Given all the activity in the technology industry: Sun disappearing into Oracle (aka The Borg); HP’s ex-CEO’s escapades with an actress (normally in the joke its a bishop) and then joining The Borg; Microsoft finally getting its PC OS right and making Office 2010 a pleasure to use; Twitter, Facebook and other’s crazy valuations; Wikileaks; FaceBook’s founder being Time’s person of the year; China hacking Google and the Internet’s BGP (Broader Gateway Protocol) tables; etc.  The Telecom industry has by comparison been deathly silent given its relative size by revenue, that is the whole of the IT/technology industry is about $4.7T, of which telecom makes up $2T.

It’s fair to say this has been the year of hand-held devices, and of course apps on those devices, but the money remains squarely in the devices, just look at Apple’s results for confirmation of that.  And increasingly the difference between the apps on Apple and Android devices is closing; while RIM, WebOS, Microsoft, Symbian, MeeGo, Bada, JavaME, etc. continue to fall behind.  In talking with consumer-facing businesses iPhone and Android are their focus, not because of customer numbers using those devices, but simply the likelihood the customer has a data plan (secondarily is user experience) makes them the only viable platforms.  For most customers it’s not the OS, it’s the apps that matter, for example being able to waste time playing Angry Birds.

Moving on to a quick time-line of 2010, covering some of the notable events:

• A rash of acquisitions kicked off the year with Telefonica buying JAHJAH for $207M, Nuance putting SpinVox out of its misery, and Apple buying Quattro Wireless for its own ad platform.
• Google had a go at trying to sell its Nexus One direct to customers, and realized customer service matters.
• CES (Consumer Electronics Show) in January had most of the 2011 mobile devices or gossip being launched their, not at MWC (Mobile World Congress).  This reflects a structural change in the mobile ecosystem, bringing it closer to that of the fixed networks, in that the devices are increasingly out of the telco domain.  At CES eReaders and 3DTV were the main stories.  Note the iPad had not yet launched so a question mark remained on tablets’ market acceptability, it’s surprising how quickly some things change.
• MWC in February was focused on 2 things 4G (being a pipe) and WAC (Wholesale Application Community (not Committee)), which has yet to present a clear proposition to the development community. I covered MWC in this article.
• Motorola announced it would split in two, while the Nortel fire-sale continued.
• Samsung Galaxy S (Android based) was announced in March and will likely sell over 6 million devices this year.  This is just one example of the many Android devices, with likely Android approaching 50% US smartphone OS market share by the end of this year.  Some refer to it as Google’s gift to the industry, but as the saying goes, beware Trojan’s baring gifts.
• Vodafone closed Wayfinder in March, 18 months after its acquisition, demonstrating the importance of 3rd party service innovation for operators.
• iPad (April) and then iPhone 4 (June) further drove home the trend that it’s the devices not the network that matter, with impressive pre-order and first month launch numbers.  I’m a laptop bigot, so was surprised at the rapid adoption of the iPad.  They’ve made it so simple a 1 year-old can use it, and for the majority of ‘commenters not creators’ it’s perfectly adequate for their needs.  Android remains inadequate for tablets, but once Honeycomb (next Android rev) comes out in 2011 it will be a much better experience.  Yet Android continues to leave API’s dying on the vine, rather than ensuring backward compatibility, so there’s a significant maintenance burden in keeping apps working across the growing portfolio of Android devices (but it’s still a better situation than the JavaME maintenance burden.)
• HP put Palm out of its misery, given the failure of its smartphone in April
• In May many operators, particularly in the UK started to implement caps on their data plans, which really only affected a few % customers.  For most customers the plan is essentially unlimited given their current usage.
• In the second half of the year we saw Microsoft make a number of changes to its mobile team as a number of market failures and Windows Phone problems took its toll on Microsoft’s mobile credibility.  Also Nokia crumbled as Symbian folded into Qt and the focus moved to MeeGo.  And on OTT (Over The Top) TV Google TV, Apple TV and the Boxee box were launched / relaunched.
• In August Oracle sued Google over the Java code in Android.  And Orange launched HD voice in the UK making voice over the mobile network nearly as good as using Skype over the mobile network.
• MetroPCS (September) launched LTE in the US ahead of Verizon’s Dec launch.
• Windows Phone 7 launched in Oct with some mild interest, but nothing compared to Apple and Android.
• Also in Oct the BBWF (Broadband World Forum) conference, reviewed in this article.  For me Olivier Baujard, Group CTO, Deutsche Telekom set the tone for the event: Broadband build-out requires regulatory support as the investment in laying fiber is immense. Customers consider separate fixed and mobile broadband as irrelevant it’s just broadband, and critically for an operator to remain relevant and MAINTAIN (not grow) its ARPU; it must constantly innovate and offer customers compelling bundles of services. It’s the services that matter as that’s what customers buy, internet access gets commoditized very quickly.  Technology is now secondary to remaining relevant to customers, it’s the services that matter.
• Then by Dec we had seen tens of LTE related announcements and launches including Verizon.  Which in general garnered little customer interest compared to getting an iPad for Christmas.

Then copying other weblogs, I thought I’d make some completely pointless awards:

BS Opportunity Award
Smart Grids.  I remain shocked at the level of acquisitions, conferences, and buzz around smart grids – its going to take over a decade, and Europe has already moved to smart meters, and its primarily about remote reading and being able to offer time of day billing.  This isn’t a big deal for telecoms.

Overused Marketing Term Award (joint winners)
Monetization.  A term used to cover gaping holes in business plans through wishful thinking.
Business Transformation.  Yet another IT transformation fad, explained in this article.

Are we back in the 1990s? Dot-Com Valuation Award (joint winners)
Twitter, GroupOn, FourSquare and Facebook.  Twitter is a weapon of mass-distraction, it’s a tidal wave of ill-thought through comments and rehashed marketing drivel.  Facebook is becoming old-hat, its click-through rate is more to do with accident than user desire, yes its 10% of internet traffic but that’s its cost not its revenue.  FourSquare has forced me to ignore many friends on FB, and check-out the web for customer reviews of GroupOn.  Consumer attention is fleeting with low switching costs, as we’ve seen with AOL, Friendster, etc.

Time is Finally Up Award (joint winners)
WiMax.  This will be a long slow death but the tide has turned.
3G CDMA (EVDO and CDMA2000). This will be RIP in a couple of years once LTE is go
od enough.  Key was a statement this year that Verizon will turn it off.

Making a Real Impact on Society Award
Apple iPad and Amazon Kindle.  They are two different price points and different experiences for quite different markets.  However, both have driven the tablet form factor into the main stream.  BUT many of the Android tablets coming out have some serious gaps: Android isn’t ready until next year; the touch screen on some devices, e.g. Dell’s JooJoo, do not compare to iPad; lack of enterprise support; price (3* a netbook in the case of iPad); and the difficulty for typing will put a brake on tablets replacing laptops, netbooks and Microsoft as claimed by some.

It Makes Sense for some Not All Operators Award (joint winners)
LTE. HSPA is good enough for most GSM operators (though a few have spectrum issues that LTE solves.)
VoLTE.  With 2G likely to remain in place for the next decade, we’ll see only a few operators make the leap to VoLTE, e.g. Verizon.

We’re Simply Tired of the Hype Award
Cloud.  According to the Center for Economics and Business Research, widespread adoption of cloud computing could give the top five EU economies a 763bn-euro (£645bn; $1tn) boost over 5 years, and also create 2.4m jobs.  I guess next is solving world hunger.

Complete Confusion Award
4G.  The 4G term is used for HSPA, HSPA+, WiMAX, and LTE; when actually IMT-Advance is 4G and won’t be here for several more years.  The difference between claimed and experienced rates is phenomenal, with HSPA at 14.4 Mbps I could see a peak close to 10 Mbps (very occasionally), LTE has claimed 100-120 Mbps but I’m only seeing 22 Mbps (and this is the lightly loaded early days).

All-Time Greatest Management Mistake Award
Using brand-name management consultants for a $1m+ overly dense Powerpoint that either tells the management what their people have been telling them for the past 2 years, or is just plain wrong.  The people you get from the brand name consultants are recent MBA graduates with likely a humanities degree and little direct experience in running a business, never mind even understanding your business; and worst of all think all the information online, e.g. analysts reports (who are paid by vendors) and press releases are factually correct.  The brand-name’s ‘processes’ are no more than the management’s own people use, just with some flowery language and addition details (that are not used in practice).  The brand-name consultants’ skill is in making the CxO feel insecure through their bravado and arrogance, and most insidiously making them doubt their own people because they “lack a broader perspective and the intellectual horse power of our consultants.”  My advice to all boards is use your people, you’re paying for them, and use independent external expertise to complement not replace them.  The answer you get may not be what you want to hear, but it will cost you less, be implementable, and deliver better long term value.  But that again is a challenge we have in the industry, boards are rewarded on short-term results not long term value.  The two are not incompatible, but there is currently no balance between the two.

Then looking forward into 2011, some topics we may see popping up include:

• Regulators, particularly in Europe, start to consider how to end Google’s search monopoly.  China has already taken its own unique approach.
• Consumers finally start to realize the Trojan Horse of Android is free because it takes their personal information so the advertisers’ message will be delivered.
• Rural fiber (thanks to government stimulus money) starts to address the mobile back-haul issues in the US.  While in other countries the diversity remains, with some like the UK having good access to metro Ethernet at fare prices, while nearby countries struggle thanks to poor regulation and lack of competition.
• WAC is a damp squib because operators still don’t play nice together, and there’s too many chefs in the WAC kitchen.
• Some of the early managed service contracts that are up for renewal may indicate that soup-to-nuts outsourcing isn’t necessarily the best option, rather the network remains a core plank of the business as it impacts customer experience.
• Femtocells will remain nascent as customers are not going to pay.
• Mobile-focused initiatives will start to look increasingly silly, such as mobile groups (e.g. Yahoo! disbanded its mobile group this year), mobile advertising and mobile payments.  Mobile is just an access method.
• OTT (Over The Top) TV continues to grow at the high-income end as customers realize they can have a choice in the channels they pay for, and increasingly move from broadcast consumption to off-line (recorded) content consumption.  And the low-income end are cutting the PayTV cord as its become too expensive, yet they keep internet access.
• Growing realization that the growth in mobile broadband is undermining existing revenue streams such as voice and SMS, which account for 70% of sales and EBITDA.  The underlining economics of data are not great, operators have to work harder for lower returns because data revenue is lower quality than their existing revenue base.  Which brings me back to Oliver Baujard (Group CTO Deutsche Telekom) – critically for an operator to remain relevant and MAINTAIN (not grow) its ARPU; it must constantly innovate and offer customers compelling bundles of services. Its either decline into an ISP, or focus on compelling bundles which requires operators to finally invest as much in services as their network and brand – so there’s much hard work ahead of us in 2011!