Alcatel-Lucent Wins Big with Verizon
By Monica Alleven
BARCELONA—Alcatel-Lucent today emerged the triple-crown winner in Verizon Wireless’ highly anticipated LTE vendor announcement at Mobile World Congress.
Verizon Communications Executive Vice President and Chief Technology Officer Dick Lynch unveiled the vendors during a morning keynote. Alcatel-Lucent, which found out about the award at the same time everyone else did, was the only vendor to be named in the three areas of IMS, enhanced packet core and radio access network.
Nokia Siemens Networks is another key supplier for IMS, while Ericsson will supply base stations and packet core solutions. Starent also will be a packet core supplier with Ericsson and Alcatel-Lucent.
As expected, the mood at Alcatel-Lucent’s MWC venue was exuberant. The company does not yet know in which markets it will be supplying network infrastructure, but the Verizon win ties in nicely with one of the company’s central messages at the show. “It validates this LTE end-to-end solution that we have been driving at,” said Ken Wirth, president of Alcatel-Lucent’s Verizon business unit.
In November 2007, Verizon announced plans to deploy LTE with Vodafone, which is a joint owner of Verizon Wireless along with Verizon Communications. At the time, the companies identified trial suppliers as Alcatel-Lucent, Ericsson, Motorola, Nokia Siemens Networks and Nortel.
Industry analysts said Motorola and Chapter 11-bound Nortel clearly are the biggest losers. On the operator side, Clearwire is probably more pressured to deploy its mobile WiMAX offering on a wider basis. Lynch said Verizon expects to be in two markets in 2009 and 20 to 30 U.S. markets in 2010.
Using existing spectrum, Verizon and Vodafone have been field testing LTE in Minneapolis; Columbus, Ohio; and northern New Jersey, as well as in Budapest, Dusseldorf and Madrid in Europe, with a variety of network providers. Field trials demonstrated peak download rates of 50 to 60 Mbps; actual average download results will not be determined until the commercial launch.
Verizon expects trials this summer using 700 MHz spectrum, assuming there are no more delays in the DTV conversion.
Lynch said building and offering commercial services over Verizon Wireless’ LTE network while also expanding its FiOS fiber network is consistent and complimentary as consumers begin to expect their devices to work seamlessly across both wired and wireless.
It’s too early to put a dollar amount on the contract win for Alcatel-Lucent or the other vendors. Verizon’s total capital expenditures totaled roughly $17 billion in 2008. Lynch in his address noted that LTE network costs would be within the company’s overall program as spending shifts from older technologies to new strategic initiatives, such as LTE.
Yesterday, 3G Americas President Chris Pearson said he believes CDMA operators will have a tougher time moving to LTE than the GSM-based operators because CDMA doesn’t have the HSPA or HSPA+ capabilities plugged into their pre-existing networks. For GSM operators moving to HSPA, migrating to LTE is mostly a software upgrade.
But Wirth said he doesn’t buy the notion that it will be especially challenging. “It’s not a forklift,” in changing the network from CDMA EV-DO to LTE, he said. Alcatel-Lucent is one of the primary vendors for Verizon’s EV-DO network as well, and it has done a lot to help Verizon from an operating expense standpoint, he said. The vendor has a network management system for CDMA that is adapted to support new LTE solutions.
Lynch also announced the formation of the Verizon LTE Innovation Center, which will be based outside Boston and is designed to be a catalyst for early development of non-traditional products for use on the LTE networks. The center will focus on helping technology partners bring new LTE-based solutions to market in the areas of consumer electronics, machine-to-machine and business products.
The expectation is dual-mode devices will be developed to work on the EV-DO network as well as LTE; Verizon said it plans to maintain 3G service well into the next decade.
RIM, SEC Settle on Options Backdating Charges
By Maisie Ramsay
An SEC investigation into options backdating at Ontario, Canada-based Research In Motion (RIM) has concluded with the company and four of its executives entering into two separate settlements with American and Canadian regulators.
The company and co-CEOs Jim Balsillie and Mike Lazaridis, former finance vice president Angelo Loberto and former CFO Dennis Kavelman are alleged to have granted millions of undisclosed, backdated options to RIM executives and employees over an eight-year period from 1998 to 2006, according to the SEC.
Though backdating stock options is not necessarily illegal, the SEC alleges that RIM made “false and misleading disclosures” regarding how the company priced and accounted for stock options. The SEC claims that the four executives backdated option agreements and offer letters, concealing that the options were granted in-the-money – which for call options places the stock’s price below the market price and for put options places the stock’s price above the market price.
In doing so, the company violated the terms of its own stock option plan and a listing requirement of the Toronto Stock Exchange. RIM is listed on the American NASDAQ stock market and the Canadian TSE.
Under the terms of the settlement with the SEC, the four executives do not have to admit or deny the allegations but will still pay an aggregate $1.425 million and relinquish the value of their exercised, backdated options. Kavelman and Loberto are also prohibited for five years from serving as officers or directors of any company which is required to file reports with the SEC.
The SEC settlement comes on top of an earlier settlement with the Ontario Securities Commission (OSC). Under the terms of the OSC settlement, Balsillie, Lazaridis, Loberto and Kavelman will pay RIM $30.39 million for backdating and $35.55 million for the costs of the internal investigation into the matter. The executives are also paying the OSC $7.22 million in administrative penalties and costs related to the investigation. The executives have already paid RIM $11.9 million to defray the costs of the internal investigation.
As with the SEC settlement, Kavelman is barred from working as a director or officer of any public Canadian company for five years in the terms of the OSC settlement. Also, Loberto must complete an OSC-approved course on the duties of directors and officers of public companies before he can again act in that capacity.
Open-Source Systems Battle for Market
By Colleen Barry, AP Business Writer
BARCELONA (AP) — The big news from the GSMA Mobile World Congress this year: New phones using the Android, LiMo and Symbian open-source operating systems are rolling out in 2009.
What’s unusual is that it is not the handsets themselves that are creating the buzz so much as what is under the hood and invisible to the user, the basic software. Lines are being drawn in the battle for dominance among the three main systems.
Vodafone announced this week that it is launching the HTC Magic, a new touchscreen handset based on Google’s Android operating system, in Britain, Spain, Germany and Italy this spring.
“This is a new Android-powered device for our customers who want to have fast and speedy access to the Internet,” said Vodafone spokeswoman Aileen Thompson.
And more Android announcements are expected as the year goes on: Sony Ericsson and Samsung both repeated their intention in Barcelona to come out with Android-operated phones. The Chinese manufacturer Huawei Technologies committed this week to releasing an Android phone later this year, but it wasn’t yet saying with which operators.
Meanwhile, the LiMo Foundation — a consortium of more than 50 companies including operators Vodafone and Telefonica, the applications designer Azingo and systems integrator Wind River committed to the development Linux-based open source software — is preparing to launch new handsets through six of its operators by the end of the year.
The new LiMo handsets will contain the second generation middleware — a more complete version stitching together more member contributions than those initially launched in the last year. What is different about LiMo phones from the other open-source operating systems is that the handset makers and operators can customize their own user interface and menus, so that there will be no single LiMo experience.
LiMo says that it has huge market potential because of the strength of its operator network.
“We now have operators specifying and deploying LiMo handsets in large numbers in the second half of the year, operators who together have a billion subscribers,” said Andrew Shikiar, LiMo’s director of global marketing. In all, LiMo has 11 operators, which the foundation believes will make them a strong long-term player.
“There is a strong, undeniable trend toward open source. I think there is a healthy debate between LiMo, Android and Symbian on how to do open source. We think the LiMo approach is best suited toward long-term planning,” Shikiar said, because it allows competing handset makers and operators to modify the user interface and create their own flavor.
Symbian, once Nokia’s propriety software, joined the race last June when it formed its own foundation, now with 78 members, and opened the software to other users. Sony Ericsson was the first foundation member to announce a phone with the Symbian S60 label — with the development name “idou” — which will come to market later in the year.
Because of Nokia’s dominance in the handset market, Symbian can claim the largest distribution: 250 million devices in use globally, and a smartphone market share of 50 percent.
“We’re not a protectionist, walled-off community where we’re sitting in a smoke-filled room trying to eat Google,” said Symbian Foundation Executive Director Lee Williams. “We’re trying to rapidly grow a large collection of creative and innovative options for an ecosystem…”
With open-source operating systems roaring to the forefront, some analysts wonder about the mobile phone business future for the proprietary giant, Microsoft. Besides being free, the open source software also allows developers to quickly and freely create new applications — critical from the point of view of operators that are seeking to create more data traffic.
“Definitely, Android, Symbian and Windows Mobile will be top OS in terms of smartphones. The challenge now for Microsoft is: No one wants to pay for an OS when they have Symbian and Android for free. What is the point?” said IDC analyst Francisco Jeronimo, who sees LiMo as a niche player.
“Microsoft are the ones challenged now. My question is how long will they continue with a proprietary system?”
Some 20 million devices shipped with Microsoft’s OS last year; that compares with 17 million Nokia smartphones in western Europe alone, along with 59 million traditional devices. Microsoft won’t say how much it gets for every OS installed, but analysts put it at $5 to $7.
For CEO Steve Ballmer, the mobile strategy is clear: sell a lot of devices. “Many phones times a small amount of money, hopefully is enough to make this all make sense,” Ballmer said in an interview on the sidelines of the conference.
Nvidia’s Tegra to Ship Mid-2009, No Word on Devices
By Luke Simpson
With Nvidia announcing a new processor and support for Android, as well as Windows Mobile and Windows CE, there is still no news on exactly what devices will use the graphics-driven technology.
Nvidia’s new Tegra APX 2600 processor is currently on display at the Mobile World Congress in Barcelona, getting rave reviews from HDTV enthusiasts. The chipset is capable of 720p HD output quality, but the Android and Windows Mobile units on display were capable of 1080p.
The website states that the first Nvidia Tegra-based devices are expected to begin shipping in mid-2009, but it does not specify whether that’s referring to smartphones, portable navigation devices or portable media players.
This comes at a time when Windows Mobile and Android are expanding their reach within the mobile device market. LG has announced intentions to build 50 Windows Mobile smartphones, with 26 to be released by 2012. Vodafone also announced this week that it will release its first Android-powered smartphone in Europe.
John Jackson, an analyst at CCS Insight, speculates that Nvidia may still be thrashing out deals with the operating systems or manufacturers.
INQ Wins Handset Award
By Monica Alleven
BARCELONA—Executives at INQ, which won the GSMA’s award for Best Mobile Handset or Device, weren’t always so keen on devices.
In fact, INQ in part was formed by operator Hutchison Whampoa for the very reason that Tier 1 handset providers were not delivering what the carrier executives wanted. INQ executives previously worked on the operator side before heading up the device unit.
The INQ1, which won the GSMA award over smartphones like the Nokia E71, T-Mobile G1, the RIM BlackBerry Storm and LG KS360, is a mass market device built with social networking in mind. It is an HSDPA handset that provides one-click access to apps like Facebook and Skype. The INQ1 also has a 3.2 MP camera that allows for photos to be directly uploaded to Facebook.
Seemingly every handset vendor and operator is trying to get deals with Facebook and other social networks. But INQ set out two years ago to design a phone with social networking at the heart. “You’re going to see Facebook phones all over the place,” INQ CEO Frank Meehan said earlier this week. “We know our … product is going to be so much better. We have to keep going forward.”
As the “1” signals, the INQ is just the first phone from the company. More devices are expected to debut this year.
INQ launched its first-generation device in November in the United Kingdom and Australia, with plans to debut in Hong Kong, Italy and Scandinavia this year. The company would like to be in the U.S. market, but realistically, that likely won’t happen before the end of the year or early next year, Meehan said.
The company says it is open to working with any network service provider. INQ executives explained that the device uses a Qualcomm chipset that can easily be switched out, so wouldn’t cost a lot extra to do CDMA.
i-mode Architect Questions Standards Process
By Monica Alleven
BARCELONA—Standards may be the enemy to innovation, says the man known as the father of Japan’s wildly successful i-mode service.
Takeshi Natsuno is a former senior vice president of NTT DoCoMo, where he developed the business strategy for multimedia-related services, including i-mode strategic alliances. He left NTT in June of last year and is now a professor at Keio University.
Essentially, Japanese operators years ago told their vendors to deliver to their specifications rather than wait for standards to be ratified. “Japan did not wait for standards,” he says.
Because of i-mode, almost one-third of NTT’s revenue is from data, and that data is not SMS, which he describes as more of an extension of the voice age. Another thing that Japan did differently in its data services was keep the mobile Internet open; there are no walled gardens.
Seventy percent of mobile phones in Japan have a mobile wallet, and it doesn’t require a major change-out of handsets. In emerging areas of the world where people are more likely to have a mobile phone than a bank account, the mobile wallet is primed for uptake, according to Natsuno.
In advanced markets, where the demand for data is well understood, the environment is ripe for Internet players like Google to aggressively develop data services at their own risk. But the scope and enforcement of standards at the application layer should be carefully set up, he says, because too much standardization can diminish the incentive for innovation.
Incidentally, Natsuno is an iPhone fan. Years ago, while at NTT, he was among those asking for vendors to come up with something simple and intuitive like the touch interface, but they weren’t interested. Today, of course, it’s hard to find a handset vendor that doesn’t have a touch-screen product.
FirstNewsBriefs for Feb. 18, 2009
Companies in the news: Zed, DeviceAnywhere, NEC, Research In Motion, Digicel Group, ZTE, LG, RF Micro Devices, Agilent Technologies, Visa
• Content provider Zed signed a deal with DeviceAnywhere to improve its global content development. Using DeviceAnywhere, Zed has access to more than 2,000 devices on over 30 different carrier networks worldwide, with locations in the key markets of U.S., U.K., Canada, France, Germany, Japan and Spain.
• NEC announced the successful development of what it calls one of the most efficient transmitter amplifiers for mobile base stations, a 2.1 GHz model that produces 45W of output power per 100W of power consumption. Transmitter amplifiers are devices that increase the strength of RF signals transmitted from base stations to remote terminals.
• Research In Motion (RIM) was honored with the GSMA Chairman’s Award at the GSMA’s Global Mobile Awards ceremony. This award recognizes outstanding contribution to the growth and development of mobile communications around the world.
• Digicel Group has launched the Coral-200-Solar, a low-cost solar-powered mobile phone. The Coral-200-Solar, manufactured by ZTE, uses proprietary technology from Dutch-based Intivation.
• LG Electronics has selected AT4 wireless MiNT T1140 RF Test System to increase test laboratory capacity.
• RF Micro Devices released the RF720x family of WCDMA/HSPA+ power amplifiers (PAs). RFMD’s RF720x product family is comprised of four PAs designed for 3G multimode devices implementing mode-specific, band-specific front end architectures. The RF720x product family accommodates major WCDMA/HSPA+ bands and band combinations.
• Agilent Technologies announced the availability of an end-to-end analysis and troubleshooting solution for LTE networks. The Signaling Analyzer Real Time (SART) for LTE provides monitoring and network diagnostics by interpreting, correlating and analyzing protocol signaling messages produced by multiple network technologies at mobile network interfaces.
• Visa Europe and Visa announced plans to work with the GSMA to advance the delivery of mobile financial services around the world. GSMA selected Visa as a provider for mobile money transfer solutions globally and is working to execute an agreement to formalize the terms.
Filed Under: Infrastructure