Much of the blame was put on macroeconomic factors and the wireless industry’s transition from CDMA to WDCMA. The company tried to point to a silver lining on the horizon (2009), but somehow it feels like wishful thinking.

Today’s turn of the events not only highlights the folly of the unlikely pairing – the worst since Billy Bob Thorton hooked up with Angelina Jolie – it also points to a larger, much deeper problem facing the telecom equipment makers in the West.

Too Many Sellers, Too Few Buyers

At the time the deal was announced in April 2006, I had pointed out that the merger of Alcatel and Lucent was driven primarily by the lack of market control by equipment vendors. As carriers continued to consolidate, most equipment companies have lost their pricing power and have been left to snivel like lowly serfs in front of industry powerhouses such as AT&T and Verizon.

In November 2007, I spoke with Krish Prabhu, the then-CEO of Tellabs, who lamented how carrier consolidation was crushing smaller players like his company. Troubles at Motorola and Tellabs are part of the same trend that has besieged the industry. Nokia Siemens, Nortel and others are also struggling to find a strong footing in what seems to be a quicksand hidden by hot tar.

At the same time, the industry is coming under sharp attack from low-cost Chinese vendors that are essentially subsidized by various governmental entities. By playing the cut-price game, they have won key contracts in fast-growing Asian, African and Latin American markets, and recently have started to mop up in Europe.

The presence of ZTE and Huawei has helped carriers squeeze blood out of a stone and destroyed the money-making potential of Western equipment makers. Companies like Alcatel-Lucent don’t really have much flexibility – they have huge cost bases that include R&D, manufacturing and little ability to play the price game in the rapidly growing Asian markets.
If these deflationary forces were not enough, some of these companies are just not prepared for the rapidly changing needs of today’s networks.

The world has gone all "IP" and the needs of telecom operators, especially the new ones with big wallets in Asia, Africa and Latin America, have evolved accordingly.

The State of The Telecom Market

The troubles of these companies come at a time when the sales of equipment to service providers and enterprises are going up, totaling $139 billion in 2007, up 13 percent from 2006, according to Infonetics Research. The research firm is predicting total equipment sales will climb to $174 billion in 2011.

Unfortunately, most of the sales are coming in areas where large incumbents such as Alcatel-Lucent have marginal presence. For instance switches, routers and IPTV gear continues to do well, as does demand for fiber broadband-related equipment. (Alcatel-Lucent has been doing well in GPON, but has seen its DSL sales slow down and profits evaporate, thanks to competition from Huawei.) China and India are beginning to account for a much more substantial part of the worldwide capital expenditure.

What makes the situation worse for Alcatel-Lucent is that they blew up in middle of an investment cycle. Why? Because the cycle has hit a plateau in North America and Europe, according to Infonetics Research. In China and India, the Chinese equipment makers are cleaning up. The growth in those two economies, much like rest of the emerging economies, is coming from the mobile buildout and lately, from WiMAX demand as well.

According to Infonetics Research, Cisco was the largest company in 2007, followed by Alcatel-Lucent. In the telecom sector, an increasingly resurgent Ericsson is running neck-to-neck with Alcatel-Lucent, which explains today’s disaster.

What Next For Alcatel-Lucent?

The shuffling of management doesn’t really address or fix the structural issues of this company specifically or industry at large. Earlier this week, there was a story in the Wall Street Journal about Alcatel-Lucent’s move into the services business. I am sure that's going to work out eventually -- they reported $1.3 billion in service-related revenues this quarter -- but in the long run they would have to buy their way into the market. Alcatel-Lucent could acquire Cognizant, a telecom industry services company, but for that they would have to give up more than half of their company. And even that isn’t going to fix this company’s structural and fundamental problems.

Too bad, for at one time Alcatel looked like the king of the telecom hill. By buying Lucent it turned that hill into a heap of scrap. I think this company is headed in the same direction the relationship of Thornton and Jolie went: south.

The agreement involves about CNY5.5 billion. According to this agreement, Nokia Siemens Networks will assist China Mobile in the designing, building and maintaining of the company's radio and core network in the major provinces and cities across China and offering solutions of the operating support system.

A representative from Nokia Siemens Networks told First Financial Daily that this agreement is the result of China Mobile's open tender for GSM expansion in the first half of 2008. The contract is signed by equipment suppliers with the provincial branches of China Mobile separately.

Zhang Zhiqiang, head of Nokia Siemens Networks Greater China Region says that they are glad to continue their strategic cooperation with China Mobile to help the company meet to provide high quality service to customers. This agreement represents the strengthening of Nokia Siemens Networks' position as a leading solution provider to China Mobile.

The tailored and optimized network designed by Nokia Siemens Networks will help China Mobile to minimize the required network capital expenditure, gain a roadmap for network evolution and achieve full potential of the product for the best possible network performance, which will enhance operations and processes as well as China Mobile's competitiveness.

Headquartered in Espoo, Finland, Nokia Siemens Networks is a leading global enabler of communications services. The company provides a complete, well-balanced product portfolio of mobile and fixed network infrastructure solutions and addresses the growing demand for services with 20,000 service professionals worldwide. Nokia Siemens Networks is one of the largest telecommunications infrastructure companies with operations in 150 countries.

Introduction

Strategic product marketing refers to the set of processes that are required to place products, services and overall solutions to ensure long term profitability and growth. Typically, a company’s product management department performs strategic product marketing with the assistance of the marketing and sales organizations. Strategic product marketing is not selling, or marketing research or product marketing per says. It is the strategic placement of products, solutions and services to lock in the market and thus keep competition in check while ensuring that the target market evolves in such a way guaranteeing long term demand for the supplying corporation’s solutions and services.

This article explains the organizational and procedural requirements required in order for a company to be market driven and ensure strategic product marketing. Although the article uses the telecommunication/information industry as a target example, the article’s concepts and thoughts can be applied to almost any growth industry.

Organizational requirements for a market driven company

There are many ways to organize a company so that it can be considered market, rather than product driven and any good text on organizational structure and organizational behavior can be referred to for this. What concerns us here is the functions that are required within a market driven organization in order to achieve long term profitability from strategic product marketing. We therefore define three necessary functions of marketing, strategic product management and sales that must function and interact properly in order to allow strategic product marketing. This article refers to functions rather than departments or units because we are not per say concerned with organizational structure of efficiencies. For the purposes of this article it is irrelevant if these functions are within the same unit, or within separate units. What is important is that these functions exist and interact properly. Where they are placed is a question of organization efficiency that has to do with the corporate culture of a particular company.

Definition and interaction of Marketing, Product management and sales functions

Marketing

Imperative to any market driven company is a strong and effective marketing department. The marketing department, aside from performing marketing research and trends analysis with the goal of identifying new potential market areas and the phase that these areas are currently in, has also the burden of interacting with particular customers and identifying this customer’s need (there may a debate here whether needs exists or are created, or both, but this debate does not concern us here).  The identification of a particular or set of customer needs must be at a level of abstraction to allow flexibility in choosing ways to satisfy this need that is, any market communication activity that identifies needs should refrain at all cost from mentioning a way to satisfy this need (ex: mentioning of products or solutions) since this will limit the possibilities of offering the imaginative and cost effective solution that will indeed cover this customer’s needs. Simply put, the marketing function is to understand the customer’s wishes and communicate those wishes in an effective manner to the organization.

Product/Solutions management

Upon identification of the customer’s needs, then the goal is to put together and deliver a feasible solution whose benefits cover the needs of the customer in question. This is the role of the product/solutions management function. Note that the input to this activity is basically the marketing communication that was mentioned previously. Good marketing input will give the product/solutions management function enough understanding of where the particular customer wants to go in order to be able to conceive (perhaps with the customer’s help) a solution whose

benefits fulfill to a large extent the customer’s wishes. Again, if the marketing information was at the right abstraction level, and did not consider or base itself on any particular solution, this gives ample flexibility to the product/solution management function to use all the available information at its disposal including competitor information and information pertaining to new technologies and product trends including strategic issues important to the company (information that may not be present at the marketing stages) in order to both satisfy the customer and keep in tune with the suppliers long term interests.

Sales

This simply said and done with great difficulty is to convince the customer that the proposed solution will meet their needs, and at the same time minimize the customer’s cognitive dissonance [1], which always occurs after a solution is purchased/installed. In order for the sales function to be successful, the solution must properly communicated to the customer and the customer must be convinced that this solution is what they were looking for. Obviously for sales to be successful, the needs of the customer must have been properly communicated to the organization (the marketing function), the solution must have been developed based on those needs (product management and design) and this solution along with the right price tag must be communicated and agreed with the customer with the usual public relation efforts (ex: wining and dining). The after sales support function, that is, supporting the products that were sold should not in any way be underestimated since again this function makes a customer feel that the supplying organization is serious and responsible about supporting the products/solutions that it thrusts to the target market. Again this all has to do with minimizing the cognitive dissonance a customer feels after a purchase. A happy customer always comes back and the 20 percent customer base does 80 percent of business, which are usually return customers.

Now that we have established the necessary functions we can focus on the product/solutions management function and the process of strategic product marketing.

The strategic product marketing process

Upon receipt of the marketing requirements, the product/solution management function will conceive the overall solution and prepare the technical requirements required in order for the relevant design departments , manufacturing and deliver channels to design and deliver the said solution at an acceptable costs in order to allow competitive pricing.

One important issue that will be tackled during the initial solution conception phase, and this is one of the primary roles of solution management, is to design a solution that first of all includes an evolution roadmap in order to secure future income from this solution, and in addition monitor/influence the customer’s network evolution in such a way that will first of all benefit the said customer, but in addition will not misalign the target customer’s installed base vis a vis the supplier’s  products. Of course this means that first of all the supplier’s technology must be state of the art, secondly that the supplier influences industry standards so that future technologies are compatible with the supplier’s  produce, but in addition that the network evolution of the customer is monitored to ensure that placed items do not produce a discontinuity with regards to products that are imperative to first of all lock out competitors, and more importantly ensure a smooth evolution to future revisions of the suppliers products.

A common approach to securing the above is to have a thorough model of the target environment that the solution is to be implemented in, before development of the solution begins. In the case of a telecommunications operator, the supplier will have a detailed model of the customer telecom operator’s target network where the solution will be implemented. Such variable as network node load as well as signaling load, billing mediation systems as well as customer care, and node load should be well defined and understood since those areas are considered of strategic importance to any operator and thus need to be addressed by the relevant supplier.

A strong understanding of the target environment implies that areas can be identified that are crucial to be addressed by the supplier in order to ensure future revenue. If we return to our telecom operator above, if the particular supplier is in the core business of selling billing systems, then it is perhaps in the interest of this supplier to have good information on what kind of billing equipment the operator has, what sort of billing mediation equipment is included in the network, and how all this is connected to the customer care units of the operator.

Another requirement for a supplier and its strategic product management function is to include roadmaps for core products that address the issue of product evolution towards a target technology while at the same time protecting present and past investments. Thus, a particular customer that invests in a particular installed base will be assured that their investment is protected as long as their network evolves in the right way.

With the above in mind we can define the following procedure:

1.        The solution management function receives from the marketing function the needs of a customer. It is assumed that these needs can be satisfied by a solution that relates to the core business that the supplier is in.

2.        A detailed copy of the customer network exists, and an analysis is performed to identify the area of the network that the solution is expected to play, as well as an anticipation of the evolution of the part of the network (as well as related parts) that relates to the present and future supplier core business.

3.        Taking as input the customer’s requirements (including budget and competitive information such as pricing, or related aspects of pricing such as network dimensioning) and the network analysis plus the anticipated network evolution to future technologies (for example evolution of a 2G wireless network to 2.5G and then 3G) a solution is drawn . It is imperative that this solution first of all satisfies the customer’s full needs including features and financial, but also contains a roadmap that coincides with the anticipated technological evolution of the customer network.

4.        When the solution is considered adequate, a financial analysis is made to see if this solution is worth pursuing. This financial analysis will of course include the cash outlays that are required to product this solution and in addition the incomes that will be received by achieving and installed base, but more importantly the future cash revenues resulting from the evolution of this solution towards future technologies as anticipated by the solution and the product roadmaps.

5.        If the result of point 4 is a decision to pursue the business, then requirements can be drawn and sent to the appropriate departments in order to design, deliver and put a final price tag on the solution, or the solution can be abandoned and other more favorable business opportunities can be pursued.

It should be noticed that the decision to go ahead or not is made in step 5. The only costs that have been incurred so far are the necessary pre-sales costs that come with marketing efforts. The said solution is only on paper and has not been communicated to parts of the company (example: R+D and design) that will develop the solution (and thus incur the costs). Rather, steps 1 through 5 dictate that a solution should first of all be developed if there is a need (and not vice versa ie. develop a product/solution and then try to find a customer), secondly that any solution should be viewed in terms of initial cash outlays in order to develop and achieve an installed base, and then revenue income initially from the installed base and future upgrades of this base.  The solution should be assessed by the initial cash outlay, the income received from the installed base, and the future income that will be received from upgrades that will evolve the solution towards a target technology. This evolution is ensured by the adherence of the roadmaps of the products that make up the solution to industry standards as well as overall technological evolution. By using the right financial assessment model (example: Net Present Value) a decision can be made whether to pursue the business or not.  Also note that taking future income in account will deter an erroneous decision from being made with regards to restrictive initial outlays. For example, it may be that the costs and received income from producing and delivering a solution result in a negative profit. However, if future income is also taken into account that the right rate of return, then the accumulate present value of the profit may turn positive thus reflecting the solution’s strategic value to the corporation. If of course the solution has a future cash discontinuity which result in a negative present value then either this solution has an inadequate roadmap that guarantees future cash flows, or the break in cost is simply too high and can never be recovered.

The important thing to notice in these steps is that an opportunity is assessed in terms of breaking into a business and ensuring future business and growth, rather than pirating in just to make a quick buck. An enterprise is assessed (in the same way that stocks are assessed ie. future dividends) not by its ability to make a quick buck, but to convert this buck into future business and of course employment.

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Conclusion

Although this article is primarily written with the telecommunication/infocom industry in mind, its concepts can be expanded to other types of business. It is imperative to understand that in today’s world where standards dominate industrial models, in order for a corporation to ensure its future viability, strategic product marketing must be considered as a necessary process that insured, and is measured by long term investment as defined by net present value analysis. The thoughtful reader or financial officer may object citing that net present value is a tool that is used to assess the viability or rationality of project undertaking ie. the assurance that a project is financially viable. The aggressive marketing of solutions and services should be assessed in the same way since long term growth is not assured by placing a box here and there, but by entering a market in such a way that the initial cash outlays due to different pre-sales activities should be measured vis a vis long term cash inflows which can be achieved only by strategic product marketing whose roadmaps guarantee evolution in favor of the corporation’s future products / solutions and services thus effectively locking out competition in the long term.

Finally, emphasis is given to the fact that strategic product marketing will never work if the products/solutions and services of a particular organization lack quality, cost effectiveness, time to market, and simply do not satisfy the customer’s need. As the market rewards thoughtful strategies as mentioned above, it thus punishes players with questionable tactics whose results are poor products and policies that endanger the credibility of the overall business environment.

Nokia, Nokia Siemens Networks, NextWave Wireless, Alcatel-Lucent, Sony Ericsson, NEC and Ericsson have all decided to push for "fair and reasonable" licensing terms for the patents related to LTE in next-generation wireless networks. The framework calls for LTE patents to represent a single-digit percentage of the sales price of mobile phones and a single-digit dollar figure for laptop computers.

While the participating companies have all committed to the LTE standard, it's worth noting that the big wireless chip vendors have yet to get on board with this effort. Obviously, the handset and base station vendors would like to see IP licensing fees set to the lowest level possible, whereas the players providing silicon would prefer to let the fees be set by market forces (rather than an industry framework). Any type of licensing would have to represent a balance between getting the most money for innovation and setting a price that the market will bear, so we'll see if this effort gains adherents from the chip side of the business.

The new technology, called Nokia Siemens Networks’ Dual Carrier EDGE solution, will double the data speed to up to 592 kbps on existing EDGE-capable GSM networks. It will be available in the third quarter of 2008, and will soon be followed by what NSN calls EGPRS 2, which will result in downlink speeds of up to 1.2 Mbps and will double uplink speed to up to 473 kbps, thus quadrupling the capabilities of EDGE today. Now that means millions of iPhone users can now look forward to a new, faster day, when their devices will get a true taste of speed!

Softbank's femtocell launch is being planned for October. Interestingly, they have been using in-home repeaters to test the concept, which suggests a basic coverage proposition - repeaters don't provide any of the other, more interesting benefits that femtocells offer (private cell capacity for the home, homezone discounts, femtozone services...).

Softbank says it has architected its femtocell system around an IMS core, which again is interesting as most other operators have adopted Iu over IP. One remaining hurdle is that the Japanese regulator currently insists that only a qualified engineer can install a femtocell (despite the fact it's no more complicated than switching on a kettle). Softbank is in negotiation to get this changed, allowing end users to install their own femtocells at home.

AT&T hints at femtocells

Commenting on AT&T's "three screen initiative" (seamlessness mobility between your PC, mobile phone and laptop), senior vice president of consumer marketing, Michael Antieri, mentioned that AT&T is developing a single voice-plan that covers both mobile and home phone lines, and a single data plan for fixed and wireless broadband. Broadbandreports.com speculates that these bundles will be enabled by femtocells.

Femtocells in the International Herald & Tribune

The IHT reports a now familiar tale - massive uptake of data services (data traffic on T-Mobile's high-speed wireless networks surged 61% in Q4) is driving demand for femtocells, which improve the quality of 3G mobile reception inside buildings.

Ericsson says wireless hotspots are doomed

"Hotspots at places like Starbucks are becoming the telephone boxes of the broadband era," according to Ericsson CMO Johan Bergendahl. At a conference in Stockholm he said that WiFi hotspots will no longer be needed as more people start using mobile broadband. This accords with comments this week from Matthias Reiss, Head of LTE for Nokia Siemens Networks, who said that mobile data will increase a hundredfold by 2015, by which point 70-90% of the world's internet traffic will be handled via mobile connectivity.

Techworld and ZDNet both point out that indoor 3G coverage will need to get a lot better before this vision becomes a reality (cue 3G femtocells, which Ericsson has so far overlooked).

But operators are concerned about mobile data profitability

The other issue Ericsson and NSN glossed over is whether mobile operators can afford to carry this much data traffic. Speaking at a Next Generation Mobile Networks (NGMN) meeting at the CeBIT technology fair in Germany, senior executives said flat-rate mobile-data tariffs meant usage was set to increase at a far greater rate than operator revenues. Therefore, they said, they would have to drive down the cost of providing mobile data connectivity if they were to continue to make money (cue femtocells again).

T-Mobile International CEO, Hamid Akhavan, said "We will see a complete decoupling of traffic and revenues. It is only a matter of time before we lose all profitability on mobile data." He also said "the world doesn't need any more cell sites", and pointed towards femtocells as a potential solution. Hartmut Kremling, CTO of Vodafone Germany, agreed. "Site acquisition is more difficult these days. We need a technology based on existing density. Backhaul is already very challenging". Lots more reasons for femtocells.

It's not just Europe - mobile broadband use jumps 154 percent in US

The number of mobile devices accessing the internet via wireless broadband skyrocketed 154 percent in Q4 2007 compared with Q4 2006, according to research released by ComScore.

Informa comments on femtocells in its MWC roundup

"While 2007 was the year that the femtocell concept seeped into the consciousness of the mobile industry, 2008 will see the first operator trials. A number of operators have expressed interest in femtocells including Vodafone and Telefonica/O2 but there remains huge uncertainty about price and performance levels. France Telecom said retail prices would need to be below €100 for femtocells to be viable but some operators were being quoted wholesale prices of up to €300 in Barcelona. In terms of timing, operators expect that it could take 6-12 months to refine the software in femtocells and to address issues relating to interference."

Forward Concepts publishes femtocell study

"Femtocells: The Emerging Solution for Fixed Mobile Convergence" concludes that...

• Femtocells will predominantly address the post-paid cellular subscriber base. As a result, North America, Western Europe, Japan and Korea will be the largest markets for them.
• Femtocells will capture the dominant Fixed Mobile Convergence market share by 2010, as UMA is deemed to be a transitional technology and cellular carriers will ultimately transition to IMS-enabled femtocells.
• The most significant technical challenge for femtocell operators will be RF interference which will require proper frequency planning by the operators.
• Global femtocell equipment revenues are forecast to grow at a CAGR of 126% from 2008 to $4.9 billion in 2012. Western Europe will be the largest market, driving 32% of the revenue followed by North America with a 22% share.
• Femtocell integrated home gateway shipments are projected to exceed 23 million units in 2012, passing stand-alone femtocells for over half of the market.
• Semiconductor revenue from both stand-alone and integrated home gateway femtocells will grow at a CAGR of 138% from 2008 exceeding $1.5 billion in 2012.

ABI reports on the Asian femtocell opportunity

A new study from ABI Research indicates that femtocells will generate revenue of nearly $5 million in 2008 from device shipments in the Asia-Pacific region. "While $5 million is a relatively modest sum in global terms, it is important to remember that it is generated from a market that barely exists yet, and as such it represents quite satisfactory early growth," said ABI Research director Stuart Carlaw.

Regulatory complications may play a role in femtocells’ regional deployment too. The South Korean government has yet to finalize its fixed-mobile convergence policy, and ABI Research believes commercial femtocell services will not be introduced in the country until 2009. Femtocell prospects in India and China are heavily dependent on those countries’ 3G license developments.

Femtocells are girly crap

Interesting viewpoint.

Low power GSM back in fashion

Telco 2.0 review's PMN's enterprise proposition using low power GSM, powered by ip.access picocells. Elsewhere, Dean Bubley's interest in low power GSM is reawakened.

Femtocells to be demo'd on the HSPA Mobile Broadband Pavilion at CTIA

Some of the demonstrations planned for the Pavilion include services that might be used "At Home" such as the "three-screen revolution," using an HSPA femtocell to integrate the home IPTV experience with a mobile device and a PC.

In other news...

• Does T-mobile's investment in Ubiquisys signal Google's MVNO plans?
• Ubiquisys appoints new chairman
• picoChip & BitWave announce femto demo
• Details of Thomson's femto-enabled TG870 home gateway

This couldn't possibly be a prototype N96 from when they hadn't decided what the final model number would be. No, definitely not. The only logical explanation is that it's a Nokia device from the future when they've exhausted  all 2 digit numbers from N01 to N99 that has been sent back in time through a random wormhole and, purely by coincidence, happens to look exactly like an N96. Yes, that's got to be it.

Today there are more femtocell network architectures than vendors (because some vendors support more than one). Initial femtocell deployments are using proprietary interfaces, but operators are pushing hard for interoperability, which allows them to purchase femtocell CPE from a wide selection of vendors irrespective of their choice of supplier for the core network integration. Interoperability is a key requirement for mass market rollouts.

Although formal standards will emerge eventually from 3GPP & 3GPP2, the Femto Forum initiative announced this week aims to achieve interoperability more quickly, through vendor consensus, while at the same time paving the way for future standards. Some may be cynical about whether fiercely competitive vendors will cooperate, but from the inside I'm seeing a lot of good will to make this happen. It's certainly not a case of the Forum attempting to "quell femtocell anarchy", as one headline put it. The next step is for the vendors to present their architectures formally at the Forum's next plenary meeting in March. You'll read about it here...

Ubiquisys joins Nokia Siemens Networks femto ecosystem

At face value this partnership makes some sense. Unlike NSN's other partners (Airvana and RadioFrame), Ubiquisys does not compete with NSN at the gateway end. However, the announcement leaves the main question unanswered - i.e. which architecture will the joint solution support?

The key statement is that "the [Ubiquisys] ZoneGate femtocell...conforms to Nokia Siemens Networks' Femto Gateway’s open architecture." Up until now, NSN has been promoting an Iu-based architecture, whereas Ubiquisys has supported two alternatives (UMA and SIP) with two other network partners (NEC and Motorola).

TeliaSonera announces picocell deployments

TeliaSonera is deploying ip.access' nanoGSM picocells for its business customers in Denmark. In-building and special solution expert, Paul-Flemming Hermann, says IP backhaul makes all the difference to the business case. "In some cases, we couldn't help customers because the revenue they provided us wouldn't pay for the [in-building] solution ... Now, we can do the most fantastic solution at the customer premises. That's the goose-bump effect."

Billing problems for Airave

Some customers have been complaining about the lack of billing transparency for Sprint's Airave femtocell. The service zero-rates all calls within the home, but customers have no way to validate this on their phone bills. One customer comments, "I have been paying $15 every month for unlimited Airave service but really nobody can tell which calls should be billed as Airave calls".

Ovum highlights QoS issue for femtocells

Ovum highlights QoS as one issue that could "make the difference between femtocells being a success or a failure". An ip.access Issue Note on this topic was published this week.

Mobile data explosion

Delivering a great mobile data experience in the home (whilst at the same time offloading the macro network) is widely seen as a key driver for femtocells. This becomes more urgent with the current explosion on mobile data usage. For example, Vodafone's Q3 results revealed that revenues from data services (excluding messaging) grew by 51.6%, with data usage being particularly strong in Europe.

Elsewhere, YouTube announced that its entire video catalogue is now available for mobile phones on m.youtube.com. Unstrung's Gabriel Brown comments, "Switching it around to consider the impact on the 3G network, it's this kind of application that makes clear why some operators saw their average daily data traffic increase eightfold in 2007. Who'd bet against that accelerating in 2008?"

New Femto Forum members

Hidden within the press release about their architecture initiative, the Femto Forum also quietly revealed several new members including big names like BT, Cisco, Ericsson, Huawei, Samsung, Softbank Mobile, Telecom Italia and Vodafone. An interesting addition is NXP Semiconductors - a second mainstream silicon supplier alongside picoChip.

In-flight GSM & WiFi to take off

Airlines will install over 4,000 picocells for passenger GSM and Wi-Fi services between 2008 and 2011, according to Freesky Research.

More femto comment...

• Femto interview with Manish Sing of Continuous Computing
• TechWorld interview with yours truly

You may remember that Nokia Siemens Networks is promoting a femtocell architecture based on an Iu interface from the Access Point to a gateway connecting to the core network. Rather than building its own Access Point, NSN is encouraging other vendors to build APs for certification against its universal gateway. RadioFrame Networks is the third company to sign up to the NSN ecosystem. Thomson announced its support in July, and Airvana signed up in September. RadioFrame's announcement is not unexpected, given their existing partnership with NSN for 2G picocells. Just as with Airvana, one potentially confusing aspect of the announcement is that RadioFrame already has its own back end gateway with a different architecture from the NSN one. It's not very clear whether Airvana and RadioFrame favour their own end-to-end solutions or the joint solution with NSN.

Air France goes live with in-flight GSM
OK, not femtocells, but close. On 17th December, in-flight GSM was commercially launched on one Air France Airbus plane on the route between Paris and Warsaw. The system is powered by ip.access nanoGSM technology, installed and integrated by NSN & OnAir. Initially, SMS and Data Services have been enabled. OnAir will enable voice services at a later date. Watch the video ; see the seat-back card.

While we're on this subject, AeroMobile (also powered by nanoGSM) has announced Turkish Airlines as its third customer. Here's a round-up.

ATT & Verizon comment on their femtocell plans
AT&T is taking a look at femtocells, says Ralph de la Vega, head of AT&T Mobility. "This is the kind of technology we watch real carefully...We're testing it...If we feel comfortable that it doesn't harm existing services that we have, we may get more aggressive on it...But we're not there yet."
Verizon Wireless also is interested in femtocells, says Dick Lynch, its chief technology officer. "We've done customer trials with femtocells around the country very quietly...We've looked at both femtocell and Wi-Fi convergence products...The real question comes down to whether (consumers) want to use their existing handset or do they want to buy a handset that has Wi-Fi capability. We can make either work."

More commentary on Ericsson & femtocells
Looks like the analysts are sceptical about Ericsson's motives for downplaying 3G femtocells.

Orange plans 3G version of Unik
Orange has now sold more than 500,000 dual mode GSM/WiFi Unik handsets, according to an industry source. The first dual mode 3G/WiFi handsets are expected in the third quarter of next year. On this topic, ABI recently commented that they see WiFi and femtocells as complementary. I'd agree that they'll both be present in the building, but they're directly competitive when it comes to connecting the mobile phone to mobile and Internet services at home. Why will femtocells win? Because they are better (licensed spectrum, longer battery life), simpler (no WEP passwords, no fiddling with phone settings), just as safe (lower power, but not useable as a marketing benefit), just as cheap (femtozone vs. WiFi homezone tariffs), and cooler (because you can choose any phone, rather than just a WiFi/UMA-enabled one).

Femtocells for developing markets?
Caroline Gabriel from Rethink Research suggests that femtocells might take off first in developing markets, where they could be used as a way to roll out a 3G network quickly. It's an interesting suggestion, but I'm wondering if this overlooks the requirement for a high penetration of home broadband, which is often not the case in developing markets?

Ecco in esclusiva le foto della mitica serata al Sio Cafè con i miei cari colleghi di ventura in Nokia Siemens Networks (uamnabell). Grande clima all'insegna del divertimento e del ballo!

Buona visione (sono ben accetti commenti hehehe)...

Atrica counts Orange Business Services, KVH and Optimum LightPath among its 40-odd customers. The deal set to close by the end of 2007 is part of my ongoing thesis that there is little or no room for mid tier-telecom equipment makers, even if they are part of a fast-growing sector such as carrier Ethernet.

Matisse Networks and Qosera are two new startups looking to capture the carrier Ethernet opportunity. Atrica had raised a total of $134 million in funding from Accel Partners, Benchmark Capital, BellSouth Corp., SBC Communications, 3Com Corporation, and Intel Capital among others.

NxtWave has established a large network of telco and systems integrator contacts including Accenture, IBM, HP, ATOS, TietoEnator, Bull, Alcatel-Lucent, Nokia Siemens Networks, Ericsson to streamline the sales process. For more information contact Mike Knuckey on +44-7901-552392 or email at mike_knuckey@hotmail.com

Contact Mike Knuckey on +44-7901-552392 or by email at mike_knuckey@hotmail.com

The Singapore operator is about to start a 6-month consumer trial with 200 customers who take both post-paid mobile and residential broadband services from StarHub.

Telecom Italia Mobile interested in femtocells

Telecom Italia is very interested in deploying femtocells and is in trials with femtocell suppliers, but it wants the cost of femtocell units to come down. Luigi Licciardi (executive VP of TIM) says, "We think femtocell is...one of the most attractive solutions for our customers is to have a flat rate, a cheap rate, to use the mobile handset at home and femtocells can solve some problems like inside coverage."

Nokia Siemens Networks partners with Pirelli

Pirelli Broadband Solutions is building femtocell technology into its home gateway products. A wide range of femto-enabled CPE models will integrate with NSN's Femto Gateway. The announcement does not specify whether Pirelli is going it alone, or partnering with a specialist supplier for femtocell access point technology that integrates with the NSN gateway like its rivals Netgear and Thomson. NSN recently denied a rumour that it is looking to work directly with home CPE suppliers (supplying the femtocell CPE technology itself), but the story refused to go away last week.

In-Stat's "Itty Bitty Basestation" forecast

In-Stat predicts that by 2012 shipments of femtocells, picocells and microcells will exceed 31 million units.

ABI says femtocells will boom in 2010

Analyst Stuart Carlaw says that femtocells will get off to slow start this year with around 100,000 units shipped, but will be booming by 2010, when shipments will likely total tens of millions.

picoChip is braced for the femtocell boom

picoChip says its biggest order to date is for 10,000 femto chips, but they expect femto shipments to overtake their WiMAX business next year. Here's a video of picoChip's HSDPA femtocell reference design demo.

26 million US households will cut the cord by 2012

Approximately 12 million households currently opt for a wireless-only phone connection, with that number expected to increase to about 26 million in 2012 (equal to about 22% of market share.) "The maturing of the younger, more tech-savvy demographic combined with emerging technologies (such as femtocell) set to improve wireless coverage and reduce costs, will further promote the position of wireless services," says Ian Olgeirson, Senior Industry Analyst for SNL Kagan.

3G coverage in the UK

Vodafone estimates its 3G network covers more than 92% of the UK. O2 meanwhile has recently met the terms of its 3G licence in the UK by reaching 80% national coverage. "O2's strategy has been to roll out our 3G network in areas where there is the most demand, providing high quality, in-building coverage in those areas," said an O2 spokesman.

In other news...

• New York Times confuses femtocells with WiFi
• FT Digital Business Review discusses femtocells
• Ubiquisys, Alcatel-Lucent and ip.access top ABI's femtocell vendor matrix
• Ubiquisys makes it into the Fierce 15
• Lime Microsystems promises cheap programmable silicon for universal femtocells
• PA Consulting believes femtocells can reach mass market price points
• Yankee Group says only consumers who have poor indoor service will be tempted to purchase a femtocell initially
• BT blames Fusion's failure on lack of competing WiFi / dual mode offerings
• 63% of Americans would switch to an FMC service if they knew such a thing existed
• ICSA Labs, an independent division of Verizon, plans to test femtocell security
• Ceva targets its "silicon intellectual property" at femtocells
• O2 UK extends fixed broadband offering - Ovum suggests link to femtocell trials
• Gary Kim questions femtocell business models
• Some good femtocell FAQ over at Think Femtocell...
• ...and discussion about femtocell handover
• What are people willing to pay for a femtocell?

And finally...

Three cheers!!! Exradia is dead! These cynical snake oil merchants were trying to sell mobile phone batteries supposedly designed to protect you from THE RAYS. It had been suggested that they might get away with this scam, but fortunately they didn't.

During the trial, the data transmission downlink speed reached 10.1 Mbps. I-HSPA will be capable of data transmission rates over 10.1 Mbps, NSN claims. The I-HSPA functionality is designed for heavy data and rich multimedia usage over the wireless network. I-HSPA connects 3G base stations directly to the Internet, enables cost-efficient scaling of the network, works with all HSPA devices and improves end user experience by reducing latency. I-HSPA flat network architecture also enables smooth migration to LTE.

A report from Taiwan suggested that Nokia Siemens Networks is planning to make its own femtocells with a Taiwanese manufacturing partner.  Up until now, NSN's strategy has been to build a Femto Gateway that works with femtocell CPE from Airvana and others.  NSN denied that it's strategy is changing, saying "In the course of our global business, NSN continuously evaluates its supply chain and operations across all areas.  However, our strategy for femtocells remains unchanged."

Japanese ministry issues femtocell policy
Japan's Ministry of Internal Affairs & Communications has finalized its "handling policy" for femtocells.  Not sure of the details yet - will try to find out.  I wonder if they have removed the requirement for femtocells to be installed by qualified engineers.

Rumour that AT&T will deploy femtocells

The rumour was started by analysts from ThinkPanmure.  These guys have been consistently critical of AT&T for not adopting WiFi / UMA like its rival, T-Mobile.

New Infonetics femtocell report

A new Infonetics report says that femtocells could potentially allow mobile network operators to make significant reductions in investment in conventional 3G macrocellular networks.  It also says that the opportunity for 2G femtocells (mainly in developing countries) is not likely to be a booming market compared to 3G.

Telecom TV gives more details of Infonetics' findings, and offers their own view: "We know putting in a femtocell probably isn't as hard as laying a patio but it resides in the same DIY zone in the brain and might not fire up in a consistent way. So while there have been some significant mobile operator announcements around trialing and launching femtocell services to customers, the jury is still out: sweating, arguing but utterly deadlocked over all those known and unknown unknowns."

Percello announces its femto chip

The PRC6000 chip will be used to produce low power, 3G, HSDPA, HSUPA, and HSPA+ femtocells.  The first chips are expected to be available for mass production in 1H 2009.

OnAir to supply Shenzhen Airlines

The Chinese airline plans to make mobile phone calls possible on all of its flights before the end of 2009.  3 planes will be fitted with the OnAir system before this summer's Olympics.

In other news...

• Quest's CTO discusses femtocells - Pieter Poll thinks femtocells are a good idea, even though Quest doesn't itself have a wireless arm that could deploy them.
• RadioFrame's Mark Keenan discusses picocells & femtocells - according to RFN's General Manager, EMEA, "considering the dramatic improvement to quality of service that indoor base stations will provide, $150 is arguably a small price for consumers to pay".
• Continuous Computing's top 10 femto challenges part II
• New femtocell group started on TelcoProfessionals.com

Solusi Village Connection didesign untuk menyelenggarakan komunikasi ke pedesaan melalui teknologi yang murah (cost-efficient) sebagai tambahan dari jaringan GSM existing. Untuk itu, network dibangun tanpa mendirikan tower BTS, namun cukup dengan “mini” network, yaitu melalui perangkat PC sebagai server, batre UPS dan GSM access point. Skema bisnis dilakukan melalui metode franchising, dimana operator akan kerjasama dengan local/ village entrepreneur sebagai franchisee. Network mini disetup di pedesaan, sehingga untuk komunikasi internal di desa, tidak akan mempengaruhi trafik jaringan GSM existing. Dengan demikian, maka untuk panggilan internal dalam desa, dapat dilakukan skema flat pricing, yang merupakan pendapatan bagi local/ villager enterpreneur. Sedangkan untuk panggilan keluar pedesaan, maka akan diberlakukan pricing berdasarkan durasi. Local/ villager enterpreneur diharapkan dapat melakukan investasi untuk GSM Access Point dan sebuah PC untuk digunakan sebagai mini server.

Manfaat Village Connection

Beberapa manfaat dari Village Connection:

Bagi Operator :
· Mendapatkan market tele-komunikasi dari pedesaan
· Mendapatkan kasus bisnis yang profitable dari daerah pedesaan.
· Memperbesar customer base, dapat meningkatkan traffic tambahan.

Bagi Entrepreneur:
· Peluang untuk menjadi Bisnis Owner.
· Kontribusi kepada komunitas di pedesaan.

Bagi Masyarakat Desa:
· Connectivity ke luar pedesaan, bahkan ke dunia.
· Memiliki telepon sendiri di rumah.
· Meningkatkan kesejahteraan.

Lesson Learned

Village Connectivity merupakan solusi yang baik untuk program meningkatkan penetrasi Telekomunikasi di Indonesia, sebagai salah satu main industry driver untuk memajukan Indonesia (Lihat tulisan saya tentang "Menuju Indonesia Makmur"). Program Telepon/ Internet Masuk Desa dapat seiring dengan skema bisnis yang digunakan oleh Village Connection. Memang Village Connection mengambil GSM sebagai teknologinya, namun tidak menutup kemungkinan model bisnis ini dikembangkan dibawah platform lain, misalnya CDMA. Yang penting, bagaimana model bisnisnya bisa merangsang para pengusaha lokal di pedesaan (village entrepreneur) untuk bersama membangun bisnis ini. Model bisnis ini sebetulnya sudah berjalan di Bangladesh melalui program dari Grameen Phone.

Mit der Komplettfertigstellung des Büro Campus Rheinwerk 2 am Standort „Bonner Bogen“ im Sommer 2008 sind auf der rechten Rheinseite insgesamt 35.186 Büroflächen für rund 2400 Beschäftigte entstanden. Das Gebäudeensemble Rheinwerk 2 bietet in vier harmonisch abgestimmten Bauköpern 14.600 Quadratmeter Bürofläche und 274 Tiefgaragenplätze. Die Büroflächen sind zu 75 Prozent vermietet.

Mieter der oberen Etagen im U-förmigen Glasbau an der Joseph-Schumpeter-Allee sind Nokia Siemens Networks (1.060 m²) und Media Broadcast GmbH (3.700 m²), ein führender Dienstleister für die Rundfunk- und Medienbranche. Beide Mieter haben Erweiterungsflächen optiert. Im Erdgeschoss ist die Beta-Klinik eingezogen, ein Gesundheitszentrum mit Spezialisierung auf Kopf, Gefäße und Wirbelsäule unter Leitung von Prof. Jürgen Reul.

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