Jajah + Telefonica

• Most 3GPP / UMTS operators will need to wait until at least 2011-12 before starting broad migration of circuit telephony to standardised VoIP. In the interim they will have to compete or partner with pre-standard VoIP players.
• Operators expecting to deploy LTE networks need to consider gaining prior experience of mobile VoIP. Simultaneously rolling out a new radio technology and a new voice architecture is a huge risk.
• There is scope for partnership between VoIPo3G innovators and incumbent operators (and other parties), especially on HSPA networks. Initial reticence will be countered by awareness of the threats of outright competition.

Those three bullet points came from the first-page summary of a report on VoIPo3G that Disruptive Analysis published in November 2007.

There has been considerable discussion on the web and various private forums about exactly why Telefonica (specifically its European arm, O2) acquired VoIP provider Jajah for $207m, a couple of weeks ago while I was on holiday. GigaOM has a good article on it here, and I've seen a few others as well.

The most obvious parallel I see is with BT's acquisition of Ribbit. In that case, BT wanted an entry-point to the developer community, and especially enterprise CEBP (communications-enabled business process) marketplace. This area is epitomised by companies like Salesforce.com, as well as a plethora of other firms helping firms manage customer and employee interactions via voice - essentially an evolution of CRM.

Telefonica/02, however, appears to be more focused on the consumer space, especially the possibility of hooking up its existing telephony user base (mostly mobile in Europe, but not exclusively) to web-based and apps-based social networks or other online applications. Jajah provides the voice back-end for Yahoo's IM-integrated VoIP service, and more generally has a presence in mashups and "white labelled" voice for various Internet players.

I can see various synergies here - some immediate, some longer term. But the bottom line has to be that O2 wants to learn more about voice without the "heavy lifting". The value of much of the new telephony concept isn't about "big iron" like IMS or even QoS. It's certainly not about vague 1980s-style waffle about operator-centralised "multimedia", as per the defunct MMtel standard. It's about the social value inherent in having voice as a platform or a web component.

Jajah helps Telefonica start to break away from the stifling "it will all be IMS some day" mantra, or at least leave it to the traditionalists slaving away in the infrastructure dungeon, trying to rescucitate the 3GPP zombie's corpse. That's not to say I expect O2 to just abandon that approach over-night (it's too ingrained into the telco DNA), but taking a first step is a wise move - it allows the company to see what else is out there.

More pragmatically, it also helps with a number of other opportunities:

- Early deployment VoIPo3G, perhaps starting with laptops connected via mobile broadband, or selected smartphones. This will probably run as a "second line" on phones, in addition to traditional circuit - a bit like having Skype or Truphone (or Jajah) on a device today, but controlled by the operator. I've been expecting operator VoIP to appear for some time in this guise.
- An easy off-the-shelf way of testing and playing around with VoIP on LTE for upcoming trials. If Jajah works sufficiently well on best-efforts or "groomed" data connections, it could save Telefonica a large amount of cash paying for unnecessary QoS over-engineering in future.
- Various options for Spanish language communities such as travellers and ex-pats moving between Latin America and Spain
- A way for Telefonica to move into new markets outside its current geographic footprint. In particular, this means that it's yet another operator doing the "unmentionable" and owning web-based services accessible from other operators' devices and access subscriptions. Along with Voda 360 and Orange ON, Jajah is now another example of under-the-floor providers playing over-the-top

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What's the story with the Phonejack 'femtocell"?

I'm now trying to catch up with events and analysis over the past few weeks, as I've been on vacation.

One of the more bewildering things I'm trying to get to the bottom of is the supposed Magic Jack "femtocell" as written about in numerous places such as here, here and here.

In theory, it hooks up a GSM phone to a VoIP client embedded in a USB stick. Details on how it works are remarkably thin on the ground, although allegedly it uses the IMEI number as part of its authentication mechanism.

As yet, the whole thing seems to be based on press releases rather than demonstrations or any hard detail on the underlying architecture. If it works as billed, I can see numerous pitfalls or open questions:

- what frequency band(s) does it work with?
- does it need a separate SIM in the phone, and does Magic Jack supply these? Do you need to switch SIMs when you leave the house? Or is the company hoping to sign some sort of roaming deal with operators?
- how does it deal with SIM-locked GSM phones? Does it "spoof" particular operators' network characteristics, or have its own network ID?
- what are the legalities around its use of licenced spectrum, even if the power is supposedly low enough to avoid interference?
- how many end users can work out how to use the "manual network select" function on their phones... or can be bothered to switch back and forth when they're at home.
- how does it deal with phones that are configured to look for 3G first, then fall back to 2G?
- what's the control, authentication and security mechanism? Does it emulate an MSC and HLR somehow?
- it looks like the PC it's attached to is a fundamental part of the device. What happens when it's in standby or hibernate mode?

The Engadget article linked above has a comment from someone who claims to be the device's inventor. He says "As far as licensed spectrum is involved,who gave somebody the right to sell spectrum in my house?You own your own cellphone,you own your own magicjack device and you own the air in your house.The licensed carriers owns the right not to be interfered with.Our device does not interfere."

While that's pretty contentious, it fits with some of the rhetoric I hear about "open spectrum". It's also worth pointing out that the various iPod-connected FM transmitters were initially thought of as illegal in some places, yet regulators such as Ofcom allowed them if they operated at sufficiently low power.

Other posts try to work out what's going on - one suggests that it looks to the phone like a network it's roamed into, but it "pretends" that it's authenticated with your "home" network and just replies "OK" to the handset.

That said, I'm extremely doubtful that this will fly, technically, legally, commercially or in terms of user experience.

EDIT: I see that Andy Tiller of ip.access has a detailed take on it - and actually got a chance to try the device at CES.

Actually, now I think more about it, one possible killer app for this is in markets with deregulated or light-licenced guard bands. In particular, if others follow the Netherlands' lead and try to have licence-exempt bits of GSM spectrum, all sorts of things become possible. Especially if you can do some clever things with connection management apps on smartphones - perhaps running 2G voice (via the Magic Jack) in parallel with 3G or WiFi data.

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Back from vacation - thoughts on mobile in Sri Lanka & the Gulf states

I got back from my extended break this morning - looking through my news emails, there's clearly been quite a lot going on while I've been away, so it'll take a while for me to process my thoughts on CES, Nexus One and so on.

Before I get back to "the business in hand", though, I want to jot down a few thoughts and observations on things mobile I've seen while on holiday. I was primarily in Sri Lanka, plus a couple of days each in Oman, Kuwait and Dubai on the way there and back.

Now, I generally like to separate work and down-time, to the extent I've had my voicemail saying that I'm not picking up messages, for the past three weeks. So I certainly haven't been doing report-grade research while I've been away. But at the same time, I've certainly been observing people, adverts, shops - so I have a few anecdotes about mobile and wireless that might be of interest to a wider audience. I should point out that I tend to travel around a lot, so I usually see a lot more than just a capital city and its high-end malls, or a plush beach hotel. In a lot of developing, you see a very different side to "mobile" on a local bus between two small towns, versus the lobby bar of the local Hilton.

First - Sri Lanka. I spent most of my time outside the capital Colombo, mostly in a variety of beach and hill towns. The most obvious thing I noticed was the differences between Sri Lanka and its neighbour India, across which I drove last April. There is much less conspicuous mobile advertising - few of the house walls painted in corporate colours so common in India. Where there was display advertising, or point-of-sale material outside various shops, it was 95% dominated by simple brand advertising for the various local mobile operators' prepay SIMs tariffs. As is common in many countries, you can buy credit for prepay anywhere from a florists' shop to a market stall, to one of the numerous dedicated communications/Internet facilities.

I bought a local SIM on the Dialog 3G network plus some credit to use a smartphone as a web browser. While coverage is OK and purchase was easy, getting online was definitely not. I needed to use a PC first to go online to get the settings for the right access point for my phone, and then find a number to SMS to a short code to purchase blocks of Internet time (1 hour etc). In fact, I asked two or three phone shops about which SIM was based to access the web on my phone, and got blank stares. The provisioning / access-control system seemed pretty clunky too - sometimes I got my allotted access time, sometimes I got "unlimited" access, sometimes it seemed to charge me adhoc amounts. It was cheap, whatever, though - nominally about £0.10 (20 rupees) for an hour's access, cheaper than the £0.01p per minute in the many Internet cafes.

That said, handset-based web access definitely seems an unusual exercise in most of the country, although I saw a fair number of shops selling Huawei HSPA dongles for mobile broadband, as well as (a few) outdoor adverts. Anecdotal evidence suggests that some of the upper echelons of the business community in Colombo have BlackBerries, but it's definitely wrong to assume a wide use of "the Mobile Web" among the general population.

A very telling anecdote came from a driver I hired for a day-trip. He laughed and shook his head when I asked if people were "accessing the Internet on a mobile phone". He has a $20 Nokia handset, but bought a $50 PC (an old Pentium 3) for web access. He pointed out that 'normal' people (well, men anyway, it's quite a segregated society) use Internet cafes, and some schools have PCs, but was completely unconvinced by the notion of massmarket mobile web usage. He said that it might appeal to the Colombo business folk - although amusingly he suggested that anyone who cared about mobile Internet use would probably be affluent enough to have a personal driver, so they could sit in the back seat with a laptop rather than struggle with a smartphone. Also, home access to the Internet has high levels of parental supervision, which would be difficult to apply to anonymous prepaid mobile access.

I saw absolutely no advertising that suggested that handset-based web access was seen as important, nor much point of sale material in a couple of stores I peeked into. I saw nobody on the buses, trains, streets, or local markets or restaurants doing anything identifiable as Internet access, although obviously SMS usage was rampant. Everywhere, however, were shops selling low-cost second-hand and refurbished PCs - Colombo even has a dedicated shopping mall just for PC and software/accessory shops.

I've spoken before about the oft-repeated myth of "the next billion" Internet users supposedly accessing the web on their handsets first, rather than PCs. I've often wondered where they might be hiding, outside of Japan and a couple of bits of India. Well, they're not living in Sri Lanka, that much seems probable. (Of course, if you live there and have more concrete observations, please let me know).

One thing that was interesting, though was the pervasiveness of WiFi. Many of the hotels and guest-houses I stayed in had free wireless attached to ADSL (mostly low-ish speeds of 1 or 2Mbit/s) , as did many of the other more tourist-oriented locations like restaurants. Coupled with the Internet cafes, the growing prevalence of tourists with netbooks may well be having a drip-feed effect on the local awareness that "The Internet" is primarily a PC-based phenomenon.

One last comment that springs to mind - looking in some of the phone shops in Colombo (handsets are normally bought unlocked and used with any SIM), I was conscious of continued Nokia dominance... but also a growing number of clones and outright fakes. The very-unsubtle "Nokla" brand with an L rather than an I seemed quite common, as did fake E71's branded "TV Mobile" which were clearly GSM sheep in 3G wolves' clothing.

The much-wealthier Gulf countries were different, although except in Dubai I still didn't get the impression that smartphone or mobile web usage was that common. Adverts for 3G dongles were pretty common though, as were PC-based broadband users in numerous cafes, with the Kuwaiti operators loudly trumpeting 21Mbit/s HSPA+ speeds. Oman had a high density of Internet cafes, especially in smaller cities outside Muscat, where I suspect that levels of affluence and home-broadband ownership are much lower. It was also notable that many Internet cafes combined games rooms with billiards/snooker tables - essentially becoming (again, mostly male) social hubs in a country where there's obviously no "bar" scene.

Ironically, like Sri Lanka, Dubai also had some less-usual handset brands. Stockists of the flashy/vulgar Vertu and Porsche phones were everywhere....

(And a note for the mobile broadband commentators - notthat many embedded-3G notebooks in the swish Dubai mall electronics shops, either).

Note: I'll probably remember some other anecdotes over coming days. I'll add them to this post as edits. And once again, this is just some observations made while on holiday - I'm sure there's a lot more rigorous and detailed research out there, but I always like to notice a few things that stand out.

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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.
  

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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.

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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.

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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.

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