Vodadone Mulls Billion Dollar Acquisition Substantially Driven by Backhaul Benefits

Vodafone reportedly is considering a £700 million (U.S.$1.1 billion) bid for C&W Worldwide, a supplier of long haul and local business communications, which was spun off from parent firm Cable & Wireless Communications in March 2010.

You might wonder why a wireless service provider would want to buy a “landline services” provider. The key is that C&W Worldwide is a provider of enterprise services, not consumer services.

C&W Worldwide, in principle, would help Vodafone reduce its mobile backhaul costs, in part by limiting the amount of leased access Vodafone has to buy.

The global portion of C&W Worldwide also would help Vodafone better compete for multinational enterprise customer business.

“At the right price, this makes sense for Vodafone,” said Declan Lonergan, research VP who has studied Vodafone's options"

A billion dollars is a lot to spend for backhaul savings, but that seems the immediate and most tangible value of the proposed acquisition. The potential advantages for sales to global enterprises is much more speculative.

70 Million Small and Femtocells to be Shipped by 2017

Mobile service providers will deploy as many as 70 million consumer femtocells and network "small cells" by 2017, United Kingdom-based Mobile Experts predicts. 70 Million Small Cells by 2017

Most of those deployments will be of consumer femtocells. ABI Research estimates four million carrier pico base stations will be shipped each year by 2015. 

Mobile Experts also sees a ramp up of investment in wireless backhaul for the carrier small cells until about 2013, with relatively steady spending levels between 2013 and 2016. Most of those connections will have to be wireless, for cost reasons.

Whichever technology is used to backhaul small cells, it has to be cheap, "it has to be massively cheap," said Andy Sutton, Everything Everywhere principal architect, access transport. "We have a financial envelope for small cells and it's challenging."

Cost is so important because small cells will have relatively low usage compared to a macrocell and there will be lots of sites to support. Compared with macrocells, small cells will cover distance of about 50 square meters or 538 square feet. That's an area about 23 feet by 23 feet.

One way to look at matters is that this is an area smaller than the range of a consumer's home Wi-Fi router.

"Mobile First" Will Lead to Contextual Apps

By 2016, smart phones and tablets will be used by a billion global consumers. The clear implication, Forrester Research says, is that "mobile is the manifestation of a much broader shift to new systems of engagement."

According to the report,there will be 257 million smart phones and 126 million tablets in the U.S. market alone.

Of those worldwide billion mobile devices, Apple, Google and Microsoft will control some 90 percent of the market with their respective platforms. Business users will factor heavily into these numbers, with some 350M employees using smart phones.

These systems of engagement help firms empower their customers, partners, and employees with context-aware apps and smart products.

That is one good reason so many firms are going mobile first in terms of their development of new products and applications.

"Mobile first" will fuel profitable growth with stickier offerings and mobile self-service, Forrester argues.

European Commission clears Motorola deal

Don Harrison, Google VP and deputy general counsel says the European Commission has approved Google's acquisition of Motorola Mobility. Similar clearance will be necessary in the United States before the deal can close on a final basis. European Commission clears Motorola deal

The United States Department of Justice also has to give its approval, but there have not been signs DoJ is opposed.



 

"Social" and "Unified Communications" are Complements or Substitutes

There's a reason one hears more talk these days about whether social media or social communications are "substitutes" for "unified communications."

As it turns out, many business users see social media as complementary to unified communications, though in some cases, social tools are used as a substitute.

In the consumer world, social media hubs such as Facebook and Google+ are taking on the role of the personal communicator, social networker, entertainment curator, search engine and directory.
But voice, messaging and video are becoming parts of overall app functionality.

In the business market, there are similar trends. In most cases, social media and collaboration tools are viewed as a natural part of unified communications and are formally deploying it as part of a UC roll-out.

 

How Well Will Industry Handle Huge Product Transitions?

Whatever else you might say about the global telecom business, there is no shortage of understanding that fundamental changes are happening and that huge challenges must be overcome.

Rapidly evolving mobile Web technologies have introduced a period of hyper-competition in the mobile sector, analysts at Deloitte say. As a result, new entrants are chipping away at incumbent advantages and profits.

The Deloitte study also suggests the mobile power structure is changing. According to 49 percent of our respondents (70 percent of which are from network carriers), Web companies, rather than network carriers or handset makers will dominate the mobile business in five years.

Moreover, 89 percent believe the role of carriers will be limited to providing access services. That is a major finding. No matter what executives might hope, nearly nine out of 10 respondents think "access," essentially "dumb pipe," will remain the role for ISPs.

The very-largest tier-one service providers arguably will have other options. But smaller firms might be entirely

Also, 87 percent believe that carriers must make the transition from the walled gardens of the past to new organizational models built around open development ecosystems to sustain competitiveness.

Some 31 percent of respondents employed by network carriers think changes in open access regulations will accelerate the commoditization of carriers and 90 percent of the same group believe the traditional carrier “closed garden” business model is quickly becoming a strategic relic.

Consumers Shifting Spending to Tablets, E-Readers?

PCs and TVs still represent the two largest categories of U.S. consumer technology hardware and consumables sold in 2011.
But tablets and and mobile phones are the third and fourth largest product categories, by revenue.

Revenue from products was about $144 billion according to The NPD Group.
PCs represented the most revenue with nearly $28 billion in sales, accounting for almost 20 percent of sales.

Tablets and e-readers were the clear growth categories in 2011, nearly doubling sales to $15 billion in 2011.

And it appears that consumers are shifting spending from other categories toward the top-five categories.

“U.S. hardware sales growth is becoming harder and harder to achieve at the broad industry level,” said Stephen Baker, Vice President of Industry Analysis at NPD. “Sales outside of the top five categories fell by eight percent in 2011 as consumers shifted spending from older technologies to a narrow range of products.”

Apple was the leading consumer electronics brand for the second year in a row. Among the top five brands Apple was the only one to experience a sales increase, posting a 36 percent rise over 2010.
Sales through online, direct mail, and TV shopping channels jumped seven percent and accounted for 24 percent of all sales, up from 22 percent in 2010.

Sales through these non-retail channels captured 25 percent of industry revenue in the fourth quarter of 2011.