Archive for 2009

 
 

Apple, AT&T, Google Explain Google Voice

Apple, AT&T and Google on Friday all replied to the FCC’s letters of inquiry regarding the companies’ roles in the rejection of the Google Voice application by Apple’s App Store, with Apple saying it hasn’t actually rejected the application – it just hasn’t been approved.

As part of a wider directive from the Obama Administration to investigate competition in the wireless industry, the FCC asked the three companies to explain what exactly Google Voice is and why it was rejected from the Apple App Store.

Google described its service as an “enhanced voice and data messaging application that provides number management and related services to users who have one or more existing wireline or mobile phone services.” Additionally, Google acknowledged that users can make calls using the service, which Google said, “utilizes the carrier voice network from the application.”

But it wasn’t use of the carrier’s network to place calls that bothered Apple. The iPhone maker denied allegations that it has rejected the Google Voice app at all. A letter from the company stated that Apple “continues to study it. The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface, for telephone calls, text messaging, and voicemail.”

AT&T and Apple denied any kind of collusion with AT&T in the review, approval or rejection of the application. AT&T saw a backlash after the application was rejected as many critics of the move accused the carrier of asking Apple to reject the application.

Both companies acknowledged certain contractual obligations designed to protect AT&T’s network health and the iPhone’s integrity. For instance, Apple noted that “there is a provision in Apple’s agreement with AT&T that obligates Apple not to include functionality in any Apple phone that enables a customer to use AT&T’s cellular network service to originate or terminate a VoIP session without obtaining AT&T’s permission.” Further, Apple acknowledged that it did not know if there was a VoIP element to Google Voice.

AT&T did say it would review its policy regarding VoIP applications running on its network, stating: “We plan to take a fresh look at possibly authorizing VoIP capabilities on the iPhone for use on AT&T’s 3G network. AT&T will promptly update the Commission regarding any such change in its policies.”

Meanwhile, VoIP service provider Skype released a statement applauding AT&T’s willingness to “take a fresh look at authorizing VoIP capabilities on the iPhone over AT&T’s 3G network.”Because VoIP services allow cheap voice calls and messaging, most have been relegated to only working over a Wi-Fi connection.

Nortel Declares Bankruptcy

Nortel filed for Chapter 11 bankruptcy today, after its loss in the third quarter ballooned to $3.41 billion and 1,300 people had to be let go.

Today’s filings occurred in Canada, Europe and the United States. “I firmly believe these are the right steps toward a solution for our company. This process will enable Nortel to become the highly focused and financially sound communications leader it should be,” CEO and President Mike Zafirovski wrote on the company’s Website.

“Most importantly, Nortel is still very much in business and our commitment to customers remains unwavering. We will continue to invest in leading edge R&D,” he wrote. “I can assure you we explored every possible alternative, sought a variety of solutions and engaged in extensive consultation with our Board of Directors and many other experts.”

Nortel’s previous turnaround attempt, which began late in 2005, was unsuccessful because of the worsening global economy, the company stated.

The former Northern Telecom was not always in such bad shape. The company was considered a major player in areas such as VoIP, especially during the dot-com boom of the late 1990s, even while facing wireless hurdles.

New steps for Nortel may include selling various business units or receiving a capital investment as a way to go private, UBS analyst Maynard Um wrote today.

Specifically, “We believe an acquisition by Huawei would be negative for the European vendors as it would gain significant market access in North America and might also open the door for Verizon’s LTE vendor selection. However, this could lead to market repair in the fragmented optics market… But large M&A in the telco equipment industry have rarely led to margin improvement in the past,” he wrote.

Nor is an acquisition by Ericsson a good fit, Um added. UBS today rates Alcatel-Lucent as neutral and Ericsson as a “sell” opportunity.