February I 2008

Fredric Morris, Editor-In-Chief, Connect-World
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

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