Silicon Labs has come up with a new chip AeroFone, that combines “a quad band transceiver, baseband processor, ARM controller, power management, and other analog processing.” This is the kind of chip that will make the $50 phone possible, and basically get millions of Indians and Chinese wirelessly enabled. Motorola is betting big on this market. On the chip side of things, Silicon Labs will be competing with everyone from Texas Instruments, Freescale, Agere and Infineon. “This is low enough to allow large operators in China or India to put up towers in less wealthy provinces and be able to offer cellular phone service,”writes Erick Broockman on his blog. This new chip is generating a lot of excitement on Wall Street. Check out SLAB stock performance in recent days. (I am currently using the StockQuoteTT plugin, which is an off-shoot of a project started by Anders Brownworth at my instigation! Folks, this is a good one to incorporate in your WP powered blogs!)

11:20:57 AM    comment   

For last six months, I have been arguing that SBC got a real bargain in AT&T. Not only did AT&T bring to the table a fully modernized network, corporate telecom expertise, but also a company whose operations are on the mend. In the most recent quarter, AT&T posted profits, and painted a better future. But the biggest thing SBC got was the AT&T name. It is worth more than all the cash on the giant’s books. And it certainly is more memorable than SBC which is a regional brand that reminds you… (add your own pun!)

“The AT&T brand reflects what customers are looking for in a provider,” Whitacre says, “They want the latest technology and services, but they also want reliability, quality and trustworthiness. Only the AT&T brand offers this ideal combination of traits.” There is a lot of stuff in the press release about next generation IP services etc. Never mind. For me, the brand is something more emotional. It was AT&T’s service that connected me to my family back home in India when I was a new immigrant. It was an emotional connection I had with the name, and I am glad to see the name not getting lost in mists of time.

10:23:30 AM    comment   

With PC sales stronger than expected, it was no surprise that Microsoft posted blowout numbers, even surprising some of the more skeptical company watchers. They gave a lukewarm forecast, but if you can manage to look beyond the myopic quarterly view of the world, you can see that Technology industry is on an upswing, starting primarily with the start-ups. Michael Copeland and I have co-authored a piece on Tech’s Big Comeback, and have posted an excerpt of that story on CNN/Money website.

The tech industry in many ways is following the classic arc of boom-and-bust cycles produced by transformative technologies of the past, from the steam engine to electricity to the automobile.

Here are some signs we found that historically have indicated an upswing. VC investments are rising, and no not in Web 2.0 companies that have garnered less than $100 million so far. Chips, Clean Energy, Networking…. you know the real technology companies. You can read more on this here. (The complete story is at Business 2.0 website, which required subscription.) A lot of people have looked at the rise of online advertising but missed its impact.

It starts with the melding of advertising, search and e-commerce developed by what are now referred to in Silicon Valley as the Big Five—Amazon.com, eBay, Google, Microsoft, and Yahoo. Advertisers are flocking to the Web; Internet advertising, $9.6 billion last year, was up 26 percent in the first half of 2005 and is projected to hit $12 billion for the year.

This money is going to the likes of Junipers, Ciscos and others. The tailwind effect, as one of my editors used to say! I think a lot of people are missing the signs because the current upswing is not like the ones in the past. It is a bottom up swing, as we highlighted in our last story, The Fifth Wave. Broadband, Wireless, Consumer Electronics, and other such trends are the forces of change. People are looking at folks like Microsoft and Cisco, when they should be focused on Qualcomm, Apple and Verizon Wireless.

10:21:51 AM    comment   

If you can’t beat them in the open market, then you get the authorities involved. That is a routine tactic which we have seen time and again used against Microsoft. Well, now, the same tactic is being used against Qualcomm. Eight months after I wrote my piece on Qualcomm, and its far reaching control of the wireless industry, six major wireless players - Broadcom, Ericsson, NEC, Nokia, Panasonic and Texas Instruments - are accusing San Diego-based Qualcomm for abusing its W-CDMA patents. They have filed a complaint with European Commission.

Specifically, the vendors accused Qualcomm of offering lower royalty rates to handset vendors that buy chipsets exclusively with Qualcomm and refusal to license key technology patents to other chipset vendors on fair terms.

From the way I see it that most of these vendors for the first time have had to compete with Qualcomm, that has a take-no-prisoners approach to business. They will have a tough time proving their case, given that there are many vendors such as Freescale who are not part of the complaint. I remember, at the time of the writing of my story, Ericsson was kicking butt in 3G, NEC was holding its own, Texas Instruments was late to the party, and Broadcom was no where in sight. Business Week writes:

Gartner analyst Alan Brown says total royalties for W-CDMA phones likely amount to 8% to 10% of their selling costs. And Qualcomm’s share is roughly half of that, figures analyst Albert Lin of American Technology Research in San Francisco. That means the total intellectual-property burden of a 3G phone approaches $50 — making it tough to deliver phones priced less than $250 at retail.

In a response to the complaint, Qualcomm issued a statement

The many new handset market entrants, working in cooperation with QUALCOMM, threaten the market shares of these entrenched manufacturers and their component suppliers. The action appears to be nothing more than an attempt by these licensees to renegotiate their license agreements by seeking governmental intervention.

I agree, for I suddenly see that service providers such as Orange and Vodafone are using devices made by no-name white label manufactures like HTC, or South Koreans like Samsung and LG Electroncis. Even in Japan where NEC and Panasonic have enjoyed a pretty decent market share, other players are muscling in.

The interesting aspect of this complaint is that it is being filed in Europe and not in Asia and United States, where Qualcomm actually has a dominant footprint. I also find it interesting that the complaining parties repeatedly have said that they have more than enough intellectual property in the W-CDMA standards to blunt Qualcomm. From what I understand, the more important play for Qualcomm is CDMA2000, where it has more IP.

10:21:10 AM    comment   

South Korea's largest mobile operator SK Telecom has reportedly ended its alliance talks with Tata Teleservices citing disagreement on price. But says it still remains interested in investing in India.

There were reports in July that it may pick a 33% stake in Tata Teleservices.

10:20:29 AM    comment   

Two stories on the moves Reliance Infocomm is making in prepartion for its IPO next year. The company posted a net profit of Rs 51 crore on a turnover of Rs 5,387 crore in [base ']Äò04-05. The previous year, [base ']Äò03-04, it had a loss of Rs 170 crore on a turnover of Rs 2,707 crore.

Reliance believed to be contemplating a $1-bn pre-IPO private placement.

The ADAE Group is looking to sell around 10% of Infocomm[base ']Äôs equity, which would value the company at around $10 bn, or just under Rs 44,000 crore, if the company does manage to obtain such a valuation in the market. Private equity majors active in India such as Newbridge and Blackstone are believed to have been approached by the ADAE Group, sources said.

Reliance Infocomm had a valuation of around Rs 22,500 crore, going by the Rs 32 per share at which RIL converted its preference shares in Reliance Infocomm, as part of the settlement between Reliance Industries chairman Mukesh Ambani and his brother, Anil, chairman of the newly-formed ADAE Group.

Inducting a major investor would help increase the valuation of Reliance Infocomm. However, some issues remain unclear. RIL[base ']Äôs equity stake in Reliance Infocomm has been transferred, as part of the settlement, to a holding company called Reliance Communication Venture (RCVL). Besides Reliance Infocomm, RCVL is also the holding company for an entity called Reliance Communications Infrastructure (RCIL), which owns some telecom infrastructure (such as, the group[base ']Äôs fibre optic cable network), the GSM service provider Reliance Telecom and Flag Telecom.

The point of confusion is this: which company will go public, Reliance Infocomm or holding company RCVL? ET reports that Infocomm may be merged into RCVL.

Anil Ambani had said in August [base ']Äô05 that RCVL may be listed before March 31, [base ']Äô06, as part of the settlement process. Once this happens, Reliance Infocomm will itself be automatically listed, albeit through the holding company, early next year. Again, any private placement prior to RCVL[base ']Äôs listing on the Indian bourses could thus be either at the level of the holding company (RCVL) or directly in Infocomm. Any subsequent public offering could also be through the holding company or directly by Infocomm. It is also possible that Infocomm, which accounts for the bulk of the revenues of the holding company, may eventually be merged into RCVL, industry sources said.

10:19:00 AM    comment   

Here are some more articles on Vodafone’s $1.5 billion investment in Bharti. This has been a second coming for Vodafone in the Indian market. It exited its first venture RPG Cellular, by selling its 20.7% stake to Aircel in [base ']Äô03. The reason given was that the venture[base ']Äôs operation was limited in geographic scope as it was a single circle operator.

CEO of the Vodafone Group, Arun Sarin says they are keen to further hike stake in Bharti Tele.

The CEO of SingTel, Lee Hsien Yang, welcomed Vodafone's entry. "We welcome Vodafone as our partner to further develop the Indian telecom market and to take Bharti to greater success," Mr Lee said. The moot point now is will this three-cornered structure last? Analysts say there is speculation that either Mr Mittal or Singtel will dilute their stake further in favour of Vodafone.

He also emphasised his company's backing for providing mobile services to rural areas of the country.

Meanwhile, Vodafone also announced a grant of $12m to Bharti Foundation for the growth of primary education throughout the country. The money will be spent on providing facilities of primary education at all the 23 circles of Bharti Televentures.

But it the private equity major Warburg Pincus that is laughing all the way to the bank. Warburg entered the Indian market in 1999 by investing about $300m to acquire a total of 18% equity stake in Bharti Tele. It made a profit of $1.6bn, which is more than five times its original.

Also, check out this profile of Vodafone group CEO Arun Sarin.

10:17:16 AM    comment   

Kaun Banega Crorepati 2 has managed to garner a total of 10 crore calls and SMSes in 65 episodes, through partner telcos BSNL and Airtel. KBC2 has beaten its own record of 9 crore calls in 309 episodes in 2000.

Of the total 10 crore figure, SMSes accounted for 15 per cent. BSNL contributed about 7.5 crore calls, while Airtel the remaining 2.5 crore. Industry sources also said Airtel has so far received Rs 15-17 crore via SMS revenue.

The numbers recorded, accounted and audited by KPMG, the process auditors reveal that KBC received a peak of 24 lakh calls in one day. Of the calls, 29 per cent came from the north, 39 per cent from the west, 20 per cent from the east and 12 per cent from the South.

A caller was charged Rs 2.40 if he called on the BSNL line and Rs 6 if he used the Airtel SMS or voice-enabled service.

According to industry estimates, Airtel closed an all-episode deal with Star for Rs 22 crore, of which Rs 7 crore was for Airtel being the exclusive telephony partner. There was also a minimum guarantee inked, which stated that a revenue sharing of 50:50 would take place after the SMS and voice call revenue for Airtel crosses Rs 18-20 crore.

Also Read: Is KBC2 lucky key for mobile cos?

10:14:16 AM    comment   

State Bank of India jointly with Visa International launched pre-paid cards on the mChq platform, which is a mobile-to-mobile payment option. It will enable students, faculty and staff of IIT and those living in nearby areas to pay for their purchases with their Airtel mobile phones.

Here is how the systems works:

The service will be available to Airtel subscribers who have an SBI pre-paid card.

SBI pre-paid cardholders will provide their mobile numbers or a secure identity code. This is keyed into the merchant’s handset with the transaction amount and the merchant’s Personal Identification Number.

The transaction details are then processed and sent to the customer’s mobile for immediate verification. The customer can access funds for the transaction by keying in the PIN number.

The merchant is given authorisation with an electronic message that is recorded and stored on the SIM card by both the customer and the merchant.

Mumbai-based company A Little World is the technology partner of Airtel and powers the mChq technology.

Related: mChq

10:11:42 AM    comment   

Nice to see Wired following our lead in condemning the Motorola ROKR phone as flawed, even to the point of quoting Steve Jobs's inability to "pause, resume" playing music when a call comes in. But Wired is more optimistic than NewsWireless...

10:03:50 AM    comment   

My October 3 post on the amorality of Web 2.0 continues to spur many and various responses. I was pleased today to see long-time tech writer John Dvorak call it "perhaps the best essay on the current state of the Web and the Internet yet written." Others are less complimentary, as some of the comments to Dvorak's post show.

10:01:18 AM    comment