Here's a perfect illustration of how fast the industry is moving. Global Telecoms Business interviewed Kris Rinne in mid February, as chief technology officer of Cingular, the US mobile phone company owned by AT&T and BellSouth.
|Kris Rinne: with|
HSDPA we can do
anything that competing
technologies can do
Fortunately she's still there, still at Cingular, still as CTO, but only a couple of weeks after the 3GSM conference in Barcelona where the interview was carried out AT&T and BellSouth announced an agreed merger.
That doesn't mean they have merged. It is subject to all the usual caveats, including approval of the shareholders of both companies and of regulatory bodies not just in Washington DC but in all 50 states and probably in Brussels, seat of the European Commission, too.
But if the proposal goes ahead it will push Rinne into an even more key position than she is now. Today's AT&T is, of course, the sum of the 2005 union between SBC and the shape-changing AT&T that somehow survived as a long-distance operator from 1984 until it was taken over by SBC, which thereupon took its name.
It seems certain that the next merger, between BellSouth and AT&T Mark II (or Mark VIII if you take into account all the changes the old company underwent between 1984 and 2005), will also be named AT&T. Mark III or Mark IX, depending on how you're counting.
And that will instantly produce a further transformation, because Cingular will then be wholly owned by the latest version of AT&T. And of course you won't need reminding — well, maybe you will, because reshuffles in the US telecoms industry in the past few years have been hard to keep up with — that in 2004 Cingular bought AT&T Wireless for $41 billion, outbidding Vodafone's $35 billion.
AT&T Wireless had been part of the old, post-1984 AT&T, but had been split off in 2001 — keeping the name, though. The AT&T Wireless brand was finally retired in November 2004 when new owner Cingular did a store-by-store refit across the US.
Well, not finally. After the SBC/AT&T merger was completed at the end of 2005, the information emerged that the new company would recreate the old brand for its mobile services, to be offered via the Cingular joint venture with BellSouth.
There hasn't been time for that strategy to be developed. One might, cynically, think that it could have been a statement more for the ears of BellSouth's board, to indicate the new AT&T's level of determination.
Still, if the latest merger, between the new AT&T and the old BellSouth, goes through this year, it looks likely that Cingular, in 100% ownership of the new new AT&T, will be rebranded back to AT&T Wireless, to become the mobile arm of an ever greater AT&T.
If Kris Rinne knew what was afoot when she was at 3GSM in Barcelona she wasn't telling. AT&T and BellSouth were still the two separate shareholders, owning 60% and 40% respectively. Her preoccupations were mostly to do with the rollout of 3G technology and services across her network.
Rinne is the most powerful GSM-oriented CTO in North America — and one of the most powerful in the world. In the US Cingular has almost as many customers as Orange has worldwide, yet has the advantages of being — the effects of the 2004 merger aside — a single network with a single strategy for technology, services, content, marketing and regulatory environment in a single nation.
Out of the backwater
The US and Canada spent many years as backwaters of the worldwide GSM standard, preferring the Qualcomm-backed CDMA standard or non-GSM versions of TDMA. International travellers, used to turning on their GSM phones after landing at Charles de Gaulle, Schiphol, Hong Kong or Heathrow and reporting back home or into the office, were — till a few years ago — left incommunicado at JFK, LAX or O'Hare.
But over the past year or so the GSM family — as the GSM Association likes to call it — has boomed. In the US and Canada there were 56 million GSM users at the end of 2004, but 80 million a year later. Latin American GSM growth was even faster, from 62 million to 118 million.
Within the US there are two significant GSM operators: Cingular had 54 million customers at the end of 2005, though not all of them GSM, compared with T-Mobile's 21 million. Its biggest rival, the CDMA-using Verizon Wireless, reported 51.3 million customers at the end of 2005. Orange, incidentally, to back up that comparison a few paragraphs ago, has 57 million customers, but in 17 countries.
UK-based Vodafone has a 40% stake in Verizon Wireless, though that appears to be under review; and Germany's Deutsche Telekom owns 100% of T-Mobile USA. So Cingular — or AT&T Wireless, or however it ends up — has the potential of becoming the most powerful wholly US-owned mobile operator, especially once it is inside an enlarged AT&T.
As testament to Rinne's position in the GSM industry she chairs the board of governors of 3G Americas, the industry organisation which represents suppliers and operators in North and South America. So at 3GSM in Barcelona she was speaking on behalf of the organisation as well as in her role as CTO of Cingular.
But Cingular first, and particularly its aggressive move into 3G and high-speed data, starting at the end of 2005. "On December 6 we launched into 16 markets, that cover 52 communities, with HSDPA," she says.
Launching with data cards
"Our primary suppliers are Lucent and Ericsson at launch. We also have two PCMCIA cards from Novatel and Sierra and those cards are capable of HSDPA at both 1900 and 850 bands. And they're quad-band GSM EDGE, so they're global devices, but the UMTS would be just domestic for the US."
And in February Cingular announced an agreement with Option for a third card, "which also includes the 2100 UMTS HSDPA, so now that's a global device for UMTS HSDPA, and it still has the quad-band GSM EDGE".
In early March, a few weeks after the interview, the company launched Cingular Video on two 3G phones. Service is available in those same 16 markets at first, offering highlights and other material from a range of TV channels — see panel, below.
"We'll continue to expand our footprint in 2006, both in the number of cities involved — we'll expand into most of the major market areas by the end of 2006 — and we'll expand the footprint within the cities that we've already launched."
On video "we announced an agreement with HBO for exclusive content that's tailored for the wireless device", says Rinne. "We'll have many, many other content providers. This will be video streaming capabilities — shorter clips. We're aren't running two-hour movies."
Services will be available over 3G with hand-off capabilities onto the EDGE network, "so it won't just be exclusively in those 16 markets, though that's where the emphasis will be, but as you move into our EDGE environment it will continue to work".
The official list of the 16 markets is Austin,
Salt Lake City,
How will people use mobile TV? Rinne is interestingly cautious. "I think it's to be determined. You know, I do look at it and I don't think any of us have any more hours in the day to watch TV and so the only way you're going to expand the content that you get is to have something that works on a mobile device, that is portable with you. For me personally, I think that means more short clips that are readily accessible."
Filling that idle time
It's analogous to portable email. "If I get five minutes, I'll check my email. I also use our WAP portal to go check my favourite sports teams or stock quotes — any time I get some idle time, even during meetings," she laughs. "I think that's where the opportunity is, to fill the idle time with content that you're personally interested in."
Will broadcast technologies — such as DVB-H or Qualcomm's MediaFlo — be part of the mix for mobile TV? With TV over 3G, every viewer gets their own, personal bitstream — adding to the cost and to network congestion.
"At some point in time I think it needs to be part of the mix. Today on my HSDPA network I can serve that information, but I'm serving it up one at a time."
She gestures around the meeting room, which includes a press officer from Cingular and the marketing director of 3G Americas. "If all four of us in this room wanted to look at the Winter Olympics highlights from last night, I will have used transmission resources and over-the-air resources to deliver the very same content four times to deliver the same content to the same space."
There is an efficiency that broadcast gives, says Rinne. "What we need to learn over time is what is that balance. If the four of us want different contents and we all want it on demand, then it may or may not fit."
Broadcast will be part of the mix, "but I think it will be integrated, where an operator is using it for efficiencies and to a certain extent quality", but there has to be transparency with the 3G service, "not like what we've done with email versus MMS, where you have to decide with some clients what the medium is".
What about the different technologies that Qualcomm and the other companies are offering? "We're looking at both DVB-H and MediaFlo," says Rinne. "We haven't made a decision. The US has some unique circumstances regarding spectrum in that regard."
DVB-H is basically a mobile phone version of DVB, the near-universal set of standards for digital TV broadcasting by satellite, cable and terrestrial transmitters. MediaFlo is Qualcomm's own standard — again — which in the US will be based on the company's use of a single UHF TV channel across the country to distribute digital TV to mobile phones in association with operators.
Mobile TV will produce a number of issues for operators. Roaming, for a start: if you're roaming away from your home network can you access the normal range of channels for the same price? And what if some of those channels are not usually available from the network where you happen to be: you might be in a different country, for example, or in an area that is not geographically covered by the channel you want to see. Or maybe the channel's rights to particular programmes is geographically limited.
There are "a lot of challenges we need to sort out" over a range of issues, including content licensing. "My perception is that if a company has the broadcast rights to that, it might be geographically contained as well. We've got the traditional roaming challenges that we're good at solving, but we'd have to solve them in another way," says Rinne. "But then we have rights and content."
At the same time as planning these advances into 3G, Rinne has been overseeing a complex merger between Cingular's infrastructure with that she took over from AT&T Wireless.
"We had overlapping TDMA networks and we had overlapping GSM networks," she says. "We have been in the process of integrating those so that there is a single seamless network and then introducing 3G services on top of that."
In the company's fourth quarter results a chart of GSM growth shows "we grew five million customers but at the same time we were doing migrations of TDMA to GSM so we really grew nearly eight and a half to nine million customers on our GSM network".
When Cingular launched its 3G services "I did launch with a separate core because it was new technology and you don't want to put that on something that is used by the people who are paying the bills", she smiles. "In 2006 I'll be using common core. Obviously I'm using the common cell infrastructure equipment, the roaming capabilities, the billing capabilities, the provisioning capabilities. I didn't have to go build new ones, so it definitely has a migration path."
But how does HSDPA compare with other data technologies such as WiMax? "There's a lot of discussion about competing air interfaces," agrees Rinne. She believes that "in five megahertz we can do anything that those competing technologies can do, and we already have infrastructure that's in the ground, that's operating now, and a common core and billing systems and provisioning systems — all of which kind of gets left out of the discussion when you're talking about new infrastructures".
There are applications for WiMax, says Rinne. "I think there's point-to-point connectivity, there's some basic nomadic services, but I think when you listen to the technology debates you have to understand the fine print."
What are people using HSDPA for in Cingular's new 3G operations? "What we're offering today is primarily to connect your laptop back to your enterprise solutions. As we begin to offer the video services we'll be introducing additional services on to that core infrastructure."
But there are different ways of looking at high speed, Rinne points out. "As an operator I tend to think about speeds in two dimensions. One of them is the speeds I might provide to you as an individual customer for your application. The other way I use speed is capacity. Those products and services that I'm already successful in and you already understand, now can do more bits per hertz than I was previously."
That means improved efficiency, improved quality as well as improved capabilities "that I can provide by leveraging those speeds".
Beating the speed
In terms of raw speed, Cingular is "advertising 400 to 700 kilobits a second and beating that", she says. "We have peak speeds of over one megabit a second." The chips in the devices are capable of 1.8 megabits and Cingular demonstrated 3.6 megabits at the Consumer Electronics Show in the US in January "on the very same infrastructure that I already have in the ground".
It's not even waiting for a software upgrade, she says: "It's there. I just need the device and the transport to support that."
Rinne remains a sceptic about wifi and WiMax. "It's all unlicensed spectrum," she points out. That means there's an unregulated free-for-all for capacity — as exhibitors, delegates and journalists knew only too well at 3GSM, where a quick survey in one exhibition hall showed 30 or 40 base stations competing for bandwidth. "That gets you into the licensed/unlicensed discussions — it's more of the fine print you need to understand," she smiles.
Let's go back to the integration between the old Cingular and AT&T Wireless. Is that done? "The people part is done," says Rinne. "Where we had multiple TDMA networks, they have been collapsed to a single network. There are 67 markets where we had overlapping GSM networks. We've completed the integration of 33 of those but that represents only about a third of the base stations."
Cingular picked the smaller markets to start the physical integration process, to ensure the processes were right — you don't want to tamper with coverage in a large city until you're really experienced.
"We will complete that by the end of 2006," she says. "In addition to that there is the billing and provisioning and support systems. We're well on the way on the integration."
Is Cingular working with a particular billing company on this? "All of them," she grins. That's the story of this industry. "Our primary systems are an Amdocs system and one that's internally developed. We'll continue to have Amdocs and then home-grown elements."
There will be two billing systems, with one for a particular geographic region or customer group. "As far as the customer is concerned it'll be a single billing system."
But why keep the two? To keep Amdocs on its toes, seems to be the answer. "We do a lot of two vendor things," says Rinne more diplomatically.
But it's clearly part of her strategy to make vendors compete for business. "You get the best of both worlds. It's kind of amazing when I sit at meetings and I can say: 'You know, vendor X said I could have this third quarter of 06. Now when did you tell me you could let me have it?' Third quarter of 06 is usually the answer. That way I don't get first quarter of 07."
The in-house system is there not only because it ensures Cingular is an informed purchaser, but because there are back-office services that run across different parts of the system, she adds.
And Cingular's back office is a bit more complicated than that.
Cingular is unusual in the industry because it has a separate business marketing group. "They let me be their CTO," she says, "but they have their own customer care, their own product development and their own device management. They have their own IT support in terms of point of sales systems, billing systems, sales force automation systems — because their needs are different."
So there is one entity that focuses on products and services for the consumer market, and one for business. "It's my job to make sure we use the same infrastructure to support that. I think we're unique in that regard. It gives us a very clear focus."
On the consumer side Cingular has five push email solutions. "Some of those are carrier hosted, so that a small or medium business doesn't have to have a server on its infrastructure. We also solve the device integration issues."
On the business side there are also specialist, "non-stock" devices, such as the terminals that UPS couriers use. "I don't acquire those for them but I verify the radio side and I provide them a provisioning system."
There are laptops coming with built-in 3G terminals. "We have agreements with Dell and Lenovo for them to deploy HSDPA and GSM EDGE in the devices, in the PCs themselves." Cingular certifies the products and provides the SIM card to customers "and we'll have the client optimised to work with our networks".
What will be the sales channel to reach the customers with this service. "They usually just let me worry about the technology," laughs Rinne. GTB
| 3G Americas at the edge
As a senior figure in 3G Americas, Kris Rinne is playing a leading role in promoting GSM technology in the western hemisphere. "3G Americas supports the whole family of services," says Rinne, who became chair of the industry body in January 2005. "The member companies support GSM EDGE." They work with suppliers and produce white papers for operators on enterprise applications for EDGE networks. "We do papers on management, roaming capabilities for member companies."
The companies have deployed GPRS extensively, she adds. "Most of them have deployed EDGE throughout North and South and Latin America, and with 3G technologies they're at different stages in terms of their business development."
3G Americas is highly pro-EDGE, a technology which is designed to boost the data rate of GRPS networks. In the US both Cingular and T-Mobile have launched EDGE services, as have Telcel in Mexico and Rogers in Canada. A total of 209 operators around the world have committed to deploying EDGE and 125 are already commercial in 74 countries. Those 209 operators have a billion customers between them, giving them a potentially huge market for EDGE services.
Though much of the industry's focus is on 3G networks, devices such as 3G data cards for laptops have the ability to fall back to EDGE operation when they're outside 3G coverage areas. The data rates aren't anything like what is possible with 3G, but they're a lot better than fixed dial-up services.
"Where UMTS or HSDPA are not deployed, in many cases the services will fall back to EDGE, transparently, without putting in a new card or having a separate subscription and separate bills," says Rinne. "As a user, you may see the difference in latency and speed but you don't have to do something totally different."
GSM is now deployed in every country of the Americas, every island and territory. "EDGE deployments are definitely happening, so we're moving forward from 2G. In the Americas 80 operators in 36 countries have committed to deploy EDGE."
And 3G has started in South America, with tests in Brazil and Uruguay.
Owners of Cingular 3G phones in 16 US metropolitan areas wil be able to watch video clips as well as sports, news and weather, entertainment and premium content.
News will come from CNN (including business and politics), Fox News and NBC. There will be local weather forecasts for 100 cities across the US.
Sports providers include CBS, ESPN and Fox. There will be cartoons from the Cartoon Network and Disney, and trailers of programmes on ABC, Fox and NBC. In addition HBO will be providing premium content at $2.99 or $4.99 a month.
Cingular Video users can create a personal home page with up to three links to their preferred sites. In addition, the service will automatically stream local weather information to a user's personal news and weather page each day.
Cingular Video will initially be available in the markets of Austin, Baltimore, Boston, Chicago, Dallas, Houston, Las Vegas, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tacoma and Washington DC.
3G services were launched on an LG and a Samsung handset, with a Nokia and an additional LG handset to be added to the product line shortly.
Cingular Video uses Helix software from RealNetworks. GTB