Triatel, the cdma-450 operator, may be moving toward offering video services. That would represent an expansion of the brand's strategy from a rather narrow focus on the corporate and government sector.
This blogger has been told by the company that some sort of videophone broadcast will be demonstrated the week of May 2. While it is hard to imagine a corporate video conference with executives balancing their Triatel phones on the their knees, there are plenty of recreational and entertainments services that can use video in a 3G environment. Indeed, most premium services on both GSM and 3G networks around the world are entertainment related.
My middle son (18) who lives in Sweden told me of the increasing number of 3 phones at his high school. Many of them were being used for such seemingly bizarre purposes as beaming live video of lunch from the school cafeteria to a friend in the classroom. Then it occured to me that for some people this is fun.
What Triatel will probably do is try to launch some mass market services ahead of the similar 3G services of incumbents Latvian Mobile Telephone (LMT) and Tele2, as well as beat Bite GSM to the punch. Having been the first to introduce de-facto 3G data services on a limited scale, it might as well be the first to launch commercial, mass-market services. The way things look now, Triatel either does this or risks being cornered in a relatively low-revenue niche (compared to say, a customer-base of 100 000 sending MMS and downloading video clips for fun) by the other two and (later three) operators.
The wacko story spiked?
Looks like the paper won't be putting out the somewhat crackpot story about a forecast that Lattelekom could loose 60 % of its SME customers once number portability (not necessary in order to take revenue away from the incumbent, carrier pre-selection will do fine..) is introduced. Somebody came to their senses, just a shame that I had to work with a number of people at Lattelekom, analysts in London and a PR company doing a corporate reputation survey to get refutations of this rather far-out-on-a-limb theory.
Maybe it is time to start blogging Latvian journalism in addition to telecoms and bizarre near-traffic accidents. But who has time...?
Saturday, April 30, 2005
Wednesday, April 27, 2005
More wacko coming?
The main rant...
A certain publication wants me to make a big deal of the fact that Latvia's Ministry of Health, in moving to new premises, installed 125 phone lines from Triatel rather than Lattelekom. 125 lines is around 0.00019 % of all Lattelekom lines and about LVL 45000 in total revenues. according to a guesstimate by the Ministry. The Ministry was previously located in two different premises and used Lattelekom.
As news, it is worth a small item, nothing more. However, under some pressure "to prove that I am not taking Lattelekom's side" (as if there were sides in this matter), I've decided to build another story around a piece of information from an otherwise very respectable source, Janis Lelis of the Latvian Telecommunications Association (LTA).
Lelis told me that the LTA had spoken to several "marketing experts" who expressed the belief that, given the chance, 60 % of Lattelekom's small and medium business customers would leave the company for another operator. This is not what Lattelekom's own customer surveys, conducted by a professional market survey organization, have indicated.
I also have to emphasize that Lelis didn't say he believed or agreed with the assessment by the so-called marketing experts, it was one piece of opinion among many that he hears in his position. So to retell this is not to assail the credibility of the LTA, only of the source it is quoting.
Anyway, staying "barely" clear of a borderline hatchet job (in my own mind) I will file an item claiming "the collapse of Lattelekom is forecast" and pointing to the forecast cited (but not endorsed by the LTA).
For those who don't know American expressions:
hatchet job
n. Slang
Anyway, most of the text will be quotes and statistics showing the complete idiocy of a claim that 60 % of Lattelekom's SME customers will flee because, as the unnamed marketing experts claim, the company has a reputation SME's don't want to be associated with. The reason for this is apparently lingering conspiracy theories about the undoubtedly debatable Umbrella Agreement of 1994. Under these theories, Lattelekom is an instrument for foreign monopolization, colonization and failure to run Gigabit Ethernet landlines to every kerosene-lit shack in the Latvian woods.
While the majority wackos of the Latvian parliament or Saeima voted to condemn the settlement agreement with Lattelekom just over a year ago based on this kind of bizzaro thinking, I don't really believe it exists among the ordinary SME customers, even those who have had problems with Lattelekom. After all, the company has been reforged over the past 11 years from what was essentially a Soviet state monopoly to what is a modern corporation making a more than decent profit even under great change-induced stress. So for a best effort, Lattelekom isn't doing so badly. I summed up attitudes toward the (then) monopoly in an article I wrote some years ago for the apparently defunct magazine Northern Enterprise with a headline Surfing with the Great Satan, which summed up how, while providing new services such as DSL, the company was still vilified in some circles.
I'm sorry that this blog has to diverge into what is more of a criticism of how journalism is done in Latvia and the sometimes bizarre compromises that one has to enter into to get certain editors off one's case.
Anyway, my hope is that this story will simply be spiked and never see the (pink) light of day. If it does, those readers of the blog who will hear of it second hand will know why it happened and that it is, if I succeed in writing it to the edge as I intend to, that it will be self-referentially absurd :). Sort of like, Flat Earth Society Convention Comes to Town (with lots of references to the obvious fact that this is all a crock of shit).
Other stuff
While we are on the subject of what does and does not get published, I have an interesting piece based on an interview with the head of the State Information Network Agency (VITA in Latvian), Juris Kanels. Since it has been shitcanned for no apparent reason, I will translate the essentials later on. Basically, it is about how VITA plans to expand into the private sector market and how it needs a clear mandate and definition of mission to avoid problems with being accused of state-subsidized unfair competition.
God, I wish people who are totally HUTA (as in head up the ass) on telecoms matters would at least realize from where they are looking at things....
And while enjoying the freedom of blogging, might as well say fuck once too, as in fuck this shit!
Back to normal again soon..
I'm gonna put on some music now and then go to sleep...
A certain publication wants me to make a big deal of the fact that Latvia's Ministry of Health, in moving to new premises, installed 125 phone lines from Triatel rather than Lattelekom. 125 lines is around 0.00019 % of all Lattelekom lines and about LVL 45000 in total revenues. according to a guesstimate by the Ministry. The Ministry was previously located in two different premises and used Lattelekom.
As news, it is worth a small item, nothing more. However, under some pressure "to prove that I am not taking Lattelekom's side" (as if there were sides in this matter), I've decided to build another story around a piece of information from an otherwise very respectable source, Janis Lelis of the Latvian Telecommunications Association (LTA).
Lelis told me that the LTA had spoken to several "marketing experts" who expressed the belief that, given the chance, 60 % of Lattelekom's small and medium business customers would leave the company for another operator. This is not what Lattelekom's own customer surveys, conducted by a professional market survey organization, have indicated.
I also have to emphasize that Lelis didn't say he believed or agreed with the assessment by the so-called marketing experts, it was one piece of opinion among many that he hears in his position. So to retell this is not to assail the credibility of the LTA, only of the source it is quoting.
Anyway, staying "barely" clear of a borderline hatchet job (in my own mind) I will file an item claiming "the collapse of Lattelekom is forecast" and pointing to the forecast cited (but not endorsed by the LTA).
For those who don't know American expressions:
hatchet job
n. Slang
- A crude or ruthless effort usually ending in destruction: did a hatchet job on the mayor's reputation.
Anyway, most of the text will be quotes and statistics showing the complete idiocy of a claim that 60 % of Lattelekom's SME customers will flee because, as the unnamed marketing experts claim, the company has a reputation SME's don't want to be associated with. The reason for this is apparently lingering conspiracy theories about the undoubtedly debatable Umbrella Agreement of 1994. Under these theories, Lattelekom is an instrument for foreign monopolization, colonization and failure to run Gigabit Ethernet landlines to every kerosene-lit shack in the Latvian woods.
While the majority wackos of the Latvian parliament or Saeima voted to condemn the settlement agreement with Lattelekom just over a year ago based on this kind of bizzaro thinking, I don't really believe it exists among the ordinary SME customers, even those who have had problems with Lattelekom. After all, the company has been reforged over the past 11 years from what was essentially a Soviet state monopoly to what is a modern corporation making a more than decent profit even under great change-induced stress. So for a best effort, Lattelekom isn't doing so badly. I summed up attitudes toward the (then) monopoly in an article I wrote some years ago for the apparently defunct magazine Northern Enterprise with a headline Surfing with the Great Satan, which summed up how, while providing new services such as DSL, the company was still vilified in some circles.
I'm sorry that this blog has to diverge into what is more of a criticism of how journalism is done in Latvia and the sometimes bizarre compromises that one has to enter into to get certain editors off one's case.
Anyway, my hope is that this story will simply be spiked and never see the (pink) light of day. If it does, those readers of the blog who will hear of it second hand will know why it happened and that it is, if I succeed in writing it to the edge as I intend to, that it will be self-referentially absurd :). Sort of like, Flat Earth Society Convention Comes to Town (with lots of references to the obvious fact that this is all a crock of shit).
Other stuff
While we are on the subject of what does and does not get published, I have an interesting piece based on an interview with the head of the State Information Network Agency (VITA in Latvian), Juris Kanels. Since it has been shitcanned for no apparent reason, I will translate the essentials later on. Basically, it is about how VITA plans to expand into the private sector market and how it needs a clear mandate and definition of mission to avoid problems with being accused of state-subsidized unfair competition.
God, I wish people who are totally HUTA (as in head up the ass) on telecoms matters would at least realize from where they are looking at things....
And while enjoying the freedom of blogging, might as well say fuck once too, as in fuck this shit!
Back to normal again soon..
I'm gonna put on some music now and then go to sleep...
Tuesday, April 26, 2005
Huawei bags Triatel, IP TV bid confirmed
Since fame and USD 0.17 (so far on google adsense) are all I can hope for from this blog, I want to point out that you are hearing this here first.
Huawei bags the Triatel deal
Triatel has apparently been happy with the trial of Huawei's cdma 450 equipment and is sealing a deal for the Chinese company to build out the rest of the "non-standard" 3G mobile network in Latvia (which will also deliver fixed wireless access and DSL class, 2 Mbps + wireless internet). Triatel's press flack says they will announce very soon. The deal is "multimillion" something – dollars, euro (USD 1.30) or lats (USD 1.85).
While it ain't exactly Portugal, the Netherlands or Algeria (where we have seen Huawei doing things in this hemisphere -- or quadrisphere, since Asia is in the Eastern hemisphere, too), it is yet more evidence that at least the company's same technological bang for a smaller buck approach is working. Not all showcases have to be big. We shall see how they do.
Lattelekom confirms consortium's proposal
Lattelekom's director of market development Gints Kirsteins confirms they are talking to the three partner consortium of Ericsson, Cisco and IBM the blog reported a few days ago. There are also others making their proposals.
That's not the point, though. As Kirsteins notes, the big problem is going to be getting a workeable business model that will attract a substantial migration from existing conventional (Telia MultiCom) and digital (some of Baltcom TV) cable operators. Moreover, Baltcom is already selling a version of the triple-play (internet, TV and voice) package that IBM dog and ponied last week. It has probably more than 1 000 triple-play users (my guess), but there has been no stampede. Baltcom has around 125 000 cable subscribers and Telia MultiCom (soon to rebrand as something else) around 75 000.
With no stampede, Lattelekom is going to be sitting alone at its Cisco boxes, waiting for someone yearning for 100 + channels to come to them (right, always wanted to pay LVL 10 or 15 a month for the Mushroom Channel -watch 'em grow- or whatever). There better be some damn attractive content there. This is the biggest problem - stuff like first run movies is going to cost, unless Lattelekom cuts a deal with its half-mother Telia Sonera, which is selling IP TV for (as I figure it, please someone correct me) about SEK 449 per month for the radically fast ADSL2+ and another minimum of SEK 129 or as much as SEK 339 or something like that for the TV subscription. That brings us close to equivalent USD 100 per month just to be entertained. That will buy one a sh**tload of booze or joints or other entertainment...:) at Latvian prices.
Getting Kolja to switch?
The other problem is - and no ethnic stereotyping is meant in any malicious way here – that basically Lattelekom has to get Kolja the middle-class Riga Russian to buy its offer. Kolja is a little shy of 40, married, one or two teenage kids, and lives in a privatized or newly bought apartment in the Riga suburbs.
During the day, the cable TV serves to entertain the inevitable babushka (granny) who sits at home watching Russian dubbed Mexican soap operas. Kolja comes home in the evening and moves babushka to another TV set, where she watches the 60s Russian oldies movies of her youth on another Russian channel. Meanwhile Kolja turns on the hockey game (Latvian TV or TV 3) and one is as likely to get him away from that as to get the Pope to step back from the altar during mass to take a call on the Papal mobile.
Kolja's kids then show up, and being more or less tri-lingual, they watch some Latvian reality show guaranteed to crank down their otherwise bright IQ by 10 points if they keep it up. Or maybe they watch MTV. Mrs. Kolja, who works for a smart downtown bank, thinks she has to polish her business English, so she catches one of the evening BBC Business News shows. Babushka watches some film about armored division soldiers and a dog for the third time in a week.
Kolja Jr. (15) leaves his 13 year old sister Katja to swoon over a pink-haired character nicknamed Chibriks on the reality show Fabrika Returns from The Grave and boots up a LVL 7.50 a month fast internet connection supplied by their neighbor Sharshkin, who has parcelled out a 4 Mbps Lattelekom DSL line to a couple of other apartments on the fourth floor. Kolja downloads a 200 Mb pirated Doom: Slash Burn & Butcher game, then types his homework. In the bedroom, on her work laptop, Mrs. Kolja Skypes her cousin in St. Petersburg and they talk for a half hour.
This, basically, is the idyllic evening that Lattelekom's IP TV offering will have to totally, awesomely disrupt. Technology alone won't do it.
Huawei bags the Triatel deal
Triatel has apparently been happy with the trial of Huawei's cdma 450 equipment and is sealing a deal for the Chinese company to build out the rest of the "non-standard" 3G mobile network in Latvia (which will also deliver fixed wireless access and DSL class, 2 Mbps + wireless internet). Triatel's press flack says they will announce very soon. The deal is "multimillion" something – dollars, euro (USD 1.30) or lats (USD 1.85).
While it ain't exactly Portugal, the Netherlands or Algeria (where we have seen Huawei doing things in this hemisphere -- or quadrisphere, since Asia is in the Eastern hemisphere, too), it is yet more evidence that at least the company's same technological bang for a smaller buck approach is working. Not all showcases have to be big. We shall see how they do.
Lattelekom confirms consortium's proposal
Lattelekom's director of market development Gints Kirsteins confirms they are talking to the three partner consortium of Ericsson, Cisco and IBM the blog reported a few days ago. There are also others making their proposals.
That's not the point, though. As Kirsteins notes, the big problem is going to be getting a workeable business model that will attract a substantial migration from existing conventional (Telia MultiCom) and digital (some of Baltcom TV) cable operators. Moreover, Baltcom is already selling a version of the triple-play (internet, TV and voice) package that IBM dog and ponied last week. It has probably more than 1 000 triple-play users (my guess), but there has been no stampede. Baltcom has around 125 000 cable subscribers and Telia MultiCom (soon to rebrand as something else) around 75 000.
With no stampede, Lattelekom is going to be sitting alone at its Cisco boxes, waiting for someone yearning for 100 + channels to come to them (right, always wanted to pay LVL 10 or 15 a month for the Mushroom Channel -watch 'em grow- or whatever). There better be some damn attractive content there. This is the biggest problem - stuff like first run movies is going to cost, unless Lattelekom cuts a deal with its half-mother Telia Sonera, which is selling IP TV for (as I figure it, please someone correct me) about SEK 449 per month for the radically fast ADSL2+ and another minimum of SEK 129 or as much as SEK 339 or something like that for the TV subscription. That brings us close to equivalent USD 100 per month just to be entertained. That will buy one a sh**tload of booze or joints or other entertainment...:) at Latvian prices.
Getting Kolja to switch?
The other problem is - and no ethnic stereotyping is meant in any malicious way here – that basically Lattelekom has to get Kolja the middle-class Riga Russian to buy its offer. Kolja is a little shy of 40, married, one or two teenage kids, and lives in a privatized or newly bought apartment in the Riga suburbs.
During the day, the cable TV serves to entertain the inevitable babushka (granny) who sits at home watching Russian dubbed Mexican soap operas. Kolja comes home in the evening and moves babushka to another TV set, where she watches the 60s Russian oldies movies of her youth on another Russian channel. Meanwhile Kolja turns on the hockey game (Latvian TV or TV 3) and one is as likely to get him away from that as to get the Pope to step back from the altar during mass to take a call on the Papal mobile.
Kolja's kids then show up, and being more or less tri-lingual, they watch some Latvian reality show guaranteed to crank down their otherwise bright IQ by 10 points if they keep it up. Or maybe they watch MTV. Mrs. Kolja, who works for a smart downtown bank, thinks she has to polish her business English, so she catches one of the evening BBC Business News shows. Babushka watches some film about armored division soldiers and a dog for the third time in a week.
Kolja Jr. (15) leaves his 13 year old sister Katja to swoon over a pink-haired character nicknamed Chibriks on the reality show Fabrika Returns from The Grave and boots up a LVL 7.50 a month fast internet connection supplied by their neighbor Sharshkin, who has parcelled out a 4 Mbps Lattelekom DSL line to a couple of other apartments on the fourth floor. Kolja downloads a 200 Mb pirated Doom: Slash Burn & Butcher game, then types his homework. In the bedroom, on her work laptop, Mrs. Kolja Skypes her cousin in St. Petersburg and they talk for a half hour.
This, basically, is the idyllic evening that Lattelekom's IP TV offering will have to totally, awesomely disrupt. Technology alone won't do it.
Triatel tests Huawei, big IT deal coming?
Huawei, the Chinese telecoms equipment maker, is letting Latvian alternative operator Triatel test its cdma-450 solution as a prelude to a possible multi-million dollar deal. If the tests are satisfactory, Huawei has a good chance of getting a contract to build out Triatel's network, which is understood to be limited and based on a Nortel solution.
Sun Gang, a Huawei executive at the company's office in Poland confirmed these facts to this blogger. Gang said the company was in the process of setting up a subsidiary in Latvia, as reported on this blog earlier.
Huawei has at least one earlier cdma-450 project in Europe in Portugal. The company is considered an aggressive newcomer to world and European markets. Competitors such as Ericsson say privately that Huawei has yet to prove it can provide the same level of support and service as established Western suppliers. Competitors are unsurprised that Huawei appeals to operators who look at the list price tag of "the boxes" first. This may or may not be the case with Triatel.
Huawei has also been seeing Lattelekom regarding its plans to use cdma-450 for rural fixed line modernization (using fixed wireless phones).
The big deal?
A major Latvian IT company is close to a big deal IT deal with a large bank from a German-speaking country. This is in addition to a possible deal with a Scandinavian bank that this blog reported earlier. My sources indicate this could be a mega-deal. The financial institution has "an IT budget that is half of Latvia's state budget". It is likely the deal will involve, as one of its elements, the maintenance and modernization of a legacy mainframe-based system.
Watch this blog or my day-job newspaper (for those of you that read Latvian) for news. It could be decided in about a month.
Sun Gang, a Huawei executive at the company's office in Poland confirmed these facts to this blogger. Gang said the company was in the process of setting up a subsidiary in Latvia, as reported on this blog earlier.
Huawei has at least one earlier cdma-450 project in Europe in Portugal. The company is considered an aggressive newcomer to world and European markets. Competitors such as Ericsson say privately that Huawei has yet to prove it can provide the same level of support and service as established Western suppliers. Competitors are unsurprised that Huawei appeals to operators who look at the list price tag of "the boxes" first. This may or may not be the case with Triatel.
Huawei has also been seeing Lattelekom regarding its plans to use cdma-450 for rural fixed line modernization (using fixed wireless phones).
The big deal?
A major Latvian IT company is close to a big deal IT deal with a large bank from a German-speaking country. This is in addition to a possible deal with a Scandinavian bank that this blog reported earlier. My sources indicate this could be a mega-deal. The financial institution has "an IT budget that is half of Latvia's state budget". It is likely the deal will involve, as one of its elements, the maintenance and modernization of a legacy mainframe-based system.
Watch this blog or my day-job newspaper (for those of you that read Latvian) for news. It could be decided in about a month.
Sunday, April 24, 2005
Ericsson, Cisco & IBM aim for Latvian IP TV
A consortium consisting of Swedish telecoms giant Ericsson, internet infrastructure builder Cisco and IBM is bidding to build an IP TV network for Lattelekom, this blogger has learned. In this case, IP TV means delivering DVD quality image and sound over 100 + channels over a DSL type connection at around 20 Mbps.
The ongoing bid also explains the eagerness of IBM's representatives in Latvia to demo what it said was "its" triple-play product. To be sure, the slides had many other company names and the IBM people said they were only "integrators", which is the role assigned them in the three-member consortium. At the same time, the IBM guys did an excellent job of leaving the general feeling that somehow, it was their "show".
The fact that Lattelekom is set to build out an IP TV network is nothing new for the readers of this blog -- what is interesting is that IBM was packaging it as "triple play". That means there is a very low cost, and, in many cases, practically free internationa and domestic voice element in the solution. Indeed, I would call "triple play" more like 2.5 play, because with the heavy duty internet pipe needed for IP TV, one has the capacity for most high quality do-it-yourself VOIP solutions. So the third element is probably going to be a Cisco VOIP phone handset that makes phone-to-phone calling easier, as well as making it possible to charge extra for the equipment and, possibly, minutes on some kinds of calls.
As things look now, Lattelekom has quietly let the "soon after Easter" goal for some kind of experimental IP TV pass and is apparently looking for a serious, heavy-duty pilot level solution that will almost certainly involve the same partners it will keep for the final, commercial roll-out. I don't think it will be that soon -- maybe a Christmas offering?
If I were Lattelekom, I would hit the market with a "shock and awe" offering - voice, interactivity, games, and a hard-disk based set-top box that would allow recording of programs. I would position it so that the middle to higher income end of the draugiem.lv crowd (275 000 18 to 40 year olds who feel at home on the net) would go after it. In fact, I would make part of the launch on draugiem. This is no partiality to draugiem, just that this is one of the largest and most focused attention platforms available in Latvia after TV itself.
The IBM demo, run off a server in the basement with snippets of real programming (I think this is what they were doing) looked impressive, especially the video-on demand features and the ability to package one's own set of subscriber channels (and skip the half-dozen Russian language channels that seem to come with local cable packages, since I don't speak Russian). Interactive features are also part of the solution, so Baltcom TV, which is going digital with its own MMDS or (limited) optical fiber solution should start watching out. So far, Baltcom is the only player offering triple play, but when Lattelekom gears up and starts, Baltcom will face some very serious competition.
However, a caution to all is that despite its high number of cable TV subscribers, Baltcom has relatively few triple-play users (partly due to geographical constraints of their network).
The ongoing bid also explains the eagerness of IBM's representatives in Latvia to demo what it said was "its" triple-play product. To be sure, the slides had many other company names and the IBM people said they were only "integrators", which is the role assigned them in the three-member consortium. At the same time, the IBM guys did an excellent job of leaving the general feeling that somehow, it was their "show".
The fact that Lattelekom is set to build out an IP TV network is nothing new for the readers of this blog -- what is interesting is that IBM was packaging it as "triple play". That means there is a very low cost, and, in many cases, practically free internationa and domestic voice element in the solution. Indeed, I would call "triple play" more like 2.5 play, because with the heavy duty internet pipe needed for IP TV, one has the capacity for most high quality do-it-yourself VOIP solutions. So the third element is probably going to be a Cisco VOIP phone handset that makes phone-to-phone calling easier, as well as making it possible to charge extra for the equipment and, possibly, minutes on some kinds of calls.
As things look now, Lattelekom has quietly let the "soon after Easter" goal for some kind of experimental IP TV pass and is apparently looking for a serious, heavy-duty pilot level solution that will almost certainly involve the same partners it will keep for the final, commercial roll-out. I don't think it will be that soon -- maybe a Christmas offering?
If I were Lattelekom, I would hit the market with a "shock and awe" offering - voice, interactivity, games, and a hard-disk based set-top box that would allow recording of programs. I would position it so that the middle to higher income end of the draugiem.lv crowd (275 000 18 to 40 year olds who feel at home on the net) would go after it. In fact, I would make part of the launch on draugiem. This is no partiality to draugiem, just that this is one of the largest and most focused attention platforms available in Latvia after TV itself.
The IBM demo, run off a server in the basement with snippets of real programming (I think this is what they were doing) looked impressive, especially the video-on demand features and the ability to package one's own set of subscriber channels (and skip the half-dozen Russian language channels that seem to come with local cable packages, since I don't speak Russian). Interactive features are also part of the solution, so Baltcom TV, which is going digital with its own MMDS or (limited) optical fiber solution should start watching out. So far, Baltcom is the only player offering triple play, but when Lattelekom gears up and starts, Baltcom will face some very serious competition.
However, a caution to all is that despite its high number of cable TV subscribers, Baltcom has relatively few triple-play users (partly due to geographical constraints of their network).
Friday, April 22, 2005
Wacko stuff on number portability
You take a f**kwit story by the Latvian news agency LETA and you have one of the ingredients for a half-assed news story in a business daily I won't name because I'm not sure what the story is with mildly dissing (as they say in the hood) these folks.
Anyway, LETA triggers a minor newsroom panic by asserting that Latvia's arrangements for number portability means endusers will have to pay for the privilege. Nobody actually says that in the original piece and moreover, nobody actually tells me that either. In fact, they say that as things now stand, people officially know just about f**k all about how things will really look (one of the privileges of blogging is that you can rant, writing the way I might speak to someone about this in an informal manner).
My story started being written that it wasn't so that number portability costs would be passed to customers even if they were incurred by operators. In other words, LETA was writing bullshit. In truth, nobody really knew whether customers might have to pay, but there were strong factors the suggested they probably wouldn't. Putting it so clearly didn't fly on the first try, so the piece was done with a twist that I'm mildly unhappy with. Then again, doesn't mean shit to those who don't read Latvian, and all the better :)...
Unofficially, it looks like the mobiles at least are going for some kind of independent organization to managed the database that knows whose number is where. That means there could be a variety of cost-sharing arrangements. Lattelekom, according to my sources, is pretty close to signing its arrangements with the small number of small fixed line operators that actually have anything going.
One idea that Lattelekom is mulling (and this would apply only to number portability within any of 26 domestic area code zones) is to package the charge for incoming customers (charged by their former operators) as a kind of fee for keeping an old familiar number while at the same time getting better tariffs, higher quality or whatever it was that made the customer want to switch. At the same time, it is also logical that number portability charges, if applied by the operator giving up the customer to the receiving operator, would also be absorbed by the latter simply as a cost of customer aquisition rather than passing it on to the customers.
It is even less likely that the mobiles would pass on charges, as they regularly put up substantial amounts for customer acquisition with such deals as subsidized phones. C'mon, no phone costa LVL 1 or LVL 19 wholesale. The operator is putting up LVL 20 just to get the subscriber signed up for whatever the minimum time is and hoping the revenues will soon make up for the wholesale cost of some mid-range Nokia or Samsung. So why should a number portability charge be passed on to the customer? At best, it will be diluted and hidden. Does anyone buy shoes on sale where the price tag says $75 for the shoes and $4.95 per buyer for the advertising campaign that announced the sale? No, those shoes are "was $ 99.95, now $ 79.95". Basta.
Even if charges were implemented, it doesn't look like people will rush to port their numbers like stampeded lemmings. Lattelekom doesn't see more that 2 % of its subscribers doing so(about 12 000), thought other sources see a double-digit percentage. However, those predicting stampede away from the incumbent (has anyone seen this elsewhere? 50 % was a guesstimate mentioned to me by one source forecasting what could happen to Lattelekom) are logically saying that the unit cost of portability will fall. If Lattelekom spends about LVL 1 million on its number portability platform, "better" to have 60 000 jump ship than 12 000.
One serious issue is whether the Latvian operators will have their act together by the time number portability must be implemented on December 1. That's when the Public Utilities Regulatory Board will start fining operators. The mobiles and Lattelekom say they will be in compliance.
We shall see. Off to Ericsson in the morning.
Anyway, LETA triggers a minor newsroom panic by asserting that Latvia's arrangements for number portability means endusers will have to pay for the privilege. Nobody actually says that in the original piece and moreover, nobody actually tells me that either. In fact, they say that as things now stand, people officially know just about f**k all about how things will really look (one of the privileges of blogging is that you can rant, writing the way I might speak to someone about this in an informal manner).
My story started being written that it wasn't so that number portability costs would be passed to customers even if they were incurred by operators. In other words, LETA was writing bullshit. In truth, nobody really knew whether customers might have to pay, but there were strong factors the suggested they probably wouldn't. Putting it so clearly didn't fly on the first try, so the piece was done with a twist that I'm mildly unhappy with. Then again, doesn't mean shit to those who don't read Latvian, and all the better :)...
Unofficially, it looks like the mobiles at least are going for some kind of independent organization to managed the database that knows whose number is where. That means there could be a variety of cost-sharing arrangements. Lattelekom, according to my sources, is pretty close to signing its arrangements with the small number of small fixed line operators that actually have anything going.
One idea that Lattelekom is mulling (and this would apply only to number portability within any of 26 domestic area code zones) is to package the charge for incoming customers (charged by their former operators) as a kind of fee for keeping an old familiar number while at the same time getting better tariffs, higher quality or whatever it was that made the customer want to switch. At the same time, it is also logical that number portability charges, if applied by the operator giving up the customer to the receiving operator, would also be absorbed by the latter simply as a cost of customer aquisition rather than passing it on to the customers.
It is even less likely that the mobiles would pass on charges, as they regularly put up substantial amounts for customer acquisition with such deals as subsidized phones. C'mon, no phone costa LVL 1 or LVL 19 wholesale. The operator is putting up LVL 20 just to get the subscriber signed up for whatever the minimum time is and hoping the revenues will soon make up for the wholesale cost of some mid-range Nokia or Samsung. So why should a number portability charge be passed on to the customer? At best, it will be diluted and hidden. Does anyone buy shoes on sale where the price tag says $75 for the shoes and $4.95 per buyer for the advertising campaign that announced the sale? No, those shoes are "was $ 99.95, now $ 79.95". Basta.
Even if charges were implemented, it doesn't look like people will rush to port their numbers like stampeded lemmings. Lattelekom doesn't see more that 2 % of its subscribers doing so(about 12 000), thought other sources see a double-digit percentage. However, those predicting stampede away from the incumbent (has anyone seen this elsewhere? 50 % was a guesstimate mentioned to me by one source forecasting what could happen to Lattelekom) are logically saying that the unit cost of portability will fall. If Lattelekom spends about LVL 1 million on its number portability platform, "better" to have 60 000 jump ship than 12 000.
One serious issue is whether the Latvian operators will have their act together by the time number portability must be implemented on December 1. That's when the Public Utilities Regulatory Board will start fining operators. The mobiles and Lattelekom say they will be in compliance.
We shall see. Off to Ericsson in the morning.
Wednesday, April 20, 2005
Blogspamming strikes!:)
I think I just got blogspammed. A creature called lori posted a 20+ lines long comment repeatedly saying that I should be careful buying the drug "Tramadol". Sounds like something from a Kurt Vonnegut novel (Tramadol from Trafalmador). Also "be careful buying penis enlargment pill". Well, thanks for the warning lori, but I deleted your bizarre chant. But now you all know, be careful...etc :).
Were you on Tramadol, lori?
Were you on Tramadol, lori?
Huawei challenging Ericsson for rural fixed wireless
China's Huawei may be a serious challenger to Sweden's Ericsson for implementing fixed wireless services in remote rural areas of Latvia under Lattelekom's plan for finishing the modernization of the last of its Soviet-era network, this blogger has learned.
Both equipment and solution suppliers have been in touch with Lattelekom about building a cdma 450-based fixed wireless voice and data network to reach the 60 000 or so subcribers still linked to analog rural switches and accessing the network through obsolete wire and cable links.
Cost is apparently an issue, since it appears that Huawei and, possibly, another China-based contender have suggested they can do the job significantly cheaper than Ericsson. If this proves true and Lattelekom – an Ericsson customer for some of its main switches and its DSL network upgrade – chooses the lower cost offer, it would be a repeat in miniature of Ericsson's loss to Huawei on a major contract in Thailand. Huawei is reported to have bid 40 % under some benchmark figure set by the Thais.
The idea is to provide both digital voice and high-speed data (probably wireless SDSL) to these subscribers under a LVL 30 million plan adopted by Lattelekom last year to modernize the last, difficult and potentially expensive subscriber lines. In some cases, the subscribers and potential subscribers in isolated rural homesteads could be given apartments in the nearest town for less than the cost of running or upgrading the wireline to their farms or residences. In other words, there is only a wireless solution
With the Latvian government's adoption of a national frequency plan on April 19, the Public Utilities Regulation Board will be able to decide whether and how to allocate part of the 450 Mhz spectrum for rural fixed telephony. Lattelekom has asked to be given some 450 Mhz spectrum for its rural fixed wireless, but the request has gone unanswered for many months. Now it remains to be seen whether the regulator will wait for new rules on the allocation of "scarce" spectrum that could make it possible to auction or charge a less-than-nominal fee for the rest of the 450 Mhz spectrum. If Lattelekom has to bid against others, this may make cost even more of an issue in the rural modernization project.
Ericsson has the advantage of being a known and established supplier to Lattelekom and probably can offer some cost of ownership advantages with its higher price tag. The support base is just across the Baltic, not in China (unless Huawei has built up a permanent Europe-based support organization, which it might have).
However, but cutting the base price low enough, the Chinese supplier can probably outweigh such factors. In any case, a lot of equipment is probably more or less "generic" and increasingly reliable, so barring new hurricane-strength storms, you will not be flying in technicians from Shenzen very often to deal with a malfunctioning cdma450 base station.
Whatever the choice, cdma 450 is the hot new/old (where NMT used to be) 3G grade technology and Lattelekom has few other currently viable choices for finishing up network modernization. WiMax is another, unproven technology and primarily aimed at data/internet markets (possibly IP TV), not voice. Somehow, I don't see some Latvian rural shack dweller installing Windows Media 10 (or whatever it is now) on his PC so he can get HD TV broadcasts over WiMax.
Other background noise
Triatel, Latvia's only cdma 450 wireless, fixed wireless and internet access provider, is moving ahead rather slowly. Uptake of the "non-standard" service is somewhat disappointing. Huawei is said to have seen them as well.
Business customers may be waiting for Latvian Mobile Telephone and Tele2 to move beyond their token UMTS deployments to see what their coverage and pricing look like. Triatel has positioned itself as serving mainly business customers, who will wait to see what the "big two" and possibly Bite GSM have to offer on the UMTS side. Also lacking (except for internet access) are 3G specific content and services. Mobile TV and entertainment (games, tones, video) will lead the way on the consumer side once 3G handsets start selling.
Both equipment and solution suppliers have been in touch with Lattelekom about building a cdma 450-based fixed wireless voice and data network to reach the 60 000 or so subcribers still linked to analog rural switches and accessing the network through obsolete wire and cable links.
Cost is apparently an issue, since it appears that Huawei and, possibly, another China-based contender have suggested they can do the job significantly cheaper than Ericsson. If this proves true and Lattelekom – an Ericsson customer for some of its main switches and its DSL network upgrade – chooses the lower cost offer, it would be a repeat in miniature of Ericsson's loss to Huawei on a major contract in Thailand. Huawei is reported to have bid 40 % under some benchmark figure set by the Thais.
The idea is to provide both digital voice and high-speed data (probably wireless SDSL) to these subscribers under a LVL 30 million plan adopted by Lattelekom last year to modernize the last, difficult and potentially expensive subscriber lines. In some cases, the subscribers and potential subscribers in isolated rural homesteads could be given apartments in the nearest town for less than the cost of running or upgrading the wireline to their farms or residences. In other words, there is only a wireless solution
With the Latvian government's adoption of a national frequency plan on April 19, the Public Utilities Regulation Board will be able to decide whether and how to allocate part of the 450 Mhz spectrum for rural fixed telephony. Lattelekom has asked to be given some 450 Mhz spectrum for its rural fixed wireless, but the request has gone unanswered for many months. Now it remains to be seen whether the regulator will wait for new rules on the allocation of "scarce" spectrum that could make it possible to auction or charge a less-than-nominal fee for the rest of the 450 Mhz spectrum. If Lattelekom has to bid against others, this may make cost even more of an issue in the rural modernization project.
Ericsson has the advantage of being a known and established supplier to Lattelekom and probably can offer some cost of ownership advantages with its higher price tag. The support base is just across the Baltic, not in China (unless Huawei has built up a permanent Europe-based support organization, which it might have).
However, but cutting the base price low enough, the Chinese supplier can probably outweigh such factors. In any case, a lot of equipment is probably more or less "generic" and increasingly reliable, so barring new hurricane-strength storms, you will not be flying in technicians from Shenzen very often to deal with a malfunctioning cdma450 base station.
Whatever the choice, cdma 450 is the hot new/old (where NMT used to be) 3G grade technology and Lattelekom has few other currently viable choices for finishing up network modernization. WiMax is another, unproven technology and primarily aimed at data/internet markets (possibly IP TV), not voice. Somehow, I don't see some Latvian rural shack dweller installing Windows Media 10 (or whatever it is now) on his PC so he can get HD TV broadcasts over WiMax.
Other background noise
Triatel, Latvia's only cdma 450 wireless, fixed wireless and internet access provider, is moving ahead rather slowly. Uptake of the "non-standard" service is somewhat disappointing. Huawei is said to have seen them as well.
Business customers may be waiting for Latvian Mobile Telephone and Tele2 to move beyond their token UMTS deployments to see what their coverage and pricing look like. Triatel has positioned itself as serving mainly business customers, who will wait to see what the "big two" and possibly Bite GSM have to offer on the UMTS side. Also lacking (except for internet access) are 3G specific content and services. Mobile TV and entertainment (games, tones, video) will lead the way on the consumer side once 3G handsets start selling.
Wednesday, April 13, 2005
Pushing 100 in Italy, banging in the Middle East
The Latvian networking website www.draugiem.lv has passed the 260 000 registered user mark, while its Italian affiliate (announced on this blog) www.vostriamici.it should hit 100 users any minute now. I assume these 100 folks are the "seeders" and their first catch.
Meanwhile, the 260 000 figure has to be taken with a small grain of salt, since when you have that many, it gets harder to eliminate jokesters and false names. My middle son (18) in Sweden was on the site as a Star Wars character for a couple of weeks (and as my friend) until someone eliminated him/it :). I also doubt that Latvian fashion photographer Valts Kleins has been doing the draugiem.lv photos for some of the 17-year old young ladies from Moss Village (Sūnuciems), who look like they are posing for the next swimsuit calendar or a Cosmo cover. On the other hand, Latvia does have an enormous concentration of very attractive women.
Nonetheless, draugiem.lv remains the second largest attention platform after Latvian TV and exceeds any print media in its potential reach, as well as assembling a huge part of the at least minimally internet-knowledgeable 18 -35 Latvian middle class.
Hariri behind International Telecommunications & Technologies?
One of my sources tells me that the late Lebanese billionare and ex-prime minister Rafik Hariri was a major player behind the mysterious International Telecommunications & Technology (IT&T) consortium, which, at the end of the day, failed to bid for the third Latvian UMTS and GSM license. Alas, some of Hariri sleeps with the fishes, other bits perhaps feed the rooftop birds and most of the entrepreneur has been given a decent burial since he was killed by a carbomb in Beirut a couple of months ago. As a result of a major investor's death, IT&T apparently fell apart. While this information is also to be taken cautiuously (IT&T faded just as mysterious as when it appeared), at least there would have been some serious money behind the unknown company.
On the other hand, perhaps all the better – it is an open question as to whether Lebanon isn't drifting back toward unrest, perhaps another civil war. Better Denmark and Lithuania than a company depending on an unstable and potentially explosive region for its financing.
Meanwhile the winner of the auction, Danish TDC's Lithuanian subsidiary Bite GSM is moving at full speed to recruit a team in Latvia, recently running a full page ad in the Latvian daily Diena looking for various kinds of management, PR and engineering staff.
Meanwhile, the 260 000 figure has to be taken with a small grain of salt, since when you have that many, it gets harder to eliminate jokesters and false names. My middle son (18) in Sweden was on the site as a Star Wars character for a couple of weeks (and as my friend) until someone eliminated him/it :). I also doubt that Latvian fashion photographer Valts Kleins has been doing the draugiem.lv photos for some of the 17-year old young ladies from Moss Village (Sūnuciems), who look like they are posing for the next swimsuit calendar or a Cosmo cover. On the other hand, Latvia does have an enormous concentration of very attractive women.
Nonetheless, draugiem.lv remains the second largest attention platform after Latvian TV and exceeds any print media in its potential reach, as well as assembling a huge part of the at least minimally internet-knowledgeable 18 -35 Latvian middle class.
Hariri behind International Telecommunications & Technologies?
One of my sources tells me that the late Lebanese billionare and ex-prime minister Rafik Hariri was a major player behind the mysterious International Telecommunications & Technology (IT&T) consortium, which, at the end of the day, failed to bid for the third Latvian UMTS and GSM license. Alas, some of Hariri sleeps with the fishes, other bits perhaps feed the rooftop birds and most of the entrepreneur has been given a decent burial since he was killed by a carbomb in Beirut a couple of months ago. As a result of a major investor's death, IT&T apparently fell apart. While this information is also to be taken cautiuously (IT&T faded just as mysterious as when it appeared), at least there would have been some serious money behind the unknown company.
On the other hand, perhaps all the better – it is an open question as to whether Lebanon isn't drifting back toward unrest, perhaps another civil war. Better Denmark and Lithuania than a company depending on an unstable and potentially explosive region for its financing.
Meanwhile the winner of the auction, Danish TDC's Lithuanian subsidiary Bite GSM is moving at full speed to recruit a team in Latvia, recently running a full page ad in the Latvian daily Diena looking for various kinds of management, PR and engineering staff.
Saturday, April 09, 2005
Latvian friends network goes italiano
The Latvian friends networking website www.draugiem.lv has started an Italian franchise, www.vostriamici.it. The log-in page looks identical to the Latvian site, except I haven't gotten an invito, so I don't know what the inside looks like. Currently, it appears to be populated by a small number of members, basically a seeding crew who will bring in several amici each, who in turn will bring in their contacts and so forth, getting the ball rolling.
Lauris Liberts, the godfather of draugiem, has deliberately kept the launch low-key to make sure that it actually works ("works" means getting past, say, 1000 members). Another factor is that Catholic Italy has been host to the mourning and funeral ceremonies for Pope John Paul II. Once this is over, the potential target audience of amici will be getting back to everyday life and less solemn activities.
An official announcement of vostriamici probably won't be made until toward the end of the month, except that the gatto is out of the sachetto (well, the cat is out of the bag) thanks to this blog and a piece that may appear in the Latvian-language Dienas bizness next week :).
One can assume that the Italian site will be the same insalata mista of features, forums, personal profile pages, uploadable photos, etc., as the Latvian original, now edging toward 260 000 members, or more than 10 % of the population.
What is interesting about this is the hosting solution – initially amici will be hosted on Lattelekom's servers. In the mid-term, the whole site may move to an Italian host, but be administered by Lattelekom remotely. I also wonder how they will solve the problem of SMS micropayments for added services
There has been some buzz on the Latvian blogosphere (yes, there is such a thing) that the relationship between draugiem and Lattelekom may be more than arm's length. This blogger has heard from the mouths of several horses :) that this isn't so and won't be so. In other words, Lattelekom has not bought nor is is about to buy draugiem.
Having said that, there is a lingering suspicion that Lattelekom realizes it is on to something potentially big and something that may not last forever. Presently, it is like the landlord of a very crowded and popular bar. All the bar does is pay the rent, but the landlord would certainly like more of the action.
The cooperation between Lattelekom and draugiem could be like what I suggested for the third mobile operator -- sell a product with a Lattelekom platform and the draugiem brand. Right now, Lattelekom offers a kind of broadband lite, Pilsetas internets (City Internet) that has a download speed of 128 kbps (the other consumer service, HomeDSL, doubled its speed for the same money to 512 kbps).
How to synergize with draugiem? Rebrand Pilsetas internets to Draugu internets, jump the speed to 256 kbps and offer it through draugiem.lv for the same price, maybe even a discount on the DSL modem or the like. From what I have heard, TeliaMultiCom, a direct competitor of Lattelekom in significant parts of Riga (LVL 19.95 for 1 Mb is one of the best deals around if one is near their cable network) was swamped with hits on its server after it put a banner on draugiem.lv. There is a lesson and an opportunity in this.
Sorry, no music behind this one :)
Lauris Liberts, the godfather of draugiem, has deliberately kept the launch low-key to make sure that it actually works ("works" means getting past, say, 1000 members). Another factor is that Catholic Italy has been host to the mourning and funeral ceremonies for Pope John Paul II. Once this is over, the potential target audience of amici will be getting back to everyday life and less solemn activities.
An official announcement of vostriamici probably won't be made until toward the end of the month, except that the gatto is out of the sachetto (well, the cat is out of the bag) thanks to this blog and a piece that may appear in the Latvian-language Dienas bizness next week :).
One can assume that the Italian site will be the same insalata mista of features, forums, personal profile pages, uploadable photos, etc., as the Latvian original, now edging toward 260 000 members, or more than 10 % of the population.
What is interesting about this is the hosting solution – initially amici will be hosted on Lattelekom's servers. In the mid-term, the whole site may move to an Italian host, but be administered by Lattelekom remotely. I also wonder how they will solve the problem of SMS micropayments for added services
There has been some buzz on the Latvian blogosphere (yes, there is such a thing) that the relationship between draugiem and Lattelekom may be more than arm's length. This blogger has heard from the mouths of several horses :) that this isn't so and won't be so. In other words, Lattelekom has not bought nor is is about to buy draugiem.
Having said that, there is a lingering suspicion that Lattelekom realizes it is on to something potentially big and something that may not last forever. Presently, it is like the landlord of a very crowded and popular bar. All the bar does is pay the rent, but the landlord would certainly like more of the action.
The cooperation between Lattelekom and draugiem could be like what I suggested for the third mobile operator -- sell a product with a Lattelekom platform and the draugiem brand. Right now, Lattelekom offers a kind of broadband lite, Pilsetas internets (City Internet) that has a download speed of 128 kbps (the other consumer service, HomeDSL, doubled its speed for the same money to 512 kbps).
How to synergize with draugiem? Rebrand Pilsetas internets to Draugu internets, jump the speed to 256 kbps and offer it through draugiem.lv for the same price, maybe even a discount on the DSL modem or the like. From what I have heard, TeliaMultiCom, a direct competitor of Lattelekom in significant parts of Riga (LVL 19.95 for 1 Mb is one of the best deals around if one is near their cable network) was swamped with hits on its server after it put a banner on draugiem.lv. There is a lesson and an opportunity in this.
Sorry, no music behind this one :)
Thursday, April 07, 2005
Paying by the number in Latvia
Read what I blog, don't read what I publish.
The Communications Department of the Latvian Ministry of Transport has proposed charging a fee for telephone numbering resources, suggesting an amount of LVL 0.50 per number per year, or LVL 0.0416 per customer line or unused number per month.
Well, the paper I work for wants to emphasize that (quoting Latvian Mobile Telephone president Juris Binde)these charges will put a damper on expected sharp declines in mobile phone rates.
This is an accurate reflection of Binde's views, whereas Tele2 issued a statement saying that the charges would not affect tariffs, but would cause additional costs to all operators.
As a journalist who has to take a critical attitude toward any and all sources, I was reluctant to emphasize the possible "braking effect" on future tariff reductions, as my paper has.
In my educated opinion, these statements are, well, just statements. I believe the effect of a LVL 0.0416 increase in cost per customer per month on future tariffs will be:
JACK SHIT
(a colorful American expression for nothing).
The total cost of numbering resources for LMT will be more than LVL 500 000, about 36 hours of turnover or around three days net earnings. It will be relatively higher for Tele2 with its prepaid dominance and lower ARPU.
However, under the proposed scheme, these costs will be avoidable if mobile and fixed operators give back a substantial part of their inventories of reserved numbers and adopt a "just in time" approach for taking numbering resources from the authorities. Certainly, Lattelekom has some 2.5 million unused numbers it would gladly dump, while the more than LVL 300 000 it would be paying for its active numbers can be recouping in any number of ways short of adding 4 santims to everyone's monthly bill.
In addition, the entry of the new third mobile operator will bring about sharp tariff cuts and no one can fail to match them or at least have a very strong value-for-money proposal as to why anyone should pay even a little more (initially, coverage and quality could be issues for Bite in Latvia). So the effect on tariff cuts will be zilch.
If there is anything to worry about, I would look at the way the EUR 150 million investment requirement will be formulated in Bite GSM's licence. If the government literally meant that all that money had to be spend shopping at Nortel, Nokia, Ericsson or – why not – Huawei in the space of a few years, building a physically independent network (down to the towers?), then someone will have to recover that investment. On the other hand, if it is a loose figure for spending over the life of the licence, it's another story. Then Bite can truly look for an optimal, low cost solution, perhaps buy carrier capacity from others, share towers (especially for UMTS, three on a pole is better than three poles on the same hilltop). This we shall see in the next few weeks.
The Communications Department of the Latvian Ministry of Transport has proposed charging a fee for telephone numbering resources, suggesting an amount of LVL 0.50 per number per year, or LVL 0.0416 per customer line or unused number per month.
Well, the paper I work for wants to emphasize that (quoting Latvian Mobile Telephone president Juris Binde)these charges will put a damper on expected sharp declines in mobile phone rates.
This is an accurate reflection of Binde's views, whereas Tele2 issued a statement saying that the charges would not affect tariffs, but would cause additional costs to all operators.
As a journalist who has to take a critical attitude toward any and all sources, I was reluctant to emphasize the possible "braking effect" on future tariff reductions, as my paper has.
In my educated opinion, these statements are, well, just statements. I believe the effect of a LVL 0.0416 increase in cost per customer per month on future tariffs will be:
JACK SHIT
(a colorful American expression for nothing).
The total cost of numbering resources for LMT will be more than LVL 500 000, about 36 hours of turnover or around three days net earnings. It will be relatively higher for Tele2 with its prepaid dominance and lower ARPU.
However, under the proposed scheme, these costs will be avoidable if mobile and fixed operators give back a substantial part of their inventories of reserved numbers and adopt a "just in time" approach for taking numbering resources from the authorities. Certainly, Lattelekom has some 2.5 million unused numbers it would gladly dump, while the more than LVL 300 000 it would be paying for its active numbers can be recouping in any number of ways short of adding 4 santims to everyone's monthly bill.
In addition, the entry of the new third mobile operator will bring about sharp tariff cuts and no one can fail to match them or at least have a very strong value-for-money proposal as to why anyone should pay even a little more (initially, coverage and quality could be issues for Bite in Latvia). So the effect on tariff cuts will be zilch.
If there is anything to worry about, I would look at the way the EUR 150 million investment requirement will be formulated in Bite GSM's licence. If the government literally meant that all that money had to be spend shopping at Nortel, Nokia, Ericsson or – why not – Huawei in the space of a few years, building a physically independent network (down to the towers?), then someone will have to recover that investment. On the other hand, if it is a loose figure for spending over the life of the licence, it's another story. Then Bite can truly look for an optimal, low cost solution, perhaps buy carrier capacity from others, share towers (especially for UMTS, three on a pole is better than three poles on the same hilltop). This we shall see in the next few weeks.
Wednesday, April 06, 2005
The Blogospheres intersect/Number schemes
The blog explodes
All news is local news. My Google adsense meter indicates an orgy of interest (500 + hits compared to 50 on a normal good day) after I wrote about that increasingly popular Latvian pastime, www.draugiem.lv. For my non-Latvian readers, this is a Friendster-style networking website that exploded from zilch in April 2004 to more that 250 000 registered users a year later. It was started by Lauris Liberts, an enthusiast-entrepreneur and reputedly some kind of child film star back in the waning days of the USSR, when almost everyone using draugiem.lv these days was also a child or unborn or whatever.
I'm glad that the Latvian net users are reading the blog, making comments. I have also discovered that a number of them are blogging themselves, in Latvian, and that there is a considerable Latvian blogosphere. Some pretty awesome people. One guy, while not a rocket scientist is studying the mathematics of rocket science. I must have drawn the short stick in the gene pool, because my dad was, well, studying the same stuff when he was almost this blog comment writer's age (21 back in 1938 vs 22). I have no idea what this man, Pēteris, does, but it has to do with quantum math and other arcane stuff. I have to ask my dad, now 88, what this is all about the next time I call the States. I'm sure he got around to studying some of it before WWII derailed a lot of his plans. But he retired as a systems test engineer from Honeywell in the US, while his son (and one of his grandsons, who now is of student age) are, as Latvians put it, "drillers of the thin table surface" ( plānā galdiņa urbēji).
Who's got your number?
Well, back on topic -- the only news in telecoms is that Lattelekom has proposed rezoning Latvia's 26 area codes into 11, freeing up 2.5 million phone numbers and solving the problem of whether to switch to eight digit numbers (which Lattelekom says would cost the Latvian economy as a whole some LVL 17 million). The seven digit numbers are all parceled out in 100 000 number lots, which means that in some of the 26 area code zones, only Staņislavs the farmer and his cow Malvīne have fixed line numbers, the other 99998 are unused but reserved for the immediate area around Mossville (Sūnuciems) in darkest Čangladesh (Eastern Latvia, known in politically correct terminology as Latgale).
The two existing mobile operators have been burning through numbers and it seemed for a while that none would be left (except for 40 000 set aside for the new operator, now to be Danish-owned Bite GSM). Now the Communication Department of the Ministry of Transport has asked that 300 000 numbers be freed up immediately for the mobile sector, in essence upsetting its own plans for a transition to eight digits (these were to be used as transitional numbers, let Pēteris do the math on that :) ). Officially, the Department says it will propose both options, Lattelekom's save-the-seven digits plan, and a new, as yet to be drafted scheme for transition to eight digits (and abolishing the domestic area codes?). We shall see, but I think that Lattelekom's scheme or some variation on it will fly. By the time any faults in keeping seven digits and different zones turn up, I suspect most urban telecoms users in Latvia will be more worried about their IP addresses than their so-called phone numbers. And hey, who needs number portability if you have a (several?) Skype names?
Music on the earphones while writing this post:
Eddie Grant, Electric Avenue, Bob Dylan, Forever Young, Subterrenean Homesick Blues, Creedance Clearwater Revival, Mustang Sally, Donovan, Season of the Witch, The Doors, Five to One, Peter Tosh, Legalize It !, Boston, More Than a Feeling.
All news is local news. My Google adsense meter indicates an orgy of interest (500 + hits compared to 50 on a normal good day) after I wrote about that increasingly popular Latvian pastime, www.draugiem.lv. For my non-Latvian readers, this is a Friendster-style networking website that exploded from zilch in April 2004 to more that 250 000 registered users a year later. It was started by Lauris Liberts, an enthusiast-entrepreneur and reputedly some kind of child film star back in the waning days of the USSR, when almost everyone using draugiem.lv these days was also a child or unborn or whatever.
I'm glad that the Latvian net users are reading the blog, making comments. I have also discovered that a number of them are blogging themselves, in Latvian, and that there is a considerable Latvian blogosphere. Some pretty awesome people. One guy, while not a rocket scientist is studying the mathematics of rocket science. I must have drawn the short stick in the gene pool, because my dad was, well, studying the same stuff when he was almost this blog comment writer's age (21 back in 1938 vs 22). I have no idea what this man, Pēteris, does, but it has to do with quantum math and other arcane stuff. I have to ask my dad, now 88, what this is all about the next time I call the States. I'm sure he got around to studying some of it before WWII derailed a lot of his plans. But he retired as a systems test engineer from Honeywell in the US, while his son (and one of his grandsons, who now is of student age) are, as Latvians put it, "drillers of the thin table surface" ( plānā galdiņa urbēji).
Who's got your number?
Well, back on topic -- the only news in telecoms is that Lattelekom has proposed rezoning Latvia's 26 area codes into 11, freeing up 2.5 million phone numbers and solving the problem of whether to switch to eight digit numbers (which Lattelekom says would cost the Latvian economy as a whole some LVL 17 million). The seven digit numbers are all parceled out in 100 000 number lots, which means that in some of the 26 area code zones, only Staņislavs the farmer and his cow Malvīne have fixed line numbers, the other 99998 are unused but reserved for the immediate area around Mossville (Sūnuciems) in darkest Čangladesh (Eastern Latvia, known in politically correct terminology as Latgale).
The two existing mobile operators have been burning through numbers and it seemed for a while that none would be left (except for 40 000 set aside for the new operator, now to be Danish-owned Bite GSM). Now the Communication Department of the Ministry of Transport has asked that 300 000 numbers be freed up immediately for the mobile sector, in essence upsetting its own plans for a transition to eight digits (these were to be used as transitional numbers, let Pēteris do the math on that :) ). Officially, the Department says it will propose both options, Lattelekom's save-the-seven digits plan, and a new, as yet to be drafted scheme for transition to eight digits (and abolishing the domestic area codes?). We shall see, but I think that Lattelekom's scheme or some variation on it will fly. By the time any faults in keeping seven digits and different zones turn up, I suspect most urban telecoms users in Latvia will be more worried about their IP addresses than their so-called phone numbers. And hey, who needs number portability if you have a (several?) Skype names?
Music on the earphones while writing this post:
Eddie Grant, Electric Avenue, Bob Dylan, Forever Young, Subterrenean Homesick Blues, Creedance Clearwater Revival, Mustang Sally, Donovan, Season of the Witch, The Doors, Five to One, Peter Tosh, Legalize It !, Boston, More Than a Feeling.
Tuesday, April 05, 2005
A letter to Lauris and Jesper
Spring has come to Riga, so perhaps it's OK to air some strange ideas. These are addressed to Lauris Liberts, the godfather of draugiem.lv (the Latvian Friendster) and Jesper Eriksen of Bite GSM (the winner of the Latvian third GSM/UMTS licence).
Lauri (now I'm mixing in the Latvian declination to address someone :)), you've basically signed up the entire Latvian young middle class and those who soon will be. Around 255 000 of them, more than 10 % of the whole f**king population of Latvia (2.3 million)! No other quasi-medium has that kind of audience, attention platform, call it what you will. And these people want to communicate with each other. That's the whole draugiem.lv point, it would seem, at least for the young singles and even those in relationships simply widening their networks.
A logical extension of draugiem.lv would be draugiem (draugu karte?), the mobile phone card. It could come with some free SMS and MMS, easy payment from the balance for all the draugiem.lv micropayments (starting your photo album, other stuff).
For Jesper, the draugiem card would be one way to get a fast-track start on selling capacity on the new Bite Latvia or whatever it will be called network. Bite GSM declared that its approach in Latvia would be to sell an open network, so the more virtual operators, the better.
I think, quite frankly, the thing would fly. My sources tell me that when Telia MultiCom -- which has nothing to do with Telia any longer -- advertised in a small banner on draugiem.lv for its new cheaper and faster broadband internet, the response crashed Telia MultiCom's server. With more and more workplaces restricting draugiem (it has become the default desktop for some users :) ), there is an incentive to have access, preferably broadband, at home. Once you have that, it is a short step to all those draugiem friends Skyping each other (unless you, Lauri, come up with a tweak of Skype just for draugiem, maybe an IP push-to-talk thing the way you can now click on a name to send an e-mail. There would have to be consent for getting these calls, though). At the end of the day (literally), you might even crash those Lattelekom servers hosting you and when you have 300 000 mobile pre-paid and IP voice customers on the system, Lattelekom may 1) regret the day they let you in or 2) buy you out :).
Another idea, Jesper, is to sell your entry-level, low-end services through draugiem.lv and see what happens. Not a bad association to have.
I hope nothing happens to dampen the enthusiasm for draugiem.lv over the summer, because the new Bite Latvia or whatever won't be up and running until the fall at the earliest.
In the tradition of Wired magazine when my old college friend Louis Rossetto was still running it, I will list the music I was listening to on my earphones from iTunes while writing this (mind you, I rarely do this).
The Music Behind this Post:
Neil Young, Rocking the Free World, Jimi Hendrix, Machine Gun, The Eagles, Take It Easy, Simon & Garfunkel, America, The Standells, Dirty Water (OK, I grew near Boston :)), The Mamas & Pappas, California Dreamin', Golden Earring, Radar Love, The Grateful Dead, Truckin' and Sugar Magnolia (while revising some errors).
Lauri (now I'm mixing in the Latvian declination to address someone :)), you've basically signed up the entire Latvian young middle class and those who soon will be. Around 255 000 of them, more than 10 % of the whole f**king population of Latvia (2.3 million)! No other quasi-medium has that kind of audience, attention platform, call it what you will. And these people want to communicate with each other. That's the whole draugiem.lv point, it would seem, at least for the young singles and even those in relationships simply widening their networks.
A logical extension of draugiem.lv would be draugiem (draugu karte?), the mobile phone card. It could come with some free SMS and MMS, easy payment from the balance for all the draugiem.lv micropayments (starting your photo album, other stuff).
For Jesper, the draugiem card would be one way to get a fast-track start on selling capacity on the new Bite Latvia or whatever it will be called network. Bite GSM declared that its approach in Latvia would be to sell an open network, so the more virtual operators, the better.
I think, quite frankly, the thing would fly. My sources tell me that when Telia MultiCom -- which has nothing to do with Telia any longer -- advertised in a small banner on draugiem.lv for its new cheaper and faster broadband internet, the response crashed Telia MultiCom's server. With more and more workplaces restricting draugiem (it has become the default desktop for some users :) ), there is an incentive to have access, preferably broadband, at home. Once you have that, it is a short step to all those draugiem friends Skyping each other (unless you, Lauri, come up with a tweak of Skype just for draugiem, maybe an IP push-to-talk thing the way you can now click on a name to send an e-mail. There would have to be consent for getting these calls, though). At the end of the day (literally), you might even crash those Lattelekom servers hosting you and when you have 300 000 mobile pre-paid and IP voice customers on the system, Lattelekom may 1) regret the day they let you in or 2) buy you out :).
Another idea, Jesper, is to sell your entry-level, low-end services through draugiem.lv and see what happens. Not a bad association to have.
I hope nothing happens to dampen the enthusiasm for draugiem.lv over the summer, because the new Bite Latvia or whatever won't be up and running until the fall at the earliest.
In the tradition of Wired magazine when my old college friend Louis Rossetto was still running it, I will list the music I was listening to on my earphones from iTunes while writing this (mind you, I rarely do this).
The Music Behind this Post:
Neil Young, Rocking the Free World, Jimi Hendrix, Machine Gun, The Eagles, Take It Easy, Simon & Garfunkel, America, The Standells, Dirty Water (OK, I grew near Boston :)), The Mamas & Pappas, California Dreamin', Golden Earring, Radar Love, The Grateful Dead, Truckin' and Sugar Magnolia (while revising some errors).
Sunday, April 03, 2005
What may soon be news and what is...
One purpose of this blog has been to hint at what may be news in telecoms and IT in Latvia in the near future. Some of the following was gleaned during a recent trip to Sweden accompanying the Latvian business delegation that accompanied Latvia's president Vaira Vike-Freiberga.
A multimillion banking IT deal?
Look for a Latvian IT company landing a contract with a major Swedish bank to do software maintenance on the bank's COBOL-based legacy systems running on mainframes and to eventually oversee the migration of these (sometimes core functions) to modern computing platforms. This will be a multi-million deal, in SEK, at least.
Smoothing the road to privatizing Lattelekom...
The feeling is that Sweden's TeliaSonera is no longer being stone-walled by the Latvian government on the issue of getting a majority in Lattelekom (it currently holds 49 %). The new government of Aigars Kalvitis and Minister of Economics Krisjanis Karins appear to be open to privatizing at least part of the government stake in Lattelekom and TeliaSonera appears to have reduced expectations of getting 100 % as it has publically declared earlier. The Swedish company has obtained just over 50 % of Estonia's fixed telecoms company and seems to be happy with that, having met its minimal goal of seeking a majority holding in all of its Baltic associated companies.
...and to IP TV in Latvia
TeliaSonera is apparently satisfied with the early phase of its IP-TV over broadband offering in Sweden and will be helping Lattelekom launch a similar product in Latvia in the next few months (see this blog earlier).
Ericsson looks to Bite
The "old news" by now is that Bite GSM, a subsidiary of Danish TDC, won the auction for Latvia's third GSM and UMTS licence by offering to pay more than LVL 6 million (the starting price was LVL 1.3 million). TDC and Bite are old Ericsson customers, and the Swedish-based telecoms multinational expects to compete to supply the new operator in Latvia. Under the auction terms, the new operator has to spend at least EUR 150 million on a distinct new network, so that is the smallest cake that Ericsson and other foreign companies (including newcomer Huawei) can hope to divide. Good for them, but what was the Latvian government thinking? Infrastructrure prices are falling and the new operator's cost of build-out is one of the most significant elements of how it will have to calculate its return on investment (and, in turn, set tariffs or position value-added services).
Bite's victory also means that virtual operators will blossom in Latvia, challenging Tele2, whose customer base is largely prepaid, as well as throwing down the gauntlet to Amigo, the virtual operator leasing Latvian Mobile Telephone's (LMT) network.
Who knows, now that Easyjet is flying to Riga, perhaps the airline's mobile phone card affiliate will also turn up here. Indeed, it appears that once Bite in Latvia (or however it will brand itself) will have a number of virtual operators among its first customers. However, this will happen in the late fall at the earliest.
Higher HomeDSL speeds announced
Lattelekom, as this blog anticipated, has also announced it has doubled the speed of its HomeDSL service to 512 kbps from the previous 256 kbps, effective April 1 (no joke I hope). I have not really noticed the difference yet, but there is always a disparity between real throughput (involving all links of the internet) and the "official" speed of a link.
A multimillion banking IT deal?
Look for a Latvian IT company landing a contract with a major Swedish bank to do software maintenance on the bank's COBOL-based legacy systems running on mainframes and to eventually oversee the migration of these (sometimes core functions) to modern computing platforms. This will be a multi-million deal, in SEK, at least.
Smoothing the road to privatizing Lattelekom...
The feeling is that Sweden's TeliaSonera is no longer being stone-walled by the Latvian government on the issue of getting a majority in Lattelekom (it currently holds 49 %). The new government of Aigars Kalvitis and Minister of Economics Krisjanis Karins appear to be open to privatizing at least part of the government stake in Lattelekom and TeliaSonera appears to have reduced expectations of getting 100 % as it has publically declared earlier. The Swedish company has obtained just over 50 % of Estonia's fixed telecoms company and seems to be happy with that, having met its minimal goal of seeking a majority holding in all of its Baltic associated companies.
...and to IP TV in Latvia
TeliaSonera is apparently satisfied with the early phase of its IP-TV over broadband offering in Sweden and will be helping Lattelekom launch a similar product in Latvia in the next few months (see this blog earlier).
Ericsson looks to Bite
The "old news" by now is that Bite GSM, a subsidiary of Danish TDC, won the auction for Latvia's third GSM and UMTS licence by offering to pay more than LVL 6 million (the starting price was LVL 1.3 million). TDC and Bite are old Ericsson customers, and the Swedish-based telecoms multinational expects to compete to supply the new operator in Latvia. Under the auction terms, the new operator has to spend at least EUR 150 million on a distinct new network, so that is the smallest cake that Ericsson and other foreign companies (including newcomer Huawei) can hope to divide. Good for them, but what was the Latvian government thinking? Infrastructrure prices are falling and the new operator's cost of build-out is one of the most significant elements of how it will have to calculate its return on investment (and, in turn, set tariffs or position value-added services).
Bite's victory also means that virtual operators will blossom in Latvia, challenging Tele2, whose customer base is largely prepaid, as well as throwing down the gauntlet to Amigo, the virtual operator leasing Latvian Mobile Telephone's (LMT) network.
Who knows, now that Easyjet is flying to Riga, perhaps the airline's mobile phone card affiliate will also turn up here. Indeed, it appears that once Bite in Latvia (or however it will brand itself) will have a number of virtual operators among its first customers. However, this will happen in the late fall at the earliest.
Higher HomeDSL speeds announced
Lattelekom, as this blog anticipated, has also announced it has doubled the speed of its HomeDSL service to 512 kbps from the previous 256 kbps, effective April 1 (no joke I hope). I have not really noticed the difference yet, but there is always a disparity between real throughput (involving all links of the internet) and the "official" speed of a link.
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