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Friday, April 28, 2006

More femtocell noise.... but just how practical are they?

There's a growing clamour around cellular "femtocells" (basically like picocells but even smaller). Designed for installation at the end of a broadband line, these are cellular base stations that are being pitched at the $100-$300 level depending who you speak to.

There have been at least two public statements about them by operators this week. SpringMobil's financial backer mentioned them on Wednesday at the MVNO conference I talked about yesterday. And this morning, Pipex has finally broken cover as the mysterious Ofcom auction winner Cyberpress Ltd (not a surprise as I'd found that the Pipex CEO was a director) and announced to that "There is also potential for this spectrum to be used in homegateways to provide mobile phone access through broadband connectivity."

Also, on Tuesday I bumped into some folk from one of the leading startups targeting the space, called Ubiquisys. The other companies I know are looking are ip.access (the leading picocell vendor), 3Way Networks, Motorola and probably most of the other cellular infrastructure suppliers. At least two silicon vendors are targeting chipsets for femtocells (PicoChip and TI)

So. We're going to get cheap home cellular base stations, either sold for peanuts (or subsidised) on their own, or integrated into ADSL/cable/WiFi gateways and routers. The first working versions should be around in the next 12 months, so surely we're all set for mass rollout in H2 2007, right?

I'm not convinced. Let's think about the practicalities of getting femtocells to market - and ponder why it took so long to get alternatives like BT's Fusion and WiFi handsets to work.

- The good news is that these devices can in theory use standard 2g or 3G handsets, so none of the complexities of WiFi dual-mode phones apply, such as battery life, IP stack etc.
- The OK news is that for non-differentiated services, no other changes to the phone will be necessary. Operators should be able to offer cheaper in-building voice and SMS, and maybe some sort of generic location-based services using existing handset capabilities. Whoopee.
- The bad news is that for really innovative services, these phones will need to be different. They will also be a sort "dual-mode" - Outdoor, and Indoor. Applications on the phone, not just in the network will have to be "aware" of the difference, and behave in appropriate fashion. When indoors, they will need to be "good consumer electronics citizens", working nicely with the PC, HiFi, TV, games console, fixed phone, camera etc. They'll need to use USB or Bluetooth locally (especially as UWB-Bluetooth should start shipping in phones in 2008). So, mobile software and OS vendors, and handset manufacturers: start thinking about this stuff now. Just what does a femtocellphone have to do? "2 or 3 year horizon" did I hear you say?

- Will femtocells plug into existing broadband modems/routers? Or will they be integrated as larger gateway products and act as replacements? Two equally unpalatable choices here: work around a horrible mess of legacy installations & expect millions of support calls on configuration "Where do I plug it in? Do you have a USB or ethernet connection? Er... wossat then?". Or convince people to throw away existing kit, which may involve persuading them to bin their current broadband provider, their TV service, their employer's home connection....
- ... and if you're a mobile-only operator & you get people to install the gateway/femtocell, what do you do when someone calls your call centre to say that their PC's VPN client doesn't work with the new firewall settings, and can you tell them how to fix it, please?
- I'm starting to think that homes need 2+ broadband connections so they can use multiple home gateways / set-stop boxes
- do they need to be plugged into the mains for power? What happens if someone switches it off?

RF planning
- where will people put these in their homes? as an operator, you have no control - on the floor, on a shelf, in the cellar, in the loft, in a cupboard, by a window. Maybe they'll move them around. Should make updating your frequency planning map entertaining....
- so, your femtocell service is a success. You've got 1000 per square mile in major urban areas. Possibly 200 in the same apartment block. And so do your competitors. Better call those RF planning guys again, if they're not having a nervous breakdown already.
- What happens if I log onto my neighbour's femtocell?

Billing and back-office
- "Location-based services! Targettable to an individual home!". Er, which services will they be? I've yet to see any application providers pronounce themselves as having a focus on this. So factor in time for these guys to get funding, a roadmap, write some code, test it, market it, sell it.....
- What impact does this have on existing billing systems? Can they cope? How long will it take to test different pricing schemes via market research? What about the fault reporting and QoS monitoring function? Inventory software? Provisioning?
- Any security issues? What happens if I unplug your picocell and plug in a different one? What happens if someone steals one?

And lastly, how exactly are you going to handle the inevitable media hysteria? "Aaaargh, a cell tower in your kids' bedroom!!!! Daily Mail* exclusive" (*Illustrative, for all you lawyers out there)

Thursday, April 27, 2006

Enterprise MVNOs are coming - new $200m VC fund

Yesterday I attended part of a major conference on MVNOs. I was speaking on a panel session about the role of MVNOs in the emerging FMC space. The bottom line was "not very much, to be honest", unless they have strong skills in procuring & customising dual-mode handsets, or unless you take a broader view of FMC to include picocell-based services.

For me, the most interesting comment came from Michael Mandahl, a partner at VC Brainheart Capital, which has a variety of interesting wireless investments. As well as representing Swedish "indoor operator" SpringMobile (which is also one of the new UK licencees), he also announced that Brainheart is starting a $200m fund specifically targeted at financing enterprise-centric MVNOs.

I think this makes a huge amount of sense. I have long held that existing mobile operators don't "get" enterprise. They don't understand IP, they don't understand IT (many of them outsource their own...), and they certainly can't grasp the fact that PBXs, especially IP-PBXs, are here to stay. Often, they also lack sales and marketing teams that can sell anything other than minutes and BlackBerries (usually with the help of RIM's own sales team). How many CIOs have their mobile carrier's account representative on speed-dial, or play golf with them (OK, that's a rhetorical question).

Enterprise MVNOs are no-brainers. Ideally, they'll be companies with existing strong enterprise relationships. Maybe PBX integrators (Damovo? Dimension Data?), maybe enterprise IT vendors & VARs (how about SAP? or Sage?) or integration/outsourcing companies (probably those that don't have other operators as clients).

I also feel entitled to feel slightly smug. In September 2003 I published a report on Multimode Wireless, in which I opined:

"Disruptive Analysis .... specifically envisions cellular-only operators enabling new classes of MVNOs (mobile virtual network operators). These will include broader service providers focusing on corporate multimode mobility services (EMSPs), as well as pure-play data-only MVNOs"


"Cellular operators face the tricky challenge of countering disruptive threats on the margins of their business, while avoiding cannibalising their core business in the near term. The clear risk is that the multimode space, while currently peripheral, sweeps in rapidly, to undermine the wireless mass market. Their current collective stance (with notable exceptions), is to attempt to delay it or produce “harmless” variants, rather than embrace it fully. While understandable, this brings its own medium-term risks, particularly losing out to MVNOs and EMSPs in the corporate space."

(Separately, and following on from my threat to name-and-shame, there was no delegate WiFi at all - free or otherwise, at the event. Poor marks to Informa for choosing the Cafe Royal in London as a venue, and a huge raspberry to the venue itself. I suggest other conference organisers steer clear, until it sees the error of its ways.)

Tuesday, April 25, 2006

Another 11 UK GSM operators (provisionally)

Ofcom's just announced its provisional list of winning bidders for its low-power GSM licences. The UK now has another 11 GSM operators (excluding O2 which already has a normal licence).

Ofcom expects to grant the licences officially next week, subject to payment of the licence fees by this Friday.

14 companies bid in the auction - the two that didn't make the cut were Zynetix and Orange.

It will be very interesting to see how rapidly companies build out services in the new spectrum - and what the usage cases will be. My view is that a few things will happen:

- the price for making GSM calls when users are not actually "mobile" but nomadic (ie at home/work) will plummet. This has already happened up to a point, but will now accelerate further, especially given other initiatives like dual-mode Fusion-type service launches and (probably) Genion-style HomeZones
- we're going to see businesses exert a much greater level of power over mobile operators. If large enterprises and government bodies have a choice of 16 mobile operators (and probably countless MVNOs), it seems very likely that corporate cellular tariffs will cease to be such a burden on CIOs' telecom budgets.
- it wouldn't surprise me if various other operators around Europe and elsewhere start to do the same thing & instigate low-power GSM regimes themselves
- it'll probably take longer to get things up and running than everyone expects. There will be technical glitches and delays in network rollout, service development and (as always) user experience tuning. For example, does anyone know what happens when a phone's "network selection" menu has 10+ options shown? Were the menus even designed to cope with that many, perhaps scrolling onto another page?
- there will probably be some interesting international-oriented business models emerging here. Clearly, PLDT is going to do something with its Philippine expats, but there are other bits of cleverness that may emerge - maybe using GSM phones to dial-in to VoIP gateways, or perhaps something with innovative roaming arrangements. I have a meeting this afternoon with a roaming specialist firm, so I'll ask them.
- a lot of companies that have been ignoring picocells and femtocells are going to sit up and take notice. I'm expecting to see that type of functionality being integrated into home gateways & bits of enterprise networking
- lots of network security equipment vendors will have to get their act together. Remember the fuss a few years ago when people were plugging "rogue WiFi access points" into enterprise networks & PCs? Welcome to guerilla wireless v2.0 , only this time with cellular.

Mobile operators vs broadband VoIP providers - FMC & mutually assured destruction?

Various mobile carriers are currently looking at ways to block / mitigate / "manage" / measure / bill / generally fiddle about with 3rd party VoIP across their networks.

Similarly, various broadband operators are trying the same thing, with assorted types of deep packet inspection gear being used in anger (or used in desperation, spite or stupidity, depending on your point of view)

I'm not going to rehash this argument again now.... but I do have a specific thought about this when it related to various types of fixed-mobile convergence.

Presumably, it would just as easy for a broadband provider to block a 3rd-party cellular carrier's UMA/SIP/IMS/picocell traffic transitting "their pipes". It doesn't even have to be sophisticated - you could just block all traffic going to another carrier's UNCs or IMS gateways.

I look forward to seeing what happens when (for example....) T-Mobile USA tries to offer UMA-based cellular services over Verizon or AT&T customers' DSL lines....

And I also want to be the first to shout "hypocrites!" at the first operator who tries doing this type of "poaching" when another division of the company is sanctimoniously playing "gamekeeper".

Thursday, April 20, 2006

Under-the-wire.... Nokia direct-to-consumer shop

There's been a surprisingly muted reaction to Nokia's announcement yesterday that it was launching a direct to consumer Online Shop in the UK, selling SIM-free "vanilla" handsets for "those who may wish to upgrade to a new or more featured device model or have an additional mobile device". It's planning on launching similar sites elsewhere in Europe later in 2006.

As I mentioned last week , growth in handset volumes in saturated markets will increasingly be driven by "second phones" - currently a market poorly catered-for by operators. Nokia must also be irked by the trend towards 18 month contracts and slower upgrade cycles. It presumably also wants to wean certain countries' customers off of handset subsidies - especially when the carrier decides to subsidise a competing product & bundle it with theirs.

At one level, I would have thought this move to sell direct would annoy the mobile operators, and represent a return to the "them vs. us" arms race between handset vendors and carriers, around customer and UI ownership.

On the other hand, they may be complacent & just recall the fuss a few years back, when Nokia launched Club Nokia to sell content & ringtones direct, but which ultimately didn't amount to a major threat, especially compared with other off-portal download sites. Given that SIM-free phones have been available from Carphone Warehouse, Expansys and other places, maybe this isn't such a big deal after all.....

I actually think this is pretty important, especially as I continue to hear that operators are "conspiring" to reduce the accessibility of WiFi-enabled handsets.

Looking at the site, it seems to be an avenue to push both exclusive variants of handsets (eg Black 8800), existing models that operators aren't pushing / customers aren't buying (eg N90)

Even more interesting would be if Nokia did a direct-to-enterprise online shop for its upcoming E-Series devices.....

Tuesday, April 18, 2006

Teaser #1..... Most SIP-capable mobiles won't have WiFi

Shameless commercial self-promotion time.

I've been writing this blog for a while, but haven't really used it to pitch my own work that much. Apologies in advance, but that's going to change in some of my future posts.

I've been working on a major research project over recent months, for an upcoming research report, that may prove rather controversial and disruptive. I'm not going to reveal the full nature and scope of it just yet - although a number of you that have met me personally know already.

But a little bit of information as a teaser.....

.... various cellular handsets are starting to ship with embedded SIP capabilities. Sometimes this is "closed" (for example in a Push-to-Talk client), and in other cases it is exposed, via APIs, to 3rd-party applications ("Naked SIP" - remember the term). A number of companies already produce SIP-based VoIP and presence clients for Windows Mobile and Symbian devices.

When I speak to many of these software firms (and handset manufacturers, service providers, network vendors and others), the underlying assumption is that these will mostly be used on dual-mode WLAN/cellular devices.

Disruptive Analysis' motto is "Don't Assume", and this is a good example of its application.

Fewer than 15% of SIP-capable cellphones will have WiFi. Not just this year, but to 2010 and beyond.

If you want to know more about the research project & upcoming report, please email your details to sales@disruptive-analysis.com

Enterprise FMC - we're getting there

Interesting announcement from Trapeze Networks and a new company Divitas, the latter a company I hadn't heard of before. A quick scan of its website & a few articles like this one and it all starts to make an awful lot of sense.

Conceptually, it sounds like a similar product to Motorola's Wireless Service Manager and also fits with some of the activities that Nokia's enterprise division is working on with Cisco and Avaya IP-PBXs. Basically, there's a smart controller box in the enterprise network and a client on the handset. The carrier is more-or-less relegated to being a pipe (completely the right approach for large enterprises, in my view), with tight integration with the enterprise-grade WLAN network (something that is totally absent in UMA and most forms of carrier-based SIP mobility management).

The main problem that Divitas is going to have is ensuring testing and interoperability with the myriad software platforms that dual-mode devices will come in. Doing a Windows Mobile 5.0 port on a dedicated handset is fine - but they will also have to work with countless other WiFi-enabled devices that corporations & their suppliers prefer. In some cases, these will come in operator-specific versions that may even try & prevent this type of usage.

Divitas is also going to have work hard on its channel to market. In my view, this type of dual-mode solution will have to fit in with the enterprise telephony world, where the IP-PBX vendors and their resellers are the kingmakers & gatekeepers.

Thursday, April 13, 2006

Handset volume forecasts - relevance and overenthusiasm?

I see a lot of forecasts about the overall volume of the handset market. Usually, major vendors include predictions in their financial statements, such as SonyEricsson's this morning, of more than 900m shipping in 2006. It seems like the magic 1 billion per year number is around the corner in 2007 or 2008.

A number of my industry analyst peers specialise in box-counting type work, and have similar (or even higher) predictions. I have no wish to directly compete with them, or criticise their results, especially as they often have people "on the ground" around the world, and compile local trends into global analyses.

However, I have some macro-scale thoughts on the underlying assumptions here.

Firstly - the sources of handset shipments are:

- New subscribers
- Existing subscribers replacing their existing phone & ceasing to use the old one
- Existing subscribers getting a second phone/device to use in parallel with the old one

A lot of growth in recent years has been driven by the first two categories. New handset subscribers in places like China and India, or existing users upgrading to cameraphones. In addition, the emphasis on ultra-low cost handsets has also boosted the market. The third category has also evolved in saturated markets like Europe, where people often have multiple handsets or a BlackBerry or other second device. (Also some emerging market users also have 2 phones, so they can arbitrage on tariffs to avoid cross-network calls if they incur a premium price).

I'm wondering about the impact of a few new factors:

- maybe it's just my perception, but I reckon the media is a bit less concerned about new phones being cool, must-have, must-change-every-4-months, fashion accessories than a year ago, with the possible exception of pink phones
- an awful lot of supposedly fashion-conscious people seem to have bought Motorola RAZRs and are still using them after 12-18 months. I also still see a lot of Samsung D500's around. I guess they're happy with them.
- Operators seem to be moving to 18-month contracts, presumably in part so that they don't need to offer expensively-subsidised "free upgrades" after 12 months
- I can't believe anyone in the developing world who's scrimped together $30 to get a ULC handset & prepay card will be on the same replacement cycle as a fashionista in Tokyo or Helsinki. I reckon the more low-end devices there are, the slower the replacement rates will get.

On the other hand, I reckon the 3rd category of multiple device ownership is probably underestimated. I see a number of operators looking at multiple-SIM tariffs, so people can have a sensible "work" phone and a cool "pub" phone without having to swap SIM cards over all the time.

Overall - I'm not sure what the continued engine of market growth is here. It's not 3G - the numbers are still too small. Replacement seems to be a but shaky - aside from "a better camera" there aren't many new must-haves. On the other hand, multiple device ownership looks rosier.

The last word on this is a tale I heard a few months ago from an aid-worker, who works in Zambia. She told me that the kids she works with don't want a phone to show off with any more. They want a USB Memory stick on a cord round their necks, because it makes them look like they've got lots of information & know how to use a PC to access it with.

Wednesday, April 12, 2006

3G-embedded laptops.... I'm not convinced

There seems to be a lot of talk surrounding the notion that millions of laptops will ship with a mobile operator's HSDPA or EV-DO card embedded. And I don't mean just putting the antenna inside the casing (which makes sense), but the whole operator-specific build, with their preferred card & preloaded software.

I reckon it's nonsense.

Who on earth is going to want to buy a laptop that locks them into a specific service provider and a contract? Especially one that has patchy (at best) indoor coverage, and in most cases hasn't yet got the whole "quad-play" or "multi-access" thing sorted?

Let's think about this a bit deeper. Laptops are bought by 2 main groups - consumers and enterprises.

Business users first. While some users are truly nomadic, most business people will use their PCs in the office a lot of the time. Where the preference from the IT staff (and users) will be to hook into the office LAN, either via a nice 100Mbit/s zero-latency ethernet wire, or via the increasingly secure and reliable office WLAN, designed for decent capacity and coverage through the building. So the connection management software (presumably customised by the operator) will need to support an algorithm that says "use the fixed LAN as a first priority, then the company's private WLAN if available, then public WLAN, and finally 3G when out of the office". I'm skeptical that many operators will be keen to set things up that way.

Especially if you're paying per megabyte or anything other than completely uncapped flatrate charges. I can just imagine the idea of paying $$$ to access your data, from your server, in your basement, when you're sitting in your office on your PC. Or whether the connection manager will be smart enough to stop you automatically downloading 10MB of email or virus updates when you’re roaming internationally at $$$$$$ per meg? Or if your backup software decides to back up your hard drive on schedule, over cellular. And I wonder how well this will work with company-mandated security and authentication software? It's bad enough that you end up using expensive cellular voice in-building when's there a "free" PBX phone next to you. CIOs and CFOs already hate this enough to clamour for dual-mode WiFi phones before vendors have them ready. The idea that they'll be happy to let you use expensive cellular data in-building when there's a much faster & more reliable LAN next to you (or wireless) is ludicrous.

So, with the possible exception of a few ultimate "road warriers" and select number of self-employed users, this is a complete non-starter in my view.

Now, consumers. This is where the issue of subsidies is more relevant. I suppose it comes down to the level of subsidy - if carriers start giving "free laptops, but you have to use our service" then some people might go for it, although they're probably the same people that use phones on prepay, not on contract, and I don't see that as an option here. And, again, will it let you set preferences like “use WiFi where you can, and HSDPA where you have to”? (and don’t say it’ll make WiFi irrelevant – you’ll want to connect to your corporate LAN/WLAN while in the office, and your proper broadband at home – and, if you’re happy with security risks, free WiFi wherever, as I’m doing now to write this blog).

Let’s face facts. Nobody buys a PC with a bundled ISP deal, wireless or otherwise. People tried the whole "free PC" thing years ago & it failed. At best, you get a few months free & a couple of CDs in the box. Oh, and while various laptop suppliers seem happy to have their PCs subsidised by carriers, has anyone thought what this is likely to do to inventory costs for retailers? I can just imagine PC World’s CFO being told he needs to expand his warehouse to accommodate 5 different operator-specific versions of each PC, or that he needs to get his staff to customise each with specific operator SIMs and software.

And can you imagine, in a couple of years' time, that it'll have a software upgrade that will only allow you to use applications that route via the IMS network? Yeah, right.

You could argue that a laptop is just a "big smartphone" and that people buy those from an operator & don't complain. The difference here is usage cases - and the role of Microsoft. On the PC, the browser (and Office, or corporate applications) is the killer app. You want maximum speed, minimum latency and maximum coverage. You'll tend to use various of the ports for USB peripherals, LAN connections and so forth. You'll have myriad drivers for bits of hardware, which may conflict with the data card. You'll have various communications apps.

Maybe I'm missing something obvious. But while I'm happy to have a T-Mobile customised MDA, I want to buy my laptop "vanilla" from Samsung or Dell and use it how I want, with whichever service provider I want.

I think that this particular Emperor has no clothes.

Monday, April 10, 2006

Mobile phone OS...

There's a lot of interesting commentary by David Wood on Symbian OS vs Linux here. David is one of the original inventors of the Psion and Symbian operating systems, and I've met him on numerous occasions. I agree with quite a lot of what he says - particularly around the idea that creating Linux phones is neither as easy, nor as cheap, as many propose.

He's also right to debunk the idea that most Linux phones are actually smartphones, just because they are built around a Linux kernel. My own forecasts predict Linux featurephones to outsell them several times over. (The difference is that a smartphone generally allows developers to write 3rd party software for the platform). That said, if you take a stricter definition of "smartness" - ie the user can buy & install 3rd party software, rather than it all being preloaded & supplied by carrier or retailer - then quite a lot of the Symbian devices in the market are too locked-down to be considered fully-open.

His arguments against Microsoft and Windows Mobile are a bit more oblique, and, to my mind, he skirts an awkward issue for Symbian:

Increasingly, higher-end mobile devices are not going to live as standalone devices. They will have be "good citizens" of an extended ecology spanning PCs, notebooks, consumer electronics, IP-PBXs, WiFi phones and IPTVs. Various emerging services and applications will span several categories of products. What this means is that while a handset-optimised OS is ideal for a handset-optimised service, it is much less clear that Symbian has a strong role to play in applications which are "federated" - perhaps across a handset, a PC and a games console, for example. It may well be the case that Windows' (or maybe Linux') ultimate deficiencies in terms of handset performance may be offset by superiorities in interoperability and cross-platform software portability.

Wednesday, April 05, 2006

16 bidders in the Ofcom low-power GSM auction

There's been surprisingly little coverage or analysis of the ongoing Ofcom spectrum auction in the UK.

The auction is for "thin" low-power 1800MHz GSM spectrum licences, which could enable deployment of some innovative business models, using technologies like picocells for indoor cellular services, along with normal low-cost handsets. There could be as many as 12 new operators as a result of the process.

In fact, 16 companies have announced an intention to bid. They're listed here. The actual award process itself is fairly protracted, with the actual licences not expected to be issued until mid-May.

I haven't had a chance to really dig deeply into all of the companies bidding - and some appear to be consortia with new company names, perhaps backed by companies or individuals wishing to stay out of the limelight unless they get a licence. But this is a rapid analysis of who's who.

The UK's largest fixed-only operators are here, none of which is a big surprise - BT, C&W, Colt, ntl. All would like probably spectrum to offer triple/quad-play services without relying on MVNO deals & other companies' spectrum, and all are probably looking at a combination of corporate, residential and wholesale applications.

O2 and Orange are represented - interesting, as both already have a fair amount of GSM capacity available. I can think of a few reasons why they might want some more, however, especially for use in "ring fenced" applications.

Centric Telecom is a newish business-focused telecom and broadband service provider, which has an eye on "landlord services" and so could be looking at in-building coverage as a service opportunity. It quotes a lot of financial and property sector "partners" on its site.

It's not immediately clear who Cyberpress Ltd is. Interestingly, it appears on the Pipex CEO's list of current directorships, though.

FMS Solutions describes itself on one of its Ofcom filings as "a small specialist company, aligned to public mobile networks, providing managed telecoms services and innovative Private GSM solutions." It's an arm of a company (Field Measurement Services) that does various wireless-related services, and which also supplies assorted niche GSM-related bits of equipment. According to this article it's looking to deploy GSM services for emergency services. And it's based in Thatcham near Newbury - home of Vodafone, which may be a complete coincidence.

Mapesbury Communications' website is here. It appears to be involved in various WiFi, VoIP and related activities, including deals with Texaco petrol stations and various hotels. It "provisions" some of T-Mobile's hotspots, which may give a clue to where it might put any future picocellular infrastructure.

Opal Telecom is corporate-focused division of Carphone Warehouse, interestingly. Given that CPW is already an MVNO (Fresh), and a landline telecom operator & broadband reseller (TalkTalk), it probably doesn't come as much of a surprise that it's interested in some GSM spectrum as well - although whether its major operator partners view it the same way will be interesting to watch.

PLDT UK is an odd one here. It's a division of Phillipines operator PLDT, which owns mobile firm SMART. Mentioned on this page , it seems to be part of the group "focused on providing Pinoys abroad only the best telecommunication products and services currently available in the market" . It seems to specialise in overseas calling cards, as well as some call centre and bandwidth services. This page perhaps indicates its interest is in using GSM cellphones for international calling.

Shyam Telecom is an Indian company I've met before at In-Building Wireless conferences. It makes things like distributed antenna systems. According to this page, its parent company also owns a division that offers cellular services in the Indian province of Rajasthan

Spring Mobil is perhaps an unsurprising bidder. It operates an existing in-building low-power GSM service in Sweden and so rolling out similar services in the UK probably makes sense. (Another company doing something similar in Switzerland, In&Phone, isn't bidding, though).

TeleWare is another enterprise-focused UK communication service provider. It seems to focus on PBX and hosted-telephony solutions, including its own SIP-based switching platform called intelligent eXchange and various value-add modular applications.

Zynetix is a company I know quite well, and which like FMS has been involved in lobbying Ofcom for the auction in the first place. It makes small GSM softswitches for various applications, including FMC and network in-fill applications.

All things considered, it looks like the UK should be getting a pretty good selection of innovative GSM business models once the auctions are concluded. Definitely an area to watch out for - and which I suspect other regulators will be closely scrutinising.

Value-based pricing? No, I don't think so.

"We don't want to be a dumb pipe. We want to offer value-based pricing for specific services".

In other words, service providers love to monetise their networks by charging more (or very occasionally less) for certain "valuable" bits and transacations, irrespective of the underlying cost of service provision, but aligning tariffs more with how their customers perceive the "inherent value" of that service.

The problem is the lack of finesse, and the rather fuzzy definition of "value" used by operators.

I was reminded of this recently by Martin Geddes' comments about operators' Gollum-like need to "capture your value, all my beautiful bits, preciousssss bits". I've also written jokingly about an ultimate incarnation of this.

I think we need to have greater granularity than just Value vs Commodity pricing. I propose the following scale:

Bargain-based pricing - it's so cheap, it's unbelievable. You tell everyone about it. You use it for the sheer sake of it. You buy other stuff just as an excuse to use it more. Example: free WiFi in cafes.

Value-based pricing - it's the right price. It seems reasonable given the probable underlying costs or its inherently fair market-based pricing mechanism. It does what it says on the tin. You can justify it easily. You mention it to friends or colleagues. Examples: Yahoo Mail Plus, Google AdWords, eBay pricing, Boeing Connexion inflight WiFi.

Inertia-based pricing - it's a bit steep. You know you could find it a bit cheaper. But it works, it's convenient, and it's not worth the effort to shop around or switch. You don't complain, but you don't recommend it either. Example: SkypeOut calls, your current broadband provider, your current mobile voice tariff, airport food.

Ignorance-based pricing - it's a ripoff, but you don't realise it. You've got no real benchmarks, so it seems "reasonable". If it was cheaper, you'd probably use it more. You don't know it's available to other people (maybe in another country) at a much lower price. If you found out, you'd be quite annoyed, complain to friends, and probably feel a bit gullible & prone to switch suppliers when the opportunity arose. Example: European SMS pricing, PSTN calls.

Resentment-based pricing - you know you're being ripped off hugely, but you "have" to pay as you have no immediate alternative. You grit your teeth, and (hopefully) expense it afterwards. You actively look for a way to avoid the cost, and minimise your usage. You complain to friends & colleagues. You develop "active customer disloyalty" and vow to switch suppliers, out of distaste for their show of customer disrespect, whenever you can. Examples: Hotel WiFi, cellular data roaming.

Tuesday, April 04, 2006

WiFi, conferences and hotels

Right, enough is enough.

I spend a lot of time at conferences, as a delegate, speaker, or chair. Unsurprisingly, these tend to be wireless-related events - wVoIP, FMC, wireless broadband, handsets and so forth.

Most of these events are organised by major, professional, conference companies, or sometimes technology vendors. Most are held in major cities, in large business hotels that are parts of international chains.

I'm getting fed up with paying extortionate fees for WiFi - often at almost as ludicrous a price as cellular data roaming rates. An event last week was fairly typical, at €28 for a day - and it didn't even work in the hotel room as well as the conference centre.

There are three groups at fault here:

1) Conference organisers that don't provide WiFi to delegates as a basic utility
2) Hotels that don't provide WiFi to conference organisers at sensible rates
3) WiFi hotspot providers that maintain rip-off pricing levels for captive audiences

From now on, I am going to name and shame offenders in all three groups.

I want to encourage delegates & sponsors to insist on WiFi from conference organisers or negotiate appropriate discounts. I want organisers to boycott hotels that rip off delegates. And I want hotels to force their hotspot partners to revamp their pricing, which is often utterly stupid.

To be fair on some conference organisers, many are put in invidious positions - I have heard of hotels wanting to charge them more than €2000 per day to provide WiFi to a conference room full of people. Simple solution: tell the hotel operator to get real, or don't sign up for that venue.

Most conferences take 5-6 months to plan. Starting from the beginning of November 2006, I will be refusing to speak at events that do not promise to offer free WiFi to delegates. I encourage readers - many of whom I know are fellow regular presenters - to do the same.

And if any HSDPA, WiMAX, TDD or Flash-OFDM service providers out there want to sponsor a mobile-backhauled WiFi router & bandwidth for me to take to events, I'm happy to report back on the results.

Monday, April 03, 2006

wVoIP conference round-up

Last week, I chaired a conference on wVoIP. I'm trying to pull together various of the strands that came out of the event - quite difficult, given the breadth of speakers and attendees there, ranging from Skype to Swisscom, and Telio to TeliaSonera. (I'm not going to write up a huge post on everything that was said - but if wVoIP is of particular strategic interest, please contact me directly.)

Overall, it is becoming clear that many larger & established mobile operators see limited benefit in accelerating the spread of wVoIP, especially in its manifestation as dual-mode WiFi/cellular handsets. Many seem content (well, OK, maybe "grudgingly accepting") to use pricing as a tool to combat the threat they see from the IP side of the fence. Many seem to believe that wVoIP has no real advantages beside (possibly) lower price voice, and that there are more effective and competitive ways to achieve the same ends with simpler, ordinary GSM handsets - and fewer regulatory issues. Unlike the previous week's FMC conference, there were surprisingly few people saying that wVoIP is only a small aspect of a much wider shift towards bridging mobile and Internet/IP domains for entertainment, content, TV etc.

Conversely, various smaller players, or more "disruptive" entrants to the sector, see it as a fantastic wedge to drive among the incumbent firms. Although much of the discussion was indeed around pricing, there were other comments around new forms of fixed-mobile substitution, business models involving WiFi-only handsets, and added-value voice-related applications like presence.

Some highlights:

- Skype is clearly doing its best to appear operator-friendly. In particular, it made a valid point that almost no consumers make international calls from their mobile phones when they're at home, not roaming. If you're an expat & want to call your mum for an hour's chat, you'll do it from a landline. Adding Skype to mobiles enables operators to capture a greater share of outbound international minutes. Skype's also looking at regulatory things like emergency calls & legal intercept.
- On the other hand, Skype remains one of the few (vocal) enthusiasts for VoIP over 3G data channels - an approach derided by the cellular community as being horribly inefficient, and lacking QoS capabilities. On the other hand, there is definitely a heretic element to the mobile industry which is adopting the wireline IP stance of "who cares about inefficiency & QoS anyway? just throw bandwidth at the problem & it'll go away".
- An even lower level of enthusiasm for UMA than at the FMC congress. I asked the entire audience whether anyone was prepared to stand up as an advocate of the technology, and the best I got was "maybe. we're still trialling it". And another operator's representative claimed that they're much-trumpeted UMA deployment was still really "an experiment".
- Nobody in Europe really cares much about indoor coverage as a wVoIP driver. Not a surprise to me, but I continue to try & bang people over the head with the fact that 3G doesn't work well indoors, and get a consistent response "never mind, we'll just drop back down to 2G instead".
- Lots of "legacy mobile operators" and their suppliers and standards bodies still like the word "terminal" instead of handset, and still solidly believe that policies, handover, QoS etc is best managed centrally, rather than making applications on the phone bearer-aware.
- Cellular operators are definitely looking at more innovative ways of doing location-specific tariffing - and they essentially accept that paying a "mobility premium" is unacceptable unless you're actually mobile & moving about. Lots of talk about picocells, HomeZones and the like.
- If you're committed to a dual-mode strategy, it's the devices that count. Not just handover, battery life etc, but (and again I reiterate this regularly) the user experience is what makes or breaks it. It's that nasty handset software issue again, not the radio.
- Applicability of innovative wVoIP business models varies significantly on a country-by-country basis, depending on things like current share of outbound calls via cellular, broadband penetration, operator attitudes to fixed VoIP, distrust of the incumbent operator, % of foreigners living in the country, cultural issues around fixed-line, availability of handset subsidies etc.
- A growing number of large operators - especially in converged fixed/mobile groups - appear to be buying into the strategy of transitioning to be a "smart pipe" provider (or "conduit" if you have a pathological fear of the word "pipe" - credit Barry Shrier)
- wVoIP will appear in some unusual guises, such as adding voice to games played wirelessly on WiFi-enabled games consoles. Also quite a few people talking about prepaid WiFi-only phones for use in Metro HotZones
- lots of conspiracy theories abound around major operators' reluctance to encourage / permit the sale of dual-mode phones "If you sell that phone in quantities of a few thousand to that new entrant..... we'll stop buying a few million of your single mode ones"
- some interesting stuff being done on VoIP Interconnectivity by companies like xConnect and

Personally, most of what I heard just added weight to my existing opinion - dual-mode VoWLAN phones are disruptive, but they're also complex and expensive to get right. They have more of a role to play in driving down cellular pricing than outright substitution. What is becoming clearer is that wVoIP will not be "mass market" technology in the short term. But to be honest, the increasing level of segmentation occuring in the cellular industry suggests that operators' don't really believe in "the mass market" any more, anyway. The mobile industry is already fragmenting, as providers look for niches from which they can derive additional value - and some of these niches will be well-suited to wVoIP, while others won't.

Pipex and Intel Capital WiMAX.... but will it be mobile?

It seems to be a pretty busy week for the UK's WiMAX sector. Last week I wrote about Urban WiMAX' plan for symmetrical corporate wireless data services. Now, the large UK ISP Pipex, which has been mulling WiMAX for some time, has announced that it is forming a new venture called Pipex Wireless - which is the beneficiary of both Pipex' slice of 3.6GHz spectrum, and $25m from Intel Capital.

There's not much detail on this yet. We know that the services will be "designed to meet the needs of consumers,enterprises and governments for wireless broadband, including citywide 'hotspot'wireless access". And, interestingly it describes WiMAX as intended to "provide Internet access over long distances". As opposed to providing non-Internet access for "own brand" applications. Put that IMS/WiMAX combo on hold, then....

Some other things are notable for being left unsaid:

- It's not immediately clear what the % shareholdings are, Intel vs. Pipex
- It's not immediately clear whether this will be using 802.16d or 802.16e - although the timeline of 2007-2008 roll-out suggests it could be the latter, given availability of certified equipment. And the comment that the company is promising trials this year, when Pipex has already trialed 802.16-2004 extensively, is another give-away
- It's not immediately clear, if it is to be 802.16e, whether this will be a properly "mobile" service, or whether the regulatory situation is still sufficiently grey for this issue to be "lobbied over" before launch
- It's not immediately clear if there will be a dual-mode WiFi/WiMAX plan for enhanced indoor coverage (which will be necessary at 3.6GHz frequencies)
- It's not immediately clear whether VoIP will be provided by Pipex Wireless

The other aspect I'm trying to judge is just how much the whole thing is a means to Intel's ends, rather than being core to Pipex, which seems to have acquired the spectrum almost through luck. Given the amount of money that Intel spent on promoting the original WiFi Centrino, it almost seems as though this $25m just makes Intel Capital a sub-division of Intel Corp's marketing department.

Perhaps I'm reading too much into the press release's phrasing and mis-spelling - "top eight population centers by 2008" which sounds just like typical American Wireless-ese "top 8 markets" PR, written in a part of the world where the spellcheckers can't cope with "centre".


Right, some more thoughts on whether this is actually going to be a mobile / nomadic service. According to Ofcom, Pipex' 3.6GHz spectrum is for fixed access.

However, it is interesting to see that the 3.6GHz spectrum is subject to Ofcom's 2005 Liberalisation measures, which introduces "New Flexibilities". Although there's no specific mention of changing a fixed licence to a mobile/nomadic one, there is this section:

"12. Will Ofcom allow other types of variation other than those in the table?
Yes, Ofcom will consider any licence variation requests, but these may take a bit longer to assess. In the first instance we recommend that you contact the Ofcom spectrum liberalisation helpdesk for the type of service you are interested in. As well as discussing the feasibility of the request the helpdesk will also establish what information Ofcom will require from an applicant to progress their request.
Requests for complex or novel variations may require detailed technical analyses, consultation with third parties, and international coordination. We will endeavour to process these as quickly as reasonably possible and will in any case within a month of receipt of the application inform the applicant of our plan and projected timescale for progressing the application."

Clearly, there a plenty of other parties that would want to be "consulted" on this.... but with a 2007 deadline and $25m budget, this is definitely one to watch

Sunday, April 02, 2006

Apple iPhone... my guess / opinion

Rampant speculation, alleged leaks, supposedly expert opinion, and assorted other blather have surrounded the possibility of an Apple iPhone.

I claim no knowledge whatsoever. I haven't spoken to Apple in years, and although I own an iPod I'm not particularly bothered one way or the other.

But seeing as everyone else is trying, I'm going to have a guess anyway. So if I get it right, I can brag about it endlessly....

1) It won't be a "full hybrid" MP3/phone. It will be primarily an MP3 player, which also has some connectivity as a secondary capability.
2) It won't be sold in a way to replace users' existing mobile phones. I don't think Apple wants to "own" voice telephony, contacts list etc. Or deal with mobile operators.
3) I'd say there's a possibility that it could be a really "disruptive"WiFi-only phone, not a cellular device at all. Maybe even (and this really is pure dreaming) a SkypeiPhone
4) It won't be available in both CDMA and GSM variants on day 1 - if at all. Which means it won't be a truly global product.
5) It won't be a smartphone. There's a possibility it could use a Linux kernel, but it won't allow the user to install an random applications

Overall, I'm pretty skeptical. The problem is that Apple would need two separate business models in different parts of the world. In some countries, notably the US, it is difficult to think of a way of avoiding the major carriers' influence, unless devices were just sold through MVNOs. In other markets, the device could just be sold "vanilla" (but unsubsidised) and used with an ordinary SIM card. Even there, Apple would have to content with working nicely with both pre- and post-paid billing models.