Predictions for 2010: Mobile Winners and Losers

It's mid-December, so it must be time for the annual prediction season. I've tried to keep them short and sharp and to the point - there's plenty of detailed argument behind each of these if people are interested.

I'm off away on holiday tomorrow, so may not get a chance to respond to comments.

Heros

• HSPA+ Just like LTE, but it's got voice and it's straighforward to implement
• Apple iPhone - looking unstoppable, playing the pricing and distribution curve flawlessly, and doubt Mr Jobs will have some extra Wow Factor in mid-2010 to maintain its cool. Apps will continue to help, although from Apple's point of view they're just a means to an end rather than an important revenue source. As usual, hardware is where the profit is.
  
• Android - OK, I'm eating my words on this one, it looks like Google has got it right on the second attempt, rather than some platforms' 3rd or 4th time around. Momentum looks like it's building, unless OS fragmentation calls a halt. Might still struggle in parts of the world where low Gmail penetration deprives it of a headline use case.
  
• Augmented reality - Layar and its peers seem to have tapped into something unique to mobile devices. The notion of a wireless "head-up display" is sci-fi turned real. I can see a whole ecosystem evolving here - and a set of headaches for network planners who have only just got their heads around a shift to indoor usage of mobile data - it might shift back.
  
• Facebook - sets the standard for personal communications, but also the user-provider interaction model. It encourages rebellion among its own users. Meanwhile, it's turning from a service to an app-platform to a web OS. Makes mobile operators' claims of "loyalty" look like a joke in comparison.
  
• Consumer femtocells - ignore the impatient critics expecting overnight adoption, the momentum is building slowly but steadily. The need for extra capacity, offload and the ability to use them as services platforms is inexorable. I'm expecting decent-size deployments in 2010 - although ignore anyone suggesting it's an alternative to WiFi.
  
• Huawei - the scariest vendor in the telecom industry. Derided by some as a cheap copy-shop a few years ago, it's now aggressively pursuing every sector of the telecoms industry with skill and depth. Watch out for its handset division taking out back-markers like SonyEricsson, while the infrastucture side is still worrying everyone. The company's lack of dogmatic pursuit of specific standards is very positive.
  
• "Comes with data" - 2010 starts to see the end of the "subscription mentality". Following on from the Amazon Kindle, we're going to see a range of devices with connectivity "built in" to the retail purchase price, with no need for onerous contracts. Behind the scene, new wholesale models will rule the roost.
• Connection-sharing - I've written quite a bit about this recently, and it might take until 2011 to really pick up, but I think one of the most disruptive possibilities is that of users pooling their mobile broadband connections. "Share my mobile connection - only with my Facebook friends"
• Operator-on-operator applications - I'm not convinced that many will be successful, but I'm expecting various MNOs to follow Vodafone's and Orange's lead and try to launch software apps and widgets to run over each other's networks, exploiting smartphones and open appstores.

Zeros

• Mobile IMS and RCS - the dead parrot is now looking undead, shambling about like a feathered zombie that won't stay buried. But there's plenty of garlic and wooden stakes around....
• LTE - No clear advantages over HSPA, all manner of teething problems in optimisation and building scale. Looks like 2001-era UMTS. Come back in 2014 for it to move beyond niche.
  
• Virtual conferences - virtually useless. Everybody hates them, irrespective of the supposed savings in travel. If I can't be there in person, just email me a PPT or PDF and give me a dial-in number.
  
• NFC - the videoconferencing of the 21st century. Repeatedly hyped, repeatedly delayed and will be repeatedly ignored by customers. Pointless.
• Twitter - either niche or irrelevant. Either way, it doesn't deserve more than 5% of its current hype.
• Enterprise femtocells - no clear business model, and a world of pain in implementation. Question to ask your mobile operator: "How many customer-facing firewall experts do you have?"
• Embedded 3G netbooks - The business model and user behaviour still don't stack up in most cases, a year after I highlighted the deficiencies in a major Disruptive Analysis report on Mobile Broadband. There's already evidence of fraud with subsidised laptops being "box broken" and resold. Dongles and MiFi's are cheaper and easier.
  
• Smartphone profit margins - Touchscreen? Check. Fast processor? Check. Web Browser? Check. AppStore? Check. Widgets? Check. Differentiation? Nope. Margins? Ever-thinner.
  
• Operator AppStores - Might turn out to be "table stakes" to play in the smartphone market, but I really can't see them being the main avenue for application sales for handsets, especially as the iPhone is excluded and every other device will have its own vendor-run store as well. Won't "move the needle" for MNO revenues or churn.
  
• Aggregated social networks - As I mentioned a few weeks ago, the idea of combining various web services into a single handy screen & identity sounds great to operators and other wannabee "owners" of customers. But no user actually wants to be aggregated - we're all very good at multi-tasking now, thank you very much.
• The terms "dumb pipe" and "over the top" - Hugely evocative and judgemental soundbites, which have caused countless executives to make hugely wrong kneejerk decisions. Try using the phrases "Happy Pipe", and "Independent Application Provider" instead for a few weeks. The world looks different now, doesn't it?

No surprises

• WiMAX - Steady but unremarkable growth for fixed-wireless broadband in developing economies. A few high-profile mobile-centric deployments, but not many devices. Slow going for the promised new business models.
• Open network APIs - Lots of noise around initiatives like GSMA OneAPI and numerous operator-specific programmes. Location lookups, network-based SMS, voice and CEBP, automated authentication and billing. Moderate market uptick in 2010, although with a continual battle as alternative work-arounds developed by Google et al continue to mature.
• WiFi - Doesn't get replaced by femtocells, doesn't displace cellular mobile broadband, gets embedded in more devices. Hotspot business models largely still a train-wreck, apart from free venue-sponsored ones.
• Nokia - finally gets going on touchscreens and decent UI. Bounces back a bit. Chugs along steadily and profitably for feature phones and the developing world. Confounds the more hysterical pessimists and doesn't disappear. Ovi might return from the dead, but I'm not banking on it.
• BlackBerry - Continues quietly growing in Apple's PR and branding shadow. Makes considerable headway among consumers, especially teenagers who use it for messaging and Facebook. The PIN messaging system starts to encroach on MSN's territory.
• Consolidation - margins are looking ever uglier. New business models aren't succeeding yet. Capital remains tight. Scale is king
• Mobile TV: Was dead, is dead, will stay dead. No surprise.
• Data roaming prices. Everyone knows it's a huge embarassment. But it's such a profitable embarassment that nobody will budge until regulators or competition authorities come after them with a big stick.
  

Another operator-on-operator service: Orange ON

After the launch of Vodafone 360, there is now another entrant into the fray for mobile operators offering so-called "over the top" applications themselves, from the usually ultra-conservative Orange.

There's an article about it here . I'm at the Telco 2.0 event in Orlando today, but will try to chase down more details when I can.

One tantalising snippet though:

"Although the final details are yet to be confirmed, the network is looking at offering VoIP-type services in markets where Orange does not have a presence. It is understood that this could eventually be rolled out to customers on other networks where Orange does have a footing"

I think that this sort of operator-on-operator competition will be a major disruptor in 2010-2011. I've been talking about the idea for a few years, but it's needed a critical mass of smartphones and appstore-type delivery mechanisms to make it practical.

For some history on this concept, see a previous post here.

LTE Voice: the more I've looked at Circuit fallback, the worse it's looked

I've been talking about the problems with voice on LTE for more than two years now. I first published a report on VoIPo3G in November 2007 in which I discussed in great detail the problems with IMS voice, and the fact that there was no simple, standardised version of "basic VoIP" suitable for operator deployment. I'd previously written about the issues with IMS-capable handsets in 2006, and VoWLAN the year before. More generally, I've been covering wireless VoIP since about 2001.

A common strand in my analysis has been that the technical standards are often completely divorced from considerations of end-user behaviour and experience, the needs of application developers, the practicalities of handset design and the realities of business models.

Like politicians, there's instead usually a focus on control and ideology, rather than pragmatism.

That's not to say that every new technology development has to start with some sort of fluffy "inclusive" focus group approach, or that pseudo-cartels should invent things that competition authorities will frown upon.

It often just means that more consideration needs to be paid to questions like:

• "Hang on a minute - how's this actually going to look in the hands of the user?" or
• "Isn't this going to make it worse than the older solution people have already? Who's going to buy that?" or
• "Isn't that going to break all the other applications running on the phone? What happens if it's multi-tasking?"

A very good example of this is one of the proposed standards for providing voice over LTE networks, Circuit Switched Fall Back (CSFB). This is the 3GPP approach to supporting voice which drops the LTE connection back to 2G or 3G to make or recieve a phone call. It is generally positioned as an "interim" solution before moving to full IMS voice.

I've written before about CSFB, and it's also been discussed in many of the comments threads on my previous posts on LTE voice, such as here, here, here and here - many of which also cover ongoing problems with IMS voice. (The recent OneVoice announcement is a possible medium-term solution to some of those problems).

Some of the issues that keep cropping up include the latency involved in the LTE-to-3G/2G process, the impacts on any data applications running on LTE at the time of a call, and the need to have overlapping coverage of older networks everywhere you put LTE.

I've now done a more thorough analysis of CS Fallback's flaws. I've come to the conclusion that it's not just awkward, it's actually terrible - worse than useless, in its current incarnation at least. Going back to my questions before, it seems clear that nobody ever said something like:

"Hang on a minute, LTE phones will be expensive, so our best customers will buy them first.... but it will give them a worse telephony experience with CSFB than their existing handset. That's never going to fly!."

(Incidentally, coming back to a discussion from another thread, one commenter asserted that fallback could be achieved in about one second. I cited 2-4secs, based on a 3GPP submission I'd seen, and we agreed to disagree in the absence of hard evidence. I spoke to a *very* senior person in handset RF development for a major device vendor earlier in the week, who has more cellular patents than I've had hot dinners. His estimate was for 6-12 seconds extra latency. For an LTE-to-LTE call or SMS, it would be quicker to use Morse code).

I've now written a white paper covering CSFB's major flaws, which actually seem pretty extensive even beyond what I've written above. It almost looks like it was designed to make IMS voice look good by comparison.

The paper is available for download from here. But first, some disclosure. It has been commissioned by Kineto Wireless, the chief proponents of the main alternative VoLGA, which has evolved from UMA/GAN. In common with all Disruptive Analysis' sponsored material, I only take on topics where I already have a strong opinion - I'd written positively about VoLGA since March , despite having been a thorn in UMA's side since its launch in 2004. (I'm convinced that somewhere in Kineto HQ is a dartboard with a picture of my face on it). It's not perfect either, but it seems much better than CSFB or IMS.

I'd also previously written about CS over HSPA (which is the same basic principle of 2G voice over a 3G IP bearer) in early 2008. I'd even originally suggested doing "2G over 3G" as a possible better use case for UMA than WiFi, way back in 2005/6, albeit a bit flippantly at the time.

The bottom line is that I think that 3GPP should reconsider VoLGA or something close to it. CS Fallback looks like a terrible interim solution for voice-on-LTE, especially for operators who aren't sure that their particular endpoint is IMS voice. The current two-solution approach (CSFB / IMS) seems guaranteed to either promote 3rd-party VoIP solutions, or delay LTE entirely. If the whole thing *has* been some sort of standards conspiracy to force IMS into the hands of the unwilling, I'd make a suggestion to include some game theorists in the discussion next time.

One thing I should note for completeness is that there are a couple of other options out there, notably NSN's Fast Track and another from Acme Packet and Mavenir. I haven't had a chance to drill into those as much, but from an external perspective they don't seem to have as much traction or behind-the-scenes support as VoLGA.

Once again, the white paper on why I feel CSFB is "not fit for purpose" is here.

Facebook just added a small Twitter bird to its farm on Farmville

I'm a longstanding Twitter skeptic.

I'm convinced that its importance is vastly over-blown by the media industry itself, especially lazy journalists who use it as a quick barometer of opinion. Nobody "real" actually seems to use it, just a few people who either like talking to themselves, or who like the external validation of lots of "followers" (celebrities, politicians, social media commentators and other assorted narcissists). Some of my friends in the tech PR community have also succumbed to it, despite my attempts at re-educating them.

So I found it deeply amusing that an even more annoying social web phenomenon has now grown much larger than Twitter - the intensely irritating Farmville apparently has 69m users - a subset of Facebook's 350m. I'm one of the other 280m who've switched off all Farmville notifications from our addicted friends.

An early prediction for 2010-11: Twitter falters a bit..... then gets acquired by some wannabe media-turned-social-media company... then disappears into a black hole to join PointCast, FriendsReunited, Second Life and Friendster as one of the long list of Internet has-beens. And it's joined shortly thereafter by Farmville as well, in a pleasing sort of symmetry.

Does anyone really want to converge mobile social networks?

I'm losing count of the times I've heard people come out with a variation on the theme of:

"Here's a single piece of software that aggregates all your social networks into one convenient application or screen".

However, I most certainly have not lost count of the number of times I've heard people tell me:

"I wish I had a single piece of software that aggregates all my social networks"....

....because the total number of people who've told me that is a big round zero.

Am I missing something, or does this Emperor really have no clothes? This problem just doesn't seem to exist - and indeed potentially it introduces massive risks to the average end user, who is probably not as stupid as many of the proponents of the concept seem to think.

Why would I want my operator / device vendor / OS provider / application shop to act as a front end and filter for my other services? I specifically don't want my contacts or addressbook converged - I keep separate lists for very good reasons. I don't want any one organisation to be able to aggregate all the info about my multiple online personae - I'm very happy having my LinkedIn and FaceBook profiles as separate as possible, and neither linked into my Yahoo contacts or Skype friends, nor my handset's contact list. The aggregation point is in my head, which is pretty good at multi-tasking.

All the people I know who are active on multiple networks do so for very good reasons, usually that they want to segregate separate groups of individuals. I do the same with IM services, using Yahoo, Skype and Facebook messaging for different sets of work / personal / family contacts. I don't want a multi-headed IM client.

Plus, most of the "converged networks" businesses seem to be predicated about adding another layer of lock-in or advertising, often with some spurious marketing verbiage and trust and security. Surely one of the nicest things about widgets and mobile web applications is that they can *diverge* easily and simply? It just strikes me that attempting to shoe-horn all these disparate networks and communications methods together risks destroying the unique "social value" of each one, not adding to it.

Tethering and mobile connection-sharing. Microsoft's thinking about it too

I wrote a few weeks ago about Joiku's new connection-sharing application Boost, which connects smartphones into local groups via WiFi, allowing them to combine and load-balance across multiple mobile data connections. I talked about the potential for "operator diversity", where you might have a number of people sharing multiple connections on different networks, and perhaps using different frequency bands and technologies.

Basically, it's software-defined-radio at the application layer. Not easy, but not impossible either - and with huge disruptive potential.

What's really interesting is that it's not just Joiku that's been playing with this concept. After seeing an article in New Scientis, I've found this really interesting paper from Microsoft on what it cools the "Cool-Tether" concept, which has lots of detail about the power management implications of this as well.

Some of the possibilities around this area are so interesting, I'm hesitant to write about them. In fact, if anyone wants to discuss commercial opportunities for collaboration around applications or IPR, let me know.....

SMS spam advertising - completely unacceptable

I have an almost irrational hatred of SMS-based advertising, which is shared by quite a number of other people I know. It's deeply intrusive, interruptive and time-consuming - and the idea that I should take even more of my time to send STOP messages to something unsolicited in the first place makes me shudder with disgust at the perpetrator.

Case in point: I got a random, unsolicited SMS from Virgin Atlantic today. I've been a member of their frequent flyer scheme for some time, and unfortunately they do not have a method to allow you to discriminate about how you receive information. The "communications preferences" page just says "Communications will be either by email, post, telephone or SMS. By opting in you will be agreeing to receive communications from us." No way to specify which you are willing to accept. It may well have changed since I first signed up, I'm normally pretty careful about this.

I don't mind emails as I don't have to take time to read them - I can see the headers. But on my personal phone, I absolutely, never, ever want spam. Yes I know I could get some fancy client for filtering SMS on an iPhone or whatever, but I do not care. SMS adverts = spam = unacceptable, as far as my personal life is concerned.

Too late for Virgin anyway - I won't be using the airline again, and I've told customer service to delete me from the frequent flyer database. No second chances.

Edit - I'm dismayed that the UK's Telephone Preference Service which acts as a central "do not call" database for telemarketing, does not extend to preventing SMS spam as well. There ought to be a centralised mechanism for opting out of all marketing-related text messages, enforced in law so that all bulk-SMS providers need to validate against it. Alternatively, I'm wondering if there are any applications for Android, iPhone or other platforms that use the same sort of Bayesian approach that PC email antispam software exploits.

A quick way of deciding if you're being ripped off for data roaming fees

A lighthearted thought experiment:

.... visit a city in a new country. Plan a journey from your hotel to a typical "point of interest" perhaps a mile (1.6km) distant.

Is it cheaper to:

(a) Walk, using Google Maps or a similar mapping product on your phone, consuming roaming data to show you the city's layout and plot a route as you stroll across town.
(b) Jump in a taxi. the driver worry about the route instead, and pay based on the meter

If the cost of the data roaming > cost of a local taxi, I think you can be fairly confident that you're paying your operator too much. Or else you're somewhere with really cheap taxis.

Is it worth going to MWC next February?

I'm currently trying to decide whether or not to take my normal week's trip to Barcelona in 2010.

At one level, it's "obvious" - it's what everyone does, isn't it? And certainly I usually have an intense week of briefings, conference-style sessions, client meetings, dinners and (of course) late nights. Bits of it are fun, and bits of it are simply a hard slog.

I think last year I ended up having about 50-60 engagements of one form or another, plus extra ones at another conference (NetEvents) that started 2 days' earlier. I managed to find some quite cheap accommodation and flights, and I had at least one "paid gig" while I was there, so that made it worth my time financially. On the other hand, I spent a good % of the preceding month playing email and phone hockey, to set everything up - and probably turning down another 100+ invitations, having pre-MWC briefings and so forth. It's hard to work out the fully-loaded ROI.

This time, I'm debating whether it's worth it at all. I meet lots of companies and individuals at smaller conferences year-round, usually without their PR minders and carefully-messaged analyst-facing slides. Maybe a couple more of those - I get no shortage of invites to speak. And I don't usually go to CTIA Wireless or one of the Asian events, so maybe I should take a week out for one of those instead?

I'm not the only one thinking this - quite a few other firms and individuals either pass entirely (Apple?) or have scaled back their presence. This isn't because of travel budget either - it's just a hard-nosed view on what & where is the most effective use of *time* rather than cash. (The answer isn't in "virtual conferences" either in my view - they're uniformly dreadful and I usually switch off after the first hour, if that). And for all those traditionalists out there - sorry, if MWC went back to being 3GSM Cannes, it'd be a *definite* no from me.

I think I'm going to give it another couple of weeks. If by then I've got a few things lined up that are direct revenue-earners (moderating panel sessions, giving customer presentations, using it as a basis for a specific research effort) then it's a no-brainer. Otherwise, maybe I'll try an experiment and skip it for once and just set up an auto-responder on my email saying "sorry, not going".

(Oh and if anyone *does* need a thought-provoking speaker or lively moderator, please email information AT disruptive-analysis DOT com)

The quadplay myth

One of the perpetual themes I encounter at the moment is the notion that the world is moving towards a "converged" situation in which individuals or families purchase all their communications services from a single operator.

In particular, there is a fervent belief that people will choose the same cellular providers and fixed broadband providers, tempted by bundling deals and wondrous "three screen" content and entertainment services.

Not only that, but these ultra-loyal users will happily spend more in aggregate, persuade their entire families to follow their lead, churn less and will be happy to have femtocells or WiFi to offload "mobile broadband" onto their own paid-for fixed connections.

For the larger hybrid operators, that is a Utopian ideal. And to be fair, in some circumstances it will actually happen.

But realistically, it strikes me as a 10-20% thing whichever way you slice it.

- Maybe 10-20% of households will have a single family plan for all mobile devices coupled to the same provider's DSL or cable or fibre
- Maybe 10-20% of fixed broadband subscriptions will incorporate a bundled "for free" mobile extension (perhaps with a detachable dongle in the gateway)
- Maybe 10-20% of triple-play (voice/Internet/TV) subscriptions will expand to quad-play with mobile as well

There are too many factors driving *divergence* here, not convergence. A partial list:

- Operator-exclusive devices like the iPhone and Motorola Droid will often drive operator choice, not the other way around.
- Some mobile operators have no fixed arms (eg 3, or some T-Mobile properties)
- Some mobile operators only have fixed coverage in certain places (eg AT&T)
- Some mobile operators have lousy coverage in certain places (or certain buildings) where their fixed arms are strong
- Devices like the Amazon Kindle and laptop/dongle combinations will proliferate with an unknown "Brand X" mobile operator behind the scenes, thus non-connectable into an existing household plan
- Prepay-centric markets tend to have many people with multiple devices, specifically chosen to be on different operators to enable tariff arbitrage
- Many users have company-issued devices on a different network to their personal devices and broadband
- Few users are ever willing to churn fixed broadband provider for a variety of reasons (unique content / IPTV, difficulties in switching phone numbers or email address, perception of disruption etc)
- Unusual households (flat-sharers, students in accommodation blocks etc)
- Preference of children to buy own devices / services with pocket money rather than as part of a family plan

You get the picture.

Now, the 10-20% of quadplay-receptive households are definitely a target worth pursuing. But let's not kid ourselves that they represent the *typical* future household rather than the ideal telco-dream segment. Yes, the picture will vary substantially by country and specific operator, but overall it's worth betting on divergence and not convergence (as per usual in the telecoms industry).

Some thoughts on Android

I'm slowly starting to become a bit more positive about Android. I've been in the US for most of the last week, and it was interesting to see how many "normal" people had Android devices, compared with the UK where it's still viewed as geektastic. Google's introduction of free turn-by-turn navigation is a bit of a smart move too: this article makes a fascinating read about the Google business model evolving.

It seems to me that the OS is maturing faster than anticipated, and certainly more quickly than Symbian and Windows Mobile. It looks as though Google will take a leaf out of Microsoft's book and jump all over its rivals if they make a mis-step (which certainly seems to be true of recent S60 and WM6.5 devices). It will be interesting to see if Maemo steps up to the plate, given Nokia's announcement this week.

I had a quick play with a Motorola Droid and was fairly impressed. Fast, comes with a QWERTY, decent-seeming camera etc. I could see myself possibly using one as a work device, if it's possible to buy one unlocked for a sensible price, although I wouldn't want to use it as a personal voice/SMS device.

Operators should push vendors & silicon companies to support 2.6GHz HSPA+ as an alternative to LTE

Following up on my post from two weeks ago about HSPA / HSPA+ in 2.6GHz, I'm now more sure that this is a becoming a wise option - and operators and device vendors should start pushing their suppliers to support it. I'm becoming increasingly sceptical about the short-term case for LTE, especially for GSM/UMTS operators in developed markets like Western Europe.

The received wisdom suggests that "new spectrum = new technology". I can certainly see the appeal and elegance for radio network engineers to put the newest, shiniest kit into the spanking-new bits of frequency in 2.6GHz and the digital dividend.

But I think that for current HSPA operators, they should think twice. Even the theoretical gains in efficiency for LTE vs. Release 8 or Release 9 HSPA+ are relatively modest. With 64QAM and 2x2 MIMO, I've heard figures of 20-30% *might* be achievable. However, given views of contrarians like Moray Rumney from Agilent, these gains may well not be attainable in the real world - or at least, only for a certain proportion of the time under specific user/cell scenarios. In terms of actual *average* throughput in normal usage, there may well be only a wafer-thin margin between them.

Yes, LTE has better latency (in theory), a flatter and maybe cheaper network, and the ability to use thin slivers of spectrum.

But this needs to be set against the need to run LTE as an overlay on HSPA anyway (3 sets of network opex....), plus the extra cost and complexity in handsets, the huge testing and optimisation costs, the probable flaky hand-offs between LTE and 3G/2G, the ongoing issue of voice support and numerous other unknowns. Add to this the fact that LTE does not appear to offer any obvious new business models compared with HSPA+ (especially if only used in limited "hotspots") and the business case dissipates even further.

That's not to say LTE won't be improved - after all, HSDPA has proven a superb "bug fix" for WCDMA, only 5 years after it was introduced. Prior to that point, 3G was pretty pointless - in hindsight, operators would have been better off leaving the 2.1GHz spectrum unused, or perhaps temporarily putting EDGE in it, although under old regulatory regimes that probably wouldn't have been allowed.

This time, there are more options.

I think that operators should give serious consideration to the scenario of continued upgrades to HSPA, including putting it in new spectrum bands like 2.6GHz. Much of the new radio equipment could be easily upgraded to LTE at a later date - if required. There's possibly an argument to skip current LTE entirely and wait for real 4G - LTE Advanced - as an eventual migration path.

Given that operators are currently starting to put HSPA in refarmed 900MHz (surely also a "new band" effectively?), why not also 2.6GHz?

Either way - I think that operators should start leaning on their suppliers, both infrastructure- and device-side - to support HSPA2600 as an option at least.

Edit: any game-theorists reading this might also want to ponder on the competitive impact of those most benefiting from early scale economies for LTE devices (on any band). In particular, CDMA operators moving to LTE will likely be disproportionately affected if their HSPA peers don't follow suit at about same time. Will LTE enable a marketing win vs. HSPA+? Given that neither is 4G I can't really see why - 3.75G vs. 3.9G isn't really a great headline-maker. In fact, if WiMAX and LTE operators can use 4G as a branding device, I see no reason why HSPA+ operators shouldn't too.

Thought experiment - two-sided broadband models

I've just seen another vendor presentation suggesting that broadband operators might be able to charge "upstream" content or Internet companies for differentiated QoS, enabling them to "monetise the pipe".

It's a common refrain, underlined as usual by the 2008-era reference to "over the top players".

Even leaving aside the realities of Net Neutrality legislation for a minute, there simply seem to be almost no real-world examples of "cold hard cash" changing hands for differentiated broadband in this way.

Some of the recent work I've been doing with Telco 2.0 on broadband business models has suggested a few possible niche options here - but there will need to be a lot of work to wrap them with integration and customisation. I'll be talking about these in coming weeks and months.

But every time someone suggests operators might charge the BBC or YouTube or Facebook for access to "their pipes" I can't but help wondering if the reality will be the exact opposite.

I can imagine Facebook, with its 400m users, starting to reverse the proposition. "Dear Mr Broadband operator, forget about trying to charge us per GB of data. Instead, we'd like *you to pay us* $1 per user per month for access to the latest version of Facebook's web platform. PS you can also buy adverts to target users on your rivals' access connections"

OneVoice for LTE + IMS : Necessary but not sufficient

EDIT: If you are interested in learning more about the Future of Voice, I am running a series of small-group Masterclasses together with Martin Geddes, as well as providing private internal workshops. Email me at information AT disruptive-analysis DOT com for more details

 This will surprise a few people: I'm actually quite impressed with the announcement the other day about the OneVoice profile for defining an IMS-based approach to voice on LTE. I've now had a chance to read through the full document.

It essentially de-options a lot of the implementation vagueness and distracting flexibility around using IMS for mobile voice, creating a lowest common denominator "Profile" from the existing standards. It strips away a lot of the unnecessary fripperies and boils it all down to what amounts to the minimum set of requirements for basic telephony to work - if you happen to be an operator bought into the IMS world-view, that is.

Exactly two years ago I published a report on VoIPo3G (which included an analysis of the role of VoIP on LTE, HSPA and EVDO). I wrote "Too much emphasis is placed by 3GPP on unproven ‘multimedia’ telephony concepts rather than ‘plain’ VoIPo3G". More than three years ago I wrote another report on IMS-capable handsets (or the lack thereof) in which I wrote "There is little consensus on the answer to the question "What exactly is an IMS phone?""

Well, this document is an IMS-centric take on "Plain VoIPo3G", and it does go a little further in defining the capabilities of an IMS phone. It makes it very clear that "other media types" like video are not essential, for initial deployment at least. There is not a single mention of the word "presence" in the whole document. It talks about AMR codecs and not the "HD" wideband version AMR-WB.

It appears to have taken a long hard look at the unloved MMTel standard for mobile IMS VoIP and turned it into something more practical. It might even make "bare-bones IMS VoIP" a bit cheaper and easier to implement for some of the operators who are skeptical.

All of which is good. -But the problems it addresses have been obvious for at least 2 years, and this announcement is a start of a process and not its end. This document is just a suggestion, not a standard. It will be forwarded to 3GPP and GSMA and other bodies. It's written on a template that *looks* like a standards document, but for now it's just a helpful suggestion from some interested parties. "this specification defines a common recommended feature set and selects one recommended option when multiple options exist for single functionality"

Hopefully, it will become more widely adopted over time - although it will be interesting to see if any changes are made when other companies have their say. Notable major omissions from the roster of participants are NTT DoCoMo, China Mobile, Huawei, ZTE, LG, Apple, RIM, Motorola, Telecom Italia, T-Mobile, Qualcomm, NEC and quite a few others.

Various other commentators have suggested that this means that OneVoice is "One Ring to Rule Them All" (....and in the darkness bind them), spelling the end for Frodo (aka VoLGA), Gollum (CS Fallback) and all the other hobbit-like contenders for Voice on LTE.

I disagree.

OneVoice is necessary but not sufficient. It makes IMS less painful for mobile voice, but it doesn't make it ideal either. It makes interoperable IMS mobile voice less slow to develop, but it doesn't make it fast. It makes it less cumbersome, but doesn't make it elegant. It makes it less costly, but it doesn't obviously make it profitable. It's an important step, but it isn't the whole journey.

When the OneVoice press release came out, I was at the Telco 2.0 conference listening to Vodafone's Internet Services team discussing 360 and commenting on IMS RCS, saying "it was going in the right direction, but taking too long". They also mentioned they might think about putting a VoIP client into 360 at some point. I initially thought Voda's presence in the press release a bit strange given it seems in no hurry to deploy LTE, but on second thoughts I see no downside for them either: simplifying IMS is either neutral or positive for them, depending on which part of the company you talk to.

Either way, OneVoice isn't going to happen ubiquitously, nor overnight. Handset vendors must be breathing a sigh of relief that they *finally* have bits of a specification to work to for IMS handsets. But it's unlikely to be quick to hit the market or be optimised. And the overall business case for mobile operators to deploy IMS is still not exactly pretty, as it offers no obvious new revenue streams. For fixed IMS, there have at least been some decent arguments around cost-savings. But it's far from clear that the mobile IMS spreadsheets have a similar bottom line benefit.

So there is still likely to be a need for an interim solution for several years - as well as something that works on non-IMS LTE operators' networks. CS fallback is a bit of a train-wreck which nobody seems to like. So I think that VoLGA still makes sense for those wanting to make the most of their circuit-switching assets. And Internet-based voice services like Skype or a future "VodaVoIP" may have appeal for the more 2.0-style operators deploying LTE.

Music industry: stop whingeing

OK, a little off-topic here, but having sat through a lot of hand-wringing during the Media session at the Telco 2.0 event this morning, I thought I'd stick my oar in as well. There was a lot of discussion about banning P2P filesharers, DRM, ISP responsbilities, traffic-shaping and so on, particularly about music. We had the esteemed presence of 1980s singer Feargal Sharkey.

Now don't get me wrong - I produce content myself, and I don't like it when fake spam blogs rip of this site, and I also take steps to protect my published research from illegal copying.

But at the same time, I absolutely disagree that the whole of the Internet industry should be paying much attention to a very small minority, worried about a very small amount of what the Internet is about. I've written before that content is just a small, special sort of application, and the more I think about it, the more my opinion is confirmed.

There is no reasons that music piracy should drive government policy or Internet regulation, any more than software piracy or the online sale of fake pharmaceuticals. However, the entertainment industry tends to enjoy cosier relationships with policy-makers (the French President's wife being a musician, for example, while UK Business Secretary Lord Mandelson is closely linked with the content industry).

Ultimately, the music industry is designed to be (a) noisy, and (b) emotive. That's it's job. So it should be no surprise that they tend to be louder and more emphatic when it comes to shouting about its concerns.

Yet I cannot believe that anyone entering the music industry in the last 10 years has done so expecting to make $$$ from record sales. All the musicians I know are well-aware of the score. They've probably illegally downloaded music themselves. They know the value of live performances, which have been incredibly strong in recent years. If they want to exercise their creativity for purely money-making purposes, they'd be writing iPhone apps instead.

I'm not aware of any decline in the number of bands being formed, despite reducing music sales. A quick glance around the web suggests that musical instrument sales are still pretty robust too.

Bottom line - while piracy is definitely bad news for the record labels, it doesn't seem to be too apocalyptic for performers. But irrespective of the rights and wrongs (and I'm not especially animated one way or the other personally) the noise generated by the music industry is far out of proportion with its overall importance. Turn it down, please.

Finally, an MNO breaks the service/access link. Vodafone 360....

I have long been of the view that the greatest challenge to operators' hold on mobile value-added services will not necessarily come from Google, Skype and other Internet players. It will come from each other.

The unspoken threat has been that other MNOs could represent the scariest so-called "over the top" risk. That they would decouple access from service, and start providing branded services over *each others* networks and handsets.

In particular, I suggested in June this year that Vodafone's acquisition of Zyb might turn into its attempt to break out beyond the narrow confines of its own access-customer base. This follows on from an early warning last year when it launched a cross-operator Facebook SMS app.

I wrote: "My view is that it's an extremely healthy development - if you're Vodafone, or for that matter NTT DoCoMo or a small mobile operator from Africa, why *shouldn't* you have inhouse-developed cool mobile apps, which you want to make available to everyone, not just people on your own network? Sure, maybe you *optimise* for people who have both access+app from you, but why not distribute your software as widely as possible?"

In a nutshell, I was right. Vodafone 360 is available to everyone, not just Voda access subscribers. It's on PCs, there's a client downloadable to other operators' (or vanilla) Symbian or Java devices, plus there's support for other OSs in the pipeline. Yes, the in-house optimised phones from Samsung and others give a *better* 360 experience, but Vodafone has recognised it has to be available as widely as possible to gain traction.

In a way, this is completely intuitive. Businesses like Facebook can succeed because they are addressable by *all* Internet users, not just those confined to a specific broadband provider. This is the way to gain network effects, scale, loyalty and ubiquity. Why would anyone prefer an operator-specific, walled-garden service? The same is true for music (I'm watching Spotify present right now), video (YouTube) or many other services.

One last comment: Vodafone 360 is not based on IMS or RCS, it's. If at some point that changes, I might revise my views on RCS.

Update: just listened to Voda's Director of Internet Services Marketing on a panel talking about 360. RCS was "going in the right direction, but taking too long".... so they used standard web technologies instead.

Obfuscating customer behaviour to maintain privacy

Listening to a discussion about telecom operators aggregating customer data, profiling people based on behavioural software and so on. Not surprisingly, there's the usual questions about privacy, peoples' dislike of personal advert-targetting and so forth.

Don't get me wrong, some of this stuff may be useful in terms of making sure adverts are more interesting and entertaining. But many people (and some countries' legal systems) will take an exceptionally dim view of telco data mining. It fits a bit into what I mentioned last week about the "social web" last week - who really wants all their contacts and behaviour and calls and traffic aggregated and analysed?

For those who do value their privacy, I see a broad set of options emerging to ensure fragmentation will endure. Firstly, the ability to share and federate anonymised connectivity via devices using Joiku Boost or MiFi-type connection sharing. And then I would also expect to see software that makes decoy calls/SMS's with your "spare" minutes and texts, or visits random websites on your flatrate data plan. That should make for some interesting "social graph" analysis.... lastly, I expect a fair amount of messaging or other traffic to be extracted by independent platforms like Facebook (and maybe Vodafone 360)...

Telling anecdote about US views on prepay mobile

I'm at the Telco 2.0 Brainstorm in London this morning. I just heard a comment which, to me, epitomises the difference between US views on prepaid mobile versus most of the rest of the world. It was made by someone who looks at subscriber data management, talking about crunching data for a "hypothetical" prepay provider.

Setting the scene, he referred to the likelihood that c50% of users would be "illegal immigrants or former convicts".

Utterly amazing. I've always recognised that prepaid had a stigma amongst many people in North America, but I hadn't realised it was that bad.

The "Social web" - does anyone actually want it?

Is this another example of The Emperor's New Clothes?

I've lost count of the number of pitches I've heard recently along the lines of "a single client to manage all your social network connections", or "a feed of updates via homescreen widgets" and so on.

I've also often been bombarded with the hideous phrase "social web", which I'm starting to think is utterly cringe-worthy, and ties in with a lot of nonsense talked about "social graph" and the farcical notion that you might be able to link together all your various communications channels.

I am genuinely unsure why anyone would want to link their various social networks or contact lists / directories, or tie together their calling and messaging patterns.

Personally, I work incredibly hard to make sure that I keep Facebook and LinkedIn almost totally exclusive. I'm happy that my Skype friend list has minimal overlap with Yahoo contacts. (Sidenote: on average Skype users have<10 contacts, but they're very "intimate").

Like most people, I'm happy with multi-tasking and compartmentalising my communications channels. I don't meet or talk to people who find they have a problem with fragmented social networks or phonebooks. And I certainly don't want *anyone* to be able to derive collated intelligence from across all of my different ways of interacting with friends, clients, acquaintances and so on. Fragmentation is safer and more comfortable.

I suspect that the only people that only really want this are aggregators and/or operators slightly irked by being usurped by Facebook et al. Plus some of the "social media connectivity freaks", who are generally just those in the social media industry itself, or its immediate neighbours like PR and politics and entertainment.

I reckon there's a near-100% overlap with the type of people people who think Twitter is important, ie a very loud and very small group who like shouting at each other repeatedly via 100 different media. The same group that sit in conferences obsessed with back-channels and Macs with Tweet-deck or whatever else they're playing with this week.

But I've seen no evidence that normal people identify with the types of problem that the "social web" attempts to cure. It's possible I'm projecting my own prejudices here, but I don't think so.

Edit: One specific problem will be that of de-duplication of messages. I already have 50%+ of personal emails being Facebook notifications, as well as the little notification icons on Facebook.com itself. So if I also had them replicated to my phone's homescreen, I'd be getting them in triplicate. Wonderful. (And no, I wouldn't turn off the email notifications as I want them on my PC as well as phones - yes, phones *plural*)

Back to low-power GSM: licence exempt?

I'm at eComm in Amsterdam - and currently listening to a very interesting presentation from James Body (historically with Truphone but wearing a different hat today).

A few years ago, I wrote about the UK's low-power GSM auctions, and the subsequent slow-burn deployment of various GSM picocell-based services from companies like Teleware. It's never really lived up to its promise, though.

I hadn't realised this before, but apparently it is now legal to deploy low-power GSM in the guard band in the Netherlands, *licence-free*. I'm not sure exactly how this is implemented, as presumably there needs to be some sort of coordination to manage interference. Maybe you act as "your own MVNO"? One of the audience reported that the Dutch military was already using this option to build their own mini GSM networks on their bases and ships.

More interesting still - apparently this approach conceivably be rolled out Europe-wide. Worth watching....

Sharing multiple mobile broadband connections - possible already

About a week ago, I wrote about the exciting possibility for the new WiFi Direct technology to enable sharing of multiple mobile devices' connections via WiFi. I also noted that this would further help to reduce the historic link between "subscription" (ie SIM) and "identity", which I have long felt is one of those areas where MNOs have taken their role for granted unrealistically.

I wrote "I'll bet one of the most popular will be some form of bandwidth-sharing or load-balancing between multiple phones or other products. I can think of numerous "reasonable" use cases here, eg de facto user-driven "national roaming" to work around coverage blackspots. I'm sure there will be some cool connection-sharing iPhone or Android apps, as well as ones for PCs"

Well, I was wrong on one score - the first connection-sharing app is for Symbian S60, not Apple or Android. I saw a presentation by Joiku this morning about their new JoikuBoost Beta, which does precisely what I had been talking about, multiplexing together multiple data connections, on multiple devices, potentially via multiple operators, and creating one super-fast WiFi virtual hotspot. This can either be open or secured. The technology could also be used by a single device to effectively combine two or more separate HSPA connections (or even HSPA and LTE and/or WiMAX I guess, if devices with suitable OS's become available).

Given what I wrote yesterday about doubling up HSPA channels to compete with LTE... well, it looks like a radio network standard might not even be necessary. Now I think about it, this is even a good way to combine two separate frequency bands - have one phone on 2.1GHz and one on (say) 900MHz, and you've suddenly got the perfect indoor/outdoor solution without all that cumbersome messing about with handoff.

The ramifications of this type of technology are huge - I can see it eventually enabling users to create their own ad-hoc shared meshes, bridging operators, frequencies, radio technologies, tariffing plans and so on. There's no reason that it shouldn't incorporate dongles and MiFi-type devices with Linux or other OS's as well.

Not so much "dumb pipe" as "dumb aether". I think this could be truly disruptive in time.

I think there's probably 100 enhancements you could do in software to optimise, set up groups, manage power, share costs equitably between users and so forth. There's also some fairly horrible things this could do to operator business models - although it potentially also enables congestion problems to be mitigated by the cross-operator load balancing functions. In a way, it's software-defined radio at the application layer. Exciting/scary stuff....

HSPA in 2.6GHz?

I'm wondering.....

... if LTE looks like it might be delayed, for example because of poorer-than-expected performance, difficult optimisation, continued wrangling over voice/SMS implementation, or because operators don't want to be strong-armed into IMS...

... then does it start to make sense to put HSPA/HSPA+ into the 2.6GHz bands, especially given the flurry of upcoming auctions in 2010/2011?

After all, HSPA is a "known quantity" in terms of radio deployment and operation, it's not too difficult to add another band to existing handset platforms, and it's got voice built-in out of the box.

Let's imagine a situation in markets with existing consumer use of mobile broadband, say Europe or Australia or parts of Asia. Now imagine the end of 2012 - there's a lot of 2.6GHz spectrum that's now owned by MNOs. LTE still has teething problems for whatever reason... and in any case, there's several hundred million PCs, dongles, smartphones and other gizmos running on HSPA, albeit only on existing bands like 2.1GHz. I've got to believe that a 2.1/2.6GHz HSPA+ netbook on sale for Xmas 2012 is going to be cheaper and more reliable than a 2.1GHz HSPA + 2.6GHz LTE one - and with broadly similar performance and network efficiency.

On the same theme, do any readers familiar with the innards of UMTS specifications think it might be possible to tweak R9 or R10 HSPA to support flexible channel size, from 5MHz-only to something more like LTE's range of options.

New personal phone - might finally get around to getting an iPhone

A real life case study in handset decision critera & thought process: Me.

This is my genuine thought process about choosing a phone. Probably not typical, but nonethless a realworld example.

At the moment, I mainly use two handsets

- A SonyEricsson C902 for my personal use, billed to D Bubley esq, and only used for voice & SMS (plus originally for camera, although the images are worse than my old S-E K800i from a couple of years ago), on O2

- An unlocked Nokia E71 for work use, used solely for web, email and VoIP. Currently mostly using a 3UK prepaid SIM, although occasionally other SIMs if I'm travelling. It's billed to Disruptive Analysis.

I also occasionally use other devices I have around on loan or that I get through other channels, usually with the 3UK data SIM. I've also got a 3G dongle & a MiFi.

My personal S-E is on a contract coming up for renewal. Also, the software is very buggy, it keeps hanging during calls and occasionally losing inbound speech while a call is live. It's a pain.

Question: what do I replace it with? My normal preference is for my personal handset to be a featurephone, not a smartphone. I have no personal interest in downloading apps at all - I only use download mobile software for work reasons. If I wasn't in the industry, I'd just want a decent browser and email client, and maybe a mapping app.

... however. I'm quite tempted by the idea of a personal iPhone. I like the UI, even just for scrolling through the phonebook and camera album. And I might resuscitate my old & broken iPod music on my PC. And maybe... just maybe... I might try some free apps (I don't have an iTunes account, so I won't be buying anything).

Otherwise, the only appealing options are things like the new widescreen LG Chocolate, the Samsung Jet and maybe the Nokia 6700. The S-E Satio looks tempting and has a camera with a xenon flash, but unfortunately I've lost faith in S-E after the C902, and anyway it's a smartphone so not what I'm looking for. At some point I may play with a BlackBerry, but that's as a replacement for the work E71, not person.

For whatever reason, the HTC Hero and the various Moto devices have no appeal to me right now.

So to be honest, I'll probably get the iPhone - because I'm fairly sure that the "smartness" won't get in the way of me using it as a basic device. My main question is whether the 3Gs if worth an extra £100 over the basic model - essentially a question about whether the camera's any better, as I don't care at all about either video or speech control.

Anyone have any alternative suggestions for a non-smartphone with a good camera, ideally Xenon flash, which looks cool & has a decent browsing experience?

LTE needed immediately!.... er, or else what?

Interesting story in today's Fierce Wireless that apparently LTE is needed urgently in 2010 to avert a capacity crunch for mobile broadband.

Well, I guess that means we're on for a crunch, then. I'm not expecting to see any major deployments of LTE in Europe until 2012, with no real massmarket availability of devices and coverage until 2014-2015.

In practical terms, the lack of devices, lack of spectrum auctions and early-stage nature of the network technology (plus the perennial "what about voice?" question) means that:

- Expect to see even more emphasis on offload to Wifi and femtocells (I'm currently working with Telco 2.0 on a specific and detailed look at managed offload, more details to come soon)
- Some operators are going to start giving serious consideration to putting HSPA/HSPA+ in 2.6GHz instead of waiting for LTE and/or will be pushing harder on 900MHz refarming. Places like Germany even have spare 1800MHz around.
- Lots of opportunities for HSPA optimisation in terms of radio network planning and tweaking
- Various attempts to keep a lid on traffic volumes, with new tariff plans based around time-of-day and so forth.
- More sensible pricing for data tariffs that aren't based solely on marginal costs
- Possibly some more opportunities for WiMAX in those tempting unused bits of TDD spectrum
- Some interesting stuff around sideloading, in an effort to get people to use local content rather than the web... maybe "free 8GB of movies on a memory card with this phone"
- Various attempts to compress web images and other traffic from the Novarra's of this world. All great, but unless you have a robust solution on the client side as well as the server (and that means PCs) it's just rearranging the deckchairs on the Titanic.

We'll also hear a lot of talk about application-level filtering ("you can't do video over 3G") instead of flatrate plans, but frankly a lot of that is just hot air. It's rather tricky to go to market with a proposition which states "it's just like ADSL. But you can't look at that funny clip that your friend has posted on Facebook".

The fact remains that most of the 3G traffic in Europe still comes from PCs and iPhones, neither of which the operators have any real control over in terms of application or, critically, user expectation of openness.

WiFi Direct - helping to break the link between SIM and personal identity

One of the claims that the mobile industry likes to perpetuate is that SIM cards (and subscriptions) are "personal" and therefore position cellular operators as ideal providers of identity management services.

I've long thought that there were lots of assumptions about the one phone = one SIM = one person view of the world that were extremely fragile. Most obviously, it's very common for one person to have multiple SIMs, but that's not a particularly critical issue in most cases. Having multiple "identities per person" is pretty valuable to most users, anyway.

More interesting is the opposite problem - multiple people per "identity". This has long been the case in fixed PSTN and broadband, where the basic subscription unit is a "household" not a person from the operator's view - perhaps with the "bill payer" identified as a named individual. The rest of the household members are generally anonymous, despite years of attempting to offer various family services to help distinguish the bill payer from their spouse or children or flatmates.

The same thing is happening in mobile. There have been fixed cellular routers for some time, albeit achieving limited popularity. But two new developments have the potential to create a massmarket disconnect between SIM and individual:

- MiFi-type devices, as sold by companies like Novatel and Huawei, which act as "mobile hotspots" for multiple users connecting via WiFi, without any form of personal identification. In theory there are mechanisms for tracking back individuals via WiFi MAC address, but in reality that's very complicated, especially for shared devices like PCs.

- the new WiFi Direct specifications from the WiFi Alliance, which essentially make peer-to-peer WiFi easier to use and more like Bluetooth-on-steroids. This will enable adhoc connections between devices, and I'll bet one of the most popular will be some form of bandwidth-sharing or load-balancing between multiple phones or other products. I can think of numerous "reasonable" use cases here, eg de facto user-driven "national roaming" to work around coverage blackspots. I'm sure there will be some cool connection-sharing iPhone or Android apps, as well as ones for PCs. Yes, there will be a ton of security issues, but I bet some could be solved via social-network reputation techniques (eg "share my connection only with my Facebook friends, and friends-of-friends")

If you have 10 random people in a room collectively & collaboratively sharing 5 bridged WiFi-to-cellular accesses, you can pretty much forget about an notion of individual identity being traceable through the SIM. Add in anonymous prepay and it's even trickier.

One scenarios where femtos could be faster than WiFi

A commonly-asked question around femtocells is the question of what advantage they confer to data devices, in the case where both the device and the broadband gateway also have WiFi access. Is there any advantage in keeping the data on the femto connection, given that many millions of people are now routinely using WiFi set-ups with security keys & SSIDs, without much hassle or confusion?

I've been thinking about this, as it also fits with some work I've been doing on offloading 3G cellular traffic, and the role of fixed operators (DSL/cable) in providing additional capabilities or grooming services, going from purely independent offload, to a more collaborative "managed offload" scenario where the fixed and mobile operators work together, even if they are not sister companies.

One scenario I can envisage is this: a homeowner has a relatively low-tier home broadband service, say a 4Mbit/s connection, although the local copper could support 10Mbit/s. Now, consider if the user purchased a mobile broadband service offering "up to 7.2Mbit/s", for which the operator also supplied a femtocell in the hope of offloading some of the traffic generated while the user is at home.

There is is an argument that attaching the 7Mbit/s femto to a 4MBit/s ADSL line is actually against consumer protection law - the customer is legitimately paying money for a mobile broadband service which, at least theoretically, should be able to get to 7Mbit/s. If he uses his laptop or smartphone at 3am next to the cell tower, he should be able to attain peak speeds. But with the femto, it ceases to be even theoretically possible, because the backhaul won't support it. Potentially, the connection would *slower* than if the user just unplugged the femto and went back to the macro coverage.

It's not really the operator's fault - the customer has chosen to have a low-spec ADSL service. But the experience is unsatisfactory nevertheless.

However, now consider that the mobile operator pays a small sum to the ADSL provider to "over-provision" capacity to a certain IP address range (ie the femto gateway). Perhaps $2 per month to permit bursts of headroom up to a total 8Mbit/s, as long as total volumes don't exceed 2GB.

Everyone is a winner in this scenario - the user gets blazing-fast connections via the femto, which actually perform better than his own WiFi. The mobile operator offloads more traffic & has a customer with more loyalty. And the fixed operator gets a bit of extra revenue which pretty much goes straight to the bottom line.

Amazon Kindle 2: Does this herald the arrival of "dumb roaming pipes"

Reading between the lines of the Amazon Kindle 2 announcement, it seems that Amazon may have worked out a method for solving one of mobile application and device developers' biggest problems: how to avoid hiring an army of lawyers and commercial personnel to put in place deals with 100+ mobile operators around the world, and also avoid aggregators that want to take yet another slice of revenue. It might also have enabled AT&T to invent a new business model - servicing end-users resident outside its own geographic footprint.

My understanding is that Kindle 2's (initially at least) will ship from Amazon's US website and operation - and will have AT&T-registered SIMs. This means that a UK customer will purchase the device and have it imported (including paying customs charges) and that it will work on one or more UK mobile networks automatically.

Details are still a bit opaque, but as far as I can see, Amazon seems to have persuaded AT&T to provide it with a fully-loaded cost for supporting non-US Kindle users. I would imagine that AT&T has sufficient clout to get some quite good international data wholesale rates in general, although whether it has negotiated a special arrangement for the Kindle seems less likely. Amazon has probably worked out some good compression mechanisms (one source I've read suggests foreign Kindles won't download images in newspapers, although that might be for copyright reasons).

I would also imagine that AT&T really won't want to disclose its wholesale rates that are behind this. But if somebody buys a book for $10, Amazon squeezes it down to a 1 MB of data, and the roaming cost to AT&T in the UK or Spain or wherever is $0.30, then clearly the numbers all work out nicely as long as they're kept in the background.

This approach will likely have upsides and downsides. Downsides will probably involve slightly cumbersome ordering and delivery from the US site to an overseas destination, plus issues around customer support, as well as possibly some interesting tax/VAT implications where books are bought "in the US" but delivered onto a technically-US registered device while it is "roaming" in the user's home country. I'll leave that one to the lawyers to deal with. A representative of a UK operator that I met at the ITU Forum yesterday seemed a bit annoyed with the whole thing - as if Amazon had behind their backs and come up with a non-optimal solution.

The upsides for Amazon are clear - far fewer headaches in dealing with multiple operators around the world: they've outsourced all their contractual headaches to AT&T. The prospect of working on 100 global MVNO deals must have had them tearing their hair out. Not only that, this means that but the nature of roaming should mean the Kindle gets better coverage, as it can potentially use any or all of the 3G networks in a given country, as long as AT&T has a roaming relationship. This means that AT&T can firstly shop around for the best wholesale rate and update its preferred partner list on an ongoing basis - and secondly, that coverage should be much better than one provided via an in-country MVNO deal.

Now, this approach only works because the Kindle is a low data-volume device. It would be much harder to justify the bundled roaming charges for video or even hi-res colour images, so I'm not expecting to see a YouTube tablet or similar following the same model. But I can think of a whole range of "mobile narrowband" devices that can benefit from "mobile broadband" networks - falling roaming costs per MB could mean a whole host of opportunities.

It's rather ironic that while all the operators have focused on Internet "over the top" players, it might actually be their international peers that become the real threat, using ever-cheaper "roaming pipes" without paying for local infrastructure or spectrum, and taking a much greater share of customer value.

The one fly in the ointment is perhaps regulatory - will national authorities really be happy with AT&T "exporting" SIMs to users in countries in which it doesn't have a licence to operate?

[Caveat - much of this is written based on limited real information and supposition, as there's a real lack of clarity. It's possible that the situation may be clarified or change over time. I'll try & update if that happens]

EDIT - one additional thought here. How does Net Neutrality and policy management apply to data roaming users, exactly? Presumably any restrictions on applications etc would need to be in the wholesale arrangement between the host and the visiting operators - I really don't know whether an operator can apply the same T's and C's to visitors as to domestic customers who have signed individual contracts. For example, I've never tried using VoIP on a device with an 3UK SIM while roaming on a network which blocks its own users...


EDIT 2 - Interesting that Amazon is already advertising the UK Kindle on prominent UK websites (I saw it on a political blog I follow). Going through to the Amazon site and clicking through to the UK T's and C's yielded this:

Important Product Information for Your Country

• Your international shipment is subject to customs duties, import taxes and other fees levied by the destination country. We will show you these fees upon checkout. Learn more
• Kindle ships with a U.S. power adapter and a micro-USB cable for charging your Kindle via a computer USB port. The U.S. power adapter supports voltages between 100V - 240V.
• You can transfer personal documents to your Kindle via USB for free at anytime. Service fees for transferring personal documents via Whispernet are currently $.99 per megabyte. Learn more
• Wireless download times can vary based on 3G or EDGE/GPRS coverage, signal strength and file size.
• Kindle books, newspapers, and magazine are currently priced and sold in United States dollars
• Blogs and the experimental web browser are currently not available for your country

The US power adapter is obviously going to be an annoyance for UK customers. But more interesting is the figure for the "personal documents transfer". If I was a normal US AT&T subscriber with a data card or smartphone, I'd certainly be annoyed if I had to pay retail roaming charges of more than $0.99 per MB when travelling to the UK in future....


EDIT 3 - just joining some dots here. Thanks to Eelco for the comment about the KPN/Garmin deal . The interesting thing there is that it references a company in the M2M space I've come across before, called Jasper Wireless, which hates to be referred to in the same sentence as the term "data MVNO", but which nevertheless has a platform which looks like a value-added MVNO aggregation service for data devices. By a curious coincidence, Jasper announced a deal with AT&T a few months ago with the even more coincidental phrase "The companies expect to connect the first emerging device under the agreement in the coming months".

If I'm right, then it's possibly Jasper that's done the heavy-lifting around negotiating data roaming rates for M2M products like the Kindle 2 - which I suspect may well be less-expensive than plans aimed normal smartphones or mobile broadband PCs. The downside may be that it only has one partner per territory, so the hopes of multi-operator roaming and better coverage might not prove realistic.

The basis for "sender pays" data is rather fluid....

I've talked before about the notion of 3rd-party payment for a user's mobile data access, for example a venue owner or conference organiser sponsoring "free mobile broadband" for certain customers or attendees.

mBlox in particular has discussed its notion of "Sender Pays" data for chunks of content. For people without flatrate data plans, having a clear method to ensure the customer isn't going to face a big bill for downloading per-MB has to be a good thing.

However, the general contention that "Sender Pays" is analogous to the postage system's model is unfortunately rather underminded by this proposition by the UK's Royal Mail to make the "receiver" of letters pay as well....

(Note: my view is that "sender pays" content represents a small proportion of the overall opportunity for third-party sponsored connectivity, as I see content as merely a small, uni-directional sub-category of all applications. Most apps are bi-directional, with the user themselves sending a good proportion of the overall traffic. This is especially the case for user-generated content services like Qik)

Nice to know that evolution to two-sided markets isn't solely the domain of the telecoms industry.

Upcoming event on all that's cool in comms - eComm Europe

I've name-dropped the two SF-based eComm events before - always among the most fascinating of events, ranging from Voice 2.0 startups to visionaries thinking about industry governance and spectrum policy, with a handful of cool apps & mobile services thrown in for good measure.

This time, it's on this side of the Atlantic, in Amsterdam from 28-30 October. I'll be there, speaking about voice-on-LTE and radio issues, and no doubt throwing my oar in on some other themes as well.

I'd definitely recommend it - it gives a great flavour of the direction that comms technology could / should / might go, as well as some meat on businesses surround it. It's not explicitly pro- or anti- large operators, but it definitely is anti-status quo. Generally, the carriers that are represented there are the ones that "get it" - the conservative old guard tends to stay away. Quite a good barometer, really.

The details are here

Net Neutrality in wireless

Another quick post.

I generally find it too hard to get worked-up about net neutrality, as in competitive markets everything tends to sort itself out. In the UK I have a choice of mobile broadband providers - some open to all content/apps, some more restrictive, with an array of price plans, coverage and customer service. I choose which I like.

The US tends to be more complex, because of the relative lack of true nationwide competition, and the barriers to consumers having (or trialling) multiple service providers, because of a lack of contract-free prepaid offers. It's much more difficult to exercise choice if you're locked into a 2-year monthly contract with onerous penalty exit clauses.

One solution may be for the FCC to impose a trial region (state?) for true open-access, let it run for 24 months and scrutinise the impact on user behaviour, network management, congestion and so forth. However, this would need to be imposed *after* network build-out, to give a true apples-for-apples comparison with differentiated-service territories. Even then, it would be necessary to monitor ongoing opex and operations to ensure a "fair fight".

The observation I'd make is that there appears to be clear consumer appetite for broadband pipes, even if they sometimes get congested. Another option could be that some form of naked and unmanaged pipe should be made available on a mandatory basis - perhaps as a % of total capacity in the air & backhaul, so customers could opt for best-efforts if they wanted, versus a fully-managed virtual partition of the rest of the network.

RCS Phase 2 - some progress

OCT 11 2010 NEW REPORT AND BLOG POST ON RCS HERE
I'm utterly buried with work & travel this week, so can't dig into this very deeply, but the GSMA has just announced its next iteration of RCS.

A key feature seems to be support for PC clients, which makes a huge amount of sense - and indeed, is just about the only area where there's historically been traction for these kind of enhanced operator services, through the efforts of software vendors like Movial.

That said, at first sight the press release seems to focus on multi-device sharing and interoperability, rather than integration into web-based services. My view is that RCS would probably get most rapid traction if it came as a slick Facebook plug-in, or interoperable with other social networking platforms.

The problem will likely be that most of the mobile operators will try to "own" the address book and hook it into subscription databases, rather than leverage a more open (or at least access-independent) contact list located online.

Should also be interesting to see what happens if I put MNO#1's RCS client onto a PC or other device connected via #2's mobile broadband......

I'll try & get a full briefing from GSMA or one of the partners when I can, although it's not likely to be until next week at the earliest.

Incidentally, the membership list for RCS supporters still seems to be missing a few important potential members, like Apple, Google, Microsoft, RIM, HTC, Facebook, Skype , Palm, Vodafone, H3G, Sprint, Cisco and so on.

Although after the treatment of Google Voice by the Apple AppStore guys & the ensuing FCC brouhaha, the RCS folk must be smirking about their chances of getting a client onto iPhones without direct support from Mr Jobs....

Quick musing on Cloud Computing

I just heard the phrase "Everything as a Service" during a presentation on Cloud, SaaS and other forms of managed service offering.

I have no problems with hosted software in general - I use enough myself for email, blogging and so forth. I also outsource an awful lot of other things - financials to my accountants and so on.

But I can't get around the feeling that there's a fundamental lack of awareness among people in the tech industry, that every individual and company has specific criteria for owning vs. renting anything.

There are some things for which people prefer opex (renting, 3rd-party services, leasing etc) and some for which they prefer capex (buying stuff outright). This applies to all aspects of expenditure, from hardware to software, from physical infrastructure to one's personal possessions.

Some people rent houses, some own them. Preferences vary by individual and by cultural background. Some companies prefer to own and control their IT and communications elements, others prefer the predictability of outsourcing or "cloud services".

I've yet to see any good analysis of exactly what determines the optimum mix of rent vs. buy, or how this changes over time. Clearly there are hard aspects to this, like cost of capital, or the tax treatment of depreciation or capital investments. There are practical concerns, like uptime or connectivity limitations. Yet there are also softer issues, like trust or fear of lock-in. For consumers, there's even an emotional element - how many people would choose to use a "jewellery service" to rent their wedding rings?

This isn't an area where I have very strong opinions - but I do think it's important to have a good set of filters and questions to sift through some of the rhetoric and hype.

Outdoor applications for mobile - underestimated?

I've been following the topic of indoor coverage for mobile for almost 10 years now. The general perceived wisdom is that most voice and data traffic on cellular devices involves communication from inside buildings (50%, 60%, 70% - pick your own number). This assumption has been the primary driver behind the growth of femtocells, and various solutions looking at WiFi offload.

I regularly see forecasts predicting that this proportion is going to grow, and certainly with the current usage patterns of 3G laptops and smartphones, that seems reasonable, at first sight.

But.... how solid is that assumption? I'm starting to wonder if the ground might be less certain than everyone thinks. Because fundamentally, the indoor/outdoor split comes down to use cases and applications. The problem is that most radio-network folk in the industry are often a long way from those thinking about next-generation applications, devices and services, and what impacts these might have on the network and traffic patterns.

I can see a few early signs of a new generation of "outdoor-centric" applications, that might reverse the trend. Most obvious is mapping/navigation in various guises. But there's also streaming audio/radio - it will be interesting to see how Spotify grows on mobile for example. Then there's the whole area of "augmented reality", cloud computing and quite a few other examples I can think of. Several of these might be more symmetric (or upstream-heavy) than current applications, too.

On balance, I suspect that any shifts will happen slowly, but it's quite possible that we'll suddenly all be surprised by a new app coming out of nowhere and getting rampant adoption, thanks to appstores and widgets and other mechanisms that make viral uptake simpler. I can think of a few hypothetical examples that might emerge, although I'm not going to mention them here. (Let me know if you're a VC, I might do one of them myself....).

It's not just applications either - factors around device and OS architecture will also make a difference. If iPhones supported background applications, cellular networks might be suffering even more pain than they are currently, for example.

If you're working in the radio part of the industry - on either the vendor or operator side - and you'd like to explore the risks of "outdoor applications" more thoroughly, please get in touch with me.

Content: just a special sort of application

About 10 years ago, it became fashionable to say that "voice is just another sort of data on an IP network". VoIP, it was suggested, just turned telephony into mere bits, just like any others.

I want to extend and explore that description of subset/superset: I assert that "content is just a special sort of application on an IP network". It's just big chunks of software.

In both cases, there is a strong empirical evidence of truth, but the one word which is out of place in each sentence is "just", at least in the short term. Nevertheless, both assertions provide a view of how things change over much longer (10+ year) periods.

First, a quick re-cap of voice and VoIP. Certainly, at a network transport level, it is entirely feasible to get good voice quality with VoIP - most international calls use packet connections in the backbone. Millions use Skype and other VoIP services on the public Internet, while corporate IP-PBXs are mainstream. So at one, level, voice certainly can be viewed as just another form of IP traffic.

However, the word "just" is still not fully appropriate yet. Voice telephony has some very specific qualities that still mean it needs to be treated differently, and retains a quite high "value per bit". Aside from the obvious issues around latency and the need for realtime connectivity, it has some other , which have kept it at 60%+ of telecoms revenues. Firstly, numbering introduces barriers to entry and a need for interoperability. Secondly, regulatory issues remain wide and critical. Lastly, it has some very specific user-interface and experience issues - call setup times, the need for useable diallers and phonebooks, the natural human focus on time metrics (minutes) rather than IP packet volume, and so forth. There's also a hundred years of legacy experience, which conveys a lot of weight, authority - and sometimes arrogance.

The result is that voice telephony is indeed "special" - but over time, its importance and specialness are starting to wane. Basic voice revenues are falling - even in mobile, in some cases. The "phone call" is starting to blend into more complex voice interactions, new "voice 2.0" models are emerging in which context adds as much value as the media stream, and so forth. Networks are still designed with voice as a "special case", rather than just another packet stream. Voice is becoming blended with other applications and services, but arguably it is still over-represented and over-regulated compared with its long-term social and economic value.

Now, content. Compared with voice, the term "content" has always been a bit woolly in terms of definition; I've heard people refer to spreadsheets or even voice conversations as "content". But for most people in the industry, it tends to refer to visual programming media, chunks of written material, music, some images and so forth. The Wikipedia definition is:

"information and experiences that may provide value for an end-user/audience in specific contexts. Content may be delivered via any medium such as the internet, television, and audio CDs, as well as live events such as conferences and stage performances. The word is used to identify and quantify various divergent formats and genres of information as manageable value-adding components of media"

Like telephony, content tends to bring with it some specifics that do make it "special" - regulation, legal and commercial rules (censorship, copyright, reproduction rights & so forth). Video and audio content often requires special treatment because of their-sensitivity and huge volumes of data. And of course, there are decades (video) or even hundreds of years (text) of user experience. There is also a huge sense of entitlement by the media industry, that makes its advocates believe in their own uniqueness.

Yet for all its power and "specialness", it is starting to be put in its place. According to PWC/Cisco the entire market for digital media is worth about $300bn, including digital broadcast [non-Internet] TV. The software industry is also worth in excess of $300bn - and is shifting to either "cloud" applications or over-the-network downloaded apps like the iPhone. The video game industry alone is worth $30bn or more. Even the software piracy industry costs $50bn a year.

There's clearly many different ways to slice the statistics, depending on definitions or what's included/excluded - Internet vs. non-Internet, inclusion of things like SMS or web advertising, is user-generated material "content" in its conventional sense, and so on.

But to my eye, there's a close parallel here. Content is getting subsumed into applications like social networks or music-based communities. Amazon's valuation is about much more than the "content" stored in its warehouses or servers - it's the platform itself which is the core of the business. Facebook's value is about it's user base and APIs, not third-party chunks of media. Even for Apple, the AppStore is much sexier than iTunes, capturing a far greater share of industry attention.

And just like VoIP, digital content is also feeling the pinch of arbitrage on pricing. I don't just mean piracy - look instead to the failing of the print newspaper industry, as value moves to other application-based sources. (Are blogs "content"? I don't think of this post as an application, but I'd wince if someone called it content, in the same way I wince if they call me a blogger). And in future, what might happen to the value of news or live sports/music, if I stream and back-up all I see and hear to a server in the cloud via "life-streaming" or a similar application? Do content rights apply to my optic nerve?

Just as I think that the telecom industry is facing a dead-end in the notion of communication as simply sessions (see my recent posts on IMS), I think the media industry is similarly constrained in thinking of content as "chunks" of video or audio material. I also think that designing next-generation networks that are content-centric is as wrong as creating them session-centric.

Let's be honest. Ultimately, if voice is just data, rthen content is just software. We're not there yet, but they're both inevitable in the long term. Lobbyists and incumbents in both cases will plead for special treatment - justifiably, sometimes. Both telephony and content come with huge expectations on the part of users and regulators, and need to be protected in various ways.

But let's not lose sight of the end-game either - or entrench decades-old prejudices or business models in the underlying technology architectures. The content tail should not be allowed to wag the future application-networking dog.

Various quick things

I'm hugely busy at the moment, but a couple of quick things:

Skype's reported acquisition is very interesting, and it will be interesting to see what evolved. I'd expect to see:
- either collaboration or competition with Google's Wave. I'm increasingly thinking that the 100-year notion of a phone call or session as the basic unit of telecoms "conversation" between people is nearing end-of-life (well, on 20 year view, anyway)
- perhaps a proprietary carrier-grade service for VoIP on LTE or HSPA+, avoiding the IMS / CSFB etc conundrum
- I've got to believe that $100bn of profitable SMS revenue worldwide is a very tempting target, especially given the success of local alternatives like MXit in South Africa
- maybe the MVNO / SIM approach being targetted by Truphone and others


I see that 3UK is launching Novatel's MiFi. EDIT: Apparently it's actually a Huawei device (see comments). I'd thought it was the Novatel, but in a custom plastic shell; I stand corrected.

The UK's leading political blogger Guido Fawkes agrees with me about the faddish nature of Twitter.

I'm also skeptical about Android - I've said before that it's massively over-hyped and according to Andy, it seems like AT&T agrees with me. He's also had another great post up recently about service vs. product.

Symbian's David Wood has a blog post evoking something I wrote about a year ago - femtocell-optimised handsets.

Lots of noise about netbooks supplied via mobile operators, perhaps subsidised - but I'm waiting to see the outcome, as I reckon the market opportunity has been overestimated. I'm hearing anecdotal evidence that customers recognise it's cheaper to get a separate retail netbook and data contract rather than a bundle.

Does telecoms NEED a unified control plane?

My IMS=Dead Parrot post the other week drew a significant amount of attention and argument, as I anticipated. It was followed by more comments in another post.

One of the consistent arguments that was advanced was that IMS is the only standardised mechanism for the control plane for telco-grade IP networks.

From my stance, a central part of my argument is that I don't see IMS as a suitable platform for future revenue-generating, customer-demanded services and applications, at a device level or through integration with Web/consumer electronics/enterprise/IT. I also think it is inflexible in terms of supported business models, for example around wholesale or SIM-free adhoc services.

In a nutshell therefore - is it better to have:

a) A cast-iron control layer for services that nobody wants, or...
b) A less-optimal control layer that permits more service innovation?

From a million-foot view, are we moving to a situation where the notion of a single, all-encompassing telecom control plane is a ridiculous notion, similar to the idea of a government controlling all its citizens through a single database and monitoring system?

(See what I just did there, political wonks reading this?)

Are the costs and inflexibilities and "injustices" (in technology, anything which is user-unfriendly) worth it, just to achieve pure elegance of the ultimate machine?

The more I think about this, the more the whole notion of a single IMS control plane for IP looks exactly like a totalitarian state, where everything is done "for your own good". Policy control is the equivalent of the nannying Health and Safety Executive, the HSS and SIM is the equivalent of the National ID Database and ID cards, DPI is the equivalent of pervasive CCTV cameras. And the whole thing is hugely expensive for taxpayers (end users) and doesn't actually work because there are always flaws in the system.

Personally, I much prefer to live in a libertarian society, where there are specific checks and balances at particular points. I'm happy with passport controls at borders, or fines for people jumping red lights. I don't mind tax evaders being pursued. I'm in favour of jury trials and punishing prison sentences. But I don't want to live inside The Matrix.

The Internet works well enough without a centralised control plane. Various point solutions like CDNs or peering points act as a form of decentralised, distributed and collaborative control, which works pretty well, most of the time. Other large-scale systems work well without central control as well - in fact, the whole basis of capitalist economies revolves around the concept.

Apologies for the high-level "philosophical" nature of this post. But after the last week or two of discussions, I am increasingly of the opinion that IMS has a flawed central assumption: that an all-encompassing "control plane" is necessary, feasible or even desirable.