February II 2009

26 February 2009

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

Economy – handsets – Barcelona

Mobile World Congress, fence sitting, handset & platform positioning, solar power and femtocells

Barcelona, the Mobile World Congress (MWC – ex 3GSM) for 2009, was once again the epicentre for the yearly mobile telephony hypequake. As hypequakes go, this was not much of an earth shaker – only four, five or so on the Richter scale. The sliding economy undercut the exaggeration and a good number of hushed voices (slightly) moderated the general clamour.

A GSMA press release reported that the GSMA Mobile World Congress drew, all told, more than 47,000 people; there were visitors, 1300 exhibitors, 2400 media representatives and others from 189 countries. Visitors to the conference and exhibition included executives from mobile operators, governments, equipment vendors, software developers, Internet service providers and media and entertainment groups. Half of the Mobile World Congress visitors were C-level executives, including more than 2,800 CEOs.

Companies all over are cutting back, even so, the movement was good although some exhibitors mentioned that a good number of people were only there for a quick, highly focussed, trips and were not spending as much time exploring as usual.
Unquestionably, the economy was the spectre lurking just offstage. Everyone was trading opinions about how it will be, what suppliers, operators, entertainment – whatever – would be the hardest or the least hit. Governments, traditionally good targets for complaints, were being touted by a number of vendors as the last of the big time spenders and potential saviours of the industry. From the talk, one would think that troubled economic waters were going to slosh off the backs of the mobile industry’s leaders as though they were ducks, but that didn’t stop them from speaking of the cash governments would inject into economies around the world. There was talk, though, that many mergers and acquisitions were likely – tacit recognition that not all the companies would make it easily through the downturn and that shop until you drop bargain hunting for companies might be planned by groups fortunate enough to have overflowing bank accounts.

Given the optimism, I wonder why so many vendors were stressing how well they could enhance and extend existing technologies and supercharge existing infrastructure instead of pushing the latest and greatest in new infrastructure investment.

Handsets are the eye candy at shows like this; everyone looks, everyone comments and everyone sees great omens in the handset tea leaves and Tarot deck.

The most significant happening in the handset game was not the great number of new product announcement, but a non-event. What happened to the Android handsets? There are nine handset manufacturers (HTC, LG, Motorola, Samsung, ASUSTek, Garmin, Huawei, Sony Ericsson, Toshiba) taking part in the that supports Android, Google’s open source mobile operating system, but only one – HTC – is actually producing Android ready handsets.

I had expected a number of companies to announce new handsets, but despite the adhesion of ten of the world’s largest mobile operators to the Open Handset Alliance (it might soon be 11, Verizon recently spoke of its interest in Android) there was only one new announcement, the HTC Magic model for Vodafone. None of the other major handset manufacturers – despite past talk and promises – had an Android model ready for the market. One has to wonder about the commitment of operators and handset manufacturers alike – with very few exceptions – to open platforms, indeed to any but their traditional, albeit updated, software platforms and their own fenced off domains. Has fence sitting become a mobile sport?

Voice quality is not even mentioned – ‘okay, it’s a phone, it talks’. Mobile handsets are about 12 megapixel cameras (Sony Ericsson); music (Samsung Beat); Internet, email and qwerty keyboards (Nokia E75); interfaces, broadband connectivity (3G, HSDP, WiFi, GPS LG Arena); and, ‘what-can-the-iPhone-do-that-I-cannot’, touch-screen phones (everybody).

Nokia, with Skype, announced its N97 with pre-installed Skype software and WiFi. This lets users call anywhere in the world using the Internet wherever they can access a WiFi hotspot. Skype’s ‘presence function lets users know whenever any of their contacts are online. Is one to wonder why mobile operators are a tiny bit paranoiac?

Could it be that egg sitting, not fence sitting, is the hot mobile sport? Guard the nest, don’t let the customer escape! Control the mobile Web, control the applications, lock the applications to the software platform with widgets and apps from their very own company store; Microsoft, Nokia and Samsung have followed the Apple lead and opened their own stores and Android, if it gets any traction, will probably sell apps as well.

Operators, rightfully, are wary about Internet giants like Google, of software giant Microsoft and handset manufacturers siphoning off their customers and are learning from early experiences with the iPhone (where Apple, not the operator was the big winner) and are hatching plans to sidetrack outsider raids upon their territory. Since, like it or not, phone makers and operators depend viscerally upon one another, one already sees signs that they are likely to join forces, cautiously, to slow the common enemy – the big Internet players like Google.

Handset makers are adhering, timidly, to the green revolution. Samsung’s Blue Earth Phone uses solar power to charge its batteries and its case is made from recycled plastic water bottles. Solar power models were shown by Samsung, ZTE and LG and Solio introduced a standalone solar powered recharging unit. Despite the green sales pitch, I suspect the real motive, the real market, behind the sun-powered handsets is to reach consumers in developing regions of the world where electrical power, if it reaches a region at all, is likely to be a low-grade, on and off again, affair. Whatever the reason, this is an important development.

Broadband was, as always, a hot topic, but Long Term Evolution (LTE’s) expected triumph was somewhat hollow this year. Sure, LTE will go ahead, but the urgency, the edge, seems to have been dulled by the economy. There was a lot of talk about pushing the limits of the existing infrastructure and even going for solutions such as High Speed Packet Access (HSPA) + or even EV-Do that would have been also-rans in a better economy, but instead of being widely available by the end of next year, LTE seems a better bet for 2012. In the meantime, WiMAX is likely to do better in many emerging markets and anywhere operators have not yet invested in 3G infrastructure.

Broadband growth is inevitable, so although LTE growth might slow, support is still strong; at least 15 companies, probably more, including Qualcomm and TI have announced LTE chipsets designed to be embedded in notebooks, netbooks and a host of other devices. The biggest concern, though, is not the technology. Cellcos are more concerned about getting the spectrum to handle the ever-growing demands of broadband applications. New spectrum can be quite expensive, and when it isn’t it is likely to be open – and open the doors for more competition.

Speaking of competition, will anyone ever ‘own’ customers again, the way they were owned in the past? People still talk about owning customers as though the Internet, deregulation and disruptive technologies never happened. Let’s face it, everyone is doing their best to get the biggest piece of each customer’s spending, but fragmentation will increase and yesterday’s business models are slowly dying.

Femtocells, small wireless access points at home or business, that might ease the spectrum crunch for some operators, although few have yet been deployed, are clearly gaining ground as important strategic network options. Femtocells offer fast, high quality wireless broadband coverage in restricted areas. When the user arrives home, femtocells automatically re-routes your mobile phone voice and data traffic away from the mobile operator’s macro-network and into the home broadband connection.

Rates for traffic routed via the femtocell are equivalent to, or less, than those for normal fixed line services and, since traffic on the mobile network is reduced, operators can make better use of their existing spectrum and infrastructure. It is no wonder that the popularity of the femtocell is growing.

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The next issue of Connect-World India will be published early next month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows such as: Convergence India, New Delhi, (19-21 March 2009).

The theme of this issue of Connect-Word India will be – It’s more than outsourcing.

The growth of India’s economy, driven by ICT and business process outsourcing has inspired comment and imitation the world over. The credit given to outsourcing is deserved, but the government policies, astute entrepreneurs a vast number of well educated and prepared professionals that made India’s success in this field are often overlooked. India’s growing ability to source new service and products, not just outsource the operations of others, and its ability to move ahead by its own efforts are also overlooked by those not familiar with the country’s vast pool of talent and potential. This issue of Connect-World India will examine India’s growing strength and look a bit down the road it is travelling.

This issue of Connect-World India will explore the influence of information and communication technology upon the transformation of India, and how India, itself, is transforming technology and processes and helping create a seamless world.

India 2009 Media Pack; Click here

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February I 2009

12 February 2009

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

The need magnet and fixed-mobile convergence

There is a big need magnet in the sky pulling services to a digital point. Networks are migrating to all-IP architectures, and the devices that access them are merging into multipurpose communications, photographic, agenda, GPS and whatever-else-electronic-that-fits in a device that slips into a shirt pocket.

One of the most promising sorts of convergence from technological, subscriber service and commercial viewpoints is fixed-mobile convergence (FMC). Some see FMC as the future and as the salvation of many fixed access operators.

Now there is a secret of sorts – no one tries to hide it, but few seem to know it – there is no mobile service without fixed backhaul connections. These connections are not just bits of string that tie mobile phones to fixed, these are major, high-speed, broadband connections that literally hold mobile networks together; without fixed links there are no mobile networks. From the user’s point of view, though, this convergence is invisible. For a user, fixed-mobile convergence means having your cake and eating it too. The mobile phone is, increasingly, the communications device of choice or, as in many developing regions, the only choice for most of the world’s subscribers. The phone is more than a communications device, it is a lifestyle, an electronic wallet – banking and credit card services for the world’s unbanked population, a game machine, a camera, a mobile TV, the social network interface … on and one with no end in sight. The mobile is more than a device; to users, it is their connection to their world, businesses and friends – it is always with them and it brings many advantages that fixed phones do not.

FMC ‘s most basic version is a voice service that gives one the best of both the fixed and mobile world by moving seamlessly to the best available network, be it fixed or mobile.

Mobile users with fixed service want to take advantage of their mobile in the home, but without paying the premium for mobile service. FMC lets subscribers use their mobiles at home; they keep their mobile number, but pay fixed-service rates. By installing tiny ‘femto’ cells, a mobile operator can seamlessly hand-off calls to and from the mobile phone to the broadband Internet connection at the home – or office, for that matter. Since the call travels to the backbone network via the user’s own broadband connection, the traffic on the mobile operator’s access network is reduced.

Business users see FMC as a way to extend home office PBX services into the field, to seamlessly and transparently reach employees through a single number no matter where they are – at the office or in the field. PBX manufacturers are, of course, each working on their own super version of FMC and piling on as many features as they can – instant messaging, voice mail -even visual voice mail, all sorts of directory-driven services and more. By integrating text, voice and images FMC can even evolve into unified communication, but that is another story with its own set of advantages and problems.

FMC usually uses dual mode cell phones with WiFi handsets to connect to the fixed network using the office WLAN or the home’s own broadband Internet connection. The dual-mode phones are still somewhat expensive and run through batteries rapidly, but they should get better and cheaper in the near future. The WiFi version makes sense in companies with an extensive office WLAN and at homes with WiFi networks for broadband Internet and home entertainment access.

There is also cell-based FMC that uses existing GSM or CDMA handsets. These 3G mobile-based versions uses licensed spectrum and can offer a number of advantages including better quality, cost savings, better battery life and a host of other benefits. Although I have heard more talk about the WiFi, dual-mode handset, version, I expect the cell-based versions will eventually take over for many applications.

Although there is a lot of fuss about FMC at home, the big equipment companies seem to be betting on the office market. I haven’t got a field team at my beck and call to check this, but my impression, based on the very limited figures I’ve seen, is that although companies are interested, maybe very interested, few have committed big bucks to FMC projects. The economic downturn makes it likely that few companies will rush into FMC until business starts picking up and the economy is heading firmly upward.

The operator’s business case for FMC will depend upon weighing and balancing a great number of factors including the capital expense to roll it out, the availability of credit including vendor financing, current backhaul costs compared to the cost of off-loading backhaul via the home or business broadband connection, the difference between FMC rates and current mobile rates. There are a good many other factors, including competitive pressures, as well, but that gives a good idea.

I wonder if, even after thoroughly crunching the numbers and massaging the data, many operators will feel comfortable with the results – positive or negative. At least they will think long and hard before giving up mobile minutes for unknown FMC gains at home. The situation in the enterprise market will be demand driven; large companies that see real internal synergies, cost savings or even income enhancements will pressure their communications service providers until they get their way or until the competition offers what they want.

I expect many companies will be in for a surprise. It sounds easy: just link your WLAN to your PBX and get dual mode handsets. There are other variations, but they all have a simple sounding, simplistic, ‘just add hot water and serve’, description. The problems will come when the WLAN – a data-centric network has to be re- dimensioned and re-engineered for voice. This costs money, and managing the new voice centric network is likely to be a trying experience. Putting in a big business FMC network, even if it is not a full unified-communications (UC) effort – no, FMC and UC are not the same thing – is bound to be a complicated, nerve wracking, experience.

Still, FMC lets companies integrate all their voice communications including all the mobile devices their employees use, control and track mobile costs, and provide a single point of contact, a single number, for each employee’s communications. There are problems with any new technology; so until the sector matures and stabilises, users will have to deal with the problems, hitches, glitches, bugs and costs pioneering brings.

OBusinesses are sure to move to FMC – and eventually UC as well – over time because of the efficiencies, cost savings, customer satisfaction and productivity gains they generate on a day-to-day basis. Today, FMC is relatively new, the full cost of FMC is falling, but still high, so the return on investment is bound to be a bit slow for most companies. Over the next few years, both fixed and mobile operators will complete the transition to all-IP backbones and the boundaries between the core systems of the fixed and mobile networks disappear; FMC systems will also increasingly become plug and play propositions.

The unified fixed/mobile core networks will help operators accelerate the move to FMC since the administration and operation of FMC becomes simpler and more cost effective with merged networks. The network transition will probably be substantially complete within three to four years, even with the economic downturn.

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____________________________________________________

The next issue of Connect-World India will be published early next month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows such as: Convergence India, New Delhi, (19-21 March 2009).

The theme of this issue of Connect-Word India will be – It’s more than outsourcing.

The growth of India’s economy, driven by ICT and business process outsourcing has inspired comment and imitation the world over. The credit given to outsourcing is deserved, but the government policies, astute entrepreneurs a vast number of well educated and prepared professionals that made India’s success in this field are often overlooked. India’s growing ability to source new service and products, not just outsource the operations of others, and its ability to move ahead by its own efforts are also overlooked by those not familiar with the country’s vast pool of talent and potential.

This issue of Connect-World India will examine India’s growing strength and look a bit down the road it is travelling.

This issue of Connect-World India will explore the influence of information and communication technology upon the transformation of India, and how India, itself, is transforming technology and processes and helping create a seamless world.

India 2009 Media Pack; Click here