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Instant messaging services now outpace SMS

This is the news that mobile phone networks worldwide have been dreading for over a decade – SMS is being replaced. Commonly known as “text messaging” SMS has been a constant for the networks for the best part of 15 years, being a major source of company revenues. However, smartphones are now the most common phone in people’s pockets, and being a smartphone they have apps that are created by third party companies.

These apps, such as WhatsApp and Facebook Chat, allow users to communicate through text whilst only needing a WiFi connection and bypassing the networks signal. Whilst using the apps on a networks signal, the use of these apps falls under the “data” part of the packages they sell, meaning that in most cases the messages are now free. Apple also released their own version of instant messaging called iMessage, which allows iPhone owners the ability to text each other for free without the need of downloading a third party app.

A recent study by Informa has confirmed the shift, stating that over 19 billion messages are now being sent over instant messaging apps per day compared to 17.5 billion text messages. This is the first time that data has proved that instant messaging has now outgrown traditional text messaging – with the signs only showing that the gap will now widen further.

Google, the maker of the Android operating system, is the next software in line to receive a pre-installed app for messaging between its users. The app is likely to be named “Babel” and will be made available in their upcoming “5.0” software update – allowing more people than ever before to use instant messaging and pretty much signifying the end of a text messaging era.

Even the Vice President of the EU Commission responded to the news on Twitter by tweeting: “It’s official: chat apps have overtaken SMS globally. Time for telcos to wake up and smell the data coffee.”

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A blip or the beginning of the end for Apple?

Most companies would be absolutely delighted with a net profit of $9.5 billion in a single quarter, however most analysts have cottoned onto the fact that although these figures are phenomenal they also represent the first dip in profits numbers by Apple in over a decade. With many people jumping on Apple’s back, making noises predominantly relating to the lack of innovation in the iPhone 5, it certainly has got many asking the question, is this the end of an era for Apple?

A specialist at law firm LLP, Vanessa Barnett actually came to the defence of the technology giant. Vanessa said that is was only “fashionable” to speak about the fall of Apple, with the company still well placed to maintain its position at the top of jungle of trees they’ve climbed. She believes that although Android (Google) have eaten into their mobile marketplace quite considerably over the past few years, Apple still have some of the world’s brightest talent and the resources to innovate.

As a consumer myself and one that is involved in technology as a career choice, I do have to say that Google have impressed me more with their innovative ideas, in particular Google Glass and the changes being made to their mobile software. Samsung themselves who rival Apple in many areas but particularly mobile manufacturer, have eclipsed Apple with new features and technologies whilst there is no escaping the fact that Apple pretty much only added 0.5 inches to their last device and labelled it the iPhone 5.

I’m a massive Apple fan, so I hope they can see through the media storm that is quick to analyse and highlight any negatives, but they must start innovating again with the aim of improving people’s lives. Google Glass is a revolution, where is Apple’s attempt? In my opinion, the decreased profits are a blip but it could become the end.

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Telecoms most optimistic market for job growth in UK

These are the findings of the annual Barclays Job Creation Survey (2013) that have discovered that out of all the markets in the UK currently, the telecoms sector is the most optimistic. 64% of companies within the marketspace responded that they expect to create full-time positions within the next year, up from 51% the year before.

There are also plans for even more job creation, in the form of part-time or temporary work, with 69% of companies saying they intend to hire in these capacities as well. This figure is also up from last year, increasing by 6%. The positions companies are expecting to recruit for are made up predominantly of skilled worker roles or those within middle-management. 25% of jobs are planned to be created for entry-level positions, offering some optimism for graduates hoping to get into the sector.

The Barclays Survey was overall a huge change on previous years, showing that most sectors and companies believe they are now in a better position to not only recruit but hold on to the employees they already have. Out of all companies who took part in the survey 79% believed they wouldn’t be facing job losses. In spite of the noises currently coming out of the British media, maybe things are a bit rosier than first thought.

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Three Italia to be bought out by Telecom Italia

This isn’t exactly surprising news for anyone following the telecoms situation in Italy, but Three hasn’t have a great deal of success since entering the Italian market, prompting speculation that they could soon be bought out. That speculation has only increased recently, since Telecom Italia confirmed that contact had been made between the two companies, when a spokesman said “The contacts are in such immature and preliminary status that the company cannot further comment on the news”.

The failure of Three (Hutchinson) to really penetrate the Italian market can be summed up by looking into the numbers. With a rather impressive 6.7 million subscribers to the service, it looks enough to sustain a business, but when you take into account the 32.1 million subscribers of Telecom Italia and the 26.3 million and 21.6 million of Vodafone and Wind respectively, you start to see the uphill struggle they face.

Couple their subscribers issues with the uncertain future of economies in the area and you start to see a picture of a company that would welcome a potentially exit strategy in the form of a buyout. The word “merger” is being branded around, but I’d imagine that the head offices of Hutchinson would prefer to close the book on their involvement in the Italian market, handing subscribers and employees to Telecom Italia instead.

Just how the deal will be ironed out is yet to be confirmed, but with talks scheduled for April 11th 2013, we’ll likely know sooner rather than later.

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Telecoms – Bringing Brothers Back Together

The world’s richest brothers, Mukesh and Anil Ambani, have joined forces for the first time in nearly a decade since their fathers death, seeing them join separate telecoms businesses to share 4G speeds. The deal is said to be worth $200m and will be focused on the India telecoms market.

The Ambani brothers are both billionaires through their separate businesses, both building on the substantial wealth left to them when their father, Dhirubhai died in 2002. However, their father hadn’t left a will, so the brothers were left to battle it out with one another to see who got what from the Reliance empire.

Ever since, the brothers have feuded with one another, with an agreement restricting one another from entering each others markets. However, in 2010 that agreement was abolished, opening up speculation that relations between the brothers had worsened further.

Therefore, it is somewhat surprising news that the brothers have now come together in a deal which not only see’s them in the same industry, but sharing resources with each other to grow their own respective businesses. It also highlights just how important the companies value 4G and the opportunities it can present.

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Looking at EU Apple

The EU are currently looking into the contracts imposed by Apple on the networks that sell their products. This has come about due to informal complaints made to the EU’s competition commissioner regarding the technology giant and how they conduct their business.

It isn’t currently unknown which of the telecoms operators have voiced their concerns over the iPhone manufacturers practices but it is believed the complaints centre around Apple’s regulation that if a certain quota of iPhone aren’t sold in a given timeframe, then Apple can step in and take over the telecoms marketing pursuits. Not only does that impose on the telecoms company itself, but Apple will also charge the company for their marketing expertise after doing so. Concerns have rightly risen surrounding this regulation because companies fear what will happen if Apple release a product that doesn’t perform as they expect it to in the market. With the recent Apple iPhone 5 not receiving as much positive press as other models have in the past, it becomes a very real concern for networks with consumers keeping a close eye on what Apple will release next.

It is reassuring to know that consumers are at the heart of what the competition commissioner is attempting to do however. The commissioner himself, Joaquin Almunia, said “The commission is currently looking at this situation and, more generally, is actively monitoring market developments. We will intervene if there are indications of anti-competitive behaviour to the detriment of consumers.” Apple have of course responded to the allegations, citing that “our contracts fully comply with local laws wherever we do business, including the EU.”

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Google’s Eric Schmidt due to visit Myanmar for telecoms chat

Back in January, we brought you the news behind Myanmar’s expected growth in the telecoms industry. Imagine how interesting it was to then read this morning that Google’s former chief executive Eric Schmidt is due to visit the booming country next week. His trip there will see him talking with governmental officials at a technology and communications get-together, all coming in the wake of countries changing political stance in 2011. This has vastly increased the attractiveness of foreign business investing in the country, largely considered as an untapped market with huge potential.

Currently in the country formerly known as Burma, mobile subscriptions account for 9% of the 60 million strong population. In neighbouring Thailand mobile subscription account for 110% of the countries population, demonstrating that nearly everyone in the country has a mobile phone with quite a few of those individuals having more than 1 phone. This public interest is likely to filter through into the neighbouring country, showing just how large an opportunity there is in the telecoms sector.

Google’s interest in Myanmar and the reason for the talks is likely to have something to do with the fact that Google themselves are large players in the mobile phone market, being the company behind the world’s most popular operating system, Android. As more and more people own handsets with Android installed, Google themselves being at their core a data business, will have more information to analyse to improve their number 1 revenue generating business, their search engine. For a company in a position such as Google, who can capitalize in various ways from a presence in Myanmar, it represents a huge opportunity where relationships developed during Schmidt’s visit could become critical.

Good thinking.

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China set to become leading M2M provider

Based on the findings of Pyramid Research, they believe that China is set to become the number 1 powerhouse in M2M technology, with a number of their leading telecoms businesses at the forefront of the charge.

M2M (machine to machine) allows wireless networks to communicate with a number of devices at once. It is fundamentally the building blocks of the “future home” where mobile phones are able to communicate with the fridge or oven all over the same network. Cellular companies such as China Mobile and China Unicom are currently in the strongest positions of all networks in China to take advantage of the growing demand for this technology in this continually developing economy. With this sustained growth, China are set to become the number 1 provider of M2M tech, with an estimated 128 millions devices being used by 2017. At the time, that will account for 8.5% of all cellular usage worldwide.

M2M is a big deal the world over, so this report is significant. It is thought that M2M is set to become one of the fastest growing industries in the US over the next year, signifying the need for it in developed economies. Over the next 4 years alone, it is believed that M2M will grow at a rate of 57.2%, becoming huge part of the overall economy and matching the growth of Cloud networks – popularised by Apple.

Just how the technology will change lives is yet to be seen, but we can certainly expect there to be a battle by network providers to provide the technology at the most affordable prices.

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BSkyB expand UK broadband business

The news has broken in the past week that BSkyB, the media giant, is set to become the 2nd largest player in the UK broadband market (subscriber numbers considered) after agreeing a deal to purchase Telefonica’s rival business. Estimated at just under £200m with add-ons taken into account, the deal will see BSkyB take their subscriber numbers from 4.2 million, to 4.7 million. This takes them just above Virgin Media into second place, who have 4.5 million.

It is believe that Telefonica, who own O2, wanted out of the broadband business to focus more of the mobile phone offerings that they have around the world. With the rollout of 4G over the past few months, and the continued acceptance the technology is gaining, their time is likely to be taken up already. Especially considering that 4G technology has already seen a rise in various companies shares prices, with Chinese based manufacturer ZTE growing 9% almost overnight at the announcement of 4G in their home country.

Both companies in the deal see it as a win. BSkyB chief exec commented “We believe that the O2 and BE consumer broadband and telephony business is a great fit, with customers used to high-quality products and strong levels of customer service”. Whilst Telefonica UK chief exec Ronan Dunne exclaimed “we believe this agreement is the best way of helping our customers get the highest quality home broadband experience from a leading organisation in the market” as they focus more of their efforts on mobile and 4G.

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4G auction raises £1 billion less than expected

Today was the day that Ofcom, the telecoms regulator for networks in the UK, auctioned off the 4G service which was previously only made available with new network EE, through an exclusivity deal. However, when George Osborne had predicted that the auction would raise the Treasury an estimated £3.5 billion, he hadn’t envisioned that the auction would only pull in £2.34 billion, over £1 billion less than he had hoped for.

It is good news for consumers however, as the 4G services will shortly be available through networks such as Three, O2 and Vodafone, who were some of the winning bidders in the auction. This competition will mean that providers will be fighting for consumer interest, with the likely result being a price war. Costs of contracts could potential come down from the prices EE had previously been offering when they had an effective monopoly on the spectrum. Of course, EE do still keep the right to the 4G services, meaning customers on Orange and T-Mobile (who form part of EE) will still be able to keep the speeds they have become accustomed to.

Although the initial budgetary figures laid out by Osborne seem to be optimistic, one of the factors that was taken into account was the figure raised at the last auction, when 3G was made available. That figure was £22 billion. Even with an estimate of £3.5 billion, that was still a huge cut in estimation for a superior service. But as Ed Richards, chief executive of Ofcom commented “What we were trying to do was ensure that a valuable economic resource was brought into productive commercial use”, insisting that gaining the highest bids possible was not the strategy the Government had set.

This is a bold move, but one that Ofcom believes will have many more financial benefits to follow. Due to the increased capabilities of the spectrum speeds, which is faster than the average UK household broadband, it is estimated that it will provide over £20 billion of benefits to UK consumers over the next 10 years. As far as the Government and Ofcom were concerned, auctioning off the spectrum to get it into commercial use was the most important part of the future UK telecoms strategy. Maria Miller, culture secretary said “Spectrum use is worth more than £50bn to the UK economy and 4G mobile broadband is a key part of our digital growth strategy, so I am delighted the auction has been completed”.

Fingers crossed.

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