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Friday, July 31, 2009

If I was running M&A at an operator looking at consumer web services businesses....

.... I'd be digging deep in my pockets and looking to buy Spotify, and keep it (largely) independent of access provision. Not that it's likely going to be up for sale for a while, but it's the sort of thing that could extend across multiple fixed and mobile network operators' handsets and PCs, and which seems to have a feasible advertising-based business model.

It could be the basis for social networks (both mobile & PC based), it could be blended with all sorts of carrier intelligence and assets/APIs about users, it could be offered in "enhanced" version when bundled with own-brand access or in "independent" mode across other competing networks. It could tie in with other initiatives in advertising or content.

It could compete with iTunes and Ovi, and integrate neatly with Facebook and other social networks.

It's exactly the sort of service that many providers would denigrate as being "over the top". And yet it's exactly the sort of thing they should be building "over the top" of their competitors.

But I suspect that even given the opportunity, most mobile operators would rather waste the money deploying a pointless IMS application environment, with its weak focus on legacy "session-based" services.

Oh well. I guess it'll probably end up with Google or Microsoft or Facebook instead.

Thursday, July 30, 2009

Enterprise mobile developers need to geta grip on API standardisation initiatives

I've just got off a call hosted by the Mobile Entertainment Forum, with the GSMA, Vodafone & O2, talking about mobile APIs that are being exposed to developers. A lot of good stuff about categorising & standardising APIs, and some really good insight into what developers and content companies seem to want to get access to.

HOWEVER, as can be surmised by the MEF trying to insert itself in the process, this is very heavily "entertainment-centric", and here we are mostly talking about "legacy content", ie purveyors of monolithic chunks of video, music etc.

My general view, though, is that in the big scheme of things, legacy content really isn't that important. Internet-resident applications and services, communications, enterprise functionality and various other macro-types of interaction are far more wide-reaching than sending chunks of "content" (ugh, horrible term anyway) from "owners" to "consumers".

But it's not obvious to me that these other groups are as effective at communicating their needs as the legacy media & content industry. In particular, enterprise-focused developers (both internal and 3rd-party ISVs) do not appear to be getting their collective acts together to say what *they* want from operator network-side APIs (or handset-side either, for that matter).

In my mind there are some very specific differences. In particular, there will be a requirement for a much more flexible split of control and security management - the presumption that the operator will always be in ultimate control is not valid. There might need to be APIs for "secure location" or "encrypted call" or "set up VPN connection". Reporting tools sufficient for compliance purposes may be required. Certain things like remote-wipe of stolen devices may need to be presented via a web interface to the internal head of security. APIs around charging may need to be modified to take account of corporate deals and tariffs, not just simple individual end-user retail price plans. There might need to be hooks into enterprise IT management platforms, and so on.

As far as I know, though, there is not a single "Mobile Enterprise Forum" working on an equivalent set of API definitions to the "Mobile Entertainment Forum". There should be.

Wednesday, July 29, 2009

Is the "subscription" mentality holding back the telecom industry?

Whenever I see discussions about new network technologies like LTE or WiMAX, the usual metrics and terms always crop up: subscribers, ARPU, "per month" and so on.

Yet I've had a nagging feeling for some time that it's this focus on subscribers and subscriptions that is holding back the telecom industry, especially in mobile. It's frozen into business models, standards, architectures, financial reporting and expectation, remuneration and bonus structures and countless other facets of the industry.

A couple of months back I pointed out how this mentality leads to standards that further entrench existing business models. I've also highlighted what I refer to as The Tyranny of the SIM Card on numerous occasions. It's no coincidence that the S in SIM stands for "subscriber".

Now obviously subscription models are certainly desirable, whether they are on a long-term contract basis or a prepaid model. But the notion of an ongoing, regular "monogamous" commercial relationship is not necessarily necessary or appropriate, especially for data connectivity.

The main benefit of "subscription" relationships from the end-user standpoint is a consistent phone number, and in fixed telecom a consistently-managed piece of wire. Having an easy payment mechanism is useful too.

But we already benefit from many other telecom services than those we "subscribe" to ourselves. They're embedded around us in daily life: credit-card swipe machines, hotel broadband services, WiFi hotspots, click-to-call websites and so forth.

As individuals, we don't "subscribe" to electricity, yet it's all around us, and we use it multiple times a day, with multiple individuals or companies or governments picking up their share of "our" usage fees. Imagine if you had to have roaming agreements, that meant you paid a fee for your implicit electricity consumption when you sat underneath another person's or company's light bulb.

I'm wondering if this is a model we should look at for telecoms as well. If I'm in a bar, trying to tell a friend how to find it, why am I doing it on *my* phone? Why not the bar's phone, as that instance of communications is part of the bar's implicit business model?

Certainly, there's a huge argument for embedding data connectivity into devices - why should I need a "subscription" to connect my PC to mobile broadband? Maybe Samsung or the retailer should bear the cost and administrative overhead?

I think this will happen gradually, and with it I also see the supposed link between "subscription" and identity evaporating even further. I think Google gets this with Google Voice - why should a network operator presume to "own my identity" simply because they provide me with a number?

Whenever I see "subscriber" numbers for LTE or 4G, stretching out to 2015, 2020 or beyond, I see someone who's blinded by the subscription philosophy. I think by 2020, it will be a concept seen as quaint or niche, rather than typical. Yes, I know it will make all the business model spreadsheets messy, but that's tough - I just don't think subscription-type relationships are the way people will consume most of their communications in future.

Thursday, July 23, 2009

Rhetoric or delusion for mobile broadband?

I was at an event yesterday organised by the UK's Mobile WiMAX Acceleration Group (MWAG). Unfortunately I had to leave early, but one thing really struck me:

Why does the WiMAX community keep touting LTE as "the competition"? It's perfectly clear to everyone in the entire mobile industry, that in 90% of cases (especially for mobile and portable devices like PCs) the game is about HSPA and HSPA+. Fair enough to talk about LTE in terms of long-term roadmaps (and no, WiMAX isn't "4G", either), but the fact of the matter is that HSPA is about now, and doing rather well. It works, it's in lots of places, and it's cheap. Yes, it may getting congested - but that's a different argument, and to win it you will need to acknowledge that it's where mobile broadband is today.

I'm still mystified as to how someone at the event managed to get up on stage and wax lyrical, with a straight face, about how his amazing trial WiMAX unit allowed him to conduct the amazing feat of using his PC when away from the office. Wow - I mean the 2 million people in the UK with 3G dongles would be astounded, I'm sure.

I can't work out whether this is marketing rhetoric, or simple delusion. Honestly, WiMAX marketing folk: drop the LTE rhetoric, you lose credibility every time you put up a slide-deck which references LTE before HSPA.

Mind you, on the other hand, the "opposition" isn't much better.

Attention GSMA folk: someone with a 3G SIM card in an HSPA featurephone is not a user of "mobile broadband" either. Just because they occasionally download a music track a bit faster, or glance at a news headline in a browser, doesn't make them a "broadband user", except in your attempt to generate PR-friendly headlines to make pointless comparisons with ADSL and cable. Counting 3G dongles and iPhones is fair enough, but we all know there's lots of unused HSPA capabilities in phones out there.

Mobile capacity - not just about GB of traffic....

Interesting article here about the impact of email and other background applications on mobile networks, commenting that regular polling of servers generates an increase in signalling traffic, even if the actual data being transferred is in small chunks.

This fits in with a theme I've been hearing a lot about recently - it's not just about the GB of data, there are other "resources" that need to be managed. Various people have also talked to me about power-control messages, number of separate parallel TCP connections and so forth.

This is likely to cause some interesting headaches for policy management and future business models - it's one thing to say (perhaps) that someone should pay for 10GB of video traffic traversing a network with a high QoS. At least there's a fair chance that all involved understand what that means, even if they don't like it.

But trying to tell application developers or content providers to keep a lid on their apps' consequential signalling traffic is a bit of a tall order, especially as it will probably be highly dependent on both the type of phone, and the precise way a given network has been configured (timeouts, power setting etc).

Separately, I've commented before that always-on applications also have a tendency to kill handset batteries, as they keep the radio in a high-powered state.

Monday, July 20, 2009

Packet-shaping of audio streams on Voda UK?

This might be a completely isolated incident, but it's nonetheless an interesting one with some wider lessons. (NB - see EDIT footnote, certainly doesn't seem to be a blanket policy on audio streams)

I'm currently working in a cafe, streaming music through headphones while I work. Normally it's fine, but today, via my MiFi+Vodafone SIM, I'm getting lots of glitches and drop-outs on the stream. Tried switching "channel" on the same site, but still unlistenable. (96kbit/s streamed MP3 via www.di.fm)

It's on 5-bars coverage, and the pattern is so consistent that it's got to be either an ongoing network problem or deliberate fiddling-about. And given that the audio is buffered anyway, my money is on something funny going on. The glitching is just too regular to blame on congestion.

Listening to the exact same stream via my 3UK USB dongle is perfect even on 1-bar coverage - so it's not the server to blame.

Haven't had a chance to do this "scientifically", ie repeated tests, switching to other streaming sites, or other codecs, or moving to other cells... but it's definitely something to keep an eye (and ear) on.

And this post is another example of why "covert" policy management will be swiftly uncovered. I bet that a few people are probably working on "policy testing" tools for just this sort of scenario, to monitor and reverse-engineer any monkeying-about in DPI boxes. If anyone can point me to a trustworthy app, I'll give it a go.

I wonder which OS vendor will be the first to be brave enough to include a network monitor-and-testing capability, designed for consumer protection and to keep broadband providers honest? That could be an interesting differentiator for Chrome OS, eh Google?

EDIT - I've experimented a bit more now. Some streams work fine on the Voda connection (eg from sky.fm), but others don't (consistently). So... there's seems to be no port/protocol-level policy being applied, but it's possible that some are delivered from different servers, or via different CDNs, or different peering points.

Thursday, July 16, 2009

Differential QoS - applicable to applications as well as access?

I'm currently doing a lot of thinking about the thorny issue of net neutrality, DPI, and whether operators (fixed or mobile) can charge "upstream" content or application service providers for higher levels of QoS, guaranteed bandwidth and so forth. Much of this fits into the discussion of two-sided business models by organisations like the Telco 2.0 Initiative, of which I am an associate, as well as concepts like "sender-data" from groups like the MEF.

I've long been a skeptic about the practicalities of "hard" policy management - blocking certain applications, or degrading them, especially when done in a covert fashion. Comcast's controversial "sandvining" of P2P epitomised the technical, commercial and regulatory problems involved.

But I've been less-bothered by clear network policies, stated unambiguously by broadband operators in properly-competitive markets. If you're a low-tier BT Broadband user and your BBC iPlayer can't run HD video, you know the reason why and have plenty of choice if you want to churn. Similar situation if you want to run VoIP over a 3G modem - you pays your money, and makes your choice. Yes, often the T's and C's could certainly be a bit clearer and more accessible, but the info is there if you want to look for it.

But the big unanswered question is whether operators can actually *charge* for differential service. Will the broadband providers be able to get media or other Internet companies to pay for guarantees of bandwidth or latency? On what basis? How will it be measured and monitored? What happens if there's a problem? Why would anyone pay for QoS during periods of no network congestion? There are a thousand questions to answer.

But there's one in particular that strikes me as the elephant in the room - what happens if certain large & popular Internet application or content companies play the same game, but in reverse?

Could YouTube deny subscribers of a given ISP the right to get access to HD content, unless the ISP pays a fee? Maybe users would churn to get what they want? What about if Google Maps had lower accuracy for subscribers of the less-cooperative mobile operators, and clearly identified that it was a low-tier service? Maybe Facebook could introduce new features selectively?

This becomes a particularly powerful strategy where users have multiple ways to get to the same application - if YouTube on the iPhone starts to be "better" than YouTube on the PC, we could even see broadband providers competing on "Who gives the best YouTube performance".

The fly in the ointment is the typical strategy of the Internet companies to get as wide an audience as possible to maximise advertising revenue. But at some point, the economics might start to look compelling.

My view is that there are almost certainly some good business models for differential network QoS-based charging.... but operators need to be exceedinly careful about how they position them, as QoS could turn out to be a double-edged sword. There is definitely a risk that potential "upstream customers" may in fact turn out to be "upstream costs", rather than a source of revenue.

Mobile payments = operator logo on a plastic card

I'm on record as being deeply skeptical about the handset-as-wallet proposition, or the broad use of NFC-enabled phones as a way to pay for goods or services.

So it's good to see O2 (one of the NFC cheerleaders in the UK) embracing reality and (at least as a first step) realise that trying to replace credit cards is a losing proposition. Instead, it's adding to their numbers with its own-branded plastic, together with NatWest bank.

It's doing some clever stuff with balance notification via SMS, and it's also a good call to spot the branding linkage around prepay. I'm sure that in time, O2 will probably have another bash at the "mobile wallet" as this article suggests. But for now, it's pleasing to see some reality about mobile payments - a mobile operator *enhancing* existing payment mechanisms, rather than trying to substitute new and clunky alternatives for current perfectly-good ones.

Tuesday, July 14, 2009

Voda UK femtocells in the real world

Hats off to Andrew Grill for his write-up of getting hold of one of the new Vodafone femtocells to use in his flat in London.

Bottom line is - it does what is says "on the tin", but there are a few teething difficulties in actually buying and installing it. The issues with training retail store staff are not insubstantial, especially with niche or unusual products.

I remember having much the same problem trying to buy a 3UK dongle when they first came out, with the guys in the local store completely unused to dealing with business-account customers - and not having any easy way to enter me on their computer system.

One interesting question would be to find out what is limiting the HSDPA to just 1.2Mbit/s. Is it the dongle, the femto, the broadband gateway or connection, something in the fixed broadband network, the femto gateway or something in the Vodafone transport domain? Either way, it's a good thing it does get some reasonable speed, because otherwise I can imagine customer service having a nightmare trying to find the bottleneck.

Monday, July 13, 2009

UK teenagers don't Twitter. Not exactly surprising.

I'm a well-known Twitter skeptic. I still think it is value-negative; I have heard only a single semi-compelling usage case for me personally to look at (notification to people of my new blog posts). It's been hugely overhyped a few people, mostly in the media & tech industry themselves, plus a few narcissistic celebrities and politicians, mostly to talk to themselves and the sort of people who compulsively read magazines like Hello.

I'm getting heartily sick of companies trying to brandish their Twitter feeds at me - one website of a company I was writing about yesterday had such an intrusive bird logo floating over their entire site, that I gave up in frustration.

So I'm finding it deeply amusing to read and watch all the media handwringing about a Morgan Stanley report, written by a 15-year old intern. He wrote:

"On the other hand, teenagers do not use twitter. Most have signed up to the service, but then just leave it as they release that they are not going to update it (mostly because texting twitter uses up credit, and they would rather text friends with that credit). In addition, they realise that no one is viewing their profile, so their ‘tweets’ are pointless."

Another poster on Forum Oxford said his 12yo son (in the US) thought that it was "a bit lame".

I hate to say "I told you so", but remember where you first read the term "legacy Twitter".