Feeds

Hope for Vodafone as staff cuts loom

But no hope for 'dead man walking' Arun Sarin

Best practices for enterprise data

Brilliant Colao?

But Colao is a genuine, old-fashioned "brilliant man" capable of startlingly rapid thinking. Stories are told about his ability to read a 200-page analyst report in ten minutes, and then quote paragraph by paragraph where it contradicts itself - from memory. And few seem to doubt that Italian Vodafone's turnround is directly due to his management.

It may be, at that. One of the key decisions the Italian management made, was to start switching off the old mobile network, the generation two, GSM phone system, and move investment to 3G. Legacy equipment can only be maintained at great expense. A proper 3G network really could cost less to run, and allow sensible profits while allowing lower call charges - or at least, that's how the Italian strategy is now perceived.

In this context, Vodafone may well (with Hutchison 3G) be able to gain a march on rivals. Everybody says they are going UMTS, of course. The reality (says American analyst Doug Freeman at American Technology Research) is that anybody providing 3G wireless solutions is trapped in a relatively stagnant market. To quote the report directly:

"We believe handset IC margins will come under pressure as the mix towards 3G is less than expected given the continued high demand for 2G and 2.5G technologies. We point to better than expected sales of 2G and 2.5G base stations as a leading indicator of future handset demand."

Freeman's analysis continues: "We also believe 2.5G networks could see useful life extension with the addition of DVB-H functionality. We believe that new model introductions are slowing with platforms lasting longer in the marketplace. The result for IC companies is that lower prices are required on mature solutions whose costs can no longer be reduced."

Invest in 3G

In other words, as 2G and 2.5G platforms see extended lifetimes, Freeman believes the margin opportunity in handsets decreases. But of course, it also means that those who are investing in 3G may well have an edge.

Till now, investors have been getting steadily more sceptical about 3G. There are pretty good reasons to be so. For example, the coverage provided by masts at 2.1GHz has disappointed the politicians (but not surprised the engineers) who planned UMTS.

This time next year, say technicians, we'll quite probably see a solution to this, with the spread of femtocells - in-house wireless hotspots using 2.1 GHz to provide in-building 3G wireless. On this, of course - as with much in 3G - the jury is still out. We probably have a year before we hear the verdict.

So Vodafone's Board has, effectively, bought time.

Perhaps, the plan to increase the number of SIM cards per user will be proven a winner. Perhaps the strategy to wind down 2G and 2.5G will turn out to be the key to profit growth. Perhaps an all-new system with integrated billing and management will prove capable of allowing the long-prophesied growth in "data revenues" which has eluded Europe's networks for so long.

Or (in the words of the proverb) perhaps the horse will learn to sing. But sadly for Arun Sarin, it looks like he won't be in the audience by then.

Copyright © Newswireless.net

Recommendations for simplifying OS migration

More from The Register

next story
Trying to sell your house? It'd better have KILLER mobile coverage
More NB than transport links to next-gen buyers - study
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Speak your brains on SIGNAL-FREE mobile comms
Readers chat to the pair who flog the tech
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?