Boy, did we get it wrong on SMS! What chance political central planners.

From this year's Economist technology and Innovation awards*

Computing and Telecommunications: Matti Makkonen for the development of Short Message Service (SMS), or text messaging. Mr Makkonen is a Finnish engineer who is credited with inventing SMS, which allows short messages to be sent between mobile phones. He proposed the idea in the 1980s while working at Finland’s telecoms authority. Billions of text messages are now sent every day.

I spent most of the 90's designing and building GSM networks. Whenever we put business plans together we just paid lip service to SMS; it was seen as something that could be used for SIM updates and nothing else. Nobody believed that any sane person would think about going through the rigmarole of tapping out a message to send to someone else.

Unless you've been on planet Zog for the past 15 years or so you'll be well aware of how wrong we were and the massive growth of SMS but maybe not aware of how much of a golden egg it became for the mobile industry:

The same Informa report shows that SMS remains a very popular technology, however. Worldwide SMS traffic was up year-on-year by around 50 per cent to more than 620 billion messages sent during the quarter. SMS revenues were up 23 per cent over the same period.

and

A report from UK-based research firm Portio Research suggests that SMS will remain the most widely used messaging format for some years to come, with revenues estimated at $50bn by 2010 driven by almost 2.38 trillion messages.

To select just 2 random articles.

When we talked to the Marketing teams to get dimensioning numbers they were either oblivious to SMS or just didn't see it as a major revenue generator, so we would just add in a single SMS centre for the network and move on, it wasn't worth spending time on the detail. This didn't matter as even if they had given forecasts of high usage we would have matched spend to revenues so there wouldn't have been much of an impact on capital expenditure (Capex) until it was needed and had revenues to pay for it.

When SMS did start to take off there was a bit of a scramble but as it is a Store and Foreward technique and instant delivery was never promised it didn't realy matter. A few engineers made extra money during that period and some smaller companies grew like topsy to meet demand, but no real harm done.

It is also worth noting that in 1994 the engineering team I worked in was given a briefing by the Orange marketing team. In this briefing they predicted that UK mobile penetration in the UK would top out at around 30% by the year 2000 and Orange would have a 20% share. As it happens penetration was approaching 100% by the year 2000.

So, why am I telling you all this? Well, apart from general interest there is a lesson in central planning to be learned. When I say "we" did all this planning, I mean some seriously intelligent people. I worked with a number of Management Consultancy companies at the time and they were the ones making the forecasts on mobile demand. Most of the people had MBA's from some of the top management schools, including INSEAD. Many of them also had years of telecoms experience as well. They were also working for some very hard nosed, perceptive and very rich clients.

These people were focused on one thing, making money. If they it wrong then companies would lose billions of £££'s, and they still managed to get something as fundamental as mobile forecasts wrong. Fortunately for the companies involved they undercooked how much money was to be made, but when they get it wrong its very expensive; ask Hutchison about its 3 operation here in the UK:

Canning Fok denies that the launch of a mobile broadband service is the last chance for Hutchison Whampoa's loss-making 3 mobile business. ... Today he is desperate to convince the outside world that the $25bn gamble 3 has placed on Europe's third-generation telephony market will - eventually - pay off.

They are still losing money, but not quite as fast.

If these seriously bright people with lots of experience can't always get it right, what hope is there for us of our current crop of politicians and civil servants, most of whom haven't done anything outside politics, planning and managing a whole economy or even, for that matter, regulating the seriously bright people effectively? And they have any political consideratios affecting their decision making as well.

Me? I would prefere to leave most of it to the seriously bright people and hard nosed business men and I include health deleivery in that statement as well.

*No link as its behind a subscription wall

Labour bashing welfare claimants without even a squeal from the BBC, what gives?

Another Government head talking on Radio 4 this morning:

0816
The government's welfare reform plans - designed to get more than a million people off benefits and into work - are to be published. Work and Pensions Secretary James Purnell discusses how benefit claimants "can play their part" in the economy.

Two things struck me about it:

Firstly, what a soft ride he got. If this had been the Tories the interviewer would have been all over them trying to rip their heads off. Furthermore, the studio would have had all the usual suspects from the Unions and self appointed spokes people claiming how bad they were, especially as we are having a recession.

Secondly, why now? We've had 12 years or so of growth without these initiatives, wouldn't it have been easier then? private industry is starting to shed jobs and the Government is doing its best to saddle us with ever increasing debt and is hardly in a position to go around creating even more jobs. That would pointless anyway as the non-jobs would cost more than keeping them on welfare.

Could it be that the Government have tipped off the BBC and their other friends that this is just a move to placate the Daily Mail tendency in the run up to a General Election?

BNP List, Newsnight, New Labour and racisim at the next Election

I watched Newsnight last night* and wanted to write a post about their analysis of the BNP list they had carried out using the Mosaic profiling tool. This breakdown of the British people by location, class, salary and other information normally used in marketing campaigns.

As I had had a couple of glasses of wine I wanted to check my facts before posting so went to watch it on iPlayer and there it was, gone! Well "not available" anyway. This is unusual as it is available for other nights so I assume it was withheld because of the BNP analysis.

So although I can't refer to the source the main thing that I remember is how big the BNP were in Labour strongholds, most notably inner cities. Now this shouldn't be a surprise to anyone who hasn't been hibernating on Zog recently, but it was the scale that struck me. It was big and accounted for a very large part of the BNP membership. Furthermore, they made the point that although there were many Professionals in the BNP it was dominated by C2's, again not too big a surprise.

I distinctly remember thinking that this is what frightens New Labour; they know there core vote in could melt away, not to the Tories but to the BNP, and why that are so keen to stress the BNP's racist undertones so much. Is this also why they raised the 70m immigration cap recently?

It could also explain why Labour has suddenly been very edgy on immigration recently, despite making political capital out of accusing the Tories of being racist every time they raise the issue.

Despite, maybe because of, the economic downturn, the next election could very easily turn in to a very nasty battle over immigration. If it does it could pan out like this:

Labour needs to be strong on immigration to satisfy their white inner city and C2 core vote that they can be trusted, this in itself will have racist undertones. They will stress their immigration points system. They may even revive the population cap argument.

The Conservative Party will stress high immigration rates and claim they first thought of the pints system, if not to get the vote switch to themselves themselves but to push Labour's core votes towards the BNP and so weaken them. Labour will accuse them of racism.

The LibDems will stand on the sideline and cast the racist pox on both their houses, but at the same time say they will be strong on illegal immigrants.

Amongst all this Nick Griffin will play the" we're not really racists argument for all its worth" and campaign heavily in inner cities, especially those with large immigrant communities. This will stir race tensions and I wouldn't be surprised if we get the odd race riot.

It does make you wonder why the list was published, though? Qui bono? I think I'll leave that one for the conspiracy theorists for now.

God, I hope I'm wrong, this outcome is far too depressing to contemplate as nobody will come out of it well.


* unusual for me as its past bedtime!

Changing my mind on tax cuts

Up until now I had been a believer as tax cuts both as a way to help stimulate the economy but also as a way to keep Governments lean. I do accept the Keynesian argument that in recession we might have to let borrowing increase, although the amount is up for discussion.

However, now that all 3 parties main are falling over themselves to promise tax cuts my natural skepticism is raising alarm bells. Ever since we were suckered in to the Common Market by all the great and the good supporting it I have held the view that if there is no serious political opposition to something it is probably bad thing ie if something seems too to good to be true, it probably isn't.

I need to think about this dilemma a bit more.

Our central planners are better than your central planners....

Just been listening to Keith Vaz explaining how the Government should start taking over businesses and telling the owners how to run them. As always there is some stealth to these types of moves and he is using alcohol:

Pub happy hours should be banned and supermarkets stopped from selling alcohol at a loss in order to combat drink-fuelled disorder, MPs have said.

What makes them think that our central planners are any better then than those of the old Soviet Union, Mao's China or Castro's Cuba?

Also, once they start setting prices for businesses will that men those businesses become exempt from competition law (my emphasis)?

Supermarket mega-chains Asda, J Sainsbury and Safeway have pleaded guilty to fixing milk and dairy prices following a probe by the Office of Fair Trading (OFT). The trio will have to pay a total of £116m in fines.

The supermarkets could now face the prospect of follow-on actions by wronged consumers or competitors.

The watchdog said that in setting the fines it had "taken into account information provided by the parties involved in the early resolution discussions which demonstrated the pressures they were under at this time to support dairy farmers."

That pressure was Governement and tabloid pressure on supermarkets to increase what they pay farmers:

"The price initiatives in 2002 and 2003, which were widely and publicly reported at the time, were designed to help British dairy farmers at a time of considerable economic pressure and public debate about whether farmers were getting a fair price for their products," he added.

Bizarre political survey question

I've just been surveyed over the phone it is was quite bizarre. The main thrust of the questions was about whether I would vote ate the next election, which party I would vote for, whether I voted at the last election and who for. After this there was a few questions on whether Gordon should be friends with Barack and whether or not USA for a force for good in the world.

All typical political survey questions then a section on Iran and what I knew about it, where I got my knowledge and attitude to the press reporting on Iran.

In between the political bit and Iran I as asked if I played Bingo, had every played bingo or would consider playing bingo! Bizarre!

Anybody got any thoughts on the bingo question?

I reckon the survey was really about whether Gordon's popularity and whether he should support the USA if they decide to bomb Iran.

As they also asked me about my eduction qualifications and where I live the could deduce where I was likely to be in the social class system, so I really thrown by the bingo question.

The silver lining to all the economic doom and gllom

Guido sums up the state we are in quite succinctly:

Government borrowing is at record levels, unemployment is heading towards two million, car workers are on a 3-day week, public sector workers are threatening strikes, nationalisation is back, Deripaska-owned Leyland is even in back the news. To complete the whole 70s era feel we have a sterling collapse. 20% since the beginning of the year...

And then we have this from the BBC:

Factory gloom 'worst since 1980' Falling demand for UK-made goods and a drop in output has caused the sharpest single-quarter fall in manufacturing confidence in 28 years, a survey says.

The CBI survey found only 4% of firms surveyed were more optimistic than three months earlier, against 64% who were less optimistic.

So the silver lining?

Now that Labour have fucked up a boom so badly, despite promising the end of the economic cycle, perhaps they will stop using the mantra of the Tories boom and bust in the 80's to imply that only Labour can manage a modern economy.

The difference is that in the 80's the Tories had to sort out the mess made by Labour and the corporatist Heath Governments and were starting from a very low base line. Labour inherited a growing economy in a country that had had most of the economic mill stones removed - bloated and inefficient public services, bullying unions and failed nationalised industries privatised or closed.

Idiot politicians

Further to my last post about senior politicians engaging brains before playing to the gallery, perhaps it would be too much to expect back benchers to be able to use a bit of logic and memory.

Again during PMQ's a couple of MP's (I was in the car and didn't catch the names) demanded that the PM and/or Chancellor insist that the bailed out banks provide mortgages and loans to people.

Surely they have enough brain cells to remember that they were happy with banks giving loans out willy-nilly that we are in this mess in the first place? Why don't they tell the PM to demand that banks only make sensible loans?

Cabinet apointment process confirms control freakery of politicians

I have long felt that one of the biggest problems with Government is the way that the Cabinet is appointed. Consider first how a large company appoints its management team and middle managers.

The Board/Owners select a CEO who they feel can deliver the growth and targets they set and that the CEO says are realistic. The Board/Owners will probably discuss the CEO's key direct reports and may maintain a veto. These positions might include the Finance Director, Operations Director and depending on the industry possibly one other, maybe the sales director in a company that requires on high sales volumes.

The Board will also discuss the overall management team structure and be concerned about the number of direct reports to the CEO, or any manager, and will be concerned if this is more than 6 or 7. Anything larger can mean that the CEO is stretched too far and is too involved in the everyday detail and is distracted from the greater strategic plan.

The CEO's direct reports will then agree a structure with the CEO, and rest of the management team, and look to recruit their reports. The CEO may take an interest and even veto who is appointed, but they will generally let their trusted direct reports get on with the job. It is important that the senior team have trust in their direct reports, which is why a good CEO won't interfere unless absolutely necessary.

This process then trickles down until the organisation is complete. The CEO and management team keeping an eye on numbers of people and ensuring that costs are kept under control and the company remains focused.

I could have gone in to lots of management jargon about SPRO (Strategy, Process, Resources, Organisation) etc, but I think you get the gist.

Now, compare that with the way our Government, irrespective of party, is appointed. We know the PM we are getting as the leader of the biggest party and probably the senior positions through the shadow cabinet or previous cabinet, but these aren't certain.

The first think we notice is that the cabinet is 23 strong and the PM appoints every one of them. That is one hell of a management team for the PM to manage and ensure that the agreed strategy is implemented. Its can also lead to tensions as areas of responsibility are blurred.

The next thing we notice is that the PM appointed the cabinets direct reports. He may discuss the appointments but is is very clear these are in the gift of the PM. This leads to major areas of conflict as he appoints people to departments who aren't trusted by their direct bosses and may even be actively disliked.

I realise that in a political party different factions have to be represented but the size of the Government and method of appointing them all isn't conducive to good governance and management.

What the Mandelson appointnment says about Labour

I expressed my instant thoughts about MAndy's appointment here and they were quite cynical. I still maintain those and quite agree with another comment I heard - If Mandelson is the answer, WTF was the question?

But on reflection there is something else which seems to have been missed. Mandy isn't an MP and therefore has to be ennobled so he can take his place in the cabinet. Now I'm not necessarily against one of the Lordships taking on ministerial roles, but Secretary of State positions? These are the highest political positions we have and they wield great power and influence so you would think that any party in Government would want one of its elected members in these positions, wouldn't you?

Maybe there was a case some years ago for a hereditary peer to be given a position in Governement, but as Tony Benn showed there is a route to divesting themselves of that peerage and standing as an MP. Also, Labour has squealed long and hard against their Lordship's having undue influence so what does it say about their hypocrisy on this subject?

If I was a Labour Party member I would be livid about Mandy's appointment just on this point alone. (I've stopped reading LabourHome so I've no idea how they feel about it). If I was a Labour MP I would also be up in arms. Can't they fill the cabinet out of what, 350 MP's? Aren't there 23 MP's capable of filling all the cabinet positions*?

And what does it say to us, the electorate? "We don't care who you vote for, were going to appoint our own people anyway" is the message I get. So if I were a Labour voter I would also be miffed.

Still, if it hastens the downfall of Labour, so much the better.

*Having looked at the list of Cabinet positions we should only need about 10 anyway, but thats a different debate. (BERR is one of first that I would axe .)

Those safe, conservative, European banks.

You know how we are always being lectured about how good europe is and how they don't go for this raw Anglo-Saxon capitalism. Well, it seems those good Europeans banks haven't been as safe and conservative as they would have us believe. According to this week's Economist:

Outside Wall Street US banks have lent 96c for every £1 deposited.
European banks have lent 1.4Euro for evry Euro deposited.

That doesn't sound very safe and conservative to me.

Politicisation * of the police

There was much harrumphing on Today this morning about the politicisation of the police following the resignation of Sir Ian Blair. Its a bit late for now, NuLabour has politicised the whole landscape since 1997.

Anyone who has served in the armed forces will be well schooled in the doctrine of "civilian control of the armed forces". In short this means the the most senior military leaders report to civilians, which in theory means the Secretary of State for Defence** but in practice means through senior civil servants, except in a crises when the PM takes control through COBRA.

As part of this deal Military leaders had the ear of the Defense Sec and even the PM and could give full and frank advice. Politicians were free to make their own decision and if they ignored the advice military leaders kept quiet, in public at least. The quid pro quo was the Military Covenant, whereby the armed services were looked after for their sacrifice. Even Labour member accept that the Covenant has been broken. This has led to military chiefs openly and publicly getting involved in politics, which is an unedifying spectacle as well as being dangerous.

Finally we have the civil service. They may be conservative plodders who are risk averse but they always had a reputation for being apolitical and giving Government "best advice". Yes they probably stalled Government policies and I'm sure that their is more than a kernel of truth of truth in the Yes, Minister! books. However, senior civil servants accepted the bidding of their political masters with good grace and got on with the job when instructed to. Again, this was undermined by NuLabour through the introduction of SpAds who are effectively political civil servants.

Now I'm not myopic enough to realise that even Maggie wasn't immune from upsetting senior civil servants, the police and the military, but she rarely undermined their leaders by the imposition of raw politics over their heads.

Now of course its too late for complaint; the appointment of Sir Ian Blair was political. He was seen as representing the face of NuLabour and was happy to accept the manageralist style of Governement by targets. The genie of senior people in the police, armed forces and civil service being apolitical is out of the bottle and it ain't going back.

What we have to do now is learn to live with the new order. There isn't much we can do about senior military officers, they have to be servicemen, but we could have elections for Chief Police Officers and there is no reason why we can't have a polical appointments as heads of the civil service as they do in the USA.

* Horrible word.

**I once caught a young soldier stealing petrol from a generator. His charge sheet read that he was stealing fuel from "The Secretary of State for Defence, The Rt Hon Michael Hesltine MP."

In praise of “Punch and Judy” politics

I caught part of the boy Dave being interviewed on Today this morning and was taken by the number of times he was accused of "playing party politics", sometimes referred to as being Punch and Judy politics. The implication is that somehow it is wrong in these difficult times to "play politics" and that the opposition should be supporting the Government in its efforts to sort out the problems.

That opinion is at best misguided and at worst down right dangerous. This implies that there is only one solution and the Government knows what it is. Well, there isn't one solution and even if there is it will be fraught with risks and dangers that we need to know about. Politicians of all parties cosying up to each other in the proverbial smoke filled room to agree whatever deal suits them is no way to work out how to deal with the mess we are in.

What we need is more Punch and Judy politics. We need the opposition to be ripping the heart out of Government plans and exposing the weaknesses and flaws, we need them point to the failures of Government and exposing weak ministers and their teams. There should be nowhere for incompetent ministers to hide. For all his arrogance this is exactly what Paxman does, and does well, and he was about the only effective opposition for about 5 years.

By doing this opposition will then be able to build their own case for their solutions, if indeed there is one. But if there isn't one we at least know that and go in to whatever solution is proposed for this mess with our eyes open.

And if the general public don't like it - tough. There is far too much at stake for simple niceties.

Politicians should stay out of sport

Yes, I know, they should stay out of our lives, period. But this is a subject that really winds me up.

Free-to-air TV sport reconsidered

The list of sporting events reserved for free-to-air television is to be reviewed, Culture Secretary Andy Burnham has said.

He told a Royal Television Society conference in London it was time to look at whether the right events were protected to serve the public interest.

The real question isn't that the right events are protected its why should any be protected. Its just rent seeking by the free to air channels who want the best bits without paying true market value or want us to pay for them on top of the BBC poll tax.

"It is because I believe in television's social role - its power to include and involve - that I continue to believe resolutely in the principle of a protected list of sporting events set by the government," he said.

What social role? The only one I can think of its part or the government's "loren orda" campaign to keep the prols off the street and maybe there wont be as many many muggings.

So why bring this up now? Well, there are 2 sports that seem to have got the BBC in particular wound up, test matches and England football.

In the case of the test matches Sky bid and won the rights. As part of the deal they have to allow highlights on free to air and we get about 45mins. However Jonathon Agnew has been (mis)using his position to slag off Sky and complain about live cricket not being on BBC. Forgetting that Sky gives us full uninterrupted play, something the BBC refuses to do, all of England's away games, 2 hours of replay and coverage of the domestic game.

But the killer is that that next year we have the Austrialians here for the Ashes tests. These are propbably the most attractive matches in cricket and its likely that next year there will be a real stink with the Govt getting it the neck because we can't all watch it "for free". Just think of that, politicians being unpopular? And we know what they do to avert that don't we? Yes, they dip in to our pockets as readers Burning Our Money will testify.

What people forget is that the BBC didn't even bid for the rights

The England and Wales Cricket board has attacked the BBC for failing to make any formal bid in the latest TV rights negotiations, after BSkyB retained all England home Test matches as part of a £300m deal that keeps live games off free-to-air TV until at least 2013.

So who will pay the ECB £300m to give the cricket to the BBC? yes, you and me. And then will everyone be happy for all BBC2's daytime schdule to be given over to test cricket 8 hours a day? I doubt it.

As to the football, this has blown up because not even the highlights of the Croatia Vs England match were on free to air TV. This wouldn't normally matter because England have been so poor that only masochists have bothered to watch, but on this occaision England somehow managed to win and there was a real storm.

So what can you do about this Andy? Maybe you missed the bit about this match being in Croatia and therefore it is up to Croatia's FA to sell their right to who the hell they like? Or maybe you have all become so arrogant you think you can steal the property rights of foreign companies as well as those of this this country?

Because that's what the list really means, by deciding which sports cannot sell their TV rights for what they are worth on the open market you are stealing them and giving them to someone who doesn't deserve them.

PS yes I am a sports fan and would love them all to be on free to air, I just don't think you, dear reader, should pay for my pleasures.

Be afraid, very afraid

Gordon Brown is to hold talks with President Bush at the White House about the global financial crisis.

God knows what else these 2 will screw up next but converting all your investments to cash and locking up your daughters and first born sons might be a good idea.

Banking mess best quote so far

From this weeks' Economist:

The Fed is nationalising banks faster than you can say Hugo Chavez

Shortest political suicide not in history?

The piece of paper on which Brown scribbled "No election" last year?

Family Vs Nation

Although The Angry Economist is writing about the USA it is equally true here:

Barack Obama:

It is that promise that has always set this country apart, that through hard work and sacrifice, each of us can pursue our individual dreams, but still come together as one American family - to ensure that the next generation can pursue their dreams as well,

Barack, dear, there is no "one American family". You see, families are not run like nations, nor nations like families. In a family (usually; and on death, enforced by the courts), resources are pooled. What the husband earns, the woman earns half of, whether she is working herself, or whether she is a stay-at-home mom.

He goes on to describe family life and how in a family we all work together and compromise and then finishes with this:

I hope, Barack, that you can see that a family makes decisions successfully, that no nation can make. There are simply far too many people, far too many voices, far too many opinions. A nation is not a family, and no comparison should ever be made between the two.

But I'm just one individual, and I doubt that you are listening to me. It's inevitable, then, that I will not get what I want during this election, and that you will disappoint me. There is a solution, though, which could make me like you. STOP DOING THINGS FOR ME THAT I COULD DO MYSELF. Your job is to keep the peace. That's it. Everything else -- including the few things that the Constitution actually calls for you to do: post roads, minting coins, standardize weights and measures, regulate commerce with foreign nations, promoting the useful arts -- all these things I can arrange within the zone of peace that is is your job to create.

Stop doings things for me. Get out of my way. Let me do them myself. I'm not a child, I'm not your child, I'm not part of your family, I'm an adult, I can make my own decisions.

I can't think of anything further to add.

Comment of the day

So Much For Subtlety over at Tim Worstall's place on a thread about Rosie Boycott:

I have to say I need to stop reading the Guardian. It makes me think giving the vote to women was a mistake.

Priceless

A lesson in politics for the young

Last week I sent the Sprog (he's 21) a text last week asking if he would like my bike because I am thinking of buying a new one. Being on just over minimum wage he will take what ever offerings he gets. We took him out for dinner last night and by the end he was angry and disillusioned, with all politicians.

He's always been interested in politics and, being young, is still a bit of an idealist, but for not much longer. When he asked me why I was buying a new bike I explained that the Government has a cycling to work scheme which means that I can get up to £1000 of bike and accessories for effectively half price because I get VAT back and the remainder is set against tax at the higher rate. The penny quickly dropped and the conversation went something like this:

Hang on, you earn about 15 times what I earn and you are getting tax breaks paid by me - Yup.

But you work 30 miles from the office - Yup

And its all motorway - Yup

Doesn't anyone check on these things - Nope

I then explained the madness of tax credits - we pay bureaucrats to tax one set of poor people to give complicated tax credits to another set, that the 10p tax debacle was really about trying to fiddle the stupid relative poverty numbers, that after nearly 15 years of growth the cupboard is bare etc. I then had a rant about the erosion of our freedoms and by the end and a general rant because I was in full flow.

He commented that its impossible to change anything and, to paraphrase him, the political class have got a stranglehold on politics. As he pointed out its not that he and his friends are apathetic, they are disillusioned with all the party's, having met a few senior politicians on his politics A Level course at Henley College.

It won't be long, I suspect, before he becomes a classic liberal free market proponent. I pointed him in the direction of the Libeatarian party as my parting shot.