Weekly Digest
Weekly Digest Issue No. 431
04-09-2008
by Deirdre McArdle
Alternative operators accelerating broadband | Vodafone and EU locked in charges battle | 'Hello? I'm on a plane' | Google's full metal attack on browser market | Rivals get mobilised | Pre-pay iPhone 3G to boost sales?
Alternative operators accelerating broadband
In Europe, super-speed broadband -- broadband with speeds of over 10Mbps -- is primarily being driven by alternative operators, according to the latest stats from the European Competitive Telecommunications Association (ECTA). This trend is certainly the case in Ireland, where operators like Smart Telecom, UPC and Magnet Networks have rolled out super-fast broadband in recent months, with the latest offering from Smart hitting 24Mbps. Liam O'Halloran, chairman of ALTO (the alternative operators association) says this trend is likely to continue if the Government's NGN plan, as outlined by Communications Minister Eamon Ryan earlier in the summer, is adhered to. That plan proposed the use of ducting for the provision of broadband services. With Eircom's plans for its network upgrade sitting in the background for now -- what with the tough economic conditions and the high-profile financial issues of one of its shareholders, Babcock & Brown -- O'Halloran said the Government needs to take charge. He told ENN that by using existing ducting infrastructure, it will be easier for alternative operators to make an investment case to their backers, as costs will be lower than LLU and returns will be higher. With the issue of broadband penetration slowly becoming more positive -- according to ECTA, as of April Ireland had 19 percent penetration -- the quality of the lines is now coming to the fore. O'Halloran said that Ireland is reasonably in line with comparative countries in Europe in terms of line quality, and that industry will fuel demand for super-fast broadband in the short term.
Vodafone and EU locked in charges battle
Over the past week Vodafone and EU Commissioner for Telecoms Viviane Reding have been at odds over the EU's proposed changes to mobile call charges. EU regulators are planning to cut the termination rates operators charge each other for connecting calls to other networks by 70 percent; Vodafone has said it will be forced to increase its call charges if the plans go ahead. Reding claims that large mobile operators are making "excessive" profits on their wholesale fees, and that the current situation is prejudiced against smaller mobile operators. The Commission had also been considering a proposal for a US-style billing system, whereby users would pay for receiving calls as well as making them, but on Wednesday the Commission said operators would not be forced to adopt this system. Vodafone had previously claimed in a submission to Reding that over 40 million consumers would either alter or cancel their mobile contracts if that system were adopted. Of course Vodafone isn't simply concerned with consumers and how they may not be able to afford a phone, its issues with the EU's plans to cut termination fees affects its bottom line, with reports suggesting Vodafone could lose up to STG1 billion in earnings if fees were cut by 70 percent.
'Hello? I'm on a plane'
Another somewhat controversial mobile issue reared its head again this week, with BMI and Ryanair both announcing that they are close to allowing passengers to use their mobiles during flights. They've both said they will be rolling out the service in the coming weeks. BMI is to pilot a texting-only service to begin with, while Ryanair has chosen to go the whole hog and allow passengers to text as well as make and receive calls and send e-mails during flights. Both airlines are just waiting for final regulatory approval, which is pretty much a certainty; UK regulator Ofcom gave the official nod earlier in the year and ComReg provisionally gave the green light in May. The issue of using mobile phones in-flight has been doing the rounds for quite some time, with the pros and cons debated ad nauseum. While some will welcome the move, the majority of consumers are likely to grimace in annoyance as the passenger next to them rabbits on about the minutiae of their life. In fact, a survey conducted by Yahoo during the summer revealed that passengers don't want to be forced to listen to phone conversations during a flight, with two out of three respondents saying there should be a designated area on planes for people who want to talk on their mobiles. Ah, an opportunity for Ryanair? "Are you likely to use your mobile during this flight? A seat in the mobile phone friendly area of the plane is just EUR20 extra... each way."
Google's full metal attack on browser market
A new front in the browser wars opened up on Monday, when Google launched a web browser called Chrome. The open source browser, which Google claims will be faster than any other on the market, is currently available in beta. Initial reactions to Chrome have been positive: Walt Mossberg of the Wall Street Journal called it smart and innovative, while other reviews have commended features like the Omnibox and the Incognito feature. With Chrome, Google is really going on the offensive and invading Microsoft's territory; Internet Explorer is by far the market leader and, let's face it, even though Firefox has been making some gains recently, Microsoft's lead would have been tough to break down. But now it has to deal with the might, popularity and seemingly bottomless pockets of Google. To be fair, Firefox has in a way opened up the market, convincing users that there are browsers other than IE. Google will no doubt benefit from this, but will Firefox suffer? Firefox-maker Mozilla's CEO, John Lilly, doesn't seem to think so. In a blog posting on 1 September, Lilly wrote that Firefox has always faced tough competition in the market, and he reiterated the group's main objective is to keep the web open. Meanwhile, Lehman Brothers analyst Douglas Anmuth has predicted that Chrome will clock up between 15 percent and 20 percent market share in just two years, effectively catching up with Firefox. Certainly it's well on its way; web traffic analysis firm StatCounter revealed that Chrome had taken 1 percent of the browser market within a day of its launch. “This is a phenomenal performance,” said Aodhan Cullen, founder of StatCounter. “This is war on Microsoft but the big loser could be Firefox.”
Rivals get mobilised
First there was the App Store, then the Android Market, and now we have the Skymarket. No, they're not all shopping centres featured in Star Wars, they're virtual stores for mobile applications launched by Apple, Google and Microsoft, respectively. Apple got the jump on its rivals, with the launch of its App Store coinciding with the unveiling of the iPhone 3G on 11 July. Google, which revealed that the first handset to be powered by its smartphone platform Android will go on sale before the end of the year, followed up with news of Android Market last week. Android Market will allow users to buy, download and install content for the upcoming Android devices. Last to the party was Microsoft, which unveiled details of its virtual store for its Windows Mobile applications, Skymarket, on Monday. It's little wonder these titans have ventured into the area of mobile apps; in the month following its launch, 60 million programs were downloaded from the App Store, with Apple clocking up a cool USD30 million in revenue for the period. While Google's market share in the mobile area is not yet known and as such, the success of Android Market is hard to call, Microsoft stands to make a tidy sum from its Skymarket venture.
Pre-pay iPhone 3G to boost sales?
The iPhone 3G is to become more accessible to the average consumer from 16 September in the UK, when O2 launches the device as a pay-as-you-go handset. Pricing for the pre-pay version of the iPhone will be STG349.99 for the 8GB model and STG399.99 for the 16GB model. Here in Ireland O2 is also planning on making the iPhone 3G available to pre-pay customers, but no timeframe has been set as yet. A spokesperson for O2 Ireland told ENN the operator would be in a position to provide more details in a couple of weeks. Making the iPhone 3G available without a contract is an interesting move and will likely increase sales of the phone, particularly among the younger demographic who perhaps could not afford the steep charges associated with the contract model. The timing is good too, and could lead to the iPhone 3G topping the bestselling gadget list this Christmas in the UK and Ireland. It's unclear yet what the strategy will be across Europe and indeed across the world -- will other operators push for the pay-as-you-go option too? If they do Apple could quite possibly see its market share increase in leaps and bounds.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 