February II 2008

Fredric Morris
Editor-In-Chief
Connect-World

Mobile in Barcelona –

Mobile broadband, cheap smartphones, operating systems, software and the killer around the bend

The Mobile World Congress (MWC) in Barcelona used to be called the 3GSM Congress. The name is new, but its importance and the spirit of anticipation remains. Each year, basic shifts in the mobile sector are signalled by the keynote speakers and the new products and services announced at the MWC.

This year’s show, as expected, was all about the promise of broadband, broadband-based services and applications, and the standards and devices needed to deliver on the promise. In his keynote address, Vodafone’s CEO Arun Sarin best summed up where the sector is going and where it should be going. He focussed upon two subjects, the proliferation of mobile operating system software products and the competition between LTE (Long Term Evolution) and WiMAX 4G broadband standards. His call to simplify the mobile world’s development through further standardisation resonated strongly with operators – and many manufacturers and applications developers as well. There are now some 30 or 40 mobile operating systems in use today. Mr Sarin would like to see that reduced, at most, to four or five and let the market decide which systems best meet their needs.

Most of today’s handsets use the manufacturer’s proprietary operating system, so when Google announced its Android ‘open’ mobile operating system it upset everyone – from Nokia and Motorola to Microsoft and the Linux fans. Mr Sarin’s plea is a needed call for sanity and standards in an increasingly software dominated sector.

Mr Sarin also suggested that integrating WiMAX with LTE may be the best way to move forward, perhaps by incorporating LTE and WiMAX within common TDD-based standards.

TDD? Time Division Duplex – TDD – is an increasingly popular way to provide simultaneous two-way broadband for mobile. FDD – Frequency Division Duplex – a more commonly used technology slices the available bandwidth into time slots and proportionately allocates them to the incoming and outgoing traffic, imperceptibly interleaving them on the same channel. FDD needs two channels – one outgoing, another incoming. Since traffic in each direction is segregated by channel, excess capacity in one direction cannot be used to handle peaks in the other direction. TDD, given the same total bandwidth as TDD, efficiently utilises whatever capacity is available for traffic in any direction; it provides much greater effective, useable, bandwidth than FDD. Mr Sarin called for a combined TDD-based WiMAX/LTE standard to end the counterproductive wrangling between existing 4G standards.

Generally speaking, the Mobile World Congress was a showcase for the sardine-can school of mobile design – let’s see how many functions, features and gadgets we can cram into a mobile phone the size of a sardine can. Equipment suppliers and operators alike seem to think super/hyper loading handsets with features is the way to go, the way to catch and keep subscribers, so super-stuffed devices with features nobody uses are quite popular. Nevertheless, several recently announced products counter the Swiss Army knife – do it all in one box – trend and move in the other direction by radically simplifying handset features. Most of the simple designs are low-cost efforts aimed at emerging markets. Apple’s wildly popular iPhone takes the middle course; it maintains the complexity, but simplifies the interface so people can actually use more of the features. It is no wonder that it has set the standard to beat.

Two announcements, in particular, delighted me. First, it was heartening to see ZTE announce the first commercial SDR (software defined radio) base station. In my second eLetter in January I predicted that SDR would be coming to the market shortly; I just didn’t expect it so soon. I also didn’t expect SDR base stations would come sooner than handsets. It makes sense though – just ‘add new software and serve’ when you wish to transmit a new standard, use a different frequency or adopt a different modulation scheme. The base station, which initially supports GSM and WCDMA simultaneously, uses software instead of application-specific hardware to process the signals. In the future, according to ZTE’s news release, the platform will also be able to support CDMA and WiMAX.

As a first step towards an SDR world, the base station makes sense. It is a lot easier, considering how new and demanding the technology is, to try it out first in a big box instead of a handset. It also makes great sense to offer operators a platform that can, at least in principle, handle whatever new technology arises in any bit of spectrum that the regulators allow, with little more to do than install new software. I was looking forward to SDR handsets, but this is still a great first step.

The next bit of news that truly pleased me was the ultra low cost Smart Entry Phone (SEP) aimed at emerging markets. It would have pleased me even more had the price been announced, but the Mobile ULC2 Alliance – consisting of Infineon Technologies, Jurong Technologies Industrial Corp. Ltd, TJAT Systems Ltd. and Brightstar, has been careful not to release any price data, although they do claim it is the world’s lowest cost smartphone. Talk, speculation really, at the MWC puts the price at under US$100, even at below US$50. The phone, targeted at emerging markets throughout the world, will provide access to the Web, email, location-based services and IM (instant messaging). According to the press release, the SEP combines “exceptionally low operational costs with no requirement for additional infrastructure purchases”. It has been apparent for some time – and numerous studies support this – that given the developed world’s saturated markets, most new mobile subscribers will come from the developing economies. Indeed, ABI Research believes that by 2011, one of every four handsets sold globally will be ultra low cost handsets.

I have written several times before that ultra low cost ‘smart’ handsets were bound to come. A variety of such devices are sure to reach the market in the near future. The astounding size of the market at the bottom of the pyramid will inexorably drive growth, competition and the development of better, cheaper, devices. Low cost smartphones will likely become the world’s dominant form of Internet access within the next few years. Smartphone will bring far more than email, games and messaging – they will be vital business tools, sources of education and of a still unimaginable variety of services.

The show, above all, demonstrated the growing dominance of software. From Software Defined radios and software-driven smartphones to operating systems, software – always strong – is growing yet stronger in mobile communications. Network management, operational support systems, business support systems, diagnostics, security and marketing – the operators’ entire operating structure, content and user applications all depend entirely upon software. The newer the product, the newer the service, the more it depends upon software.

Okay, you’re impressed with the stranglehold software has on the industry – so am I. The show, though, never lets one forget that software without hardware has nowhere to go. And the hardware is getting slicker and slicker; some of it is downright mouth watering. There’s the iPhone, of course, and a growing number of iPhone ‘wanabees’- some great feature-rich phones. There’s no iPhone killer yet, but given the hot and heavy innovation seen at the MWC, Apple needs to run fast, there’s a killer just around the bend.

Connect-World: Africa & the Middle East (2008) will be published next month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows where we are media sponsors such as: ITU Telecom Africa (12-15 May, Cairo), Tunisia Telecom, (Tunisia, 22-25 October), and GSM ME Gulf and North Africa (UAE, 2-3 December).

In addition to our normal global mailing, this issue will also be distributed to a select list of world leaders, to the ranking executives of the world’s largest companies including the Fortune 1000, to government authorities, and to international institutions. This issue will also be available on our website to all other interested readers throughout the world.

The theme of Connect-World: Africa & the Middle East (2008), our coming edition, will be Convergence and data – pushing the limits of the network, pushing the limits of economic and social development.

The growth in data transmission, together with the exponential rise in video and images in general, and the tendency to funnel more through fewer, converged, networks are largely fuelling the need for greater broadband capacity and speed. Not so long ago, we looked to universal telephony as a goal all nations should strive for to meet the needs of their citizens. Today, the growth of the Information Society has raised the bar; universal access to broadband is now the goal – indeed the necessary pre-condition – for digital, economic and social inclusion. This has stretched the resources of governments, service providers, equipment suppliers, businesses and all others involved in the provision and use of broadband.

The need is evident, but there is much to do not only to rollout broadband access and pay for it, but also to make the best use of it to contribute to economic growth and the personal well-being of urban and rural users alike. What should we all be doing, what can be done, not just to provide broadband, but also to use it productively?

Africa and the Middle East 2008 Media Pack; Click here

February I 2008

Fredric Morris
Editor-In-Chief
Connect-World

Results … 8,440,000 for mobile trends 2008 (0.03 seconds)

Since the Mobile World Congress (ex 3GSM) in Barcelona is coming, I thought I would write about mobile trends. I have always been something of a trend watcher, but a bit of research never hurt, so I called Google to the rescue. Google’s response – in three hundredths of a second – is above. I tried and tried, but could only skim the first million results. One thing I didn’t find was a trend towards better, more intelligent response to search queries, mobile or otherwise. Sure, there are efforts to better the search engine responses, to provide quality instead of quantity. It’s far from being a trend yet, but that is a trend I would truly like to see.

Surprise! The growth in cellular telephony will continue and developing countries will show high growth rates. Surprise! Handsets will get cheaper and have more functions stuffed in. Surprise! More people will use their mobiles to access the Internet. Obvious? Obviously! Enough surprises.

A few trends are worth examining. Trends are long-term phenomena not flash fads. Many of the trends I see are just starting , are still toddling, but they all promise to grow steadily and run strongly in the coming years.

Broadband, not voice, is shaping up as the real driver of both mobile innovation and operators’ dreams of higher ARPUs (average revenue per user). WiMAX / LTE /4G will certainly grow strongly. It might seem that WiMAX and LTE (long-term evolution – a third generation approach to high speed GSM broadband) will be shooting it out on main street at high noon, but early reports show clear and separate tendencies for each technology – LTE is the technology of choice for operators with big investments in existing networks and WiMAX will tend to be the choice of greenfield operators. The CDMA camp has a third option, UMB, but it is far behind in the race and may not finish. Still, no one really has a clear idea of how or even exactly when major network rollouts will take place.

Unlike previous mobile rollouts, handsets will not provide the initial thrust needed. Packing the needed circuitry into the handsets – see my last eLetter – will increase the complexity, size, cost and power consumption of both WiMAX and LTE handsets. Since most of today’s HSPA (high speed packet access) broadband networks are still mostly under utilised, many in the industry expect the new technologies will take several years to ramp up and achieve commercial success.

Wireless modems for laptops and even fixed access points for broadband Internet access in remote or hard to reach regions are among the real early drivers of wireless broadband. Wireless broadband will be a godsend in regions where there is little copper, but enough public or private money for broadband. Parts of Asia, Eastern Europe, Russia, and Latin America are likely to be early large-scale adopters.

Obviously, mobile applications, entertainment and the like will push wireless broadband adoption, but for the next few years, the time it will take to get an affordable and technologically attractive handset to the market , growth will be limited to users – likely business users – who must have broadband access and are not put off by power, size or cost restrictions.

Many of the trends building up a head of steam are building upon broadband. IP-based mobile video is one of these trends. It is already gaining an avid following in some parts of the world, but until the costs of both the handsets and the service come down it will grow, but not explode in the market. Mobile IP telephony, a sort of Skype on wheels, should take off once unblocked broadband becomes common; this worries some operators greatly, and they will fight a battle they know they will lose just to stretch the revenue stream from their current technologies. As mobile broadband grows, so will IP-based services and SMS will tend to wither away.

Mobile operators will recuperate part, perhaps all, of the revenues lost to IP telephony through mobile advertising which will subsidise a great many services much as advertising does today with broadcast radio and television. Some of the advertising supported services will be available only to viewers who actively agree to receive advertising material, but others such as broadcast mobile television will probably follow the old tried and true commercial broadcast model. Since social networkers, virtual world participants and MMOG (massively multiplayer online games) players, given the enormous amount of time they tend to spend online, are sure to become targets of choice for many advertisers, they are likely to benefit from a great number of advertising supported services.

As 3G mobile broadband brings down the cost of always-on connectivity, mobile social networks will grow and become an integral part of the lives and lifestyles of people as they move about during the day. Video blogging and all other forms of online personal/public interaction will inexorably grow in step with mobile broadband.

Network operators throughout the world are beginning to recognise there are costs associated with trying to hold back the inevitable coming of open networks. The mobile operator’s Frankenstein Monster, Google’s Android and its Open Handset Alliance, is just the latest of a long list of challenges operators face trying to control the services their subscribers use. It is only a matter of time, but the trend towards open networks and unblocked devices will not be stopped. Like it or not, it won’t be many years before mobile operators will have to put up with just about any handset, any device, any use, media, content or application their subscribers wish. DRM (digital rights management) as we know it today is dying; it may take a while, but the handwriting is on the wall.

Mobile commerce, mobile shopping and mobile financial services will grow to the point they threaten traditional (even on-line-traditional) services. The growth in the use of mobile phones as credit/debit card devices, the growth (finally) of location based services, the availability of highly sophisticated mobile search services, and the fact that mobile phones are always with the user, will all push the mobile commerce phenomenon to greater heights.

The trend towards using mobile devices as a means of payment will grow. I expect mobile phones will largely replace cash and credit cards within the next 10 to 15 years. Mobile phones equipped with circuitry for near field communications are already being used to pay for public transportation and vending machine purchases in some parts of the world. The security and speed of electronic payments and the low cost per transaction (it is cheaper to process an electronic transaction than to handle, control and account for cash) will foster the growth of mobile payment systems. It seems obvious that both financial institutions and mobile service providers will both want to control this market, so competition between these sectors as well as financial services/telecommunications services mergers and acquisitions will become increasingly common.

I don’t know if I will see it yet at this year’s Mobile World Congress in Barcelona, but during the next few years we should begin to see the ‘Internet of Things’ and the mobile world join forces as RFID readers are incorporated into mobile handsets.

What we are certain to see at Barcelona is a frontal attack on the iPhone; big touch screens with sexy applications are sure to abound and the ghost of Android, Google’s open source operating system, will be hovering about.

There are a good number of other interesting trends, and we’ll get to them when I have more space, time and inspiration.

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Our next Connect-World Europe issue will be published later this month. The issue will be widely distributed to our reader base and, as well, at shows where we are one of the main media sponsors such as: Mobile World Congress (ex-3GSM), Barcelona (11-14 February), CeBit, London, (March 4-9), IPTV World Forum, London (12-14 March), and SOFNET, London (21-24 April).

The theme of this issue of Connect-World Europe will be – From broadcast to broadband – it’s show time!

Distinctions among traditional services providers are increasingly blurred. Not so long ago, the last-mile technology service providers used essentially defined what they were and gave them control over their users – they ‘owned’ the subscribers to their services. Today, IP-based converged networks mean traditional voice, data or video service providers can – all of them – economically deliver any and all of the services offered by any other type of player. Nowadays, service providers may no longer own their customers; indeed – heresy of heresies – they may not even own their own networks. Skype, Google TV, MySpace and YouTube did not even exist a decade ago, yet they are a mighty threat to ICT sector business as usual.

Telcos offer IPTV and data, cablecos offer phone service and data and ISPs offer whatever service they can, and all are poaching upon territory that once belonged exclusively to the broadcasters. The competition is growing, although in many cases the income still isn’t – the traditional companies with the experience and the customers have an edge – but that is changing and so are the business models.

The profound changes IP networks bring to the sector are, perhaps, most clearly seen in the planning by nearly all service providers to provide entertainment, and in the rapid proliferation of entertainment delivery platforms. The impact upon the broadcast sector cannot easily be calculated, but everyone involved in delivering entertainment – content providers, the advertising industry, telcos, cablecos, ISPs and equipment manufacturers among others – is affected. As the sector ramps up to meet the demand for the new services, regulators, lawyers, manufacturers, carriers, service providers and the consumer will all have significant changes to deal with and difficult decisions to make.

The issue will examine the changes the sector – exemplified by, but not limited to, IPTV – as seen through the eyes of the regulators, service providers, manufacturers, indeed, all those struggling to make the transition to new models. The game is changing; it’s a new show.

Europe I 2008 Media Pack; Click here