Professional Documents
Culture Documents
Traffic Jam
featuring
Social networking: What
do you get when social
SMARTPHONES, DONGLES AND THE DATA BOOM networks go mobile? Some
very big numbers indeed.
Matthew Key:
The CEO of Telefónica Europe
talks exclusively to MCI.
Editorial 02
contents february10
News 04
Orange unveils its advertising strategy, the result
of a partnership with Blyk, while browser specialist
Opera makes a mobile advertising move of its own.
Vodafone puts a new shine on its femtocell proposal
in a bid to shift more units and Palm overhauls its
Pre handset with a new hotspot feature. A new
ecological initiative, the Green Touch brings together
a range of players and Indian carrier Bharti moves
into Bangladesh.
Analysis 12
30 | networks and 34 | mobile Social 18 months after its acquisition of mapping and
the data boom networking navigation firm Navteq, Nokia is making its entire
The surge in mobile broadband It’s a proven service on the fixed web offering free to owners of its handsets in a bid to
traffic might well be what the carrier and the move to mobile seems a natural make Ovi Maps a contextual platform at the centre
community has long been waiting evolution. What happens when the of a range of apps. Coming right back at the Finnish
for, but its arrival has proven a double worlds of mobile telephony and social vendor, meanwhile, Google has finally launched its
edged sword as networks have groaned networking collide? own-branded handset; the Nexus One.
under the strain. What can be done to
alleviate the pressure? Interview
Matthew Key 18
The CEO of Telefónica Europe talks exclusively to
MCI about the challenges faced across his portfolio,
mike.hibberd@informa.com
Future gazing
I
n this month’s feature on the decade ahead There are big question marks for some over HEAD OFFICE
Mortimer House, 37-41 Mortimer Street,
(beginning on p41) we have a look at some whether mobile operators are best placed London, W1T 3JH
of the industry developments that the next to match these behaviours, though, and the Tel: +44 (0)20 7017 5000
Fax: +44 (0) 20 701 75647
ten years might bring. Developments over debate as to the carrier’s role in the value
EDITORIAL
such a time span are not easy to predict in an chain, which was lively in 2000, has only Please send all press releases to support@telecoms.com
industry that can be marked by such a fero- gained intensity over the decade. Whether Editorial Director
cious pace of development as this one. How or not operators will be able to build exper- Mike Hibberd
Email: mike.hibberd@informa.com
many of us, if we’re honest, would have been tise in software platforms and application Tel: +44 (0)20 701 75201
able to paint an accurate picture of today’s development fast enough to catch up to the Deputy Editor
industry back in the year 2000? established players remains to be seen and James Middleton
Email: james.middleton@informa.com
It’s worth having a go, though, because it their attempts will prove definitive, one way Tel: +44 (0)20 701 75257
forces you to look at the greatest pressures or another. Correspondents:
that are acting on the industry today. What We’re creating a space on telecoms.com The Informer
lies in store ten years down the line, after all, to enable this debate to unfold and expand ADVERTISING
Sales Managers:
will emerge from the tensions that currently in whatever direction the industry thinks it
Michael Butcher
define the sector. ought to take, and we want to hear what you Email: Michael.butcher@informa.com
The most crucial of these for readers of have to say on the matter. We’ll be featur- Tel: +44 (0)20 701 7
Mobile Communications International is the ing comment and predictions from a wide Suki Bains
Email: suki.bains@informa.com
jostling for position in which all players are variety of industry experts, participants and Tel: +44 (0)20 701 7
engaged. Everyone wants to maintain the observers and all opinion is welcome. Japanese Sales Enquires:
customer relationship and companies from all Please join the debate by going to www.tel- Media Communications Inc
Simon Timmis
divisions of the industry are looking to build ecoms.com/2020vision and having your say. Email: timmis@mcijapan.com
the ecosystems and software environments Tel: +81 (0)3 3523 2600
that they hope will hook end users and keep DESIGN & PRODUCTION MANAGER
Joanne Lowe
them spending money. Email: joanne.lowe@informa.com
You only have to look at Google’s handset Tel: +44 (0)20 701 75604
launch and Nokia’s decision to offer its entire MARKETING / LIST RENTAL
mapping catalogue to all customers for free Head of Marketing
Sophie Burdajewicz
(both of which developments are explored Email: Sophie.burdajewicz@informa.com
in the news analysis pages of this month’s Tel: +44 (0)20 701 75461
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04
mobile messaging | internet | music | e-recharge | video | advertising | gaming | commerce | voice apps
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NEWS February2010
06
08
*Free femtocells are provided at the sole discretion of HSL to representatives of mobile network operators. Femtocells will be shipped to
qualified visitors after the event (est. April 2010). Femtocell can be used with HSL FemtoNet Managed Service for demonstration purposes
without need to integrate with your network, or as part of your network subject to limited integration work. This offer is only available in
conjunction with the Mobile World Congress in Barcelona during February 2010 and only available to visitors to HSL’s stand. Mobile Networks
vendor view
SPONSORED AND WRITTEN BY
I
t goes without saying that mobile inter- data volumes, they could miss out on the about users’ online behavior. This
net usage has experienced significant inevitable increase in ARPU. includes trends relating to most popular
growth over the past couple of years sites, device types and average brows-
and has become an integral, irreplace- ‘One Web’ Experience ing duration.
able part of many people’s lives. Analyst Bringing a high quality web experience Smartphones typically do not have
firm Forrester predicts that 125 million on mobile devices has historically proven proxy settings pointing to the inter-
Europeans will access the mobile internet to be a challenging feat, specifically with mediary gateway. They are similar
by 2013, more than tripling today’s users. regards to harnessing the power of a to laptops in that their data traffic
On a more global scale, Cisco Systems esti- system that was designed to be used and goes directly to the internet unaided.
mates that mobile data traffic will double viewed on personal computers with large More importantly, most of the mobile
every year through 2013, reaching over screens and at broadband speeds. The internet traffic comes from smartphone
two exabytes per month by 2013 . launch of the iPhone changed everything users. According to comScore, in the
On the one hand mobile data usage is – moving the industry toward a unified UK nearly 80 percent of iPhone owners
being driven by our changing professional one web experience where the web expe- accessed news and other information
and social lifestyles: consumers expect rience on a mobile became tantamount via a browser, nearly four times the rate
faster, simple and omnipresent access to the to the PC. for all mobile phone users, and mobile
internet. On the other hand, the rise in usage Whether or not you bought an iPhone e-mail was used by 75 per cent of Brit-
is a direct result of the way in which mobile or one of its many clones, you understood ish iPhone owners, making it the most
operators, device manufacturers and all what was possible. Mobile operators un- popular type of mobile content con-
the other associated players in the industry derstood as well; one by one, their walled sumed on the device .
make the web available to us on the go. garden internet portals came down. Translation: operators are seeing a
Increasingly, we are seeing user- They quickly realised that they could not short term gain in data ARPU as a result
friendly payment options for mobile sustain their revenue growth – let alone of increased mobile internet usage, but
broadband with bundled-rate and pay-as- increase it - if they were to prevent access they have far less visibility into what
you-go billing models; faster and higher to off-net services. Their subscribers these high value subscribers are doing.
bandwidth networks; and continuous im- would just churn over to an operator that The question is: how can these opera-
provements in mobile device capabilities. allowed open internet access. tors monetise the increasing amount of
The regular churn of new device models off-net traffic? The answer lies in regain-
entering the consumer market is driving New Rules for a New Game ing that bird’s-eye view of subscribers’
the range and quality of key features and Of course the f lipside of embracing a online behavior so they can offer them
functionalities; particularly in the area more open approach to off-net content revenue-generating services which are
of user interface (touch-sensitive screens is the risk of losing control of subscrib- deemed relevant and useful to each
are the most obvious). ers. Traditional WAP1 or WAP2 feature individual user.
More traffic is good news for mobile phones go through an intermediary
operators and their bottom lines, but proxy gateway owned by the opera- The Role of Analytics
too much of a good thing can create tor for authentication, access control, Operational Analytics
significant challenges as operators transcoding (if applicable) and poten- Mobile analytics services provide
struggle to fortify their networks for the tially other value-added services. This operators with business intelligence
growing number of transactions. Failure model allows the operator to maintain and reporting that not only describes
to prepare for this growth can have a control of the user experience, and by what is happening in their network, but
dramatic effect. If operators are unable suitable manipulation of proxy server also provides insightful information as
to accurately predict future growth in logs, access a wealth of knowledge to why it is happening. The Holy Grail
for analytics will be its ability to form • Is the subscriber on contract or pay-as- will pay a premium to reach a specific
predictions of what is likely to happen you-go? audience to create new revenue streams.
in the near future, based on historical • Which products does the subscriber Using mobile analytics, an operator can
and circumstantial factors. One of the use while at home or at work? aggregate, anonymise and sell access to
major benefits of this type of service is consumer data to ecosystem partners as a
its capability to provide early identifica- Once the subscriber is profiled, mobile subscription service.
tion of mobile data trends and proac- analytics can enable up-selling of new The mobile operator continues to oc-
tively help operators avoid potential services and service bundling. For up- cupy the ideal position in relation to the
bottlenecks. selling, operators should analyse the consumer who is also a mobile internet
Operators can leverage analytics to subscriber’s product preferences, their user. From their vantage point the operator
assist with critical operational func- needs and spending threshold in relation uniquely collects the knowledge that is
tions such as network and capacity to their particular segment. key to monetising the mobile internet. The
planning. This helps operators identify more an operator can understand about
network congestion areas and predict For example: their subscribers, the more they will be able
trends where congestion is most likely • Is the new service pricing within the to determine, and then provide, services
to occur in the coming months. By subscriber’s spending limits? that are not only relevant, but ones which
proactive capacity planning, operators • Does the device provide a superior user subscribers might be willing to pay for.
can defer CAPEX/OPEX costs and use experience?
bandwidth management solutions to • Can the subscriber share the same The Time is Now
address capacity problems. services within his/her social network? With mobile internet usage continu-
• Does the network have sufficient ca- ing to rise unabated through 2010, it is
Marketing Analytics pacity to offer good quality of service? clear to us that the scale of the challenge
An in-network mobile analytics solution facing the mobile industry is immense,
can turn the raw data on an operator’s Successful service bundles are those but so is the opportunity. Leveraging
network into actionable intelligence to that are tailored to address the subscrib- the mobile operator’s network owner-
help improve traffic flow and monetise ers’ specific needs. Using mobile analyt- ship and direct relationship with the
traffic. Mobile analytics solutions can ics, operators can analyze usage patterns consumer can deliver a fast, safe and
provide aggregate data that allows op- of subscriber segments and then develop seamless user experience, while provid-
erators to understand what is occurring highly targeted services for those seg- ing operators with the monitoring tools
in their networks, both on-portal and ments, driving increased ARPU. to manage traffic and effectively market
off-portal, at a more granular level, so their services.
they can build a 360-degree view of the Ecosystem Analytics It is therefore paramount that operators
mobile subscriber. Mobile analytics offers real business embrace the situation head-on, invest in
Using the 360-degree-view of the value to competitive markets. It is critical capacity and begin to develop services
customer, operators can understand the to ensuring successful targeting by oper- that will protect these investments and
subscriber and the effectiveness of serv- ators wishing to promote their own serv- make the most of the coming opportuni-
ices by asking: ices. It also provides valuable information ties. Some are already doing this, but if
for advertisers. Besides increasing ARPU the industry and consumers are to really
• What are the subscriber’s interests? and improving customer satisfaction, benefit, more need to follow. n
• What is the subscriber’s demographic mobile analytics can turn operators into
profile? information brokers engaged in powerful Visit Openwave at Mobile World Congress
• Which products has the customer sub- partnerships with advertisers, content 2010, Hospitality Suite AV97, The Avenue,
scribed to and how are they being used? publishers, and Web 2.0 companies who Fira Exhibition Centre Montjuïc.
Going places
Eighteen months after its acquisiton of mapping and navigation attractive alternative to offerings like the iPhone, which
boasts native mapping using Google Maps, but does not
firm Navteq, Nokia aims to make Ovi Maps a contextual platform
allow for caching or offline usage. In this respect Ovi Maps
at the centre of a variety of mobile applications. provides a far greater range of data and services than
Google’s Maps Navigation offers, which is, for now, limited
to the US.
I
n mid-January Finnish handset vendor Nokia revealed Gavin Byrne, research analyst at Informa, notes: “Clearly,
what it’s been up to with location and mapping firm Nokia has one eye on developments in Mountain View, CA.
Navteq, which it bought in 2008 for $8.1bn. It turns Google’s announcement of Google Maps Navigation Beta
out that the world’s biggest handset vendor is shaking up for Android 2.0 in August 2009 was a shot across Nokia’s
the mobile space by making mapping and turn-by-turn bows. That danger became all the more imminent in late
navigation available for free to a potential 83 million users. November when Google announced that it had backported
At a London launch event hosted by Anssi Vanjoki, the application to Android 1.6. Suddenly it could become
executive vice president of Nokia, the company removed all available to a host of in-market devices, such as the G1,
costs associated with its Ovi Maps offering, for which it had Magic and Motorola Dext.”
previously charged up to €59.99 per year for a European Nokia’s proposal allows the user to sidestep heavy data
Maps 3 Drive licence. roaming charges by preloading maps before they visit a
Besides the price, the big attraction with the revamped county and just using GPS, which is free, rather than the
service is that the maps are available in both on- and offline data network to find their location when abroad.
mode. They can either be downloaded on the fly over While the Maps application is free, data charges will
cellular or wifi, or sideloaded in advance from the PC. Any apply to users downloading maps on the fly over the cellular
maps that are downloaded are also cached so they don’t network. For many this may be included in their data plan,
need to be downloaded again, and this goes for all the maps but prepay users may get hit by charges. Still, Nokia claims
available for 180 countries. The service also features car that the vector mapping technology used by its platform is
and pedestrian navigation features, such as turn-by-turn ten times more efficient than the bitmap-based offerings
voice guidance for 74 countries in 46 languages, and traffic from other providers. An innovative feature is the inclusion
information for over ten countries. of 3D landmarks on the maps, to better help the user with
Through a partnership with Facebook, Nokia has also orientation.
introduced a ‘share my location’ feature to use with the Vanjoki indicated that, in the long term, Nokia hopes to
social networking service. The offering will also include free gain greater revenues through the widespread adoption of
Lonely Planet and Michelin guides as standard. Ovi Maps as a contextual platform for mobile applications,
which will, of course, be sold through the Ovi store. Vanjoki
Nokia’s proposal allows the user to sidestep said that Nokia believes the map should become “the
heavy data roaming charges by preloading user interface to our life,” marking another step toward
positioning its mapping data and technologies as a key
maps before they visit a county and just platform at the centre of applications.
using GPS, which is free, rather than the data And when asked about the potential revenue loss from
making features such as turn by turn available for free,
network to find their location when abroad. Vanjoki said the intention was to make a little money from a
much bigger pool of users, rather than taking a lot of money
from a smaller base. He also hinted, however, that in the long
Already ten Nokia models are able to download the new term, the platform would be good for mobile advertising,
version of Ovi Maps as a free update; the N97 mini, 5800 suggesting another, much hyped, revenue stream.
XpressMusic, 5800 Navigation Edition, E52, E55, E72, 5230, In September of 2009, Navteq acquired location based
6710 Navigator, 6730 classic and X6. Going forward, all advertising firm Acuity Mobile for an undisclosed sum.
Symbian S60 devices released by Nokia will boast this same Navteq and Acuity are long-term partners with a jointly
functionality and the vendor will later make Maps available developed interactive advertising platform already deployed
on its Linux-based Maemo platform. Devices will come by the mapping firm. Navteq launched the LocationPoint
preloaded with the relevant regional maps out of the box. advertising platform early in 2009, using Acuity’s precise
Research firm Gartner estimates that, globally, 26 per location targeted advertising.
cent of mobile devices were GPS-enabled in 2009, with the “The acquisition of Acuity Mobile further strengthens
figure leaping to 76 per cent for North America. In Europe our eight plus years in location-based advertising and
the number is more moderate, at 30 per cent, while Asia interactive advertising,” said Chris Rothey, vice president
Pacific is a long way off the pace at 13 per cent. Still, Nokia’s of advertising, at Navteq at the time of the purchase.
move threatens to take a chunk out of the PND (portable “Our research indicates that the more finely we target
navigation device) market, and also sticks the boot into advertising, the higher value it brings to consumers and
any other paid for navigation offerings. It also makes an advertisers alike.” n
T
raditional handset vendors got no let-up from the either unlocked or on the T-Mobile network, is from the
sector’s upstarts in the opening days of 2010. Before online Google store. Interested parties cannot get the
Apple had introduced us to a niche within a niche handset from T-Mobile, which means that it cannot be
with its iPad as January drew to a close (see p48), internet sold as an upgrade to existing customers. Nevertheless,
heavyweight Google had thrown its hat into the ring with the operators seem to be on board. Google has promised
the launch of the Nexus One. This, the firm promised, partnerships with Verizon Wireless in the US and Vodafone
would be the first of many Google-branded handsets, the in Europe in the near future.
arrival of which had been mooted since the firm bought So why is Google entering the phone business so
Android in 2005. directly at all? Delaney believes that Google sees these
Until January, Google had seemed content to let devices as a means to an end. And that end is to build a
its handset manufacturing partners shoulder the large user base for Google’s mobile services; to expose
developmental burden, relying on competition between that user base to advertising; and to collect the data its
them to generate to drive the most innovation from user base generates. “In other words, Google wants to
the Android platform. There were at least 20 Android be everyone’s starting point when they use the mobile
handsets in the market at the close of 2009 and that internet,” Delaney said.
number is likely to more than double in 2010. Perhaps The reality, however, may turn out different to the
Google was disappointed with the progress its partners ambition. Google won’t be launching its own-brand
had made, though. Android devices into the vast and fast growing Chinese
market. Indeed, the web services firm is threatening to
Google sees these devices as a means to an pull its local search engine amid censorship concerns
end. And that end is to build a large user and allegations that Chinese hackers broke into Google’s
email services and gained access to the email accounts of
base for Google’s mobile services; to expose Chinese human rights activists.
that user base to advertising; and to collect Yet Android will find its way into the Chinese market
by another route. Resurgent US vendor Motorola will
the data its user base generates launch its recently unveiled MotoRoi Android-based device
in China via China Unicom and will also release OPhone
devices based on China Mobile’s own Android-based
The argument that pitches open source competition platform.
against a closed dictatorship will probably never be The home grown OPhone open source platform is really
satisfactorily answered. But given that Google’s play just another branch of the Android operating system. The
with Android is all about driving more people to Google’s OPhone SDK 1.5 is compatible with Android SDK 1.5, so
ever-expanding suite of internet based services and developers can use both OPhone APIs and Android APIs to
applications, it is perhaps not surprising that the firm develop OPhone applications.
should look to exert a little more control than it was To accompany the launch of the MotoRoi, Motorola
able to muster by simply lobbing a new OS into the recently opened the doors of its Android focused app store
development arena. in China. The Shop4Apps, or Zhi-Jian-Yuan, which means
Manufactured by HTC, the Nexus One features a “Place for Apps Wisdom” in Chinese, will allow users
3.7″ OLED display, five megapixel camera and a 1GHz to download apps and customise their Android-based
Qualcomm Snapdragon chipset. It runs on Android 2.1, handsets with new services including a search provider of
the newest version of Eclair, and boasts features like a their own choice. The search providers available are the
voice-enabled ‘keyboard’ allowing users to speak into government sanctioned local providers like Baidu, and are
any text field. It also comes with a host of popular Google likely exclude the likes of Google.
applications, including Gmail, Google Voice and Google Motorola said Shop4Apps will give developers a path
Maps Navigation. to promote their applications in the market through
IDC’s research director John Delaney described the MotoDev, Motorola’s global developer program, and
Nexus One as “the best Android phone to hit the market through other Android development ecosystems like
so far,” so perhaps the firm has achieved its goal in that OPhone. n
D
espite the proliferation of smartphones and efforts Meanwhile, the mobile web applications development
of promoting native development and runtime environment is an emerging alternative to native
platforms, web-based services are emerging as applications. This shift is best illustrated by the rush of
cost-effective challengers that could take application operators and handset vendors to provide their own
runtime to the web environment. Not only will this allow widget ecosystems which use web technologies to facilitate
the development of cheaper and advanced applications, mobile applications development and lower the overall
but it could also shift computing resources and their development cost. It could also enable mobile operators
management from the device to the cloud, which could in and vendors to tap into the wealth of the Internet and
turn lower the barriers for enabling advanced applications address their customers with contextual applications that
over non-smartphone terminals. are more relevant to them.
In recent years, the mobile industry has moved from The trend towards the adoption of the web as a
proprietary to open, allowing for continued improvements mobile applications development environment is likely to
in device hardware and more innovation at the application intensify thanks to both the emergence of mobile cloud
level through the creation of developer communities and computing and the low latency of the next-generation
application distribution mechanisms. This trend has attracted access networks, which include LTE, HSPA+ and WiMAX.
the majority of device vendors and operating system (OS) In addition, this trend will help to shift processing and
developers as well as the mobile operators, which are now storage resources to the cloud, which means advanced
eager to offer their own branded app store and subsequently applications could be accessed by more resource-
an immersive user experience and advanced mobile constrained devices. This could in turn widen the
applications to their customers. As a result, there has been addressable market for the cloud applications beyond the
a strong increase in smartphone OS handset shipments, smartphone market.
estimated by Informa Telecoms & Media at 216.3 million units By increasing the reliance of end users on the web and
in 2009, up 34 per cent on the previous year. By 2014, sales of cloud applications, new business models will emerge and
smartphones will reach 572.5 million units, representing 40 revenues will be diversified from multiple sources that
per cent of total handset sales. include advertising, network API charges to third-party
service providers and the creation of premium services for
the enterprise market. In addition, the migration to a web
development environment could increase traffic around
By increasing the reliance of end users on the hosted services such as email, VoIP, online office, calendar,
web and cloud applications, new business online gaming and social networking.
Several device vendors have been pre-installing key
models will emerge and revenues will be widgets in their devices but the trend now is to reorient
diversified from multiple sources their software platform strategies towards the creation
of widget ecosystems for the development, distribution,
lifecycle management, discoverability and monetization of
widgets and web applications in general. These applications
This trend is actually encouraging developers to create are generally easy to create, fast to distribute and serve a
applications that are targeted at different platforms and plethora of niche markets on the Internet.
native runtime environments. There are many advantages The aim of major operators is to move away from
in developing mobile applications natively, including better pipe services based on flat rates towards the creation
integration with the device functionality, high-performance, of content-based service plans that will enable them to
always-available capabilities, and access to greater support address different consumer groups with relevant real-time
from device vendors through the availability of advanced contextual applications and services.
tools and developer programs. In this context, vendors of mobile widget solutions
However, there are also many challenges facing native could facilitate the work of operators by enabling them to
application developers, which include: code complexity, bridge the gap between the web and mobile applications
which could affect the cost of the application development development. These vendors already propose a suite of
and time to market; application portability across a wide applications that could include a widget player, idle screen
range of devices to achieve economies of scale; and replacement, ODP and a white-label application store.
restricted application distribution to operators and OEMs’ These products could be deployed either individually or as
channels. Moreover, in the case of Apple, application part of an end-to-end widget development, distribution,
approval has been a contested topic that has alienated presentation and monetization ecosystem. n
MCI interview
T
he O2 brand that was born
when UK incumbent BT spun
out its cellular arm almost eight
years ago remains visible within its
markets of operation. But behind the
bubbles the carrier is now Telefónica
to the marrow, says Matthew Key,
chief executive of Telefónica Europe,
the stable that comprises the O2 op-
erations in the UK, Germany, Ireland,
Czech Republic and Slovakia.
O2 has now been part of Telefónica
for as long—four years—as it was
independent of BT before the Spanish
player snapped it up. These last four
years seem to have passed quicker
than the previous four, a perception
that exists internally as well as exter-
nally, Key says. Today, he adds, staff
at offices across the five markets for
which he is responsible, are more
likely to talk about being part of
Telefónica than they are about being
bought by the firm.
And they certainly are part of some- Matthew Key, pictured in the seats at the O2 in London
thing bigger. Telefonica is the fourth
largest carrier in the world by pro-
portionate subscriptions, with 181.9 amount from Telefónica in terms of offering useful guidance for the rest
million subscribers across a range of their disciplines, their financial driv- of the portfolio.
markets in Q309, according to Informa ing, their purchasing power, their Things are a little more complicated
Telecoms & Media’s World Cellular scale. But it’s really been a two-way in Ireland and the Czech Republic
Investors service. The firm’s revenue process and they’ve taken things on (through which Telefónica entered
powerhouse is Latin America, where from us; the level of focus on the cus- Slovakia, where it had a little over half
it has operations in 13 markets, most tomer across the whole organisation a million subscribers at the end of last
of which are wholly owned. is much higher now.” year). Here, says Key, the aim for the
Key’s markets totalled 43 million What the Telefónica financial mus- carrier is to dig its heels in.
proportionate customers in Q309 ac- cle will not be doing, however, is fund- “In Ireland we’ll just continue to
cording to Informa (Telefónica owns ing further expansion of the European operate as best we can,” he says. “It’s
69.4 per cent of the Czech and Slovak footprint. The firm’s watchword for a very difficult market; GDP is still
operations) and represent 26 per growth in Europe is ‘organic’ and struggling and our view is that Ireland
cent of the group’s overall customer Germany—Europe’s largest market will probably recover 12 months after
base in January 2010, when Key is where O2 sits fourth and last (15.4 a lot of the other Northern European
speaking to MCI. His unit’s revenue million subscribers at Q309)—is top economies. In the Czech Reuplic we’ve
contribution is slightly higher than of the list for development. got a fantastic product range but a
that, he says, while his share of OI- Key says maintaining the perform- very difficult economy. The economy
BDA is slightly lower. Spain, which ance of the flagship UK operation (first has gone minus five or minus six and,
operates as a separate division within place, with 21.9 million subscribers at as the largest network, we’ve been
Telefónica, is the leading market by Q309) while building up the German disproportionately impacted by the
this metric. operation, are his priorities. The UK drop in inbound roaming.
Four years into life as part of Tel- is of particular importance, he says, “It’s made even more difficult for
efónica, Key says the relationship has because it is the market in which Tel- us because we have a very large share
borne fruit: “We’ve taken on a huge efónica Europe’s trends emerge first, of the corporate and government »
Opencode
Network Innovation Workgroup
Email: info@opencode.com
Website: www.opencode.com
Modern USSD changing the telecom sioned or billed as designed by the operator. At Opencode Systems we have worked
cloud to a services cloud From the core network to Internet, several years on the new USSD Client lead
Over the last 10 years the USSD services modern USSD services reach is large and by our global USSD Center footprint and
market has been transformed from a niche rapidly transforming the telecom cloud experience. Today new generation stand
that catered mostly to the needs of prepaid into a services cloud. alone USSD Client is available offering
services into a mainstream service adopt- The transformation from the telecom smart phones new USSD ergonomics and
ed by the mobile mass market, operators cloud to services cloud is clearly valued by features. This new USSD Client, called U-
and service providers. Modern interactive users. Modern USSD services operators Browser, is a network agnostic, on-device
and real-time USSD services, together see their stature quickly changing from smart USSD browser that brings with it
with excellent compatibility with all mo- mobile line providers to innovation super- new USSD user experience and features
bile terminals (from the oldest handsets to market with always available new and such as USSD session encryption, USSD
the newest smart phones) have all played fresh network services and applications. ringing control, automatic USSD naviga-
a role in enabling this transformation. tion, rich USSD display, USSD session
But the biggest contributor to progress Standardization of new USSD history, and many others.
has been new USSD network equipment, client for smartphones The largest handset manufacturers
called USSD Center (USSDC), which is USSD applications have been longtime of have shown interest in U-Browser and
totally open and able to integrate instantly interest for different industries. End-to- while USSD Client standardization is
with any telecommunication and infor- end encryption of USSD communications progressing, mobile operators demon-
mation system and Internet. for example, continues to be a fascinating strate strong demand for deploying mass
Today USSD Centers offer revolution- topic for financial as well as other institu- and vertical U-Browser assisted USSD
ary network service creation and power- tions and enterprises. services.
fully engineered application servers and Today the device landscape is also Given the growing interest for the
gateways, making new services available rapidly changing, and although smart new USSD client, Opencode Systems is
to millions of users in a few hours or days phone competition looks quite open actively working on U-Browser improve-
where before long months and years were and the longevity of different players is ments and commercial deployments.
needed for adoption. This ease of design unpredictable, smart phones are the way The new USSD Client is available via
and implementation has stimulated new of the future. www.u-browser.com and www.ussdclient.com.
application ideas and driven creativity With rich media user interfaces, smart
back to operators and services providers. phones bring new layers of ergonomic About Opencode Systems
Today the pace for introducing killer complexity when it comes to user experi- Opencode Systems (www.opencode.com)
USSD network services is faster and faster. ence of USSD mobile services. is a telecommunications solution provider,
These include operators’ commercializa- The goals are two-fold: address- dedicated to open systems for the mo-
tion of 4 and 5-digit USSD short codes and ing the growing USSD market for new bile network. Opencode makes network
their operation by third parties (such as services and features, and ensuring the technology that is invisible to consumers
service providers, banks and enterprises), user-friendliness of USSD experience on but underlies many of the mobile services
Roaming USSD Portals, Pre-call and Post- smart-phones and other mobile devices. they use. Opencode core network centered
call USSD Flashes, USSD Sponsoring, USSD All mobile devices, from the simplest solutions are deployed by major operators
Campaigning and Voting, USSD Call-Fil- handset to the most sophisticated smart worldwide. Opencode USSD Center and
tering and Presence, Location based USSD phone, provide the same standardized Multi-Services Open SCP are the world’s #1
Services, USSD Gaming and Betting, User USSD Client capabilities from end of 90-s selling open mobile network platforms. n
Managed USSD Applications and Content, GSM specifications. In a decade of grow-
a few to name popular new USSD services. ing popularity, the fast-evolving USSD At the Mobile World Congress 2010,
All of these USSD services are chargeable ecosystem has shown a multitude of new Opencode is exhibiting at Hall 2 Level 1
on-the-fly, subscription-based, commis- USSD Client requirements. Stand B51.
MCI interview
segment. There’s an interim Govern- In Germany Key may no longer In Germany, he says, the two firms
ment in the Czech Republic that will be reliant on national roaming with are “on track” but he reveals that in
probably be in place until next May. T-Mobile but, across the portfolio, markets where there is disparity be-
They’re not placing any forward or- Telefónica Europe has acknowledged tween the sizes of the two networks
ders, or creating consumer confidence,” the need for joint efforts. In March last (Telefónica is much smaller in Ger-
he says. Key stresses, though, that year the firm struck a portfolio-wide, many and much larger in Spain) the
Telefónica remains committed to the passive network sharing deal with exercise is “more difficult”.
Czech Republic, where it leads the Vodafone that sees the two companies If symmetry is important, it is at
market in mobile, fixed and DSL. now sharing what Key describes as least more readily available in the UK,
The economic downturn has forced “steel and concrete”; sites, masts and where the network share deal is most
international operators to renew antennas, and the like. advanced, Key says. His team has 1,700
focus on a smaller number of core Key says that, since the deal was new sites planned for the UK and 80
markets, Key says, quoting Vodafone announced, he has learned two les- per cent of these will be shared with
CEO Vittorio Colao’s assertion last sons above all: “First you have to be Vodafone. The two carriers have not
year that he has five essential opera- strategically aligned at the top and yet declared the number of shared
tions in Europe and question marks as corporations and, second, deriv- sites that have gone live and Key says
over all the rest. “The economic is- ing benefits from this sort of project that it is still too early to claim that
sues we’ve all had have accelerated takes quite a while.” Key is a former there has been a step-change in the
natural patterns,” he says. “The weak Vodafone employee, although he didn’t customer experience across the board
players have become weaker, so the work with the firm’s European CEO as a result of the programme.
thinking they’re doing about their Michel Combes, with whom he struck Key is one of the less gung-ho
model has been accelerated. So you the network share deal last year. carrier CEOs when it comes to the
get things like the T-Mobile/Orange And, while they didn’t cross paths at issue of network sharing. While some
merger in the UK as businesses Vodafone, Key knew Vodafone’s group people have suggested that a single
question their future in different CTO Steve Pusey from Pusey’s days at network is all a market needs, with
markets.” Canadian vendor Nortel. operators competing on service and
In Germany, O2 is clearly the weaker While this smoothed the path of the offering, Key still believes the network
player. O2 had 15 per cent of the deal, it hasn’t been without its issues. is an essential differentiator—and the
market at end Q309, with less than Again, says Key, Ireland has proven a kind of passive share that he has with
half the subscribers of market leader problem. “In Ireland we’ve been a bit Vodafone is an economic necessity
T-Mobile and close second Vodafone. slow to get off the mark,” he concedes, rather than an admission that the
But with the market one of three pub- “which is disappointing. It’s been industry has moved beyond network
licly earmarked for major investment about corporate focus; we’ve needed competition, he says.
by Telefónica group (the other two are to get both companies focused on that “In this industry we’ve seen a ten per
Mexico and Brazil) Key is expecting being one of the priorities.” cent per annum price reduction to »
this to change.
Until the end of last year, O2’s Ger- Telefónica Europe Subscribers by market
man network was still roaming onto
T-Mobile to fill gaps in its national Dec 2007 Market share Sept 2009 Market share
coverage but this is no longer neces-
Czech Republic 5,242,000 39.7% 5,103,200 37.3%
sary. Network investment has taken
Ireland 1,646,000 32.8% 1,717,500 32.5%
the firm to comparable levels to the
first and second players in Germany, Germany 12,472,000 13.5% 15,400,300 15%
according to independent performance Slovak Republic 274,000 5% 463,000 8.2%
ratings, Key says, leaving E-Plus off UK 19,295,600 27% 21,980,800 28.6%
the pace. Telefónica has installed a
new German CEO, and is in the proc-
ess of acquiring fixed player Hansenet.
Overtaking E-Plus should be achiev-
able for Key’s team this year, but mak-
ing ground on Vodafone and T-Mobile Source: Informa Telecoms & Media World Cellular
Information Service www.wcisplus.com
is a far stiffer challenge.
L
ike most things in life, commercial op- using the network operator scenarios. All three network scenarios, these versatile platforms
portunities and technical advancement are solutions execute on a common platform, com- enable users to test and analyse device perform-
not easily won. The LTE generation will prising the complete 3GPP family of standards ance without the travel or cost of field trials.
be no exception. LTE standards are a significant from GSM, GPRS, EDGE to WCDMA, HSPA, Anite’s market-leading Network Simulator tool
technical challenge for device manufacturers, HSPA+ and now the LTE standards. This ap- has been adopted by major global Network
platform/protocol stack vendors and network proach gives the unrivalled benefits of system Operators as an integral part of their handset
operators who are once again relying on leading re-use and a scalable and upgradable path for acceptance programs. “SAS” now supports the
test-vendor, Anite, to deliver the best-in-class existing and new customers who need complete LTE standard and users can benefit from the
wireless testing tools to help smooth the way to LTE and legacy standard test solutions. easy scripting environment, which requires no
a successful LTE offering and accelerate time- Anite’s Development Toolset solution cov- programming knowledge, and an interactive
to-market of mobile devices. ers a broad range of development and design real-time testing GUI.
LTE is an evolution in the 3GPP standards verification tasks, recognising the parallel way An essential requirement for testing LTE
and is a major step towards achieving the goals in which system level components for handsets devices will be a complete device automa-
of 4G. The air-interface technology is different are developed. From pre-silicon and host-based tion and campaign management facility. At
to 3G and uses Orthogonal Frequency Division protocol development tools - which help you to a simplistic level, and assuming that adding
Multiple Access (OFDMA) modulation, which test designs before the final chipset hardware another radio technology to a wireless device
significantly increases the spectral efficiency is ready - to advanced development tools to to the legacy radio’s will increase testing by at
(also referred to as bit per Hertz), and includes aid in design-verification testing. Development least one-third, device manufacturers need to
a scalable bandwidth allocation. Frequency Toolset is positioned at the leading edge of the find efficient testing processes to accommo-
diverse technologies such as OFDMA are well LTE development curve and already supports date this test increase. All Anite applications
suited for imperfect radio conditions, but have LTE FDD/TDD and multi-RAT features in both (Development, Conformance, Interoperabil-
a high loading on the signal processing lower target and protocol host configurations. The ity) support full automation and use common
layer controls. For many operators the LTE LTE Toolset also includes ready-to-use C++ tools such as “Terminal Automation Gateway”
spectrum allocation will have to fit closely samples from layers 1 to 3 and the Non-Access which can not only automate the device but
to other radio service bands including digital Stratum (NAS) layer. Development Toolset also other third party tools such as SIM card
TV and MediaFlo™. The 3GPP core network is complemented by Anite’s leading protocol emulators or web-cams that might be required
has gone through a major upgrade for LTE, analysis tools, which are also common to other in testing.
employing a simplified all-IP architecture that Anite applications. With its unique LTE and 3GPP wireless
can support the IP-Multimedia Subsystem Conformance Toolset tests the individual product portfolio, and experience in protocol
protocols. The challenge for the LTE device protocol stack layers in a wireless device to and interoperability testing, Anite will continue
manufacturer is immense: adopting the new ensure compliance with the latest industry to bring considerable advantages to its custom-
radio and protocols defined by 3GPP as well standards. Anite’s conformance test solutions ers and maintain its leadership in this highly
as the requirement for devices to support the incorporate comprehensive campaign manage- competitive field. n
legacy GSM and WCDMA standards which ment and analysis tools to assess the quality of
operate across many radio bands. It’s clear to devices under evaluation, as well as extensive To learn more on any of our market leading
see that manufacturers need help. automation and a remote control interface to solutions, please visit the Anite stand at
Anite commands a leading position in LTE help maximise test throughput. In the autumn Mobile World Congress (1H21) or contact us:
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platform flexibility, system scalability and nounced an important milestone for the 3GPP Email: wireless@anite.com
the easiest to use Graphical User Interfaces LTE standards development with the successful Web: www.anite.com/wireless
(GUI’s). This has enabled us to assist device verification of the industry’s first LTE protocol
manufacturers and network operators for nearly conformance test cases.
two decades. The Anite portfolio consists of Interoperability testing and network simula-
three product lines that address the full wireless tion has been offered by Anite under the brand
device product development lifecycle. “Devel- name “SAS”. “SAS” makes it possible to carry
opment Toolset”, “Conformance Toolset” and out detailed, repeatable interoperability tests in
“SAS” cover early functional development and the laboratory thus reducing the variability in
integration testing through to formal conform- dynamic or immature networks like LTE. By
ance approvals and interoperability testing creating, or importing and modifying ‘real-life’
MCI interview
the consumer. Not many industries can says, exposed O2 to criticism. “We The likes of Apple and Google (through
go through that and not take a good, had problems in London. Did we have Android) have altered the landscape of
hard look at their cost base. But are we them outside London? Not such that the handset space irreversibly and those
naturally cautious of giving away the you would notice.” players that were once at the vanguard
crown jewels of customer experience? If the exclusivity of the iPhone find themselves struggling to innovate.
Yes we are,” he says. proved a double-edged sword for O2 in Their greatest challenge, says Key, is to
Key argues that, while the first the UK—drawing a multitude of cus- build the kind of integrated ecosystem
wave of network competition—based tomers but generating serious network that has given the iPhone such a power-
on coverage—has passed in many headaches—then it is at least no longer ful hold over consumers.
markets, a new phase, based on ca- an issue. Apple ended its exclusivity But this challenge is not limited to
pacity and performance, has begun. deals during 2009 and all eyes are on the vendors; carriers are also under
For him, this makes the network an the continued performance of those few pressure to create their own space in
asset that must be owned, controlled, anointed networks that were given first this new value chain, with some believ-
and protected. “We’re now going into option on the iconic device. ing that nurturing their own ecosystem
the next stage of the industry where Key is a little cagey on the topic, is the best way to retain the customer
network will again start to be a dif- refusing to admit to real concern over relationship. And in much the same
ferentiator, because of throughput. the loss of exclusivity. “Would I have way as he views the network as the
So it’s really important to be able to liked to keep exclusivity? Yes,” he says. “crown jewels of customer experience”,
control your own roadmap of how “Was it a key differentiator for the two Key is in no mood to relax his grip on
fast you’re investing, and where. So years we had it? Yes. Have we seen a the customer relationship.
if you are going to share, you have to significant downturn in our volumes “It is part of our raison d’être to
be partnering with somebody who is since Orange took it on? No.” maintain a customer relationship and
very like-minded on investment.” It is an open secret in the industry that customer advocacy is at the heart
Performance has been a prickly is- that carriers have had to kick back of how we operate,” he says. “How the
sue for O2 in the UK, particularly in a percentage of iPhone related data industry plays out over the next two
London, where Key says the network revenues to the device vendor, an issue or three years will be fascinating be-
share deal will be less in evidence. on which Key offers neither comment cause if you can create value that the
The firm faced a good deal of criti- nor denial. But he says it has not customer perceives, they will maintain
cism from angry customers last year affected his relationship with other their relationship with you.
as network performance in the UK handset vendors. Exclusivity deals “But we’ve always said that we’ll be
capital took a dive. UK CEO Ronan remain important to O2, evidenced by very flexible with our business model.
Dunne even made an apology to af- the high profile deal with resurgent Where we need to partner with the
fected users. vendor Palm for its Pre device. best, we’ll do so. Where we can do it
The finger of blame has been pointed “If a handset is going to be a dif- ourselves, well do so. You shouldn’t be
at the carrier’s much trumpeted exclu- ferentiator in the market, exclusives dogmatic about drawing a line between
sivity deal for Apple’s iPhone, which are important. But we think it has to different types of player,” he says.
has seen data usage rocket while the work for both partners,” he says. “So Telefónica has no intention of get-
network has at times failed to keep with the iPhone and the Pre we could ting involved in hardware platforms,
pace. “Did the explosion in data usage give real clarity and focus around he says, but the software and ap-
take us by surprise? Yes it did,” he says. the product. We haven’t declared any plication space is something that he
“Any company that has a through- numbers on the Pre yet but, are we describes as a “natural place for us
put increase that doubles every three happy with the sales? Yes—customer to be looking at; all the operators are
months is going to struggle to manage,” satisfaction is very high.” The Pre is looking at it.” Just because all the
he adds by way of mitigation. going to the kind of users who were operators are looking at it doesn’t
The boom in traffic wasn’t the the first to adopt the iPhone, he says, make it the right thing to be looking
only learning curve, with the way and he describes the phone as having at, of course, and Key poses the most
that the devices interact with the “fantastic capabilities”. He doesn’t crucial question of all when he says:
network proving to be “something believe, however, that the Pre will be “What we need to figure out is how we
that we’d never seen before, ”he says. the iPhone killer whose arrival some turn it into a success.”
The clustering of iPhone users in within the industry seem intent on In searching for the answer to this
London, where the press and analysts heralding. “Do I think the Pre will be conundrum, of course, Matthew Key
are also found in greatest density, he as big as the iPhone? No,” he says. is not alone. n
Overview
Deployment of LTE (Long Term Evolu-
tion) is now underway, as pioneer operators
begin the journey into the fourth genera-
tion. But there are clear challenges, even at
this early stage. These include:
61 62 63 64 65 66 67 68 69
790-798 798-806 806-814 814-822 822-830 830-838 838-846 846-854 854-862
Downlink Duplex gap Uplink
• T-Mobile had an early deployment plan • Urban: 10MHz DD band for penetration still challenges that the industry must face.
for LTE at the beginning of 2010. But • CBD: 20MH 2.6GHz/2.1GHz/1800MHz These include:
this has been set back because of the im- for performance
maturity of the technology and because • How to deal with the millions of wire-
the carrier wants to wait for the DD band The sufficient bandwidth of higher less microphones in theatres
release frequencies could be an important capacity • Interference from the adjacent DVB
• e-plus has already tested DD band HSPA and performance supplement to the DD channel
and learned from it. Now the operator is band. Operators will get the benefits from • availability of terminal chipsets
preparing its DD LTE trial the DD LTE because:
ZTE Corporation committed itself to DD
The 790~862MHz DD band has re- • Base station numbers will be greatly de- LTE at the beginning of 2009. The first DD
versed duplex direction with a 12MHz gap. creased – 10.10Km range with DD and LTE showcase will be ready in the October
It belongs to the 61~69 blocks in the band 1.61Km range with 2.6GHz according of this year.
plan. Compared to the other bands, DD to the UL link budget with 3GPP HATA Not only do we have strengths on the
LTE has a number of advantages: rural model system side, ZTE also works extremely
• The operation and maintenance cost will closely with many terminal chipset manu-
• DD band has a very good coverage be greatly reduced due to less complexity facturers. The first commercial DD LTE
capabilities, and a single site is expected dongle will be ready in May 2010.
to have a range of at least 8km in rural Economies affected by the global finan- With a US$25bn credit line available
areas. In dense urban deployments, it cial crisis will not make a speedy recovery. from state banks for customer finance and
also offers good penetration into the With the constraints that will be placed R&D investment, ZTE has a very attractive
buildings. on operator CAPEX, LTE in the DD band offer to all operators, both technically and
• DD LTE is only for the rural data usage comes at the perfect time. commercially.
initially in Germany, while the CS serv- Because of the Digital Dividend, LTE
ice could not be considered. European Countries’ Consideration can be a reality sooner rather than later. It
In the UK, blocks 61, 62 and 69 are oc- will not simply be a showcase; it will really
• Bigger size CPE terminals are allowed in
cupied. It is planned that the occupants will make the profit for the operators. n
the initial stage.
be switched to the other channels to enable
alignment with other European countries.
The German deployment model, which
Meanwhile the French government is also
requires that LTE is deployed initially in
involved in cleaning up its spectrum, with
the DD band could serve as an example to
availability of the DD band scheduled for
all the operators.
2012.
When the DD band LTE comes next
year, the reasonable LTE application sce-
narios in the future could be:
Challenges
The DD band has much to recommend it
over the other bands. Nonetheless there are
• Rural: 10MHz DD band for coverage
MCI interview
I
f you want to take the temperature plications; the Google community, the
of the sector, there are worse places Nokia community, the Microsoft and
to do it than the Mobile World Blackberry communities. It’s about
Congress; the industry’s largest get how we do something that brings all
together. Financially, attendance and of this stuff together and creates that
exhibitor numbers offer a decent ‘GSM effect’ we had with SMS; a com-
indicator of confidence and, strategi- mon standard that allows applications
cally, the headline discussion topics to be deployed globally.”
generally reflect the issues that are With SMS interoperability, though,
exercising the carrier community most the companies involved, while in
vigorously.The headline speakers from some cases competitors, shared an
outside the immediate cellular world, identity. SMS meant the same thing
meanwhile, offer an insight into the to each of them, and they all stood
kinds of people and organisations to benefit from enabling intercon-
with whom show organiser the GSMA nection. It’s not self evident that the
wants to be seen to be cultivating various players in today’s complex
relationships. mobile value chain recognise par-
For the past two years the organisa- ity between the links, or view their
tion has gone for Hollywood heavy- markets as limited by an absence of
weights with its top speaker slots, centralised co-operation.
hosting the actors Robert Redford in As O’Hara points out, though, the
2008 and Kevin Spacey in 2009. This carriers are motivated to take the lead
desire to rub shoulders with the glit- in trying to create this co-operation
terati reflected a sense that had been Michael O'Hara, chief marketing officer, GSMA because, as it stands, it is their role
growing within the carrier community that most requires definition. “This is
that it needed to position itself away the key issue for carriers,” he says. “It’s
from the engineering-led, utility heritage them collaborating. “It’s an interesting very clear that they have the traffic but
of the communications industry and year because we’re bringing a bunch they have to find a way to play in that
towards the 21st century glamour of the of these leaders from outside of our value chain. So I would point to a lot of
content and media industry. But if the industry and really getting them en- work being done on standards around
past two years have been about making gaged,” says GSMA chief marketing applications and how operators can
toothsome new friends, 2010 could be officer Michael O’Hara. “I think it’s expose their assets into the applica-
interpreted as an exercise in the Associa- going to be really positive.” tion world to get a share of the revenue
tion keeping its enemies closer. The GSMA has its roots in bringing play as a very key initiative.”
The talk may all be of partnership competing organisations together in Being so determined to keep the
but it seems clear that the greatest the name of a common goal. It’s early carrier front and centre in the
threat to the cellular community’s labours involved the creation of roam- application-led world, O’Hara is
relationship with the customer comes ing agreements between international more downbeat about the model,
from the large internet and software carriers and it moved onto push for proposed by some analysts, that sees
platform players whose logos are SMS interconnection so that sub- carriers retreating to a transport-
increasingly prominent on the mobile scribers on rival carriers’ networks based model, concentrating more on
phones once branded exclusively by could send one another text messages. enabling than interfacing directly
the carriers themselves. So it’s no sur- MMS interconnection was a similar with the end user. “I have heard that
prise that this year’s keynote speaker crusade a little further down the line. argument, but I think that challenges
is Google CEO Eric Schmidt. Clearly the body feels that it is ideally the potential of the operator to play
Adobe, BBC Future Media, Microsoft positioned to stimulate inter-working a full part in the revenue chain.
and Spotify are also represented at between potential competitors in this Having said that, if someone has a
a high level, along with the biggest new world. business where they think they can
names from within the industry who “It’s all about how we actually act be more of a pipe then who are we
are the more traditional speakers. The as the bridge to unite some of these to query it? I’m sure in some of the
central thrust of this year’s show is islands that are developing. They’re lower ARPU markets you’ll definitely
to get these people together and get vertically integrated islands of ap- see that,” he says. »
O
ne year later, backhaul is at the front a few notches, but involved investment in ad- growing from around 25 Mb/s today to 300 Mb/s
line in the battle to upgrade networks to ditional leased circuits (with the resulting term in 3 years [3]. Ideally this capacity would be pro-
support demand for high speed mobile commitments) or swapping out transmission vided by fibre which supports almost unlimited
broadband data. Furthermore, it will pave the equipment, at a time of extremely tight budgets bandwidth growth, but this is costly in terms of
way to the eventual introduction of LTE. in a declining economic environment. leasing and installation. In addition, copper tech-
For the first time, mobile phone subscrib- nologies, such as DSL and copper bonding do not
ers are starting to see the practical impact of The mobile data explosion promise the capacity scalability needed to support
the huge growth in demand for data on legacy Operators at the forefront of this trend, such as the backhaul evolution for LTE.
mobile backhaul networks: poor and unreliable AT&T in the US, struggled with negative media A practical approach is needed for an
coverage; dropped calls; slow downloads. As coverage and reports that network infrastructure alternative method of connecting base stations
a result everyone wants to talk about backhaul, was unable to keep up with the demand from traf- where fibre cannot economically reach. Hybrid
including mainstream media. fic growth. For AT&T this growth had exceeded transport networks utilise available fibre where
6,000% in little over 3 years[1]. In the UK, O2 possible, along with a high speed microwave
Backhaul never before an issue was not far behind having experienced an 18- radio, to provide the most cost-efficient solution.
Until recently, backhaul was invisible. Second fold increase in data demand in less than twelve For over 20 years microwave radio has been
and early third generation (2G and 3G) mobile months thanks to the introduction of the iPhone. the solution of choice for operators rapidly rolling
networks had plenty of backhaul bandwidth to Operators were forced to provide a degraded out cost-effective backhaul infrastructure, with
cope with the growth in regular voice calls, SMS service and apologise to their customers [2]. over 50% of the world’s mobile base stations now
and low speed data downloads. Backhaul networks Ordinarily success of this nature would be connected using microwave. Today, microwave is
were built using a variety of media, such as copper welcomed by operators, but over-whelming selected for its speed of deployment and ability to
leased lines, microwave links and fibre. What these demand turned the opportunity into a PR meet new costs and capacity challenges
all had in common was their use of TDM (Time nightmare, and significant competitive threat. In
Division Multiplexing) circuit-switched transport the US, Verizon capitalised on AT&T’s woes by Microwave for 4G backhaul
technology: both 2G voice and 3G ATM data were launching their controversial ‘There’s a map for Microwave radio provides an ideal solution for
transported over multiple E1/DS1 circuits in the that’ campaign, causing an advertising war over 4G/LTE backhaul, combining support for very
access portion of the backhaul network, and over who had the better 3G network. Verizon had two high link capacities up to 2Gb/s with reduced
SDH/SONET in the metro/core. Some operators advantages in this battle – no iPhone to support costs and incredible flexibility. Microwave also
deployed optimisation using timeslot grooming to (yet), and a backhaul network that was less reli- supports ultra low latency to exceed the stringent
reduce backhaul requirements, but in many net- ant on ‘sipping straw’ leased copper circuits. requirements of LTE, with hybrid transport of
works each base station had one or often multiple TDM traffic alongside new packet-based data to
dedicated E1/DS1 circuits, from the network edge Getting ready for LTE enable the smooth, low cost and low risk migra-
to the BSC/MSC in the core. In addition to rapidly upgrading backhaul networks tion of today’s mobile backhaul networks to LTE.
While traffic patterns were relatively predictable to handle the new demand, operators now need As new, faster mobile broadband services and
and growth contained, this TDM transport model to prepare their networks for the next genera- richer content hit the market, networks based
could handle the data demand. Even with the tion of mobile download speeds supported by on modern microwave systems will be well
introduction of HSPA and the USB dongle, traffic LTE. Industry-wide there is an increased sense of equipped to scale and hence meet demand.
was manageable since adoption of these new urgency to switch backhaul networks to all-packet
or all-IP transport. This transition will cut the cost To find out more about how Aviat Networks is
high bandwidth data devices was limited to small enabling the 4G/LTE future, visit us at Mobile
per megabyte of transport by taking advantage of
numbers of business users. When the Smartphone World Congress 2010 in Barcelona, 15-18 February,
cost-effective Ethernet switches and making more
arrived, everything changed. Old traffic models Booth #2F27, or go to www.aviatnetworks.com.
efficient use of available backhaul capacity.
instantly became redundant with handsets, such as References:
However, operators must continue to support
the iPhone, offering millions of consumers high 1. Ralph de la Vega, AT&T, New York December 9, 2009.
high quality voice services to minimise subscriber
bandwidth data services and data-rich applications 2. ‘O2 says sorry for snags in London network’, By Andrew
churn and maintain revenues. A hybrid approach Parker, Telecoms Editor, FT.com, December 29 2009.
that hadn’t previously been available.
will enable operators to leverage existing TDM 3. Morgan Stanley, The Mobile Internet Report, December 15, 2009.
Operators who led the way in introducing
backhaul investment, while gracefully introduc-
Smartphones relied on backhaul networks built
ing new network packet transport architectures
largely upon either copper leased lines in the US
that can then be scaled as data demand increases.
or a variety of contemporary and aging micro-
wave systems in Europe. There was also fibre What does a fourth generation backhaul
in the core of some networks. In the case of the network look like?
leased circuits and older microwave gear, adding Backhaul capacity needs for a high-demand
capacity is not as simple as turning the dial up urban cellsite is expected to reach 129% CAGR,
MCI interview
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Tight squeeze
The surge in mobile data and broadband traffic in advanced markets over the
last couple of years is something of a double-edged sword. While it has finally
validated carriers’ long-held strategic thinking, it has exposed gaps in their network
performance.
By Mike Hibberd
T
he world of popular storytelling is full Compuware recently conducted a survey of “It’s not so much a spectral efficiency issue,”
of tales that caution the reader to be senior executives at 22 mobile broadband he says, “it’s more about the cost per megabyte
careful what they wish for. After all, operators from around the world in a bid to increasing. The cost to deliver a megabyte to
they might just get it. Since the 3G auctions gauge their visibility of customer experience somebody is no longer defined just by how
began a decade ago amid a cycle of hype and satisfaction. The results, according to many megabytes you’re sending. It’s no longer
that, ten years on, looks like a kind of mass Jerry Witcowicz, product manager for Com- a common number, it’s now influenced by the
hysteria, the wish of mobile operators in the puware’s Vantage for Mobile solution, make mix of your traffic.”
most advanced markets has been for sufficient for a sobering read. It’s almost a tradition in this industry to
uptake of mobile data services to justify the “All of the executives we interviewed said look to the dawn of the next major technologi-
enthusiasm with which they snapped up 3G that experiencing a poor performance in data cal era as the answer to everyone’s problems.
licences. service is the top reason for their customers But in these straitened times many operators
It’s been a long time coming and, now that to churn,” Witcowicz says. One interviewee have conceded that LTE, the champion of the
it’s here, it is proving to be something of a revealed that, “when we introduced the iPhone fourth generation, may be slower to arrive
mixed blessing. While the arrival of genuine our traffic spiked by 30 per cent and the than originally anticipated. So what can
mobile broadband capability is a cause for capacity did not keep up.” Another revealed: carriers do?
celebration, some carriers have been caught “We expect the network traffic to increase 50 A variety of options are open to them, some
short by the sheer scale of uptake. Victims of times in the next few years.” network based and some more strategic than
their own marketing push—offering ‘unlim- The two mobile broadband segments— technical. Perhaps the most obvious solution
ited’ data usage for relatively low subscrip- dongle/embedded laptop (portable) and is simply to put in more cell sites. It’s the
tion charges—and the unforeseeable impact smartphone (mobile)—are each problematic. kind of response that enables an operator
on users of the iPhone and the devices it has Portable usage accounts, and will continue to show contrition to disgruntled users as
subsequently influenced, carriers have been to account, for the overwhelming majority of well as a willingness to roll up its sleeves
overtaken by events. mobile broadband usage. Informa figures for and solve the problem.
High profile headlines have seen US carrier global mobile network traffic show portable At the end of 2009, O2 UK made just such
and iPhone pioneer AT&T castigated for fail- usage at 1EB in 2010, almost 90 per cent of an announcement in the wake of its iPhone-
ing to deliver a sufficiently robust network traffic. By 2014 this will have grown to 14EB, induced network issues. The firm promised
to cope with the handset’s uptake, and UK representing 93 per cent of traffic. to build out 1,500 new network sites in 2010,
player O2 making public apologies for similar But this does not mean that portable traffic with 200 planned for London, where the
shortcomings. represents the only challenge. UK carrier O2 iPhone (along with critics from the press
Figures from Informa Telecoms & Me- has been deliberately slow into the dongle and analyst communities) is present in the
dia show that total mobile traffic in 2008 market but has been hard hit by uptake of the greatest concentration. The firm said its in-
measured 1.1 exabytes (trillion megabytes) iPhone. And mobile broadband-capable hand- vestment would run to hundreds of millions
worldwide. This is forecast to grow to 2.5EB sets are going to grow in number enormously of pounds, and followed a £500m payout
in 2010 and 18EB in 2014. While some of that over the next four years as technology gets over the previous two years in order to meet
will be traditional, circuit-switched voice pushed further down device ranges. increased demand for data.
traffic, mobile broadband is set to explode, According to Dave Nowicki, vice president Such a response has its detractors, though.
surpassing 14EB during 2014. for marketing and product management at John Spindler, vice president of product
By the end of 2010, mobile broadband US network and femtocell provider Airvana, management at ADC argues that traditional
subscribers worldwide will number 450 smartphones have their own particular is- behaviours require a rethink. “Things have
million, which will represent a 45 per cent sues. Studies conducted by Airvana on EVDO to change in the way that carriers look at the
share of the global broadband market. In networks in the US and Asia, he says, have network architectures and network topolo-
2011, though, the mobile broadband market found that smartphones place a far higher gies,” he says. “The old days of throwing up
will overtake the fixed segment, growing to signalling burden on the network than dongles cell towers and doing what we used to refer
near 670 million subscribers and a 51.8 per and embedded laptops—a problem he says to as ‘spray and pray’ just isn’t going to be
cent market share. Despite a healthy CAGR has just as much relevance to carriers using adequate. It’s becoming impossible.”
of 12 per cent between 2008 and 2013, In- 3GPP standards. Even those who back the effectiveness of
forma says, the fixed market’s share of global “We found that there was this amazing ac- such a strategy concede that there are ob-
broadband subscribers will drop by half celeration in signalling traffic. On measuring stacles. Land is a finite resource and, in the
over the forecast period from 70 per cent it what we noticed was that while a dongle or kind of dense, urban areas in which capacity
to 35 per cent. data card was using 25 times more data than boosts are most sorely required to accom-
Carriers have won what they wished for, a smartphone, the signalling ratio was only modate data surges, sites are at a particular
and the problem of provisioning capacity three to one,” he says. “Which means that, for premium. Such build-outs are also arguably
for the data boom is clearly not going to every bit it sends, the smartphone is pumping the most costly form of improvement upon
disappear any time soon. Mobile users vote out eight times more signalling traffic.” which an operator can embark.
with their feet and poor network perform- Nowicki argues that this requires a shift in But, says Mike Roberts, senior analyst at
ance is something to which they assign great the way networks are dimensioned, with car- Informa Telecoms & Media, the cost need not
value. Application performance specialist riers needing more radio network controllers. necessarily be prohibitive. “When you get »
It’s an irony particular to down to the network itself, it can just be ten
or 15 per cent of your base stations that are
that traffic must be coming from the home,
he says. The total share of home-based mo-
the mobile data boom generating the vast majority of your traffic,” bile broadband could be as high as 50 per
he says. “So it might not be a massive invest- cent, he adds.
that wireless carriers, ment programme that you’ll need to undertake Most laptops today ship with wifi embed-
to add capacity to the base stations that are ded and most smartphones, too. As Stephen
for so long motivated by overloaded. From that point of view it can be Rayment, chief technical officer at Belair
drawing business away a manageable problem,” he says.
Roberts’ assessment of geographical
Networks, a specialist in wifi offload, argues:
“The problem and solution lies in the palm of
from the fixed line, are now load differentials chimes with a statement our hand. More than 1.5 billion wifi chipsets
made late in 2009 by Ralph de la Vega, chief have been shipped to date and we’re looking
scrambling to dump their executive at US carrier AT&T. Q309 saw at one billion run rates in four or five years.
own traffic back onto it record activations of the iPhone for AT&T
but, said de la Vega, just three per cent of his
Wifi is pervasive and is a very effective way
of getting some of that data traffic off the
wherever it’s available customers were generating 40 per cent of his mobile networks.”
data traffic. Rayment argues that wifi makes sense for
But some argue that although major net- wide area capacity relief for two reasons
work deployments may offer a solid capacity likely to prick up the ears of any carrier
solution, the time involved in making them with a capacity issue; the ease and speed
happen lessens their effectiveness in dealing with which it can be deployed, and the cost.
with a problem that requires an immediate Historically the firm’s customers have been
solution. Capacity in other forms is already owners of large venues like sports arenas
in place, they say, and can be used to alleviate and shopping complexes, as well as fixed
the pressure more promptly. broadband players looking to add nomadic
These people are proponents of offload wireless access to their portfolio as a sweet-
strategies, using either wifi or femtocell ener. Rayment says wireless carrier deals are
technologies as a release valve for congested in the offing for the first half of this year.
mobile data networks. It’s an irony particular “The big advantage for mobile carriers is
to the mobile data boom that wireless carriers, that they can deploy this offload at anywhere
for so long motivated by drawing business from one third to one tenth the cost of de-
away from the fixed line, are now scrambling ploying wholesale upgrades to their mobile
to dump their own traffic back onto it wher- network,” he says. “You can deploy wifi in
ever it’s available. a targeted fashion; where the 3G carriers’
“Offloading to wifi is great for us and great subscribers are congregating and where
for the customer,” says Matthew Key, CEO of the cell towers are glowing red hot. Plus
Telefónica Europe (read the full, exclusive the devices are already here. We all know
interview with Key on p18). “The customer LTE is coming but we don’t have to wait for
gets a better experience and it takes the traf- it.” Furthermore, he says, the wifi networks
fic off of our network,” he adds, in the kind can be plugged into a carrier’s network op-
of statement that might almost have been erations centre, and can be managed using
unthinkable from a large cellular carrier just existing tools.
a few years ago. Not everyone is convinced, though. “The
“We’ve got agreements with The Cloud thing about wifi,” says ADC’s John Spindler,
and BT in the UK but we’re also going “is that it was never designed for wide area
through an educational process with us- use. From the attempts that we’ve seen to
ers about how to make use of wifi in their put in metropolitan wifi networks we’ve seen
home. The vast majority of people now have that it doesn’t work. Most have failed miser-
broadband in their home, with a wireless ably. It’s really designed for smaller coverage
router,” he says. areas and has a limited number of channels
Key’s last point highlights the relevance of on the access points that you can actually
offload strategies in a world where a great deploy. It’s good as a hotpsot technology for
deal of mobile broadband usage is happen- coffee shops, but not for wide area. Plus it
ing in the home. Airvana’s research, says operates in unlicensed spectrum so you get
Dave Nowicki, shows that the peak time for more interference.”
mobile data traffic is the evening. Given that Rayment concedes that, three or four years
that peak traffic remains on the one cell, and ago, it was all but impossible to take a wifi
that most people are home in the evenings, offload solution to a mobile carrier “without
Social services
Social networking has already proven its appeal, if not its
worth, on the fixed line internet—and the move to mobile
seems a natural evolution. So what happens when these
worlds collide? Some very big numbers indeed.
By James Middleton
T
he mobile telecoms market is no In the fixed line internet space, social LinkedIn with about half as many again—the
stranger to big numbers. Global mo- networking—a phenomenon that has taken traction of the medium is obvious. So what
bile services generate close to $1tn in the PC world by storm—is generating some happens when social networks go mobile?
revenues, putting the market up there with big numbers of its own. It’s impossible to Some very big numbers indeed, accord-
the worldwide automotive, food and weapons tell how many subscribers there are to social ing to industry analyst Informa Telecoms
industries. Global mobile subscribers are on networks worldwide, or indeed how many & Media. The research house is bullish on
their way to five billion and the world’s big- social networks exist. But if we look at some the subject, believing that the importance
gest mobile operator, China Mobile, has close of the leading players—Facebook with 350 of mobile social networking will escalate
to half a billion customers in its domestic million active users, China’s QQ with 300 mil- exponentially over the next five years,
market alone. lion, MySpace with about half as many and creating a much larger industry. Informa
when all they have with them is a mobile things you do throughout the day, most of
handset. It is natural that people who value the things that are important happen while
immediacy and contextual relevance in their you’re physically away from the PC, so there’s
communications would seek to have them an inherent business case there.”
when they are not in front of their PC. After While Gypsii’s presence is global, its
all, your social life doesn’t happen while you’re largest market is China, where the company
sitting at your desk, so the mobile allows users operates in partnership with China Unicom,
to report on things that are happening now, targeting the carrier’s 148 million mobile
without having to wait until they get back to subscribers. “China still has massive white
the computer. space,” says Lennon, “There’s the potential
Mobile social networking encompasses a to sell 300 or 400 million phones to new
diverse portfolio of technologies and services, users. And operators are now pushing data
ranging from simple chat applications to services. There’s China Unicom with the
multimedia-rich environments and content iPhone and China Mobile with the [Android-
generating and sharing communities which based] OPhone platform. Social networking
persist after the user logs off. It is, more is expected to drive the data business and
so than anything that has gone before, a Chinese operators are learning fast about
reflection of the breadth of both ecosystem how much consumers are willing to pay. I
participants and users. think you will soon see data plans in China
But at the same time, the boundaries of mirroring those in Japan and Korea.”
this industry are getting more difficult to One of the greatest influences on social
define systematically and accurately. Social networking is cultural conventions, espe-
networking is creeping into and changing the cially where those conventions are in a state
nature of many other non-community based of change. Lennon notes that Chinese users
services, making precise service category are “ferocious” social networkers, clock-
definitions much more difficult to reach. Just ing up about ten times more activity than
as the differences between PC-centric and Gypsii users in Europe and the US. “Chinese
mobile-centric are eroding, it is also getting users are coming out of a closed society so
more difficult to cleanly distinguish a mobile there is a lot of curiosity as well as a mas-
social networking service with value added sive migration from rural to urban areas.
says there is sufficient diversity within the content from a service that has social net- This is stimulating a natural embrace of the
social network arena that, in a high growth working features added in order to increase platform—Chinese users actually want to
scenario, nearly 25 per cent of total mobile the stickiness to end users. make friends,” he says.
subscribers worldwide will be attracted to Different users are motivated by different Social networking makes as interesting an
and participating in mobile social network- needs and have vastly different ways and anthropological case study as it does a busi-
ing by 2013. means of experiencing their mobile com- ness one, because of the evolutionary demands
The forecast is encouraging, with Informa munities. Early adopters are using more it places on social etiquette. Facebook CEO
using three scenarios to forecast mobile powerful, community-centric handsets and Mark Zuckerberg recently stated: “Privacy
social networking user base growth as a services for finding and communicating with is no longer a social norm.” That may be an
fraction of the total addressable market. others, quickly adapting their lifestyles to overstated remark, but it’s indicative of how
According to the analyst there were approxi- the benefits provided by the services. While our concept of privacy has changed.
mately 92.5 million mobile social networking in parallel, tens, and soon hundreds of mil- Because users are the lifeblood of an online
users globally at the end of 2008, or around lions of new mobile community members society, social networks are almost universally
three per cent of the total mobile subscriber are registering with community services viewed as organic communities that oper-
base. By the end of 2013, Informa predicts for the first time. ate in autonomy. But China, with its strict
that the global mobile social networking According to Shane Lennon, senior vice internet constraints raises an interesting
user population could rise to between president of marketing and product manage- question on the subject of control over these
641.6 million—the most conservative growth ment at mobile social network Gypsii, there’s communities.
scenario—and 873.1 million, or 22 per cent a sea change happening on three levels—the At present there is a three-way struggle
of the total mobile subscriber base, in the consumer level, the device level and the going on for ‘ownership’ of the community,
high-growth scenario. distribution level. “Consumers have been which perhaps more importantly trans-
But where will this staggering growth in looking to do more on mobile, particularly lates into a struggle for ownership of the
subscriber numbers come from? The mobi- in emerging markets where they don’t have user. In one corner we have the traditional
lisation of existing PC-centric communities access to the internet via a PC,” Lennon says. PC-centric networks, Facebook, MySpace,
is the most obvious source, providing further “Even two years ago you saw people trying to LinkedIn et al, while in the other there are
confirmation that the mobile model is robust, use WAP to mobilise Facebook and MySpace. the operator portals and co-branded or
allowing users to access their communities If you think about social networking and the white label offerings, like Gypsii or Zyb, »
designed to keep the carrier where it tradi- The suggestion here is that it’s better to portals as well as seeing new announcements
tionally expects to be—the gateway to the partner with the big brands. “Nokia’s Ovi and invitations to join mobile-centric com-
user experience. But there’s also a contender and RIM’s BlackBerry services are also munities. So while on the one hand mobile
emerging from the devices space, where the going down same route; they want to be a subscribers are now aware of the community
proliferation of mobile applications stores VAS (value added services) provider to the service options available to them, they also
is allowing handset vendors to reconstruct end user,” says Brinkshulte. But does that have less time to spend on each community.
the walled gardens of the last decade. mean partnering with the known players in Informa found that time spent on community
Nokia’s Ovi is a good example of how a given space—say Facebook or MySpace in services is increasing, but not as rapidly as the
social networking creep has added value the social networking market? It’s certainly number of different communities with which
to another service model. In the same way one option. “Handset manufacturers could a single subscriber is registered, resulting in
that Amazon really started out as a social offer exclusivity for whatever service they’re reduced time and page impressions in markets
network that just happened to sell books, associated with, just like Apple did with where large PC-centric networks have recently
the Finnish vendor set up Ovi to extend the iPhone,” adds Brinkshulte. “But when been mobilised.
its relationship with hundreds of millions the exclusivity period is up the competitive The more open-minded operators have
of Nokia device owners around the world advantage disappears again. If carriers just made some attempts to exploit this phe-
beyond the lump of shiny plastic in their give up and partner with MySpace in order nomenon, as well as to hedge their bets
hands. Nokia launched the Mosh environ- to offer a mobile MySpace, they only gain a about which social networks to partner
ment in 2007, a dedicated social network short term advantage, because another op- with by launching aggregation platforms.
giving users a place to communicate and erator will partner with the same company These offerings, like Vodafone 360, bring
share their content, as well as to make a month later. Facebook’s not going to do an together all contacts and content in one
requests for content not yet available. But exclusive deal with any carrier. So the carrier place on the device, allowing customers ac-
the firm closed the service down in 2009 will be further pushed down into being a cess to different networking sites including
in favour of the Ovi Store after it became dumb pipe,” Brinkshulte concludes. Facebook, Windows Live Messenger and
increasingly problematic to police Mosh, The term “dumb pipe” was bandied around Google Talk. Users can also create different
which had become riddled with pirated a lot in 2009. It has clear negative connota- contact groups across social networks, so as
content. tions but it’s not a model that everyone dis- to share different information with different
Piracy is a problem but, in combination misses. “Some operators will happily choose groups of people.
with the app stores, Lennon claims that social to be dumb pipes,” says Anu Shah, head of This, according to all the companies MCI
networking features will drive viral uptake mobile services provider IMImobile Europe. contacted for this feature, is the smart move
of mobile applications. He points to the suc- “Operators do not launch services quickly for operators because they have access to
cess that Apple and Android have had in this enough for a consumer centric market. They one thing that the device manufacturers
regard, but states that “no other provider has shouldn’t offer single services, but instead and online service providers don’t have—
come close.” It’s a telling statement. A few offer building blocks—phonebook, location, at least not yet—the user’s contacts book.
years ago Apple and Android were names that billing services—to make differentiated serv- The address book is the one area where
had no place in a conversation about mobile ice offerings. At the moment operators are consumers interact with their mobiles on
technology; nowadays it’s almost impossible trying to do it all in house, but they should a daily basis, and, according to Shah: “A
to avoid mentioning them. look to partnerships and become a consumer rich address book is a jumping off point
Branding seems to be the key here. To de- services provider.” for social networking activities, for email
scribe Apple with the iPhone, and Android, While it may seem like many social net- activities, for IM activities. It could allow
with its connections to Google, as “well works just appeared overnight, Shah main- you to share a music playlist to your con-
known” would be an understatement. And tains a certain skill set is required to launch a tacts right from the address book, and also
something they’re both very good at is getting successful social network. “Operators should allows you to create events and send them
their brands in front of eyeballs. “If you have enhance and enrich a service rather than just to contacts either via a client app, on WAP
an iPhone and you’re in the US, you barely compete directly with it,” he says. or over the web.”
know you’re on the AT&T network because One of the direct consequences of the Shah believes this approach can be ex-
Apple branding is everywhere,” says Carsten mobilisation of PC-centric social networks tended to keeping a user’s contacts in the
Brinkshulte, CEO of mobile messaging firm is increased choice. There are millions of cloud, backing up their address book and
Synchronica, “It’s the same thing with Android new users of PC-centric community services personal content and at the same time
and Google.” visiting the community areas of their operator keeping them close to the operator bosom. »
Contact us:
Sylvain Victor
Tel.: +49 5251/8 79 70 21
Fax: +49 5251/8 79 70 27
www.cards-united.com
info@cards-united.com
Subscription fees are talked “It’s still an astonishing problem that people mainly because these companies are infamous
for an absence of revenue model.
have when they change their phone—how do
about in hushed tones they move their contacts and content to the Subscription fees are talked about in hushed
new device? Lots of operators have solutions tones by the social networking community,
by the social networking but the consumers don’t really know how to because it’s well known that users are a fickle
community, because it’s find them,” Shah says.
To paraphrase entrepreneur Victor Kiam,
bunch at best and even the guys who sell the
social network platforms to service providers
well known that users are a VAS provider Critical Path liked the idea so pitch them as a value added service rather than
much it bought the company. The company a premium feature. This might be one route to
fickle bunch at best in this case was social media platform the money, as Informa notes that models for
Shozu which allows users to push and get generating revenue from mobile social network-
content from multiple social networks as ing are also evolving, with new business models
well as to backup and sync their content built on cross network mash ups, where social
and contacts. “The social address book, this networking is pitched as a VAS to another, more
is the way an operator can play a big part easily monetised, feature.
in the social networking phenomenon,” says You could also do worse than look to the
Mark Paloma, CEO of Critical Path. “People big disruptors in the space for direction. Both
don’t connect to one social network, they Google and Apple have recently made purchas-
may connect to four or five and the big es in the mobile advertising space. In early
challenge the consumer faces is how to keep January Apple acquired mobile advertising
everything in sync and easily navigate the firm Quattro Wireless for somewhere between
different social networks.” $250m and $275m, perhaps paving the way for
Paloma refers to Japan and Korea as coun- Apple to offer an advertising platform to its
tries that have had success in this area, “but App Store and iPhone customers. While late
adds: Those phones are highly configured last year, Google upped its game in the mobile
because they’re controlled by the operator space with the purchase of AdMob for $750m.
in those markets.” This is a statement that Google and AdMob currently specialise in
lends further credence to the argument that different areas, with Google’s focus on mobile
operators should maintain control of the search ads, while AdMob’s focus is mobile
customer. “The challenge with going through display ads and in-application ads.
one interface from one social network to “Device manufacturers, Apple and Google
another is that you don’t know how other have a solution in advertising,” says Gypsii’s
users want to be contacted. In the end the Lennon. “They currently take a share of rev-
consumer just wants the information, just enues from all applications sold and in the
wants the message, he doesn’t care about future will want to supply advertising. So our
the medium,” says Paloma. ultimate model, our long term goal, is adver-
It is this level of customer knowledge and tising revenues. E-commerce is now mobile
insight that is one of the few remaining assets, commerce and you will also see premium
along with the phonebook, location and bill- content services. We will see lots of talk around
ing, that the operator can still leverage. And advertising in the social networking space.”
as location-centric Gypsii has proven, they But for this to happen, the media agencies
are assets that can be successfully exploited. need to mature, says IMImobile’s Shah. “It’s
Comforting news for Nokia, which in 2008 not the product that’s the issue, but at present
acquired mapping firm Navteq for $8.1bn—it’s it’s not easy enough for media agencies to buy
single biggest acquisition to date—and last mobile inventory,” he says. However, advertising
year bought travel focused social network in this sense might not take form as we might
Dopplr among a raft of other social network- expect. Lennon believes that users will actually
ing related purchases including cloud-based search for adverts, or have them pushed out by
social media sharing and messaging service the social network. It’s a different proposition
Plum, Cellity, Bit-Side, Plazes and Twango. to the kind of research you might do on Google
Nokia can afford it, but $8.1bn is still a lot at the PC, “But when looking for vouchers, for
of money to spend on a medium that has yet a restaurant for example, the natural place to
to prove itself as a money-maker. The market do this is on the mobile,” he says, where the
values of Facebook and Twitter have been viral element can be exploited.
artificially over inflated by the same sort of On this, the proponents agree. Social net-
hysteria seen in the dotcom boom days, but working should be used as an enabler—the
acquisitions have not been forthcoming, money is in the mash-ups. n
2020 vision
Ten years is a long time in any industry, but especially in one that moves as fast
as the mobile sector. The last decade has seen the industry ride out by far its
toughest times and still manage to turn out truly world-changing products and
services. Here we take a look at what we can expect to happen in the ten years
that stretches ahead of us.
By Mike Hibberd
T
en years ago, the newly merged Vo- ment. That year’s GSM World Congress saw services and business models based on WAP,
dafone Airtouch was sealing its hos- the first prototype GPRS network on display they were asking: “What is the consumer ready
tile takeover of German carrier Man- from Ericsson, including a much vaunted to pay for? How can every organisation in the
nesmann, a move which CEO Chris Gent prototype handset. As onlookers applauded value chain realise their share of the money?”
promised would create “the world’s leading this achievement it is doubtful that they And in an observation of worries that proved de-
mobile multimedia operator”. Virgin Mobile, could have imagined the post-iPhone indus- cidedly well placed, MCI noted: “Mobile internet
the world’s first MVNO had just announced try that would be gathering in Barcelona ten services seemed to be at the forefront of many
its launch, and the must-have handset was years hence. delegates’ minds. But many were concerned
the Nokia 7110—attractive not so much for In many ways, of course, it was a drastically about the impact of fixed internet companies
its rudimentary WAP capabilities as for the different world from the one we know today. moving into the mobile environment.”
spring-release cover that enabled its owner But a look back at a post World Congress George Schmitt, a stalwart of the conference
to answer calls in a way that briefly emulated report from the March 2000 issue of Mobile sessions during those years, and the head of
Neo from box office smash The Matrix. Communications International reveals that, US carrier Omnipoint (to be absorbed by T-
The year 2000 had been hailed by some as while much of the technology has evolved, Mobile down the line) also had his finger on
the ‘year of mobile data’ in what would soon some core concerns remain unaltered. a crucial point: “Our networks have their elec-
prove to be a hopelessly optimistic assess- As speakers and delegates contemplated tronic eyes on everyone with a GSM handset, »
I
t used to be all about miniaturisation in this what you’d have, essentially, would be a laptop
industry. The smaller they could get the without the hinges. No doubt the iHinge is in Join the debate
phones, the better they were deemed to the works.
be. Remember those tiny little Motorola things Nope, the iPad seems to be primarily about
Have your say on the comings and
people used to marvel at? Not any more, though. access and display; particularly when you
goings in the communications industry
Now it’s all about functionality rather than consider that Apple is going after the e-reader by climbing onto the soapbox at: www.
portability and, in January, Apple launched what market with its new slate. telecoms.com/join-the-debate. Here’s
looked for all the world like the biggest mobile There will be two connectivity options a selection of comments from the past
phone there’s ever been. available, one version with wifi and 3G cellular couple of weeks:
Except it wasn’t a phone, it was an iPad, a and one with just the wifi. This latter version
naming decision that sent a giant e-snigger will start shipping in late March, costing a Orange’s decision to specifically target
across the web like some kind of comedic hefty $499 for the 16GB model, $599 for the consumers based on their personal interests
Mexican wave as people compared the new 32GB model, and $699 for the 64GB model. is certainly an innovative step in the evolution
gadget’s moniker to certain feminine toiletries. The Informer’s not sure he sees the benefit in of mobile marketing, but could throw up
The Informer, it has to be said, was party to a 16GB tablet designed to store lots of music, additional, initial challenges to overcome.
that snigger. movies and photos, but it’s probably a trade- Taking mobile marketing to such a granular
off to ensure there’s a model level relies on consumer trust more than ever,
that can compete on price with and in a “spam-conscious” age, brands need
Amazon’s Kindle. to ensure they are not turning away potential
The wifi and 3G models will be leads through their very appearance.
available in April for $629 for the Julie Strawson, Director of Marketing, Europe,
16GB model, $729 for the 32GB Monotype Imaging on Orange’s launch of
model and $829 for the 64GB Orange Shots
model, although users will then
need to buy a data plan from AT&T The statistics make very promising reading
in the US or whichever carriers for Vodafone. However it will be interesting to
Apple has elected to partner with see how many people will stick with the model
internationally. that they have proposed, or if a competitor
Apple will open up a new section can offer a more attractive model.
The sacred tablet in the App Store to cater to the SimonTMV on Vodafone signing up 450,000
iPad, although the device is also music fans
Anyway, the iPad is here and, while it looks able to use 140,000 existing iPhone and iPod
like a great big iPhone, it lacks the killer app Touch applications. However, some have noted Femtocells are not just ‘home base stations’. I
that is voice functionality. In his introduction at that once some of these apps scale up to the have a friend who runs a bar in the basement
the unveiling ceremony (complete with cringe- available resolution of the iPad (1024 by 768 of an old stone building. The lack of phone
inducing whoops and wolf-whistles from the pixels at 132 pixels per inch) they look a bit like service drives some customers away. A
crowd), Apple CEO Steve Jobs kept repeating the blocky graphics you used to get on your femtocell is the ideal solution for him since for
how brilliant the new device is, as if simply by Commodore 64. his customers the service will be transparent...
saying it over and over the sentiment would Cellular voice may be missing—and you’d
be absorbed as fact by anyone watching. It
Nick on Vodafone’s revamping of its femtocell
look a proper chump holding the iPad to
probably worked in the room. He promised that
offering
your face—but an interesting development
it would deliver “the best browsing experience in the iPhone SDK was revealed just before
There are no operators considering using
you’ve ever had; way better than a laptop, way the product was launched that may pave
WiMAX for backhaul for mobile networks as
better than a smartphone.” the way for VoIP on the device. Application
far as I know, primarily due to the latency
He talked up the product’s excellence as a developer iCall said that the iPhone SDK has
performance over WiMAX. Rather mobile
photo display tool, movie viewer and music been updated to allow VoIP calling from the
operators are deploying WiMAX in parallel
player and, while there is a large virtual device over 3G networks. iCall now has a 3G
with GSM base stations to deliver high
keyboard that makes email and input possible, VoIP application available for the iPhone and
bandwidth ‘wireless DSL’ services to premium
it looked to the Informer as if it might be Google Voice is now expected to be allowed
customers to increase revenue and ARPU.
difficult to use. Apple has also launched a onto the handset. Because the iPad can run
dock-keyboard peripheral for the iPad to solve iPhone apps, it has also been suggested that Stuart on MEA’s regional prospects for WiMAX
this problem. But if you were to buy that then 3G voice may work on the new gadget. n