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Monday, July 31, 2006

WiFi phones: look, will you just forget about hotspots?

There's a sudden rash of articles about WiFi-capable phones at present, seemingly catalysed by a NY Times piece.

A common theme seems to be "Wow, these will be usable at WiFi hotspots! What happens to the carrier business model then? Cannibals ahoy!!!!"

Look, all of you, will you just forget about hotspots for WiFi phones? It's irrelevant, a niche of a niche of a niche. Dual-mode phones are about using VoWLAN in the home & at work. Period. Everything else VoWLAN-related - hotspot, hotzone, plane, donkey, whatever - is noise. Secondary or tertiary - remind me again in 2009, and I might be persuaded to care. Sorry FON, T-Mobile, The Cloud, city WiFi evangelists, but unless I'm a top-1% prosumer enthusiast user, or a street-cleaner spending all day outdoors, it's an irrelevance.

Yes, I know, I've talked before about running Skype-over-WiFi from my laptop in a hotel, but that's different: I'm using the hotspot for data already anyway, I've signed up using a full-screen browser & credit card, I'm avoiding heinous international roaming fees, I'm not moving, it's not dual-mode with cellular (seamless or otherwise) and I'm only making outbound calls.

So why is all this nonsense?

Think about who is buying (or subsidising) dual-mode phones, and why they want to use them.

  • Fixed-mobile combined operators (France Telecom, Telecom Italia etc) want to launch innovative triple/quadplay services leveraging their home broadband user base. Yes, this might include cheap voice at home (using WiFi or maybe cellular-only solutions), but it'll also be relatively sophisticated with other "converged" features like video, network-resident address book & other valuable, churn-reducing capabilities. Some of these will succeed, but only with a lot of effort in areas like customised phones, dedicated home gateways & 100 other niggly bits of technology and customer experience to optimise.
  • Partnerships of broadband/mobile operators, or MVNOs (BT, Sprint/cable co's etc) want much the same. They're also likely to have a fair shot at this, although not controlling both sides of the infrastructure will make it harder.
  • Mobile operators would potentially like to exploit their customers' broadband and WiFi at home, because it's a much cheaper way to provide coverage. You, the customer, pay for part of their radio network using your own broadband line and WiFi. It also lets them offer a VoIP service which could, in theory, further their aims of fixed-mobile substitution. However, there's a whole bunch of problems with configuration, customer support and a decent user interface/experience which means most such attempts will fail miserably.
  • Residential customers want WiFi in phones primarily for data, not voice. Browse the web or do IM from your sofa, transfer 6 megapixel images or MP3 files to/from your PC and so on. If you've got lousy cellular coverage, or are particular enthuiasts of Skype or another Internet VoIP provider then yes, you might want a VoWLAN client on the device as well - but it will have to be a top-end phone to work properly.
  • Business customers want to reduce their cellphone bills by any means possible, especially in Europe, where roaming is a huge issue. Many already have office/campus WiFi, albeit without 100% coverage or voice optimisation. Most have PBXs or IP-PBXs that they'll keep for a long time (forget IP centrex too), and many have long-distance IP networks like MPLS-based VPNs connecting their main offices. Most are also aware that employees prefer to use cellphones for many calls. Most don't want to pay for more devices than needed, but also don't want to route calls through a carrier (& pay) when it's not necessary. This is driving companies like Cisco, Avaya, NEC, Siemens, DiVitas and others to put a PBX "personality" on a WiFi-capable cellular phone. Not easy, either in terms of technology or route-to-market, but it's the first time in 15 years as an analyst I've seen more end-user "pull" ("I want this now!!!") than vendor "push" ("Hang on, it's not that easy, we're still working on it"). Most will want to work with some operators, but ideally fixed/mobile hybrid providers with teams who understand both PBXs and systems integration, not common-or-garden legacy mobile-only carriers with no entreprise network expertise.
  • VoIP service providers want to use dual-mode phones to put their software clients on devices & turn them into a "second line" using WiFi. They also face a whole bunch of challenges around integration, and may turn to hotspots in desperation, when they realise they can't control all the bits of a proper residential/corporate offering as described above.
  • Hotspot and Hotzone providers are also desperate to add voice as an application, because they've wasted 3 years' lead on HSDPA / EV-DO by sticking to stupid pricing, roaming and marketing strategies. Hotspot operators face huge problems of browser-based settings on "normal" dual-mode phones, except on pre-configured (and probably WiFi-only) devices sold specifically for that purpose. Hotzone / metro-WiFi operators will face problems of extremely patchy indoor coverage (amongst other things)
  • Handset manufacturers want to play arms merchants to all of the above, but also make sure they don't get tripped up in the "sour grapes" politics of wireless carriers who've realised they can't exploit WiFi, and who therefore don't want anyone else to play with their toys either. Especially in those countries where handsets are subsidised.

Bottom line: dual-mode is difficult. Not impossible, but nowhere near as trivial as many people make out. Some of the technology, ironically (battery life etc) is the easy bit to fix. The real problems are in user interface, integration with the fixed domain (broadband, VoIP, PBX, WiFi AP, whatever) and things like authentication/security and channel-to-market.

Consequently, business models around VoWLAN will only work in those places where there's already high usage, where lots of costs can be saved - in the home, or at work. Saving 2.7 cents twice a week when calling outbound from Starbucks doesn't make a viable business for anyone. Hotspots might come later, but for now, they're not where the dual-mode action is.

(Hey, I'm really proud - I managed to write a whole article on VoWLAN without singling out UMA and being rude about it once.....)

Friday, July 28, 2006

iPods and musicphones..... another angle

There's been a lot of hoo-ha recently about "is the iPod's star waning", and, in particular, will it get trounced by music-capable phones.

It all depends on your angle, of course. Depending upon whether you sell music, make flash memory, run an operator, build devices, provide network backhaul capacity, design headphones, or a hundred other roles, your view of "what stat is important" will vary.

What matters?

  • Number of "music-capable" devices sold? (and do you include FM radio as well as MP3?)
  • Number of "music-optimised" devices sold (eg a SonyEricsson Walkman phone vs a SonyEricsson Cybershot imaging-oriented phone which also has an MP3 function)
  • Number of music-capable devices in use (ie addressable "installed base")
  • Number of music tracks sold, intended for a specific device? Their value?
  • Total hours of music listened to per user per day/week/year?
  • Total # of people who have ever used their device for music, even if only once?
  • Proportion of people who listen to music "regularly" on a platform
  • Source of music listened to (or bought) - mobile download, sideload from a PC, split between online purchases vs CD rips vs peer-to-peer filesharing?
  • Number of music devices per person and when/how they're used?
  • Proportion of someone's total music listening given per "context" - mobile / car / home hifi / gig / club / friend's house etc?
  • Total aggregate share of someone's entire disposal music-related expenditure?
  • etc. x 100
You get the point.

Now, I've been engaged as part of a vigorous debate with the esteemed Tomi Ahonen, who stirred up a firestorm a week or so back with a hard-hitting piece on whether we should claim "iPod RIP". I'm not going to re-hash all the arguments, counter-arguments, flames and other stuff. It's all still burning on Tomi's site with small secondary conflagrations on places like the excellent Forum Oxford.

I'm certainly not going to get embroiled in the 14% / 76% market share debate. As the above indicates, there are at least 10 differently-defined "market shares" here, which are of differing importance to different people.

I have, however, tried to do an apples-to-apples comparison with some publicly-available data, which suggests that there may still a range of 2 orders of magnitude (ie a factor of 100) in terms of regularity of purchase of "music for devices".

Firstly - the UK. A market with a fairly good number of musicphones (however defined) and fairly decent 3G penetration, as well as high levels of music-fandom overall. In March 2006, the UK division of Hutchison's 3 mobile operator reported "With average sales of over 200,000 tracks per month, mobile media company 3 today announced that its audio service has made up over 53% of mobile audio track downloads since the start of 2006". In other words, in Q1 2006, the run rate for the market as a whole was about 400k songs to mobiles in the UK.

In Q1, 3 had about 3.5 million 3G subscribers, so it was selling 0.057 songs per sub per month = 0.69 songs / sub / year annualised. As 3 is the leader, this is probably a better rate of sale than the other 3G operators in the UK, ie probably an average 0.5 songs / sub / yr for 3G in the UK (particularly as other operators have more datacards subs). Another source has suggested "11% of 2G/2.5G users in Britain, and 32% of 3G uses in Britain downloaded music to phones" that suggests 2.5G users would perhaps be around 0.15-0.2 songs / sub / yr , and probably (average across all UK subs, probably around 80%+ 2G) about 0.25 / sub / yr averaged across the whole UK mobile population.

Japan is one of the most advanced mobile music markets. KDDI has now downloaded 50m songs, with the last 20m sold between Dec '05 and May '06. ie a run-rate of 4m / month and thus 48m / year. It has 24m subs, so this is 2 tracks / sub / yr. I've seen something else (can't find the source unfortunately) which suggests that 23% of its users download music, so this average figure is skewed between lots of people on zero, and a smaller number on much higher figures.

Conversely, Apple has around 40m iPod users as an "installed base" of users. It had sold 500m iTunes songs in July 2005 and 1bn by Feb 2006 ie a run-rate of 71m per month, ie 1.8 / owner / month or 21 / owner / year.

All this obviously excludes music ripped from CD (or downloaded from other legal/illegal Internet sources) and put onto iPod or phone by USB or memory card. However, to sum up - legal device-oriented full-track music sales, averaged across all users/subscribers (yeah, I know definitions are a little different & some people have several phones or iPods) are:

UK mobile - about 0.25 songs / sub / year, rising to 0.5+ among 3G users (and using some other stats I've seen on what % ever download any music, probably about 2 songs / active mobile-music sub / year)

Japan mobile - about 2 songs / sub / year (and at 23% of KDDI users downloading music at all, about 11 songs / active mobile music sub / year)

iPod - about 20 songs / user / year

I reckon that's about as close to "apple-to-apples" as I can get on published data.

Disclosure: I own an iPod Nano, 3 different MP3 playing-phones and never buy songs from iTunes or via operator download, preferring to buy & rip CDs instead & use USB and memory cards.

Tuesday, July 25, 2006

Free mobile as a triple play marketing tool?

I had an interesting discussion with a client yesterday. We were discussing the "Free Broadband" services being launched in the UK by companies like Orange and BSkyB. Basically, they are all different spins on bundling - ie get "free" broadband when you subscribe to an expensive-enough package for voice / mobile / satellite TV.

It got me to wondering why "reverse" free mobile packages aren't offered - perhaps "Free mobile phone + 200 mins / 200 texts per month, when you subscribe to our £30 a month 20Mbit/s ADSL2 service"

Can't be too long before someone tries this angle, probably an fixed/broadcast provider with an MVNO arm, and not much of an existing mobile base to worry about cannibalising. BT, maybe?

Friday, July 21, 2006

Fudging the numbers, part 1

Recently, I've been becoming increasingly aware that the mobile/wireless industry often plays fast-and-loose with statistics. It does this both to appear good externally (to investors, commentators, regulators, and scaring competitors) and as a form of "positive affirmation" internally (OK, OK, self denial....) when it is confronted with unpleasant truths.

Before I get a flood of emails, obviously the mobile industry isn't the only one that plays with numbers to put a positive spin on things. The marketing industry's use of surveys does the same thing across every segment from cars to chocolate to (I imagine) industrial waste disposal. Most government bodies do the same as well (step forward Tony, Gordon & Ken, in particular.....)

I suspect that this will be an ongoing theme, but I'd like to try and compile a "top 10" list of numeric fudges. Let's see:

1) Subscribers = Users
- Fudge: multiple phone/SIM ownership by many people

2) Overall ARPU numbers
- Fudge: exclusion of rebates, and similar repayments that come out as "costs" rather than lost revenue

3) Data ARPU (1)
- Fudge: Inclusion of revenue from enterprise & data-only devices (laptop cards, M2M modules, Blackberries) aggregated in non-SMS Data ARPU, and then using the figures to suggest that consumer use of content/MMS/etc is rising faster than it actually is

4) Data ARPU (2)
- Fudge: Revenue allocation of bundling. So, I get 250 minutes + 500 texts per month for £30 (+ video / MMS / whatever). How do they decide that "inside the bundle" 1 min = 5p / 1 text = 10p ... or 1 min = 3p / 1 text = 14p ? How is this audited? How much "arbitrariness" is there when operators report "Data ARPU was 19%"?

5) Coverage %
- Fudge: it's outdoor coverage, bizarrely using "percentage of population covered". Which is strange, as I always thought that most of the population lives indoors.

6) Radio downlink speeds (for 3G, or WiFi, or WiMAX or whatever)
- Fudge: what's the aggregate capacity of the cell? so, how many concurrent users of your 1Mbit/s HSDPA saturate the base station, or its backhaul?

7) Comparisons mobile vs. broadband
- Fudge: comparing apples & pears - people vs. households. Sometime useful, but often irrelevant as both are important metrics for different reasons.

8) Comparisons of mobile phones vs PCs
- Fudge: no, most people's "computing experience" won't be on phones, even in developing countries. Have you been to many developing countries, Mr Marketing VP? Seen kids packed into in Internet shops using MSN & doing their homework? Stop using the (equally spurious) home PC penetration figures & understand the real world

9) Early mobile application market growth numbers
- Fudge: often include substantial "internal" use by the mobile industry itself - application developers, competitors, journalists, testing (including automated network probes) etc, rather than "proper customers"

10) Smartphone market size
- Fudge: Includes a huge number of "closed" operator-customised phones developed on theoretically open OSs (eg DoCoMo FOMA use of Symbian & Linux) which are locked-down for 3rd-party software, plus a vast number of Nokia S60-based devices bought by people who neither know nor care that their device has an open "smart" OS. The proportion of smartphones bought by individuals who knowingly choose an "open" & flexible software platform is probably less than 20%.

I'm sure there's loads more of these type of things.... any suggestions?

Tuesday, July 18, 2006

The problems with unlicensed spectrum

Clearly, I've underestimated some of the dangers of interference between different wireless devices operating in the same spectum.

OK, no sniggering at the back now. And absolutely no jokes about QoS.

Monday, July 17, 2006

The Tyranny of the SIM Card

I've been meaning to write this post for a while, but some events today have catalysed me into action.

I've regularly been using the term "Tyranny of the SIM Card" in meetings and at conferences for the past few months. I'm fast being converted to the idea that the SIM is a relic of the 1990s, and deserves to play little (if any) role in the future of mobile telephony, except for the most basic prepay low-ARPU mobile-only unconverged services.

Don't get me wrong, there are some good things about SIMs. They can be transferred between handsets, they're secure, and they have enabled some OK-ish first-generation data services. I bought a bunch of local SIMs in Africa over Xmas to make cheap local phone calls. Easy to distribute, and proven technology. The problems occur when you start trying to "converge" products and services from multiple sources. I own my PC & laptop, I've got a couple of "vanilla" handsets knocking around, my consumer electronics are my own and so forth. If I worked for a large company, I'd have a wide variety of bits & pieces of comms & IT kit that are owned or leased by the organisation.

The SIM is essentially "a service provider on a chip". Which is fine for authenticating you against things that are standalone services, like basic mobile voice on a basic phone. But much less good in instances where there are multiple parties involved in security - your IT department, your broadband provider, your digital TV supplier, or indeed you yourself.

I'm never going to have a SIM in my TV set. Or a SIM in printer, or my home broadband WiFi router. They're mine, they're not subsidised, and I don't want them "registering" with a service provider before I can use them. Similarly, I don't want a SIM embedded in a laptop, as it turns it from being a computing "product" into "part of a 3rd-party service". Sure, if I use a cellular broadband data card, I might use one, so long as I don't have to have branded & clunky operator-specific software cluttering up my device UI.

Clearly, the more advanced FMC services cannot rely on a SIM in everything, especially in the typical multi-person, multi-service providers, lots-of-consumer electronics household. Thus the fixed-line equivalent of IMS, ETSI's TISPAN architecture, allows non-SIM devices to be connected. And if you won't get SIMs in everything in a converged service.... then why bother to have them in anything?

But what's really convinced me of this is my experience today. On Friday I wrote about my nightmare experience getting a new phone & plan from Carphone Warehouse. Well, the helpful guy's promise held true, and I had my new phone delivered this morning. Only without the new 3G SIM the invoice suggested ought to be in the box. Cue another round of IVR and customer service hell. In the end, rather than wait for another delivery, I got them to credit my account with the cost of a replacement SIM & arrange to pick one up from my local store.

Observations? Both the customer service rep and the sales guy in the store were confused & asked me if my old (2G) SIM didn't work in the phone, as that should suffice. I had to point out that the new phone is 3G, and that therefore a 3G SIM might be useful if I was to access the new & wondrous services promised by the marketing people. "Oh, well it only gives you access to videotelephony" was the helpful response. Eventually I persuaded the guy to give me a new 3G SIM, after pointing out that there were in fact some technical differences between the SIMs, even though they were the same shape.

(even more amusing is that on CPW's receipts, they still refer to O2/Telefonica as BT Cellnet. The invoice says "BT 3G SIM" )

I now have to have the new one's IMSI registered. There will, apparently, be an indeterminate time between my old 2G one ceasing to work and the new 3G one being activated. Between 2 and 24 hours. Useful, eh? So business contacts, friends etc go to voicemail if I'm lucky, or get lost in the ether in the intervening period. What idiot thought that system up?

I mean, when I part-exchanged my car earlier this year, my dealer didn't have to tell me to re-register the new key for 6 hours with the DVLA (UK car & driver licensing authority)? I gave him the old key & car, and drove off with the new one. When I download a new version of the Skype software, it doesn't need a lengthy re-registration period. Replacement credit cards work instantly, perhaps sometimes with a phone call to confirm receipt.

This is a theme I'm going to come back to, because I reckon I'm one of the few who's really stood up and said that the SIM Emperor has no clothes. No, I'm not sure what to replace it with yet - but I'm sure someone will have a smarter idea than the current dinosaur-on-a-chip.

Spectrum neutrality, 3G and WiMAX

The GSMA appears to be more scared than I expected by possible future competition from WiMAX, especially in Europe. It's put out a press release (not yet up on its website as I write this) essentially saying "Technology Neutrality in 2.5GHz? No way!"

In a nutshell, the situation is this:

The European 2.5-2.69GHz band is designated for "3G extension". In other words, it's sort-of been pre-allocated for use for existing 3G services "for future expansion" with a specified technology. This has historically been the way wireless service have evolved. "You can use this bit of spectrum in this particular way".

However, there is an ongoing move towards being much less restrictive. Obviously, the 2.4GHz area used by most WiFi is a complete free-for-all, but has been a huge success in terms of usage & innovation, even if congestion occurs. But this is unlicensed spectrum - there's a parallel trend for regulators to move away from being technology-specific in licenced bands too. The UK's Ofcom has already adopted a position of saying "Spectrum should be technology neutral unless there's a very good reason otherwise", essentially putting the onus on the vendors & operators to work out ways to ensure their various different technologies play nicely with each other & don't interfere. The European Commision has been watching this keenly, as have various other national regulators.

Clearly, there are powerful influences at play in the 2.5GHz range. The existing mobile operators (ie the GSMA's membership) have the experience & scale to roll out existing 3G services in new spectrum in the future. New entrants would have a tough time, and it is likely that the vertically-oriented access+service model would continue to bumble along. But on the other hand, they've made a pretty poor collective job of doing cool & useful stuff with existing 3G spectrum.

As an alternative, backed by Intel, Motorola and others, WiMAX (and assorted other wireless broadband alternatives) are looking hungrily at 2.5GHz, which represents the best chance for fairly-harmonised global wireless broadband spectrum. And which would level the playing field of established cellular operators vs. new entrants. Many of which are more likely to adopt the philosophies of the IP/fixed broadband in terms of service definition and pricing, thereby having a knock-on impact on the "competitiveness" of rival services in the existing 3G bands.

The GSMA is taking the angle that "standardisation is necesssary for decent scale economies", amusingly overlooking the fact that usage 2.5GHz outside Europe is likely to be pretty standardised on WiMAX anyway. I particularly love the patronising line "The GSMA also fears that developing nations will be the hardest hit by the fragmentation of spectrum usage" and that if "the price of a low-end 3G phone increases by $30, the effect will be severe"

Really? I would have thought that decent competition between technologies would have the impact of pressuring rapacious patent-holders to price their IPR at non-monopolistic prices. And that if we encourage more business models & value chains than the traditional mobile operators, we stand a decent chance of properly harnessing the benefits of Moore's Law in the mobile domain?

Mind you of course, as the GSMA believes that 2.5GHz "must be reserved for the IMT2000 family of technologies" that seems to imply it's quite OK for it to be used for CDMA EV-DO as an alternative to UMTS. You listening, Sprint and KDDI? The GSMA is happy for you to bid for 2.5GHz alongside Voda, Orange et al and the WiMAX guys.....

Friday, July 14, 2006

Carphone Warehouse and customer (dis)service

I'm always wary about recounting my personal experiences in buying/using mobile services, but after this afternoon I feel the need to vent / discuss ..... especially as I feel it reflects on the day-to-day service received by "the average punter", as well as customer psychology.

I've had an account with O2 via Carphone Warehouse for more than 4 years. It's been reasonably OK - couple of glitches with international roaming permissions, another with trying to get a GPRS data "bolt on" which screwed up all my data usage temporarily, a replacement SIM easily obtained after a handset theft, but otherwise unremarkable. The guys in my local CPW store (actually the one where the company started out) are pretty decent blokes & helpful. I've spent quite a bit of money over time.

Given I work in the industry, I haven't been getting handset upgrades/replacements from CPW/O2 - I've usually had "vanilla" phones about to put my SIM into. This time, however, I thought I'd try out a proper, up-to-the-minute, operator-customised 3G phone - and also try & lower my bills at the same time. I had a look around at phones, decided on a SonyEricsson K800i (never played with an S-E for any length of time but hear good things, liked the specs etc, so seems a decent choice). I had a look at the SIM-free price (about £330), so decided to go for a subsidised one, either getting it on my CPW/O2 account, or churning & using number portability to switch to either Orange or Voda. Had a look on the Voda website, and with the (equally friendly) blokes in my local Voda shop as they had a pretty good deal in terms of bundled minutes/SMS.

I phoned up CPW "customer service" (on an inexcusable expensive 0870 national-rate number) and clicked through the IVR to the "customer loyalty" option to see if they'd match the Voda tariff. And sat on hold. Repeatedly over the course of 2 weeks. Tried the "upgrade" IVR option - same deal. Looks like CPW has taken half its phone support staff & cross-trained them to help out with the new & woefully-understaffed Broadband call centre. So I went to the store instead, thinking it would be quicker. If I'd just wanted the K800i, it would have been easy. But to change tariffs, the staff had to dial into the call centre & get me to talk to them. (Phone call made from the store's landline, amusingly....). Cue 30 mins of hold music & occasional "it'll just be a minute" interventions from the first customer service bloke trying to transfer me to the "loyalty" (!!) dept. Getting fed up, I asked the store staff if I could just cancel my contract & get the number portability PAC code from them. No. You need to spend an hour on the phone just to cancel the damned service.

In the end, I had to resort to the blogger's equivalent of "Do you know who I am??" and start throwing my weight around. "Put me through to someone senior who can make decisions". "I want to speak to your boss, your boss's boss, or else Charlie Dunstone's secretary". "I'm not wasting any more of my time on hold. Get someone to say when they will call me about this". "My time's more valuable than yours - this'll cost you £2 per minute - who do I send the invoice to?". "No I won't call back tomorrow, I want to speak to someone now". "Who runs the call centre - O2 or CPW? I want to be sure to criticise the right people".

I nearly got a red card & was threatened with being booted off the call for swearing when I said I "couldn't be arsed" to hold any longer (Arse? Oooh, what a naughty word. There, I said it again. Report me to the police or sue me for being offensive, I dare you).

Finally I stooped to saying "I'll be writing something on my blog about this - exactly what I say depends on how helpful you are". I'm not proud I had to pull a trick like that, but it seemed to work. (I pity Joe Average, though) I don't know whether they Googled my name to realise I wasn't bluffing, but I eventually got through to a customer service manager called Martina who was helpful / efficient / allowed to say something that didn't come up as a script on the screen. She promised I'd get a call back from "one of the best guys" in their loyalty dept in 15mins. And indeed, I got another real person called Matt phone me back quite rapidly. He's obviously one of their guys dedicated to particular troublemakers like me - conciliatory, and empowered to offer me a decent deal, which I accepted. When I say "decent" I suspect that translates as "almost bribe him". Given the handset subsidy, a rebate & the cost of the customer service peoples' time, I estimate that collectively CPW & O2 will make roughly zero gross margin out of me over the next 12 months, if that.

Interestingly both O2 and Voda now seeing to be using big SMS bundles as a "sweetener" - perhaps unsurprising as the internal cost of these is near-zero, and presumably it enables them to fudge the data ARPU percentages (a topic for another post....)

Bottom line? If in doubt......shout.

Thursday, July 13, 2006

Disproportionate resources.....

Hmmm. You know what I said yesterday about deep packet inspection etc only being useful for the use case of "Limit/throttle any person using an app which consumes disproportionate amounts of network resource" ?

Well, thanks to James over at the Chaotica blog it appears that this use case might be needed pretty soon. Something I've used as a "case study" for a while is at fruition. P2P-over-3G from a smartphone.

Put this app on your shiny new HSDPA Windows-Mobile device (like the numerous upcoming variants of the HTC Hermes, including the "vanilla" non-operator own-brand TyTn) , attach an "unlimited" data plan, sit in a basement with 10 of your friends, and hey presto! An accidental denial-of service attack, and the cell collapses ("breathes") down to the size of a coin, while the backhaul connection gives up too.

So OK, in this eventuality, yes, I'll give in and admit that some form of protection in the network is a necessity. There's a big difference between crass anti-competitive blocking of things you don't like from a commercial standpoint (eg Skype, Google) vs protecting the overall functionality of the infrastructure.

Wednesday, July 12, 2006

ID cards RIP.... tiered/non-neutral Internet next in line?

For the past few months, I've been pretty trenchant in my views around the "Net Neutrality" debate, along with the larger carriers' attempts to block or monetise competing services' traffic using deep packet inspection (DPI).

The techno-libertarian in me cries "foul", and worries that all this will stifle innovation from the type of "two guys in a garage in Palo Alto or Bangalore" operation that has hitherto been much more successful at generating killer apps for the Internet (Google, Yahoo, Skype, Hotmail, HotOrNot etc etc).

However, the pragmatist in me has been saying "Who cares about the legislation when the whole stupid idea won't work anyway?". There are so many flaw, work-arounds, ill-thought out approaches, legal risks, opportunities for customer disloyalty and churn that it doesn't stand a chance of occuring. Better, the more idiotic attempts to monetise "pipes" may backfire so badly that the operators concerned will lose more money, more customers and more credibility with observers & shareholders.

In fact, with clients and at conferences, I've regularly been comparing the notion of DPI/Internet-tiering with the UK Government's daft and draconian plans for an all-singing, all-dancing ID card for us hapless citizens. "Lousy idea, but I'm not too worked up about it, as it's doomed to fail anyway, just a shame I'll end up paying for the failure through my taxes".

But, miracle of miracles, it now looks like the UK Home Office has woken up to the fact that it's facing an impossible task, and is on the verge of fudging / postponing / cancelling it.

How long before the more aggressive operators (especially in the US) also start backing down in the face of the impossible task of picking a fight with Google & Yahoo? Or realise what might happen if they block some innovative corporate customer's P2P app, or a clever way of using VoIP for emergency services, or one of their roaming partners' new services, or whatever?

I've already spoken to quite a few product vendors whose pitch has shifted from "Block Skype! Charge Google! Kill all peer-to-peer!" to the much softer "Limit/throttle any person using an app which consumes disproportionate amounts of network resource".

Come on, telecom operators - there's still time to put out a face-saving "it's under review" press release before you commit your shareholders to the bottomless pit of "policy management".....

Monday, July 10, 2006

All-or-nothing technologies, IM, presence and IMS

I'm starting to look at mobile services and applications from a slightly different angle. It strikes me that some could be describe as "all or nothing technologies". What I mean by this is that they either work fantastically well - or not at all. There's no middle ground.

So, if everyone has them, they're standardised, and people use them appropriately - they're great. Think SMS here. This is the "all".

Or, alternatively, they're poorly standardised, not ubiquitous, implemented in different ways of varying user-friendliness, and non-interoperable with alternatives. Nobody uses them. Think MMS. This is the "nothing".

Basically, these technologies do not "degrade gracefully". They're binary. On or off. Success or failure. 100% usage (approx) or 0%. Lots of Internet applications (eg failed social networks) are "nothings" as well, it's not just a mobile phenomenon.

The converse are technologies which are either so simple, or so open, that they can thrive with adoption rates in the middle. Multiple different implementations and standards can work in (relative) harmony with a bit of glue - gateways, aggregation servers and the like. Voice telephony is one of these. It doesn't matter if you use PSTN, GSM, CDMA, SIP-VoIP, H323, Skype, Cisco or (almost) a tin can on a string. You can still talk to everyone else. Email is another.

I reckon that mobile presence is dangerously close to being all-or-nothing. It's great if 100% of people in a community use it 100% of the time, updating their status information regularly. But if 90% of people use it 90% of the time, it starts to become irritating. At 80%/80% you have to put up with a whole bunch of inconvenience, even before you consider interoperability issues. Below that it's worse than useless. Even the attempts to second-guess some of the status information into smart network-resident applications won't cut it sufficiently in my view. Too many "false positives" - yes, you're theoretically available, but in reality you've bumped into your boss in the corridor & don't want an interruption. Or you've nipped to the bathroom & didn't change your status first.

Attempts to knit together different mobile IM/presence domains won't work either, unless there's a transparent (and free) interconnection with Internet/PC based ones. Again, it's all-or-nothing. Interestly, the Internet IM presence model isn't all or nothing. With plenty of screen real-estate and a decent multi-tasking OS, there's nothing stopping people overcoming interoperability/uptake issues by the simple expedient of having multiple apps running simultaneously. This won't work in mobile as long as some people have operator-provided handsets with second-rate Internet IM interconnection, and others use single-tasking featurephones.

I'm also wondering about IMS. It's now patently obvious that the mobile world is never going to be all-IMS. There too much legacy, too many alternatives that bypass it, and too many operator-specific partial implementations rather than the whole shooting match. And of course, my pet topic...no phones. In other words, if it's an all-or-nothing technology.... it ain't gonna be "all".

So there's an interesting set of questions about how IMS behaves in a heterogeneous world. The best "vision" I've heard that can potentially extricate IMS from this mess is the idea of an "ocean" of Internet/IP applications, with "islands" of IMS floating in it, offering particular value-adds like QoS, integrated billing and so forth.

In other words, it's best to position IMS as a platform for selected "premium IP services", rather than the current worldview of IMS as a repository for "all mainsteam IP services, with a gateway to that nasty uncontrolled other stuff for the real pain-in-the-butt customers we don't really 'own'".

I'll be talking about some of these views at the upcoming IMS Services Brainstorm . This event looks like an increasingly influential one, and for this week there's a kind offer of a 25% discount for Disruptive Wireless blog readers - email the organisers and claim your special 'Disruptive Analysis' reduction".

Tuesday, July 04, 2006

UMA conference

I managed to survive my jaunt to Barcelona last week, where I faced a rampaging mob of UMA-istas wanting to lynch me for my heretical comments about their pet technology. I was reasonably stark with my views, with one slide entitled "Salvaging something from the wreckage of UMA".

Actually, there were mostly pretty nice about it, to be be fair. I was only there for one day of the three, but there had already been a bit of a reality check from the highly emphatic John Strand

Some thoughts:

- There was a common refrain of "but it's just another access technology!" which is sort-of true but ignores the fact that it's an access technology with a range of dependencies on handset capabilities & user experience, as well as things like home gateways
- There was a fair amount of agreement with my (comparatively positive) belief that UMA may get reincarnated as a more generic authentication technology for operator-provided devices which aren't dual-mode phones.
- There's still an underlying belief (also present in IMS circles) that "the network knows best" and that applications such as voice ought to be "access agnostic", with the "top layer" of the phone unaware of what wireless access is being used. This despite increasing numbers of discussions I'm having pointing out that Moore's Law means that phones are increasingly smart enough to decide which network to use (and how) for themselves.
- Customer service issues remain a potential business model killer for UMA. In particular, my assertion that only households with operator-provided home gateways (rather than retail purchased WiFi APs) seems borne out by operator feedback.
- Many operators quite like the idea of VCC as a UMA alternative, but to quote one UMA-deploying operator "unfortunately VCC's not available tomorrow". I'm also starting to suspect that it may not be as easy as it looks, either.
- Interesting presentation from inCode suggested there's no clear roaming business model for UMA. (Interesting as well in that inCode has been a lot more UMA-positive in the past - something which had prompted me to challenge them to a head-to-head debate, which their PR people shied away from.....)
- Nobody seemed to have considered the possibility that UMA traffic could be easily-spotted (and perhaps blocked / charged / degraded without Net Neutrality) on a non-friendly broadband ISP's connections
- UMA business models which don't rely on cheap in-home voice as the main driver were thing on the ground. And given the other ways of getting there with HomeZones, Picocells and (as Mr Strand pointed out) cheap flatrate MVNOs, it's not obvious that this pricing argument is sustainable.

I'll update the post with some more thoughts later as I have to run now....

Conference WiFi update

Regular readers may recall that I'm running a campaign to force conferences & conference venues to provide free (or at least sensibly-priced) WiFi & good wireless coverage to delegates. I will be refusing to speak at WiFi-less events in future, and will be extending that to poor indoor cellular coverage. It's generally the fault of the venue owner, which may charge £200-1000 per day for WiFi to the conference room, often with clunky sign-up mechanisms to boot. The alternative is usually delegates buying stupidly-priced hotel WiFi on an individual basis.

As a result of a previous post, I've been trying out a portable WiFi router backhauled with a Vodafone 3G card. The idea is that this is a proper "guerilla access point" that completely bypasses the hotel/venue's rip-off inhouse hotspot. My experience has been fairly positive - obviously, it's subject to 3G coverage being available, but it seems usable for a few concurrent web/email users - and probably many more if it was a new HSDPA card running at 1.8Mbit/s. Technically it's been a bit of a mix - easy to set up in "unsecured" mode, but for some reason the setup software threw a glitch which stopped me setting up a security key. Also, the international roaming on the temporary press SIM didn't seem to work when I tried to use it abroad. It's quite light & compact to carry around, though.

Bottom line: I reckon there's a great niche business for operators renting these out to conference or event organisers. An informal sample I made (OK, two) suggested they'd perhaps pay £50-100 a day, which works pretty well vs a normal monthly datacard flatrate 3G tariff. (Although something would need to be done to circumvent roaming fees, maybe supplying them with a range of national SIMs, as there won't be any inbound calls).

Stick that in your pipe & smoke it, Hilton Hotel or Olympia Conference Centre WiFi Pricing Drones.