Communications

Youth smoking falls with rising mobile phone ownership

Now that's a wacky statistic, but it's the fifth "key fact" from the MobileYouth survey posted by Graham Brown at mobileyouth.org. 

This is a global study that includes other interesting facts like:

• 1.1 billion youths own a mobile phone
• 10% of youths' disposable income goes to mobile products and services
• Youth spending on mobile will reach $300B by 2010
• Youths spend 8 times more on mobile than on music
• Only 27% of youth said they "trusted" their mobile operator

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US Mobile Internet access prospects looking up

This is a very good week for the mobile Internet in the US.  Our best prospect for open mobile Internet access is not legislation or regulation, but having four or more competing networks that are technically able to offer mobile broadband access.

We have three such networks today — Verizon, AT&T and Sprint — but three is not enough to break the walled garden mentality.  What's changed?

1.  T-Mobile USA has launched their first 3G service using the spectrum they won in the 2006 AWS auctions.  For now, it's only New York City, but Reuters reports that T-Mobile plans to launch in 20 to 25 new markets by the end of the year and T-Mobile's stated intention is a full national HSPA network. In 2009, this will be our fourth national 3G network fully capable of multi-Mbps down and multi-hundreds Kbps up.

2.  Clearwire has cut a deal to take over Sprints WiMAX network.  As the Wall Street reports (subscription required) today:

Sprint Nextel and Clearwire are close to announcing a $12 billion joint venture that plans to roll out ultra-fast wireless Internet access for cellphones and laptops in coming years, with the backing of an unlikely alliance of technology and cable companies. Sprint has agreed to merge its wireless broadband unit with Clearwire, a Kirkland, Wash., firm founded by cellphone pioneer Craig McCaw. The new company has raised a total of $3.2 billion in outside financing from several heavyweights -- $1.05 billion from cable provider Comcast, $1 billion from Intel, $550 million from Time Warner Cable and $500 million from Internet giant Google. Smaller cable provider Bright House contributed $100 million. The investments value the new company at more than $12 billion.

This also reduces Sprint's financial exposure and hopefully reduces the likelihood they will be taken over or their network consolidated, at least in the short term.  I've been negative on the prospects for WiMAX in the past, but if anyone can make this go, Craig McCaw is good bet.  So Clearwire represents our fifth national network capable of delivering mobile broadband Internet access.

Assuming all this holds together, we will see affordable flat rate open mobile Internet access in the US by 2010.

Talking about Voice SMS, Video SMS and MMS in a webinar tomorrow

Tomorrow (May 6th) at 9 am EDT (1300 GMT) I'm doing a webinar on:

Mobile Messaging- Its Not Just About Texting

Mobile Text messaging has created new opportunities for additional revenue resources for global mobile operators.  Industry analysts predicts mobile messaging to reach $65B in annual revenue by 2010.  As a result of this messaging explosion, operators continue to look for ways to differentiate themselves in messaging services and to increase the revenue realized from text messaging.  Adding voice and video messages to the standard text message service is just one of the services operators are using to enhance the texting experience within their subscriber base. This webinar will examine video and voice short messaging services(SMS), discuss the technical considerations of implementing these types of services and review various operator successes with media messaging services.

Multi-Media messaging (MMS) has been very successful in some markets, e.g. the UK, while in others, like the US, it's used only for sending photos.  In other markets, it's hardly used at all.  Part of the problem is handset interoperability, especially when it comes to exchanging video clips.  In some cases, there are handset-specific user interface issues and in some markets the problem is enabling MMS operation, e.g. roughly half of the MMS-capable handsets in the Philippines haven't been "activated" (as the operator needs an SMS from the customer indicating their handset type).  Finally, there are markets where MMS inter-connection between operators.doesn't work, either technically or commercially.

But where there's a failure, other solutions emerge.  That's what I'll be talking about tomorrow.

I've written in the past about Voice SMS and about Video SMS, two services that fill the gap by being very simple to use and by working with every handset and every operator.

If you're interested, sign up here and listen in tomorrow.

eComm 2008 Panel: What Will Drive Wireless Innovation?

Here's the complete video of the panel discussion I ran at eComm 2008 in March, all 86 minutes.

My panelists were:

• Martin Geddes (STL Partners),
• Stanley Chia (Vodafone),
• Sumit Agarwal (Google),
• Jonathan Christensen (Skype),
• Christopher Allen (iPhoneWebDev.com),
• Benoit Schillings (Trolltech/Nokia)

Time permitting, I'll see if I can index some interesting highlights and have a follow up post with direct links — that's just in case you're hesitant to invest 86 minutes in the whole session...

China's 3G license delay is a smoke screen

Last week there was a flurry of stories about China's 3G plans after Jonathan Dharmapalan of Ernest & Young was quoted as saying he expected it to take 12 to 24 months from the start of China's commercial TD-SCDMA trials, i.e. from now, until 3G licenses were issued.  But there was little analysis or comment on what's really happening.

3G licenses are a formality.  They delay the deployment of 3GSM & CDMA 2000 which could otherwise happen rapidly — just plug new cards into existing radios and offer established handsets (already being manufactured, in China, for the world market).

China 3G is happening, without licenses.  China Mobile Group already has deployment-scale TD-SCDMA radio networks on assigned, but not "licensed" frequencies, in eight cities.  The bottleneck is TD-SCDMA handset silicon.  Commercial trials were finally enabled by the recent delivery of an initial batch of 60K handsets.  This also allows China to meet, at least technically, their pledge to have 3G service in time for the Olympics.

Dharmapalan is speculating that it will take 12-18 months of commercial trials to get the bugs out and the system to scale.  That's plausible.  If so, it will be 12-24 months before "licenses" are granted, i.e. before 3GSM and CDMA 2000 deployments are allowed to proceed in parallel with TD-SCDMA.

The problem is China's patent position.  The core patents for 3G and for 4G are already held by the likes of Ericsson, Nokia, and Qualcomm.  TD-SCDMA provided a way for China to obtain patents on a specific 3G implementation and the size of China's market makes that implementation interesting to Ericsson, etc.  Since China missed the boat on core patents for both 3G and 4G, expect TD-SCDMA and it's 4G successor to exist on a parallel path for the next 10-20 years.

The good new is commercial TD-SCDMA deployments have finally started.

I'm most interested in 3G applications.  China has a vibrant market in value-added services for 2G.  As more and better TD-SCDMA handsets get deployed, we should see some really interesting innovation coming out of China — innovation that will be applicable to any 3G technology, anywhere in the world.

Mobile video-on-demand Yes! Mobile broadcast TV not so hot

I have an article, Going Mobile (TV), that's recently been published by MobileIN, a wireless and mobile information site.  In it I basically argue that major investments in mobile TV broadcast capability are less likely to pay off than investments mobile video-on-demand.

The biggest trend in commercial television viewing is personal video recorders like TiVo.  People want to watch TV content when they want, not when broadcasters schedule it.  The only exception is major sports events (the Superbowl or World Cup matches).  Even the evening news is frequently rescheduled for later in the evening.

The second relevant trend is growth in YouTube and similar web-based video content.  Broadcast TV went from 2-3 channels in the 1950s to hundreds of channels on a typical cable system today.  But consumers are also interested in the long tail of millions of videos that can only be served over the Internet today and, potentially, over the mobile Internet in the future.

Finally, survey's of early adopters of mobile video show music videos, movie trailers, weather, sports action clips, comedy videos, cartoons and amateur video shorts – typically a few minutes long at most – are the most popular content. In addition, it appears 85 percent of mobile video viewers watched viral videos (content sent or pointed out by others) rather than content they found themselves.

All and all, mobile consumers are looking for video -on-demand, not pre-scheduled broadcast TV.

So what's the logic for massive investments in spectrum, followed by even more money in new wireless infrastructure, followed by the need to sell everyone new handsets that can receive the new broadcast mobile TV channels?

WiMAX in the US, a limited window of opportunity?

Their first service launch has been delayed, but Sprint Nextel CEO Dan Hesse repeated his vow to blanket the US with a WiMAX network in his talk at CTIA this week.

I sincerely hope he succeeds.  We need as many competing data networks as possible, if we're to see any measure of open mobile Internet access. However, I'm worried.

WiMAX has been quite successful in emerging markets, providing fixed wireless Internet access in countries as diverse as Pakistan, Bulgaria, Nigeria, Georgia, Ethiopia and Georgia (the country!).

The US is another story.  The only significant US deployment is Clearwire's with roughly 400K subscribers, but on a mostly “pre-WiMax” network.  Again, the application is fixed wireless Internet access. 

It’s one thing to use fixed WiMAX to provide Internet access in Pakistan.  It’s another thing to compete for fixed access in the US.  Yes, our telephone & cable duopoly is moving slowly, but they are going after all the more profitable neighborhoods with broadband offerings substantially faster than what fixed WiMAX provides.

What about mobile WiMAX?  Mobile WiMAX is in trials today, using technology and providing performance that the 3GSM community will only see 2–3 years from now.  Sprint clearly hopes to use WiMAX as a springboard past its competitors and past concerns about its declining user base.  Presumably, in the longer term, they hope to converge their dissimilar networks (Sprint EVDO and Nextel iDEN) on mobile WiMAX.  But can mobile WiMAX build a large enough market soon enough? 

Volume drives down cost and cost advantages win in the end — witness Verizon’s announcement that they are jumping ship on Qualcomm’s CDMA evolution in favor of the 3GSM community’s long term evolution (LTE).  Today, GSM networks (GSM/ EDGE/ W-CDMA/ HSPA) have 80% of the world mobile phone market with billions of subscribers and a billion or so handsets manufactured each year.  Right now the entire Sprint-Nextel customer base is ~54 million subscribers.  Perhaps emerging markets will also adopt mobile WiMAX, thus driving up volumes?  Unfortunately emerging markets are even more price sensitive with the high volume application being basic voice telephony plus SMS.  GSM is the lowest cost solution by a wide margin. 

I hope I'm wrong.  I hope mobile WiMAX's performance lead (over LTE) is enough to carry the day.  And, in particular, as I’ve written before, I would very much like to see Sprint succeed, with or without Clearwire, because their WiMAX network would represent yet another source of wireless Internet access.  With four of more networks capable of mobile broadband Internet access, competitive pressures alone should give us what the FCC is currently ignoring, i.e. mobile data plans that are both open and reasonably priced.

 

Zippy interviews me on Mobile TV

Zippy (actually Richard Grigonis) got my views on Mobile TV for a series on TMCnet. 

I'm negative on broadcasting :-) but very positive on mobile video on demand and on the profusion of other video-related things that people are finding to do with their mobile handsets.

Most cell sites have only one or two T1/E1 links, or less

One of the things that surprised me at eComm was the audience reaction to hearing that most cell sites have only one, or perhaps two, T1 or E1 links going to them.  eComm was a sophisticated audience but they weren't familiar with this kind of operational detail.

Of course, I've seen a lot of data on this particular subject as, until our recent sale of the AccessGate product line, NMS Communications was in the backhaul optimization business.

Net-net:  As spectral efficiency keeps improving with HSPA and so forth, backhaul is rapidly becoming the bottleneck. 

Cell sites are fixed locations.  The vast majority are in urban or suburban neighborhoods.  Their bandwidth requirements will continue to grow, indefinitely.  In any rational world, one would purchase dark fiber to most of these sites.  In the irrational real world that is the US today, dark fiber is available on long haul routes but is extremely hard to come by in populated areas where most cell sites are located.

The root problem is we have given Verizon and AT&T privileged access to the public right-of-way, without requiring them to sell dark fiber, or lease dark fiber, or offer any connectivity other than T1 service.

What would it cost to construct dark fiber to 95% of these sites, if it were done as part of a community-wide dark fiber build like that being planned in Singapore and already completed throughout greater Stockholm (and most of Sweden)?  Construction costs for point-to-point fiber are 20% or so above those of passive optical networks (PON), but the cost of the dark fiber alone (no electronics) is perhaps 80% of the total construction cost, so they're in the same ball park.  Verizon has directly and indirectly reported various costs for their FiOS construction (FiOS is a PON network), but all current estimates are below $1000 per home passed. Even at $5K per cellsite, the payback for a mobile operator would be measured in months.

T-Ring: Audio logos promote mobile operator brands

It's not a new idea.  Short audio "logos" have been used to identify radio shows, TV networks, long distance phone companies (during the long distance wars in the US in the 1990s) and, most recently, podcasts.   But mobile operators have missed this opportunity, at least so far.

Now SK Telecom has introduced the idea in Korea and a number of other mobile operators are scrambling to leverage the idea.  In Korea it's called T-Ring and it's both a branding exercise and a key part of a special pricing bundle.

When you call an SKT subscriber, the first thing you hear is a 1.5 second sound clip — the SKT audio logo.  Then you heard the called subscriber's ringback tone (assuming they are among the 55% of Korean subscribers who pay for ringback tone service) or you hear normal ringing signal, until the subscriber answers.

Everyone hears the T-Ring sound, letting them know they are calling an SKT subscriber.  Even better, SKT has introduced a pricing bundle where subscribers get 50% off on calls to other SKT numbers.  As a Korean friend puts it,

Of course it is nice to hear the sound before the connection is made because your brain is naturally set to read "Oh 50% discount."

This is also good for NMS Communications, as the equipment is similar to that used for ringback tones and we already provide components and platforms to most of the major ringback tone suppliers worldwide.  :-)