Reuters - Operators unite to challenge Apple's apps

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Operators unite to challenge Apple's apps

Monday, Feb 15, 2010 3:39PM UTC

BARCELONA (Reuters) - Twenty-four telecom operators have formed an alliance to build an open platform that will deliver applications to all mobile phone users in an effort to compete with Apple's successful apps store.

The move is supported by three of the world's largest device makers -- LG Electronics, Samsung and Sony Ericsson, the telecoms industry body GSM Association said on Monday at the Mobile World Congress in Barcelona.

But analysts were skeptical whether so many operators could work together efficiently and noted that it was difficult to compete with the strength of Apple's brand.

"I do question whether such a large group of mobile operators will be able to achieve the level of cooperation and integration required to make this initiative a success," said Mark Newman, chief research officer at Informa Telecoms & Media.

"Some of these operators (for example AT&T and Sprint) are fierce competitors and have always tried to find ways of differentiating themselves in order to win market share," Newmann added.

AT&T, Bharti Airtel, China Mobile, MTN Group, NTT DoCoMo, Orange, Orascom Telecom, Telefonica and Vodafone are among those who have agreed to the initiative, the GSMA said.

"There is one point that is missing: the brand and the marketing power that Apple has," Frost & Sullivan's analyst, Saverio Romeo said.

"Every time Steve Jobs decides to launch a new product/device/service, the entire world, the common individual in the street included, passionately discusses it for days," Romeo added.

Together the operators have access to over three billion customers around the world, the GSMA said, adding the plan would help reduce fragmentation in the industry.

In a first step, "the alliance will seek to unite members' developer communities and create a single, harmonized point of entry to make it easy for developers to join," the GSMA said.

John Strand, owner and chief executive of Strand Consulting, said the plan reminded him of OMTP or Open Mobile Terminal Platform that was founded in June 2004 by eight operators and never heard from again.

Frost & Sullivan's Romeo also said the alliance would have a hard time getting past Steve Jobs.

"Apple has built a nice and very well functioning castle with a direct bridge to consumers over which no one else seems able to walk comfortably so far," Romeo said.

"If the rest of industry just keeps talking about applications stores trying to walk on the Apple's bridge, they will always find Steve Jobs at the door of the castle."

(Reporting by Nicola Leske; Editing by David Cowell)

Reuters - Smartphones a growing problem for networks

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Smartphones a growing problem for networks

Tuesday, Feb 16, 2010 10:57PM UTC

By Kate Holton and Georgina Prodhan

BARCELONA (Reuters) - The chief executive of Vodafone Group Plc, the world's largest mobile network operator, expressed the fears of many on Tuesday when he said Google Inc should not be allowed to dominate the mobile space.

Vittorio Colao, speaking ahead of a keynote speech by Google's chief executive, told the Mobile World Congress trade fair in Barcelona that, instead of letting one group dominate, new business models needed to be created to cope with the demand operators are facing for data services.

The comments added to the impression at the annual gathering that, while handset makers, chipmakers and service providers are all flourishing from the rapid growth of smartphones such as Apple Inc's iPhone, operators are being left to fund the related improvements needed in network capabilities, while pondering how to make a profit.

Later, Google responded to say the mobile industry needed to rise to the challenge and work with the Internet giant to meet the insatiable consumer demand.

In his first speech at the fair, Google Chief Executive Eric Schmidt told a packed auditorium he relied upon the successful delivery of services from operators and said the two sides needed to work together.

"Find a way to say yes, not no is our thesis," he later told journalists. "We need them to go ahead and invest these enormous amounts of money at great risk and in return they need us to continue to build powerful new reasons to upgrade the connections and get a new phone."

BlackBerry-maker Research in Motion Ltd said it was well aware of the data problem, saying smartphone manufacturers must develop less bandwidth-guzzling products or risk choking already congested airwaves.

As users abandon traditional cellphones for netbooks, wireless modems and feature-rich smartphones, wireless data traffic has exploded and is threatening to saturate network capacity, co-CEO Mike Lazaridis told Reuters in Vancouver before setting off for the trade fair in Barcelona.

"If we don't start conserving that bandwidth, in the next few years we are going to run into a capacity crunch," Lazaridis said. "You are already experiencing the capacity crunch in the United States."

TURNING POINT

Colao said the industry was at a key point in its development, as it adapts to the new economic realities of the smartphone and the ever-increasing amounts of data that consumers wish to consume.

In order to succeed the industry needs to allow operators, content owners, application developers, search and operating system owners to develop new business models, to enable the operators to continue to invest in new and faster networks.

Within the search and advertising market, Colao said one player, Google, dominated the industry and held around 70 to 80 percent of the market, which should be "looked at."

Spain's Telefonica SA said last week it was considering charging search engines and a source at the Spanish company told Reuters they had previously discussed the proposal with other European operators.

But Verizon Wireless -- the biggest operator in the United States and which is owned by Vodafone and Verizon Communications Inc -- said they were taking a more considered view.

"I recognize like everybody else there is the scary aspect of Google which is similar to the scary aspect of Microsoft 10 years ago," Verizon Wireless Chief Marketing Officer John Stratton told Reuters.

"Who knows where this Google thing is going to go. I do think there is a bit of a knee jerk response to anything that Google does."

Vodafone's call for a different approach stands in contrast to the makers of operating systems and those involved in the production of the handsets.

Samsung Electronics Co Ltd and Sony Ericsson unveiled new high-end smartphone models on Sunday aimed at improving their positions in the more lucrative part of the phone market.

Texas Instruments Inc told Reuters at the fair on Tuesday it was enjoying strong demand for its wireless chips due to the continuing rise of smartphones.

"That's what's driving the industry," Greg Delagi, the head of TI's mobile operations said. "It's the place where there's opportunities for differentiation."

And he also gave an indication things may only get tougher for the operators, explaining that TI was working on new capabilities such as filming and sharing three-dimensional video on smartphones which are even more data intensive.

Cisco expects data traffic to more than double each year over the next five years, with video making two thirds of mobile data.

(Additional reporting by Georgina Prodhan, Tarmo Virki and Nicola Leske in Barcelona and Nicole Mordant in Vancouver; editing by Greg Mahlich and Andre Grenon)

Reuters - Google CEO woos suspicious mobile industry

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Google CEO woos suspicious mobile industry

Tuesday, Feb 16, 2010 10:59PM UTC

By Georgina Prodhan and Kate Holton

BARCELONA (Reuters) - Google's Chief Executive Eric Schmidt urged the mobile industry to embrace the mobile Web instead of seeing Google as the enemy, in his first speech to the world's biggest wireless industry fair.

Schmidt said the industry stood at an historic moment when the computing power of mobile phones, attractive services and networks that could handle them had come together, and said Google was driving network traffic to the benefit of operators.

"It's like magic. All of a sudden there are things that you can do that didn't really occur to you... because of this convergence point," he told a packed auditorium at the Mobile World Congress in Barcelona.

"That time is upon us -- right now, right here, for this year and at least the next many years," he told the audience of operators, telecoms gear vendors, and observers of an industry that generally views Google with suspicion.

Google has recently made overtures to other industries who consider it a threat, including newspaper and book publishers, and advertising agencies.

In telecoms, Google has raised hackles by launching a free smartphone platform, Android, selling its own-branded phone directly to consumers without the mediation of carriers, and announcing plans to build a super-fast broadband network.

It has also been seen as a problem by some operators, who are having to invest to upgrade their networks to meet the huge demand for data services required by users who are spending more and more time on the mobile Web on sites from Google and others.

Google announced two new features: one that translates images of text in foreign languages captured by a camera, such as restaurant menus, and the addition of German as the fourth language supported by Google's voice-recognition technology.

YES, NOT NO

Schmidt's remarks were met with skepticism and some hostility from an audience already worried about economic recession and the prospect of becoming "dumb pipes" that merely carry valuable content, including free Internet calls.

"I'm talking about Google stealing operators' talk minutes," said one questioner, when asked by Schmidt to clarify his concerns. Schmidt shot back: "It's not our objective to steal your minutes."

Later, in a roundtable with journalists, Schmidt explained why he believed the two industries needed one another.

"We need them to go ahead and invest these enormous amounts of money at great risk and, in return, they need us to continue to build powerful new reasons to upgrade the connections and get a new phone," he said.

"Find a way to say yes, not no, is our thesis."

Google's core business is in helping online businesses to attract vast audiences to which it can sell advertising.

"We want to have a little bit of Google in everybody's transaction with the Internet," Schmidt said.

He added that, eventually, other means of making money than advertising, like selling software to large enterprises, would become significant. Google has email, document-management and other subscription services for business users.

(Reporting by Georgina Prodhan and Kate Holton; Editing by Andre Grenon and Tim Dobbyn)

Reuters - FCC to propose faster broadband speeds

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FCC to propose faster broadband speeds

Tuesday, Feb 16, 2010 11:35PM UTC

By John Poirier

WASHINGTON (Reuters) - The U.S. Federal Communications Commission unveiled a plan on Tuesday that would require Internet providers to offer minimum home connection speeds by 2020, a proposal that some telecommunications companies panned as unrealistic.

The FCC wants service providers to offer home Internet data transmission speeds of 100 megabits per second (Mbps) to 100 million homes by a decade from now, Commission Chairman Julius Genachowski said.

Industry estimates generally put average U.S. Internet speeds at below 4 Mbps.

The proposal is part of the FCC's National Broadband Plan, due next month. It comes a week after Google Inc rattled Internet service providers with its plan to build a super-fast Internet network.

Some providers derided the FCC's plan.

"A 100 meg is just a dream," Qwest Communications International Inc Chief Executive Edward Mueller told Reuters. "We couldn't afford it."

"First, we don't think the customer wants that. Secondly, if (Google has) invented some technology, we'd love to partner with them," Mueller added.

AT&T, the top broadband provider among U.S. telecommunications carriers, said the FCC should resist calls for "extreme forms of regulation that would cripple, if not destroy, the very investments needed to realize its goal."

Verizon, the third-largest provider, and one that has a more advanced network than many competitors, said it has completed successful trials of 100 Mbps and higher through its fiber-optic FiOS network.

"(One gigabit per second) as discussed in current news reports is a lot of signal; typically enough for many massive business operations," Verizon said in a statement that referred to Google's plan to test a network with those speeds. "But we could make it happen over the FiOS network without much trouble, should a market for it develop."

Verizon said it offers speeds of up to 50 Mbps.

One analyst questioned whether the FCC's proposal could lead to a sustainable business model.

"In order to earn a return for investors, you have to be conscious of what consumers will pay. I don't know this is something consumers will pay for," Piper Jaffray analyst Christopher Larsen said. "It's a nice goal, but it's a little on the over ambitious side."

Genachowski said the FCC plan would set "ambitious but achievable goals" in remarks to the National Association of Regulatory Utility Commissioners conference.

He offered few details on the plan and how the FCC would get providers to reach the minimum speeds. He said the goal is to transform the United States into the world's largest market of very high-speed Internet users.

NEED FOR SPEED

Genachowski said speedier Internet service would help create jobs and economic growth.

"Despite significant private investment and some strong strides over the last decade, America's broadband ecosystem is not nearly as robust as it needs to be," he said.

The United States ranked 19th in broadband speed, trailing Japan, Korea and France, according to a 2008 study by the Organization for Economic Co-operation and Development.

Data shows that about 64 percent of U.S. households used a high-speed Internet service in 2009, the Commerce Department said on Tuesday. That is a 25 percent increase from 51 percent two years earlier.

Companies like network equipment maker Cisco Systems Inc, which makes routers and switches which support Internet traffic, would benefit from greater broadband investment.

"Cisco believes that a next generation Internet will enable economic growth and job creation, as well as improve the delivery of health care, education and energy," Jeff Campbell, Cisco's director of technology and trade policy, said in a statement.

Research in Motion Ltd, which makes the BlackBerry mobile device, said on Tuesday that smartphone manufacturers must start developing fewer bandwidth-guzzling products or risk choking already congested airwaves.

Genachowski lauded Google, the world's top Internet search company, for plans to offer its fast network to up to half a million people, and called on other companies to step up their broadband plans.

Google wants to demonstrate that a carrier could easily manage complex applications that use a lot of bandwidth without sacrificing performance.

"We should stretch beyond 100 megabits," Genachowski said. "The U.S. should lead the world in ultra high-speed testbeds as fast or faster than anywhere in the world."

The FCC also wants to use the universal service fund, a U.S. subsidy program for low-income families to gain access to phone service, to get more people high-speed Internet access.

(Additional reporting by Ritsuko Ando and Sinead Carew in New York, editing by Dave Zimmerman, Robert MacMillan, Tim Dobbyn)