks of bandwidth.”

LTE was drawing attention from carriers seeking to “re-farm” existing radio bandwidth and CDMA carriers looking to switch to migrate to GSM but reuse as many of their radio assets as possible.

“The CDMA industry peaked at 30 per cent of market share. It’s declining. That comes back to economies of scale,” said Djuphammar.
Ericsson had switched Brazilian operator Vivo from CDMA to GSM changing out 2300 base stations in 103 days.

Telstra will switch off its CDMA network in January after migrating customers to its GSM voice and HSDPA data networks. As a result, Telecom customers will need to take GSM phone when roaming to Australia or invest in the $299 Samsung WorldMode phone on offer that contains both CDMA and GSM chipsets.

LTE is likely to become commercially available towards the end of 2009 following further testing.