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ICT market news from InfoCom, March 23, 2012 — Issue No. 55

Business Cloud News is the leading source of strategic insight, news and analysis on Cloud Computing...

ICT market newsletter with industry hot topics that InfoCom's team is currently researching:

- The high comfort of telepresence lead to a better market acceptance
- Verizon focused on expanding portfolio of LTE-enabled devices to stimulate LTE adoption in the US
- AT&T ends unlimited data plans to prevent data congestion.
- Philippines telecom incumbent PLDT sees 5% decline in 2012 core profit
- Mobile equipment companies use patents to gain market advantage, EU Commission counters
- Application Performance Management on a steady rise


Broadband MEA 2012 25th - 27th March 2012, Dubai, UAE	Small Cells Asia 2012 26th - 27th March 2012, Taiwan
Mobile Money Americas 2012 26th - 29th March 2012, Mexico	4th Annual Telecom Customer Retention and Profitability Summit 16th - 17th April 2012, Duabi, UAE
East Africa Com 17th - 18th April 2012, Nairobi, Kenya	MVNO Virtual Forum LATAM 17th - 19th April 2012

We hope you find this information useful. If you do not see the information you are currently interested in and need for your strategic work, feel free to call us and find out about all topics that InfoCom is presently researching.

Research News

The high comfort of telepresence lead to a better market acceptance
From InfoCom's TS&T – Telecom Strategies & Trends

During the last years, the major market drivers for telepresence solutions have been related to external factors, for instance natural catastrophes, restricted airplane traffic due to volcano ashes or snow, or other causes, for instance terror attacks. In addition to these factors, as issues such as environmental protection and green IT gain importance in the public opinion, many companies are now committed to reducing their carbon footprint. At last, companies seek to reduce their travel expenses significally, avoiding high travel costs for meetings outside. Telepresence has thus been seen as a promising option to cope with several, if not all, of these problems.

The high quality provided by telepresence has been indeed a decisive factor that has lead to a better acceptance of such a solution as a real alternative to personal meetings. Thanks to high audio and video quality, as well as the availability of adequate equipped rooms, the participants get the feeling of sitting at one table with all the other meeting participants. As a result, meetings are not as tiring as video conferences with systems, which do not provide the same comfort and quality. Consequently, Telepresence is not only used for short conversations and meetings may last even for several hours, where participants discuss and exchange more thoroughly, thus leading to a relevant increase in productivity and to a faster decision making process. In addition, telepresence solutions can be used quickly and easily, e.g. conferences can be booked via MS Outlook or special booking platforms and can be started by pushing only one button.

Verizon focused on expanding portfolio of LTE-enabled devices to stimulate LTE adoption in the US
From InfoCom's Innovations Spotlight

More than a year after its launch, Verizon’s LTE service is just beginning to reach device and coverage requirements to pursue a widespread deployment and adoption in the US. In late 2011, Verizon focused on expanding its portfolio of LTE-enabled devices (with 6 LTE-enabled smartphones released in 4Q11) and coverage (more than 200 mn inhabitants in the US by year-end 2011) to stimulate the take up of the service. The company’s efforts have resulted to some success with Verizon posting 2.3 mn LTE-enabled device sales by the year-end. Although significant, the penetration rate to the total mobile subscriber base remains low, with a lukewarm reception of users to LTE-enabled devices currently offered by the operator.

In an effort to beef up LTE subscription, Verizon doubled the data caps of its existing LTE packages. The promotion increases the value proposition of LTE services, as Verizon offers the same pricing for both 3G and LTE packages. Verizon also launched HomeFusion Broadband in 1Q12 to stimulate the adoption of LTE service in the rural regions. HomeFusion Broadband serves as an alternative Internet connection for rural areas with limited broadband infrastructure.

In addition, Verizon is aggressively developing Voice over LTE, with plans to launch the service by 2013. Lastly, the recent release of the new LTE-enabled iPad and the speculated integration of LTE to new iPhone models are also expected to increase interest in the service.

AT&T ends unlimited data plans to prevent data congestion.
From InfoCom's Fixed v Mobile Broadband Monitoring Service

AT&T is ending its unlimited mobile data plan offering in response to foreseen data congestion on its network. This is in response to the operator's customers' rapidly growing use of mobile devices such as smartphones and tablet PCs for viewing online videos and downloading movies. The operator will now limit 3G and LTE subscribers’ allowance to 3GB and 5GB per month, respectively. Consequently, data usage going beyond limit will be throttled, or slowed down.

Prior to this new policy, the mobile operator offered tier pricing, charging customers depending on their desired speed including unlimited data option. Verizon, AT&T’s rival, is took the same initiative and slowed down data connection for about 5% of its top-bandwidth users. For the moment, Sprint Nextel Corp. has not followed its rivals and does not impose restrictions to its unlimited plan subscribers.

In light of this de-congestion strategy, AT&T continues to expand its LTE footprint in the country, hoping to be able to migrate 3G customers as fast as possible. For 1Q12, the operator plans expansion to 12 markets, bringing the overall coverage to a total of 40 markets or over 74m inhabitants.

Philippines telecom incumbent PLDT sees 5% decline in 2012 core profit
From InfoCom's Quarterly Mobile Monitoring Service

In line with Philippines Long Distance Telephone Co.'s (PLDT) acquisition of Digitel Telecommunications Philippines Inc. (Digitel) and its subsequent integration as well as its USD 1.5bn modernisation program, the group sees a lower core profit* for 2012 by around 5% YoY to USD 850mn.

For 2011, PLDT announced a 21% decrease in its net income to USD 740.5 m as it posted a 10% increase in its expenses due to network upgrades, a weaker US dollar and its acquisition of Digitel for USD 1.6bn in 2011 the same year. PLDT’s 4th quarter net income alone was pulled down by a net loss of around USD 14m from the Digitel acquisition and a 46% YoY increase in expenses.

Last year also proved to be a challenging year for PLDT as its service revenues decreased by 1% to USD 3.5 bn due to around 7% drop in mobile voice revenues, a 4% decrease in wireless data/ SMS revenues and a 1% decline in fixed line segment revenues.

* Core profit is net income adjusted for the new effect of gain/loss on FX and derivative transactions, additional depreciation charges and recognition of deferred tax assets.

Mobile equipment companies use patents to gain market advantage, EU Commission counters
From InfoCom's Patent Daily News Digest

Technology companies have been active in patent litigations recently, seeking to ban sale of competitors’ products in major markets. During the second half of last year, for instance, the mobile device market in Germany was characterised by several such cases. In August, sales of Samsung’s Galaxy Tab products had been banned due to the on-going patent infringement battle between Samsung and Apple. Later on, as a consequence of Motorola’s infringement claims against Apple, iPhone products were temporarily banned after a Mannheim court ruled in favour of Motorola.

The EU Commission expressed its opposition on the use of patents to hamper a competitor as this activity can be deemed as anti-competitive and would be encountered under the EU Commission’s general objective of restraining any anti-trust behaviour. The Commission is currently taking a closer look at a recent patent complaint from Microsoft against Motorola. The mobile phone maker is allegedly impeding access to Internet connectivity-related patents – regarded as fundamental to a device – demanding royalties, which Microsoft claims to be unreasonably high. The European Commission announced that the case will thoroughly be examined, citing that the application of high charges for the use of technology patents breaks a general industry common agreement to make such patents available to vendors at a minimum cost.

Application Performance Management on a steady rise
From InfoCom's TS&T – Telecom Strategies & Trends

APM will continue to grow in importance, especially with the adoption of application delivery service level agreements (SLAs). The task of meeting the organisation’s performance expectations will continue to be a challenge as more services are added to the network. Simply spending money adding bandwidth and more people to manage and support, it is no longer the solution. Instead, effective APM will allow for better utilisation of resources, efficient planning and problem resolution. These are some of the findings of InfoCom;’s recent study on Application Performance Management (APM), an extensive research based on widespread talks with a large number of companies, providers and vendors across worldwide markets.

The research highlights several current trends that are pushing for the improvement of APM in enterprises. The most tangible one is the fact that many organisations have taken applications out of branch offices and consolidated them in centralised data centres. The strategy to simplify and consolidate data centres is motivated by factors such as the improvement of service levels, increased availability and manageability as well as need to reduce costs. However, this shift puts a lot of pressure on an organisation’s infrastructure to deliver applications.

About InfoCom

InfoCom is a market research and consultancy company with 20 years experience providing strategic analyses and planning assistance to stakeholders in the telecommunications, IT and multimedia industries. InfoCom’s independent and fact-based analyses highlight trends and opportunities, supporting decision makers to understand market dynamics in order to improve their competitive advantage.

Broadband MEA 2012
25th - 27th March 2012, Dubai, UAE