Video... so just how important is it really?

I'm sitting at Cisco's analyst event in the US at the moment. The various execs presenting have been trying to hammer two themes into the heads of several hundred analysts sitting in the audience - video, and collaboration.

The collaboration theme fits into Cisco's acquisition of WebEx. It put up some fairly persuasive examples & demos of this yesterday - talking up the potential to improve productivity in large businesses. It also eats its own dogfood in realigning its own business processes around interactive, collaborative teams.

While I personally detest using the type of online presentation tools that's one of the more familiar faces of WebEx (just send me the Powerpoint by email, please, and talk it through on the phone), I can certainly appreciate the benefits for internal corporate collaboration for large businesses. There's also a lot of cool Web 2.0 stuff they're talking about like Wikis, blogs etc. Basically Intranet 2.0 stuff, which makes a lot of sense (eg submitting business opportunity suggestions & getting them rated / favourited).

The video message is a little less clear. Despite attempts to claim "no, it's not just about driving IP traffic up the curve & selling more routers" I'm really unconvinced. Obviously, IP video is important in IPTV (hence Cisco's Scientific Atlanta acquisition). And Cisco's high-def Telepresence corporate videoconferencing gear is very impressive. And lastly there is a lot of sense in networking up CCTV cameras via IP.

But I simply do not buy the argument that video-based communications will become pervasive, and will be used in a large percentage of total person-to-person interactions. This is actually a bit reminiscent of Ericsson's attempts to shoehorn video into mobile handsets, either in the past through the useless H324 videotelephony approach, and again now now with the over-complex IMS Multimedia Telephony standard.

My belief is that each individual's (or company's) communications will become fragmented. Sure, certain business-to-business sales calls, or internal product planning meetings, among technology-savvy (and technology-happy) people will benefit from telepresence. But other instances will not - if I'm in a cab late for a meeting, I'll use SMS. I can see almost no business reason for me to use video - for me personally, it adds little beyond voice, and I much prefer face-to-face meetings with my clients for a host of reasons. Mobile video for business is an even more unlikely proposition, unless I'm sitting in an airport watching YouTube or maybe a business webcast on my PC.

The irony is that increasing mobility of employees works precisely against the use of video in the enterprise. It is inceasingly likely that one party in a given call will be driving, walking, out of coverage, roaming, using an incompatible phone, in a different timezone and so on.

Of course, Cisco doesn't have a major presence in mobile devices & cellular networks, so in an ideal world perhaps Cisco would actually like people to get back to their desks and offices, and be connected with a big fat LAN. Given their comments about the travel savings associated with telepresence, it wouldn't surprise me to see a green argument expounded in the future, about the "evils" of corporate mobility.

In fact, I see this as emblematic of a much wider long-term battle between the world's too most important communications technologies - 3GPP GSM/UMTS cellular vs. Ethernet. I think that's another theme for 2008, although I don't expect too many people to admit it openly.

Depersonalising mobile

This is a speculative, 'what if?' post rather than one based on current observable trends.....

I regularly hear that one of the unique aspects of mobile communications is 'personalisation'. You are identifiable by a number, you have a private, non-shared, customised device with your favourite ringtone & colour scheme, and you are 'owned' and identified by your service provider.

In general, I agree - but will this always be the case?

I'm just wondering out loud, but perhaps there might be scenarios which 'depersonalise' the mobile. It's certainly not common now, but it's dependent on social dynamics & fashion, so it might change. Some possible scenarios that could muddy the waters:

- Phones shared ad-hoc among friends (eg teenagers 'swapping identities' as apparently sometimes already happens with IM or MySpace)
- Mobile numbers being allocated to shared (non-phone) devices like PCs, web tablets, consumer electronics
- Secondhand mobile phones
- Swapped prepay SIM cards
- Maybe it becomes cool to have a new phone / number every week so they get passed around
- Use of non-operator SMS-replacement clients could mean that you could 'sign in' from any phone
.... and so on.

Maybe there are specific 'depersonalisation' opportunities.... if you could automate number portability via a web interface, and couple it to ways to move your personal phonebook & profile, you could switch seamlessly between operators or phones.

You could rent an appropriately stylish phone to match your outfit for the day, then give it back & revert to your normal one. You could temporarily switch to another operator for the duration of the Olympics, if they had exclusive Mobile TV rights. You could try out all the operators in your country to find which one has the best overall coverage during the course of your day.

And maybe sharing phones could reduce the environmental impact of producing a billion handsets a year?

To be honest, this is all totally speculative on my part. I'm just musing. But it occurs to me that there would be quite a lot of business models exposed if we ever saw mass depersonalisation of mobile phones / numbers for some reason.

And look at other markets. In theory, cars (and registrations) are very personal. Yet people regularly rent cars, use taxis, lend cars to friends/family - and, recently, you have innovations like the shared City Car clubs.

I'll keep a close eye out during 2008... remember where you first heard 'mobile de-personalisation"...

Sensor-tastic

I'm at Cisco's analyst event today so I don't have time to delve into this right now, but at first glance this looks absolutely like what I've been talking about with motion sensors in phones.

So what has been the 'device of the year' in 2007?

I reckon the three most influential mobile products this year have been:

• For FMC and VoIP: I'd nominate the Nokia N95 for its relevance in driving assorted top-end features like WLAN and good-quality Naked SIP support into the mass marketplace - especially from the point of view of Mobile VoIP. And of course the 5MP camera and GPS, and more recently its 8GB version have also been major catalysts driving the initial sale of the device to customers. The E65 has also escaped from its original intended market of the enterprise, and become an important part of the SIP-based FMC landscape, and the 3 Skypephone (made by Amoi) is cool as well.
  
• For user experience & changing perceptions: The Apple iPhone has lived up to its hype. I have to confess I was a skeptic initially, but having played with a few and listened to lots of owners, I'm pretty impressed. It's certainly forced the rest of the handset industry to sit up and pay attention. And its forced the operators to ask themselves hard questions about whether they can really do cool UIs themselves - and given them another concrete reality check that consumer like hardware rather than services. And above all, it has that ineffable "Oooh I want one of those" quality.
  
• For driving data services and defining mobile broadband: It's got to be the Huawei family of USB-connected 3G modems. They've facilitated the adoption of mobile data by consumers as well as business users, and illustrated perfectly why 3G-embedded PCs are niche products. Why would you want to have an operator-customised (and possibly locked-down) laptop, when you can get a proper unmolested one and just add a separate plug-and-play connectivity device? Laptops last longer than mobile contracts, so the user wants the ability to switch providers (or rent a local modem when travelling to avoid roaming charges). Lastly, they're better for operators too - they really don't want to put 500 different types of PC through their testing labs, when they can just test 3 external modems instead. And they're (finally) driving 3G data revenues - laptops are the best devices for getting 'the real Internet' when you're mobile. According to a presentation I saw last week, the Huawei devices are the current top-selling 'phones' in Sweden.
  

So what do you want in your phone for Xmas?

I saw "disruptive" adverts from two companies yesterday - both advocating bypassing the cellular network through choosing handsets with advanced features

- Truphone is advocating getting smartphones (ideally with WiFi, but at least "Internet ready")
- SanDisk is exhorting customers to "discover their slots'

The issue I see is that the SanDisk argument (sideloading of micro-SD cards) is indisputably usable without incurring extra operator charges, while the "Internet-ready" approach typically means paying out for a data plan (albeit with the potential to save money via using VoIP as well) unless you just use local WiFi.

In an ideal world, your Internet-ready phone would also have a 'no cost' win by enabling efficient sideloading as well - it would be 'PC ready' for connection via USB cable, or better still WiFi. But many people still balk at the clunkiness of PC-phone connectivity, and instead turn to memory cards. This ties in with my recent comment about the lack of cool "local" apps for WiFi phones.

SanDisk's marketing is also a manifestation of another long-term trend - the much steeper price/performance curve of storage, compared with other computing metrics like processing power, network capacity or battery power density. Brough Turner has had a couple of fascinating blog posts recently on this. The long and short of it is that, if your application doesn't need to be realtime, memory wins out over wireless networks.

The world's highest-capacity form of data transport between two cities is a truck full of flash memory. Lousy latency, but awesome bandwidth. Luckily for Truphone & peers, latency is rather more of an issue for VoIP than it is for content....

Multiple device ownership - crunching some numbers

A regular theme that I have to deal with is multiple mobile device or SIM ownership. Statistics are very fuzzy on this - you get the usual estimates of 120%+ penetration, but very little analysis of what that means in reality.

Vodafone occasionally tries to estimate the level of multiple SIM ownership in its markets, and I commented on a survey on the UK market recently which seemed to suggest 1.6 SIMs per person, but definitions seemed questionable, eg with penetration of phones among children.

I thought I'd try and come up with some slightly harder numbers.

The UK has 70m SIM registrations at the moment, and 60.8m people, with a demographic breakdown given here. Last year, Carphone Warehouse did some analysis of mobile penetration among children up to age 12, while Ofcom has some great research (figs 15 & 16) on the proportion of adults who personally use mobile phones.

This yields the data that 86% of people >15 years old are active users. This is heavily skewed by older people - only 52% of over-75s use mobile in the UK. Among children, from the CPW study there is near-zero penetration among 8-year olds & below, 20% @ 9, 50% @ 10, 70% at 11 and 90% at 12. Given the other data it seems reasonable for me to assume that about 93% of 13 & 14 year-olds are users. The youth data is a year old, so might have shifted slightly, but it's a good starting point.

Multiplying this all through by the population stats gives me:

Total UK Mobile Users = 46.4m individuals - ie 76% of the total population.
Total UK non-users = 14.5m (mostly young kids & seniors)
I'd estimate 1-1.5m SIMs are used in non-personal M2M applications (EPOS terminals, vending machines, wireless routers etc, but excluding laptops & PDAs which are personal devices).

So.... 69m personal mobile subscriptions among 46m active mobile users =

1.46 Mobile Subs / Active User in the UK.

This excludes UK citizens who have international SIMs as well (although probably some of the UK SIMs go abroad too).

What remains slightly unclear is the mix of people with 1SIM+Multiple Devices vs. Multiple SIMs+single device. ie the ratio between active subs/person and active phones/person. Travellers often put local SIMs into a single phone when abroad, but users who like phones for fashion reasons may swap a single SIM among multiple devices.

What this all categorically tells me is that the "one mobile device" philosophy is completely inapplicable in the UK. My rough estimates are

Zero Subs = 24% of all UK individuals
1 sub = 49%
2 subs = 17%
3 subs = 7%
4+ subs = 3%

Bottom line = a majority (51%) of the total UK population either has zero mobile subscriptions, or multiple. People with just a single active SIM are actually in the minority (49%).

A misconception - 1 SIM = 1 Identified User

There seems to be a common belief that because all GSM/3G phones have SIMs, and that everyone has a phone, this means that the SIM is an ideal platform for determining identity. I've heard people suggesting integrating SIMs with healthcare records, payment cards, ID cards and other similar alternatives.

I'd urge caution on this. The world is not as simple as you think.

Some of the problems:

• People have multiple SIMs, and multiple devices. While this doesn't apply to everyone, a growing fraction of individual users will fall into this category. I'd expect far more people to have 2 SIMs than 2 nationalities/passports.
• A few people have no phone/SIM and no inclination to change. Some form of 'digital inclusion' policy would be needed for the cellular refuseniks.
• *EDIT* - also see my more recent post where I try to quantify the two factors above
  
• Many countries still have anonymous prepaid SIMs. While some countries like Italy & Thailand force SIM purchasers to register their ID, that's a far from uniform situation. I've bought loads of SIMs over the years with total anonymity. And I'll bet that black markets exist even in countries where registration is mandatory.
• Just because a SIM is registered to an individual, that doesn't mean they're the user. A speaker from India yesterday said that SIMs are usually registered to a head-of-household, rather than the actual user.
• No idea what happens with legal responsibility & identity with children with SIM cards, but I'll bet it's complex and variable per-country
• Plenty of SIMs are used by machines, not people. How do you know if it's actually a vending machine that's sending a message, or someone hooked up via a PC?
• Some phones or other devices are shared between multiple people (eg in 'pooled' devices in businesses, cellular fixed phones, or phones for a whole village in emerging markets)
• There is some evidence that young people swap phones (& SIMs) amongst each other in social groups. This could be because of the dynamics of who has prepay credit among friends, for example, or in situations where an operator doesn't offer x-network minutes and it makes sense to use someone else's phone to save money.

The last point is perhaps the most crucial. The whole idea of one SIM = one person it hugely exposed to the risk of social dynamics and fashions. It only needs one group of teenagers to come up with a 'killer app' for phone-sharing or swapping (maybe it becomes cool to have a new number every week), you get viral adoption around the world in a couple of months, and the whole identity/SIM linkage falls apart.

Ironically, the use of Internet access on mobile devices exacerbates this risk, as potentially users can sign into Yahoo/Google/Skype/Truphone/Fring from any device rather than their 'official' phone & SIM.

E-Mobile - cellular VoIP and subsidised DSL

I'm in Hong Kong at the Mobility World Congress, speaking about Mobile VoIP and also mobile user interfaces.

One of yesterday's speakers was from E-Mobile, Japan's new 4th operator, of which I have to confess I'd been fairly unaware until recently. It's affiliated to E-Access, an established fixed broadband operator with about 2m DSL subscribers.

E-Mobile's main offering is flatrate HSDPA - at around $45 a month. Interestingly, it comes with the offer of a 'free' DSL line for customers to use at home (and which would offload some traffic from the cellular network). Although some companies like Carphone Warehouse have given away 'free broadband' before, this is the first time I've heard it being done more for the reason of macrocellular offload economics, rather than simple bundling.

This has some significant implications for future femtocell business models - the current working assumption is that the user should be "happy" to pay for their own indoor-wireless backhaul when their phone is on the femtocell. That assumption may be a bit too optimistic:

- If the broadband is supplied by a separate company to the mobile operator, they may well view cellular femto traffic as being as undesirable as P2P when running on 'their pipes' . They may try to extract some form of rent from 'over the top femto operators' in the name of QoS - especially as those femto operators are likely to be mandated to provide emergency services access. It's easy to imagine femto traffic being 'traffic shaped', especially if it's being used for high-speed data. (I've heard some fairly fanciful notions of femto-HSPA being positioned as a replacement for WiFi in-home, but I'll address that in another post)

- If the broadband is provided by the same company that runs the femtos (triple/quadplay), then they are at risk from competitive pitches like E-Mobile's. "We've sold you a personal mobile broadband service, but we'll reward you for using DSL at home by giving it to you for free, as it saves us money"

E-Mobile is also expected to launch a full mobile voice service early in 2008. Although details are not available yet, I suspect that it might turn out to be a full mobile VoIP service using HSDPA+HSUPA. As it's a completely new IP-focused operator, I can imagine that it would probably like to avoid buying a cellular circuit core if it can avoid it. (It has a roaming deal with DoCoMo outside its own HSPA coverage area).

VoIPo3G would probably be made easier in Japan than many other countries, because of the lack of need for SMS or prepaid billing support. There is also ample scope for tariff arbitrage - apparently mobile voice charges in Japan are amongst the highest in the world - the presenter suggested 40c per minute is typical, which goes some way to explain why data services like email are so widely used instead.

It is already offering a partner-based VoIPo3G service in conjunction with Jajah, on its mobile data PDAs.



It's also apparently launching a mobile voice service early in 2008. Although details are not available yet, I suspect that it might turn out to be a full mobile VoIP service using HSDPA+HSUPA. It has a roaming deal with DoCoMo outside its own coverage area,

Femtocell - who coined the term and when?

A fairly tangential question cropped up in a client meeting recently.... how long has the term 'femtocell' been in use? I first encountered 'picocell' as a term in 2001, along with ip.access' use of its brand 'nano BTS'. But femtos are more recent developments, and have also been called 'home base stations and various other synonyms.

PicoChip can claim a Feb 2006 use of the term.

I first had a mention in my blog from Nov 2005. I'm pretty sure I didn't invent the term, though - but I'm struggling to remember who I first heard it from. It might have been a presenter from O2 at a wVoIP conference in Brussels in late 2005.

Anyone got any prior claims?

Is there such a thing as a 'vanilla' IMS handset?

There's been quite a lot of renewed talk about IMS-capable handsets recently. It's still early days, and most industry participants still only expect to see large-scale mobile IMS service launches in 2009 and onwards, but there's definitely a sense of movement. Some of the problems I identified last year appear to have been fixed.

A thought occurred to me, however. There is also now a definite move towards the sale of open, 'vanilla' handsets, both through established non-operator channels like Expansys and Nokia's own stores, but also catalysed by shifts like Verizon's new openness policy.

How will these vanilla devices be configured to access a given operator's IMS? What needs to be provisioned, downloaded, set up? Can this be automated? Can there be a 'native IMS client' which will automatically register work with anyone's IMS infrastructure, or is this too much of an interoperability headache? Presumably, this would only work with the core set of IMS applications (IM, presence, videoshare, PoC etc) as it presumably wouldn't be possible to download an arbitrary 'cool, differentiated, operator IMS app' to an arbitrary IMS handset framework.

I guess a similar situation will occur when roaming with an operator-provided IMS phone onto a foreign (non-affiliated) operator's network.

Sorry, I don't have any answers for this one at present, but it's something I'll see if I can check up on soon.

Handset privacy - any rules or standards?

I was just playing with the Adobe Flash player on my PC, and stumbled on this page about privacy settings.

It got me thinking about the software on my mobile handsets - what applications have the automatic right to access the microphone and/or cameras? Obviously the main phone dialler, any obvious speech-based functions, and the videotelephony app, and any VoIP clients... but what else? And how do I control it?

Now I know there have been a few stories about the potential for security services to covertly switch on phones' microphones, but that's a little separate. I'm thinking about other applications - either mainstream multimedia apps, or perhaps malware. Maybe I'm just being paranoid.

As far as I know, there aren't any standards about this which span different handset smartphone OS's, or even more locked-down featurephones. As a user, I have no direct knowledge of when the mike or camera is "live". Maybe there should be the equivalent of a TV camera's red 'recording' light? I guess that organisations like the OMTP might be the best-suited to standardise something like this.

I suspect that any really intrusive always-on audio/video spyware would have a noticeable impact on battery life, but imagine a piece of software that just recorded what you said for the 30 seconds after the end of a phone call.

"Great! another customer paying full price! What a sucker"
"OMG, he just asked my on a date!"
"It's OK, my wife thinks I'm in a meeting"
"Yeah, that geezer's got a garage full of moody kettles"
"Jeez that was a tough briefing. Bloody know-it-all analysts"

I'm currently sitting in a hotel room, so I can't check & see if a Windows or Symbian device has a privacy menu which enables you to force applications "to always ask for permission" to use the mike or camera, but I can't remember seeing one, and I suspect that 99% of normal users would never find it anyway.

Mobile payments for car parking - awful user experience

I've just had my first encounter with Westminster Council's new mobile parking payment system.

It sucks. Totally. Wearing my "mobile user" hat rather than my "analyst" hat, this was my first and hopefully last real-world encounter with mobile payments.

Basically, London's Westminster Council is fed up with people vandalising or stealing coins from parking meters, so it wants to reduce its amount of on-street payment equipment. Laudable & understandable on the face of it, but that's the only positive.

The system they've chose is for users to either phone or text the reference number of the parking bay and the length of time they want to stay. But the payment mechanism is via debit or credit card - and the first time you park, you have to call into an IVR system to set this up (or do it on the web if you're organised enough to sort it out before driving), and your car registration.

The first problem is the number - an 0870 premium-rate one, which isn't included in most mobile call packages, and which therefore costs an unknown extra amount to call. The second problem is being certain that some phisher hasn't swapped the signs over - how do I know that it's the correct IVR system, and not one that someone's set up to capture credit card details? The third thing is that I don't know who else is involved in running the system, and I really don't want to have my credit card # on file with the council - let's face it, local government authorities aren't always the most trustworthy institutions.

Once you're set up on the system, the next time you just have to SMS the location code, length of time and credit-card validation number. Which assumes you remember which card you've registered with, of course.

All of this must be a triple nightmare if you're a tourist using roaming, or if you use hire/share car systems with a different registration every time.

Then I thought "why on earth aren't they using premium SMS or some other mechanism that doesn't need a credit card to be set up?".

My first thought was that the council (quite reasonably) didn't want to involve mobile operators taking a cut of their revenues. As the end user, I certainly don't want to pay any more for subsidising my own inconvenience - it's much easier & quicker to put coins in a meter than faff around with texting. And I really don't want parking fees appearing on my mobile bill anyway.

Then another thought struck me - credit risk and complexity of integration with prepay billing. I seem to remember reading that the average prepay user only has £5-10 credit on average at any point in time - yet parking is £3 an hour up to a maximum of 4 hours. Given the high proportion of prepay users in the UK, this would mean many users having to first top up their account, before paying for parking - clearly nonsensical.
It also raises the issue of whether the whole amount is debited upfront, or drip-fed over the period of parking.

NFC approaches wouldn't work either - it would still need some equipment on the street to scan & print a ticket. And then you might just as well have a debit-card reader in it too, for people without NFC phones.

All in all, I reckon the most convenient form of mobile payment for parking remains the coin. It works, it's quick and there's no need to pay anyone else trying to shoehorn themselves in the value chain.

I'm not the only person who reckons the system's rubbish either. The UK's next-but-one Prime Minister has also experienced the same problem

On the bright side, all this confusion will probably lead to more parking fines & cars being towed. Given I'm also a Westminster resident, the extra cash should help lower my taxes.....

Verizon Wireless and LTE - don't be so hasty

Interesting to see yesterday's Verizon's announcement about its LTE trial & deployment intentions with Vodafone. It's been an open area of discussion that the company has been interested in LTE for some months now, although I've been a little warier than some in describing this as a death-knell for CDMA UMB.

While I agree that the statement is pretty definitive, there's still a number of unanswered questions & scenarios that could play out:

• Firstly - it's a trial. Until the trial is proven successful, presumably the chequebook stays in Verizon's pocket.
• Secondly, as Sprint's current review of its deployment of WiMAX illustrates, it's always possible to change direction at a later stage if necessary.
  
• Verizon is likely to keep (and evolve) its existing 3G EVDO Rev A network irrespective of LTE. Its news release says that it will "continue the expansion" of its existing technologies. Although Rev B isn't getting much traction either, I guess there's scope for a Rev A+ of some sort.
  
• The big 'swing' factor for UMB continues to be Japanese operator KDDI. If it also backs away from the CDMA family, then its pretty much goodnight for UMB. If it runs with it, then there's possible large scale deployments to follow in places like India or Brazil.
  
• Another variable is of course SprintNextel, the other big US CDMA operator. Don't forget that it originally trialled Flarion's Flash-OFDM (on which UMB is based, since Qualcomm's acquisition of Flarion), and quite liked it - but felt it wasn't ready for deployment back in 2006. If Sprint backs away from WiMAX (or scales its rollout down), I can't see it necessarily wanting another 3.5G+ technology in the shape of LTE.
• Lastly - it's unclear what might happen if Vodafone & VZW ever parted company.
  

My gut feel is still that I see full radio convergence more in the timeframe of the next step beyond LTE, lets call it ELTE (Even Longer Term Evolution). But I could certainly buy the notion that Verizon might want a converged access network that looks like SAE in the meantime, which could connect together multiple radio standards.

Essentially, I see convergence between 3GPP and 3GPP2 extending from the core outwards for major carriers:

Stage 1 - Core Network (IMS or something similar), Now
Stage 2 - Radio Access & Transport (aggregating LTE together with HSPA, EVDO, WiFi, TD-SCDMA and maybe WiMAX), around 2011
Stage 3 - Air Interface becomes fully harmonised (excluding things like TD-SCDMA probably), around 2015

That said, the option to create dual-mode CDMA/LTE devices could help Verizon manage multiple networks. And if it did, then it would definitely also create an interesting backdrop for how it treats voice - would it use VoIP on LTE, and circuit on EVDO? Or VoIP everywhere?

Phone... or wallet?

Put your wallet in your phone?

I think you're much more likely to put your phone in your wallet.

xG Technology finally launches mVoIP..... Well, sort of.

According to this news release, xG has started operating a network with mobile VoIP capability in Daytona Beach in Florida. There's been a flurry of news recently about new wireless technologies being rolled out (like China's TD-SCDMA), so it's good to have some confirmation that xMax is finally out of the starting blocks. [And another mysterious one is just emerging too]

A few months ago, in its last results, the company promised a November launch, and so it looks like they've just managed to sneak in before the beginning of December.

I'll certainly agree that xG deserves some congratulation on reaching the milestone of deploying its technology in a real-world environment. It's a small company and has undoubtedly encountered many setbacks and unexpected technical and useability glitches along the way.

But on the other hand, I have to say this is a fairly tenuous use of the word 'launch', which appears to be used more to satisfy its detractors by hitting its self-imposed November deadline, than in the way the telecoms industry would usually interpret it. "The first soft launch customers will begin populating the network shortly in anticipation of the retail launch" is a bit woolly. I wouldn't say that first installation = launch. It's perhaps more equivalent to laying a foundation stone.

Compare and contrast with the Brough's description of the status of China's TD-SCDMA "trials": "under the name 'application trials,' experimental TD-SCDMA networks began running in four cities in 2005. It took longer than expected to get the system running, however, since April 2007, these “trials” have been extended to ten cities and have been substantially enlarged to what I might call “deployment scale.” . (Also discussed here)

It's also interesting to see what xG isn't saying in its new release:

• No new specific deadlines on commercial launch, that might hold it hostage on timing in the future. The phrase "continuing to pay particular attention to the quality of service for voice" is quite telling. [by coincidence I am listening to a technical conference presentation on VoIP QoS as I write this. Put simply - it's challenging & time-consuming, and needs tools like dedicated test & measurement gear]
• No outlandish claims of orders-of-magnitude improvements in performance or capacity, just a fairly loose marketing-ese comment of "longer range, more power efficient"
• No mention of the service provider deploying the network - notably the mysterious Far Reach. It's pretty unusual for a vendor to announce a launch rather than an operator, so I suspect it may be an in-house operated network rather than that of a customer operator. The use of the term 'customer' to refer to end-user in the text perhaps also indicates direct sales from xG rather than via a service provider.
• No more assertions that it is the first mobile VoIP solution provider, when plenty of others are now in that space.

Overall, it looks like an important step for xG, but I still think it's a long way off large-scale rollouts and the exact nature of any competitive differentiation (technical or cost) is unclear. As the technology is still proprietary it will need to have significant clear & measurable advantages for operators to consider it. Really, xG needs to push it somehow to become a standard.

Given the final paragraph includes the line "we are now afforded the occasion to address the multiple other opportunities, both wired and wireless, which have presented themselves" I'm wondering whether the company is finally realising that mobile VoIP is the hardest and most competitive place to start, and is going to look at less-challenging applications as a priority.

Verizon Wireless opens to 'any apps, any device'

One of the core assertions in my VoIPo3G market model & report is that operators will relax their restrictive and VoIP-hostile terms of services on their 3G+ networks over the next 12-24 months.

Some such as 3 and ONE Austria are already implicitly permitting VoIP, while others like Vodafone are much more restrictive and can actively block VoIPo3G.

I believe the laggards will, by and large, be forced to change their attitude. The combination of direct competition, regulatory intervention, customer demand and emergent threat from WiMAX will act as catalysts - plus the incentive of new revenues from competing head-to-head with fixed DSL and cable broadband for PC connectivity.

I've encountered skepticism from some quarters, with some commentators insisting that carriers are utterly conservative, and will resist VoIP and other competitive 3rd-party applications at all costs. A few people have pretty much offered to eat their hats if this changed.

Which is why I'm feeling rather vindicated today:

"Verizon Wireless today announced that it will provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications not offered by the company. Verizon Wireless plans to have this new choice available to customers throughout the country by the end of 2008".

Now to be fair, the devil's in the detail & we won't know the full technical specifications - or the price of openness - until Q1 2008. But the line "Any application the customer chooses will be allowed on these devices" seems pretty unequivocal to me.

Would you like your hats fried or toasted?

EDIT - I wonder if this will also mean that Nokia is tempted to start making CDMA Symbian phones?

I'm quoted at Carnival of the Mobilists this week

Thanks Martin for including my post about dual-mode WiFi phone in this week's Carnival roundup. Some other really good links there too, including Michael Mace's critique of the Amazon Kindle.

His own post on tech vendors' YouTube videos is pretty cool too - I like Ericsson's pseudo-cheesy IMS adverts. Although they've still got a long way to go before they compare with the anti-establishment virality of some the VoIP service providers' efforts like Truphone & Vonage.....

Impact on WiMAX from World Radio Congress

There has been an awful lot written (by me among others) about the ratification of WiMAX as a 3G technology within the IMT family. This gives it access to the 3G-designated frequency bands like 2.5GHz.

Cue lots of huffing & moaning from the UMTS advocacy brigade.

But now I'm wondering if perhaps the boot is on the other foot. Part of the outcome of the WRC was to designate a number of new ranges for IMT technologies, and also to get rid of the distinction between IMT-2000 and IMT-Advanced. Two of the bands discussed - 3.4-3.6GHz and 2.3-2.4GHz - have previously been home to fixed broadband wireless technologies of various types, and, especially recently, WiMAX.

There's lots of 3.5GHz WiMAX being deployed, usually for fixed applications even if it's using 802.16e. Korea uses 2.3GHz for WiBro.

Now, it looks like we could see UMTS or CDMA encroaching into those bands. I bet we'll see a 3GPP profile for 3.4GHz UMTS pretty quickly.... and then it wouldn't surprise me to see a lot of HSPA+ or LTE fixed-3G chipsets and devices being made available pretty rapidly.

Given that the mobile operators are already successfully pitching 3G modems to home users for fixed/nomadic usage, I reckon that fixed WiMAX will come in for some stiff competition in 3 years or so time.

Why are there no cool local applications for dual-mode WiFi phones?

I am becoming slowly more disillusioned with the notion of WiFi on mobile phones.

For the last 4 years, I have been expecting the addition of WiFi to drive innovation in handsets, and lead to a variety of interesting applications and business models. But to date, I've only really seen 3 use cases:

• Connection to operator telephony+SMS via WiFi, using UMA, or sometimes SIP.
• Connection to non-operator telephony based on VoIP (Skype, Truphone, enterprise PBX etc)
• Connection to the Internet to share a broadband connection for web & email

I suppose 'indoor coverage' is a fourth, and maybe (from the operator point of view) macrocellular offload onto the customer's own broadband connection. But I'd argue that those are justifications rather than actual applications, and in any case overlap strongly with enabling the other three.

I've seen almost nothing about using the WiFi to connect to local computing or electronics resources. Nobody uses a WiFi phone instead of a microphone at conferences. Nobody shares music or video between phone and PC hard drive via WLAN. Most people still sync email & PIM via USB or Bluetooth. Nobody uses their handset as an Xbox or PlayStation controller. Nobody interacts with a street kiosk with a dualmode phone. Nobody orders their own food in a restaurant.

The exception here is in the enterprise, where phones will now hook into the PBX for a variety of purposes beyond voice - and WiFi (albeit usually on single-mode devices) is also used for a variety of specific corporate data applications like stock control or point-of-sale connectivity. But I don't see Nokia N95's or 'handsets' as such, being used in warehouses -although maybe the Symbol MC series count as dualmode phones.

But in the consumer market, WiFi phones are just about telephony and Internet. Apple has helped a bit with the iPhone, so maybe we'll get some innovation there. And in theory, the use of universal plug-n-play (UPnP) on some Nokia devices should facilitate better interworking with consumer electronics.

I suspect there are a few problems that have inhibited the use of cool, local, WiFi-enabled apps on smartphones:

• Relatively low numbers of WiFi handsets - and often consumers don't know, don't care or can't even switch it on when they do have it. I'm thinking here about people who got an N95 subsidised down to zero, solely choosing it on the basis of a 5MP camera.
• Relatively low numbers of WiFi homes (and offices) until recently. Plus lots of general horribleness around configuration, security settings etc etc. As an aside, this has also inhibited the use of WiFi in other non-PC devices like cameras.
• Passive or active discouragement of WiFi by operators, especially in operator-centric, non-Nokia strongholds like the US, Japan & Korea.
• Lack of willingness by handset makers to rewrite all their embedded applications to exploit WiFi. "Oh no, do we really have to rewrite the music player app to look for a PC hard drive when the phone's in WiFi range?"
• Usual problem of fragmentation of operating systems & customisations, that makes creating any sort of 3rd-party software a pain. Add this to the fragmentation of home WiFi setups and you multiply the complexity.
• Generally poor support for developers to write bearer-aware applications - ie apps that behave differently (or are only accessible) when the phone is in WiFi mode. This is slowly changing, with Symbian's new Freeway architecture, for example. Long way to go, though.
• Potential for 'fights' between operator use of the WiFi, and local applications. What's more important & gets priority - an operator phone call, or a file transfer to the company's Oracle database over the WLAN? It's very difficult to balance the rights and privileges of 'private' WiFi use against 'operator' WiFi, especially if there are multiple SSIDs set up (eg on some home gateways, UMA services have their own WiFi SSID).
• Generally low awareness of, and low comfort with, WiFi in peer-to-peer mode.

Obviously telephony (operators' or someone else's) and fast web/email access are hugely important. Offloading that phone/Internet traffic from the operator's network is economically attractive for some operators. But I think for WiFi to really get beyond perhaps 10% of handsets, there has to be more than that. With the advent of HSPA/EVDO with flatrate data, various improvements to indoor coverage (eg femtos), there's nothing compelling or unique that you need WiFi for in a phone, except in the enterprise. You can do VoIP over the 3G network. You can browse over it. You could even run UMA over 3G if you really wanted.

For dualmode WiFi phones for consumers to become massmarket, there need to be local applications, connecting to home PCs or consumer electronics, or maybe stuff besides Internet connection at hotspots. And these will mostly need to be non-billable, non-operator applications too.

Put simply - stop calling it WiFi, and start calling it by its techier name, Wireless LAN. Then forget the 'W' too. We need some LAN (local area network) applications for dualmode phones, not just wireless ones.

Over to you, Apple, Nokia, Microsoft & co.

Amazon Kindle - wireless eBook reader. Hmmm. Unconvinced.

There's apparently a lot of fawning and drooling today over Amazon's new gadget - an eBook reader connected via CDMA EVDO, which lets you download digital books (and magazine subscriptions) wirelessly. It costs $399 to buy, and then $8 or $10 for a book, and some other number for a magazine sub. Oh, and $1 for a blog/RSS feed.

And apparently there's a charge for converting PDFs to the inhouse proprietary protocol if you use the email service. Amusing, as I've joked before that in an all IMS world, we'd never have got free PDF clients, but instead be stuck with some lousy billable document viewing service. (I'm really going to have to stop writing up what I think are really stupid ideas as that's the second time in a month someone's actually gone & tried them out).

I like idea of a wireless tablet-type device in general (it fits in with my belief in multiple devices, and divergence). And the fact that there's no ongoing wireless service subscription fits in with my comments that we'll see more devices that subsidise the service, rather than the other way around.

But I'm totally unconvinced that this particular one will succeed. "This isn't a device, it's a service" says Amazon CEO Jeff Bezos. Funny, but actually I like to own stuff that I read. I don't want a personal document & library service. I want it tangible, sitting on my shelf or on my coffee table.

Some thoughts:

• In the eye of this particular beholder, it's hideous. The name's a bit naff too.
  
• It's black & white. OK for text in novels & newspapers, but not ideal for magazines.
  
• It's quite expensive for what's essentially just a screen & some memory.
• There's limited content. Checking the Amazon Kindle website for my favourite author, it only lists 3 of Iain Banks' novels. Same deal for Haruki Murakami. And there are none of the Lonely Planet travel guides listed (which would be pretty good to have in electronic form).
  
• "The captain has switched on the seatbelt signs. Please secure your tray-table and turn off your ebooks."
• "Long battery life. Leave wireless on and recharge approximately every other day". Am I missing something, or is that not really 'long' for a mobile device with the radio off?
  
• I'm not really interested in locking my reading matter to a proprietary device for all eternity. At least with iTunes I can play music back through my PC as well.
• It's not as obviously 'personalisable' as an iPod. And it doesn't come in pink.
  
• What's the point of reading most blogs if you can't follow the links? (or, presumably, add comments). OK yes there are some news-type blogs which I just scan, but I'm unconvinced I'd pay for this.
• I've seen some fairly spurious "save the trees!" environmental commentary. That's not convincing as most paper is made from farmed forecasts. And I'm sure that the plastics & silicon of the gadget itself have a fairly large energy input in their manufacture. Books and magazines are rather more easily recycled too.
  
• Magazines are delivered 'overnight' - which suggests Amazon cut a great MVNO deal with Sprint to get low-cost data transmission. I know that there is a part of the magazine market (subscriptions) for which timeliness is less important - but quite often I want instant gratification with reading material. [my gut feel is that the subs part of the magazine market is quite a small % vs. newsagent in-store purchases, but maybe that's different in the US]
  
• Not everywhere in the US has Sprint EVDO coverage. Let's hope people test it out before giving it as an Xmas present.
• I've got a pile of old magazines in bathroom. Maybe there should be a Kindle-holder accessory next to the loo roll holder.
  

And at least in London, there's actually huge competition from paper-based alternatives to mobile devices - there are now 3 free newspapers handed out on street corners every workday, one in the morning and two at night. Plus a couple of localised ones in the City and elsewhere. Sure they're not the pinnacle of journalism, but they're perfect for a 20 minute tube ride.

I think I'll be adding this to the 'What's not' column on my website's Opinions page.

And the killer mobile application is......

.... the colour pink.

This is an SMS I received from a friend this weekend:

"Is Orange worse than Vodafone? They have a pretty pink phone & I'm tempted"

Reality check, eh? OK, this isn't a particularly high-end user (prepay, mostly uses SMS, no interest in mobile Internet or downloading apps). But it's emblematic of the problems involved in differentiating based on software or applications.

I overheard a similar conversation in a branch of Carphone Warehouse recently. "Hmm, that's cute" (pointing at a Samsung) "Oooh, but that one's got a 5MP camera".... pointing at an expensive, ultra-sophisticated Nokia N95.

Anyone who says that users are 'demanding content' or 'clamouring for advanced services' probably goes to too many conferences where everyone has smartphones and contract data plans. It's easy to assume that everyone views things the same about mobility as people 'in the industry'.

My advice in response to the first SMS, by the way, was "borrow someone else's Orange phone & check you have decent coverage in your flat".

Salvaging something from unused videotelephony capabilities

One of the background themes in 2007's mobile industry has been:

"What can we do exploit the unused videotelephony capabilities we put in for 3G?"

Pretty much all 3G UMTS handsets have a forward-facing secondary camera, intended for videotelephony. It typically comes with software for controlling a video call, and uses the H324M protocol.

But unsurprisingly, nobody uses it. 3G videotelephony was one of those applications (like MMS) which was designed by committee, rather than on the basis of how users actually behave. To use mobile videotelephony, you have to hold the phone right up level in front of your face, or else the camera gets a great view of either your nostrils or your earhole. This is uncomfortable, unnatural, and downright dangerous if you're walking or driving.

Then there's minor issues like unclear pricing (question: do YOU know how much a video call would cost you with your current tariff?), privacy and a total lack of consumer demand.

Put simply, it's useless, it's always been useless, and it will probably always be useless. (As will be proved yet again with the upcoming IMS variant called Multimedia Telephony).

(Although I did see a drunk woman waiting for a bus last night, pointing the camera at the bus stop, as evidence to loudly prove to her husband that she was actually on her way home. So maybe, just like MMS being used for embarrassing photos in the pub, the optimum usage case for video calling is best summed up as 'seven pints of beer and a couple of tequilas').

And despite the pointlessness of videocalling, even the cheapest 3G phone still ships with the capability anyway, wasting time & money in BoM, software and integration & testing. And annoyingly, it isn't even possible to delete the video call application, so it just sits in the phone wasting memory, with unused icons cluttering the home screen, lengthening menu lists and adding unnecessary clicks to the user experience.

But something interesting is happening now..... unconstrained by the bewildering user-ignorance of standards bodies, some genuine innovation is happening with mobile video.

Developers have started to realise that it might be possible to salvage something from the wreckage of videotelephony. After all, there's now a standards-based video client on 10's of millions of handsets, so perhaps it can be pressed into service for something a bit more intelligently-conceived than person-to-person video calls.

Some interesting examples of H324M use cases include:

• TV streaming
• Uploads to social networking sites
• Video mail
• Video blogs
• Security & surveillance
• Video voting & other contributions for TV shows

Now not all of these are perfect, and there obviously are limitations in using client software originally designed for something else, but the general concepts are going in the right direction. The nicest thing is that using the built-in video client means that developers don't have to design their own software and port it to 10 different OS's laboriously.

I've had assorted briefings, discussions & collateral with a lot of companies in this space. I know the guys at NMS Communications pretty well, and they & their partners have some cool applications. And then I had an interesting discussion & some demos over dinner with HP the other night around the mobile video theme as well. (Ewan at SMS Text News has a great write-up here). Radvision and a bunch of other companies play in this space too.

Now there are definitely still some challenges here - the video quality isn't always good enough for some applications, and there's usually no option to save the video stream to the phone's memory as well as send it over the air. This means that the mobile video-call approach is best suited to 'real time' applications like TV viewing - otherwise you might as well as just use the videocam function, save the file to a memory card and transfer it to a PC later on. Once it's on a PC you can email it, upload it to YouTube and so on - usually for free. There's also still the question about pricing, and whether it fits with prepay models.

But overall, I'm a bit more positive about niche applications for mobile video - now that it's being exploited by market-savvy application designers, rather than some just group of academic grey-beards decreeing that videotelephony is 'obviously' a good idea.....

Disruptive Analysis website hosting problems

Apologies to anyone trying to access the main Disruptive Analysis website.

My current (and soon to be ex-) hosting company, who I'll happily name & shame as Pipex WebFusion, has had severe problems over the last 24 hours which seem to have taken down a lot of its clients' websites, including mine. They also host my email, so that's been up & down as well.

Track the ongoing status of their attempts at salvaging their reputation here.

Amusingly, even their own main website is also down. At least they eat their own dogfood....

Drivers for cellular VoIP - why operators will catalyse VoIPo3G

As expected, my press release on my new VoIPo3G report has caused a bit of consternation. 250m is a pretty big number, and it's raised a few eyebrows, especially in North America, where VoIP has always been a particularly contentious issue.

It's worth giving a bit of background to the market drivers I'm seeing for mobile VoIP.

The easier one to tackle is that of the independent, 'over the top' VoIP players like fring, Truphone, Yeigo and Skype, as well as softphone suppliers like FirstHand. They're all piggybacking on the increasing trend towards faster 3G networks (HSPA, EVDO Rev A), flatrate data tariffs and open smartphones.

A linked trend is the growing use of laptops with 3G data cards - not just for mobile executives, but also 3G USB modems pitched at consumers as an alternative to low-end DSL or cable offerings. Most broadband PC users won't even check the terms & conditions - they'll just download Skype, or whatever cool voice-enhanced FaceBook add-on their friends have invited them to sign up for - and expect it to work. While some operators frown on this (or try & block it), quite a few don't care, as long as they get an extra broadband subscription.

The independent players (or enterprise VoIP platforms) all have their own business models. Some are looking at PSTN breakout, some on inbound interconnect, some on advertising, some are hoping to be acquired and so forth. Basically, pretty much any rationale used for over-the-top VoWLAN also applies to VoIPo3G but with wider coverage. (Yes, it's actually a bit more complicated so ask me for any more details)

But it seems to be my assertion that operators will lead the charge to mobile VoIP that has caused the most consternation.

• First off, if the carriers want to move to future networks (call them 3.9G or 4G) like LTE, UMB or WiMAX for reasons of bandwidth, data capacity or better spectrum use, there's no choice. They're all-IP, so you have to use VoIP, or maintain parallel GSM/UMTS technology for circuit voice. The GSMA has just endorsed LTE as its preferred future technology. Another operator group, the NGMN (next gen mobile network alliance) specifically lists VoIP capabilities in its requirements document and is also closely aligned with LTE and is also watching UMB & WiMAX.


• Secondly, from HSPA+ or EV-DO Rev A onwards, you can get more calls/Hz/cell with VoIP than circuit switched. LTE should be able to get 100-200% efficiency gains. Given that voice pricing is coming down, capping the spectrum being used for voice makes sense. I believe that operators will become increasingly spectrum-constrained, and any ways to extend the carrying capacity of their frequency allocations will have economic benefits in future. There's a lot more on the links between spectrum policy and Mobile VoIP in the report.


• Thirdly, you can do 'cool stuff' with VoIP that you can't with circuit-switched - eg embed it in a game with stereo location cues, encrypt it, run a full unified comms client for enterprise and so on. You can also do hi-def voice and so on.


• Fourthly, over time the operators will want to switch off their GSM and CDMA 1x networks and reuse the spectrum for UMTS or LTE or EVDO, and not have to run multiple networks in overlays


• Fifth, FMC carriers will want to move to a single voice switching & application infrastructure (maybe IMS or some other NGN). If they're going towards VoIP on the fixed side (and ultimately turning off the PSTN), they'll want a similar migration path on mobile. Look at BT's expected opex savings deriving from moving to 21CN

It's also worth thinking about how VoIPo3G enables non-telephony VoIP applications. Operators are already launching VoIP-based push-to-talk (eg DoCoMo PushTalk in Japan), and Sprint is launching its VoIP PTT in Q1 2008 and eventually wants to migrate its 20m or so iDEN PTT subscribers over to CDMA Rev A. It wouldn't surprise me if other North American operators also go down the VoIP PTT route in the near future.

Then there are leading-edge operators like FarEasTone in Taiwan, which already has its own mobile VoIP proposition.

As I wrote the other day, the biggest sensitivity in my forecasts is to the rollout schedule of LTE and UMB. In fact, I reckon that one of the reasons that UMB will actually happen. But I also believe that the complexities of rolling out new LTE networks mean that HSPA operators ought to get earlier experience of VoIPo3G. I had an interesting meeting with Actix last night, which helps operators optimise 3G radio networks - and they highlighted the likely trickiness of getting LTE working well.

I think 2008 will see a lot of operators putting a toe in the water with VoIPo3G - some through PTT, some through IMS-based approaches like FarEasTone, and some through partnering with the independent guys. At the same time, fring & friends will also continue to gain users, and at some point we'll see a big push from Skype (and perhaps Google or Microsoft or others). 2009 will be even more busy, as we get HSPA+ rollouts, and perhaps UMB.

If you want more details about the report "Mobile VoIP: VoIPo3G Business Models", please email information@disruptive-analysis.com

New Disruptive Analysis Report - 250m users of VoIPo3G by 2012

I've finally published the new Disruptive Analysis research study on VoIPo3G Business Models. The press release is given below and also here, and details of the report & contents are here.


250m users of VoIPo3G by 2012

VoIPo3G to be driven by both wireless carriers and independent challengers

LONDON, November 13^th 2007 - A new research study from Disruptive Analysis shows that evolution of mobile VoIP will rapidly eclipse voice over WiFi and become a mainstream form of communication. The analyst firm predicts that the number of VoIPo3G users could grow from virtually zero in 2007 to over 250m by the end of 2012. This is comfortably in excess of the expected number of FMC users with dual-mode VoWLAN/cellular phones.

The report demonstrates that it will be the operators themselves which will be mainly responsible for the push towards VoIP being carried over cellular networks. Carriers will become increasingly attracted to VoIPo3G because it will enable them to fit more phone calls into their scarce spectrum allocations, reduce operating expenses by combining fixed and mobile core networks, and launch new services like push-to-talk and voice-integrated “mashups”. VoIPo3G also fits well with the move towards femtocells. Future generations of wireless technology – 3GPP LTE (Long Term Evolution), 3GPP2 UMB (Ultra Mobile Broadband), WiMAX – are “all-IP”, so unless mobile operators continue to run separate voice networks in parallel, they will inevitably transition to VoIP at some point.

However, because these new radio technologies are three to five years away from mainstream deployment – what happens in the meantime will provide the major disruption to operator business models. Some independent VoIP players are already exploiting the fact that today’s 3G networks can already support VoIP, putting dedicated software on smartphones, exploiting open operating systems, flat-rate data plans and features like “naked SIP” and built-in VoIP capability. These are linked to competitive ‘over the top’ phone or IM services via a mobile Internet connection.

At the same time, there is an increasing trend of carriers marketing 3G modems for PCs – not just for mobile computing, but also to compete with home DSL/cable broadband offerings. Laptop users expect to be able to use their normal broadband applications over 3G, including voice-based ones like Skype. Some operators are even offering their own VoIP software for PCs with wireless broadband.

The end-result of the push towards VoIPo3G is that by 2012, most VoIPo3G users will be using mobile carriers’ own standards-based VoIP capabilities, over the new, advanced 3G+ networks. However, a significant minority of about 60m will be using independent or Internet-based solutions – many actually operated in partnership with carriers or retailers.

Dean Bubley, author of the report and founder of Disruptive Analysis, comments: “3G networks are increasingly capable of supporting VoIP, for both traditional mobile operators and independent Internet-based VoIP challengers. But while CDMA operators will benefit from VoIP being ‘designed-in’ to their newest networks, 3GPP / HSPA operators will have to wait for several years – a window of opportunity which will be exploited by the ‘over the top’ players. Rather than competing head-on, partnership models have the potential to create win-win propositions”

The report, “VoIPo3G Business Models”, is available from Disruptive Analysis from today. It is based on a huge research effort spanning hundreds of interviews and meetings, and contains extensive market forecasts, industry commentary & analysis and company profiles.

Ends.



Commentary

Yes, 250m is a surprisingly big number. Especially when viewed against the VoWLAN users at the same time (below 100m). I did the sums and then had to triple-check my own model. But underlying it is one absolutely fundamental point:

If mobile operators roll out LTE or UMB, then VoIP is mandatory; they're all-IP networks, just as WiMAX is.

Now I've had to take a call on the realistic rollout schedules of those technologies, and if there are substantial delays, the VoIP forecasts move to the right as well. There's also an expectation that some operators will want to deploy VoIP earlier, on EVDO Rev A/B or HSPA/HSPA+ networks. This morning's announcement about FarEasTone's VoIP service is a very timely example.

I've also built in analysis of spectrum-related issues, device availability, IMS and a hundred other factors. The full set of inputs and sensitivities are in the report's methodology section.

The key thing to think about is that for many users, VoIP will be invisible. For them, it will be an underlying enabling technology, not a service in its own right. Its prime function will be to enable operators to squeeze more calls into a given slice of spectrum. Yes, its other functions are more interesting - helping independent 'over the top' VoIP providers get a foothold in the mobile market, and facilitating a new generation of 'Non-telephony VoIP' services. But they will be comparatively small compared with its main manifestation as 'necessary plumbing'.

(Non-telephony VoIP means where voice is not used for a simple Person A calls Person B phone call, but is somehow a feature of another application - inside a game, linked to FaceBook or some other type of mashup or corporate web service)

The other angle to recognise is that almost all of these VoIPo3G users will also still be using circuit switching for some of their voice traffic. There will be very few all-IP users - most will fall back to GSM or UMTS or CDMA 1x or another network, either when out of 3.5G coverage or for other reasons.

If you're interested in more details & pricing for the full report, please email:
information AT disruptive-analysis.com
A table of contents of the report is available here
I'll also be speaking at the upcoming IIR conference on VoIP & wVoIP in Madrid on the 26-28th Nov, and the Mobility World Congress in Hong Kong on Dec 2-5th

Operator VoIPo3G in Taiwan

My VoIPo3G Business Models report is launched today - I'll be making a separate post about it later.

But with impeccable timing, there's also another announcement (OK, yes I'm quoted in it) from Finnish IMS software vendor Movial, relating to a contract with Taiwanese operator FarEasTone for enabling its new VoIP service on both handsets and laptops. This includes the use of voice on its HSPA macro network, plus its in-home HSPA router with WiFi.

I reckon that this is the first 'official' operator-branded VoIPo3G service, except for some 3G-based IMS-PoC push-to-talk services like DoCoMo's, plus non-IMS partnerships like Skype/E-Plus.

Some interesting things to note

• firstly, FarEasTone pushes pretty hard on a whole host of technologies. It announced its IMS/HSPA deployment contract with Ericsson in September 2006.
• secondly, Skype has huge penetration in Taiwan, which is definitely a catalyst for operators' own VoIP launches, as people are looking for ways to mobilise it as well as using it on fixed broadband. This also seems to indicate that there's a substantial % of voice traffic for which 'best efforts' is perfectly acceptable.
• thirdly, FET is also a WiMAX licence-holder (it recently signed a deal with Alcatel-Lucent) for southern Taiwan and so is likely to benefit services that can ultimately bridge HSPA, WiMAX and WiFi.
• fourthly, Taiwan and FET have relatively low levels of prepay use compared with contract subscribers, which makes it easier to subsidise high-end devices, or for mobile operators to enter fixed-broadband markets.

All this means that FET has seemingly been able to launch VoIPo3G, before HSPA is fully voice-optimised. I suspect that some of the options in the network and handsets like RoHC (robust header control) and voice-friendly scheduling haven't been implemented yet - my understanding is that they're due to be included in most vendors' infrastructure components in 2008/9. I'm also curious about what's happening at the application level in the network, given that there's no specific 3GPP or OMA standard for 'ordinary mobile VoIP' yet.

This all suggests that VoIP on FET's HSPA network might not be as spectrally-efficient as circuit yet, although in this instance the unique characteristics of the Taiwanese market appear to mean that competitive gains offset this consideration.

Because of these fairly unique factors, I'm not expecting too many other HSPA operators to follow suit, at least in this specific way, before 2009. Apart from anything else, there aren't too many phones which have HSUPA as well as HSDPA, although that should change by H2 2008, with massmarket devices available in 2009.

What I see more likely is for an increasing number of operator VoIPo3G partnerships with the Skypes/Truphones/Frings of this world in the near term. Plus some more laptop-based VoIP services. But more on that later....

Voda data 'pipe' revenues up... and has content revenue fallen?

I'm quite impressed by Vodafone's results today - and even more impressed by the company's turnaround over the last 12-18 months into one which is embracing 'the real Internet' rather than persisting on trying to push its own content & multimedia services in preference.

Around London I see Voda advertising hoardings exhorting people to use Google on the go, something that would have been unthinkable a couple of years ago.

I suspect much of its epiphany has sprung from the realisation that it's 'pipe' revenue that is making its data revenue figures look good. It has shown organic growth of 45% in non-messaging data revenue. Non-messaging revenue is now up to a level of half that of messaging (SMS+MMS, which is itself still growing quite well) in Europe.

I've posted before about how much of Voda's data revenue must be attributable to laptop data cards & BlackBerries. This time around the company is pretty upfront about it: "The organic growth in data revenue of 45.1% was particularly strong and can be attributed in part to increasing penetration of Vodafone Mobile Connect 3G/GPRS data cards and handheld
business devices." [I suspect that 'in part' is a polite way of saying 'mostly']

This is particularly interesting given that "Handheld business devices increased by 112.6% since September last year and Vodafone Mobile Connect 3G/GPRS data cards grew by 78.9%."

This means around 1.8m data cards in Sep 07, and probably about 1.4m handhelds (there doesn't appear to be a hard number for last year's published so I'm extrapolating from Mar 06). So basically an average during the 6-month period of 1.4m 3G cards and about 1.1m handhelds [mostly BlackBerries]. Looking at my estimates last year this means that the time-averaged subscriber base has grown 65% and 100% respectively. Both are certainly above 50%, whichever way you slice it.

Now given those figure, that puts the 45% revenue growth in a slightly different light. It seems to imply that non-datacard/BlackBerry data revenues (content, Live!, consumer Internet, M2M etc) have actually fallen. It also probably means that the average costs for business data users have fallen, which makes sense as recent BlackBerries have moved outside the boardroom.

Let's use a very conservative back-of-an-envelope estimate of £35 a month for 3G cards, and £25 for BlackBerries. Multiplying through for 6 months gives £294m for datacards and £165m for devices. That's £459m out of a European total of £843m non-messaging data.

In other words, I'm estimating that 'data pipe' revenues have increased from 46% to 54% of Vodafone's European data revenues over the last year.

(I'm also not sure where Voda classifies data roaming interconnect fees, so that might account account for another chunk as well)

Once again, this illustrates my belief that mobile content is really pretty unimportant, compared with communications or context. Sure, Voda is very business-focused (28% of revenues are corporate), but it's still an indicator for the rest of the industry.

My data roaming moratorium

I've been travelling quite a bit over the past month, including a couple of trips to both the US and Madrid for events like VON and the NMS Communications Connect events, where I've been moderating panel sessions.

I've tried an experiment - a complete ban on myself using data roaming on my normal email & web device (an HTC handheld courtesy of T-Mobile Web'n'Walk). While I like the T-Mo flatrate for use in the UK, the £7.50 per MB roaming charges are a joke. It's been costing me quite a bit of money over the past year - and it's even encouraged me to switch off images in my browser (back to 1996, eh? try advertising at me now....).

When I get a free day I'll churn to another more roaming-friendly network as the contract's now finished, but in the meantime I'm still using it. Or I may get the device unlocked & get hold of one of these Voda Germany pre-pay data SIMs I've heard about.

Instead, I've been relying on laptop+WiFi for my email everywhere - not too tricky as I've been mostly staying at hotels and at conferences which have had free or inexpensive WiFi.

Of course, this means I've been unable to do the traditional email-check in airport baggage halls while waiting for my bags, or in the cab on the way to the hotel.

And you know what? The extra 20 minutes I have to wait makes absolutely no difference whatsoever to my productivity, my responsiveness to clients or my life in general. If I'm in a different timezone, and I'm taking 8-hour flights, my email often has a long latency anyway. An extra few minutes is irrelevant - except for my personal sense of instant gratification ("Must have email NOW"). I'm not even wasting the 20 minutes - there's plenty of other stuff I have to read on paper anyway.

Now clearly this won't work for everyone. There are some people for whom email & data connectivity always needs to be as realtime as possible. But it does highlight how much money is wasted on an illusion: that full mobility is always necessary.

It isn't. For me, data roaming is a nice-to-have rather than a must-have.

With one exception. I cheated once - to Google the address of the hotel, because a cab driver was clueless. That's got a clear ROI - 100kb of data (the first page of results showed the address without even clicking on a link) vs. an extra few pounds for the cab driving in circles. Although now I think about it, it probably would have been cheaper to just phone someone I knew was in front of a PC....

Nokia Ovi..... how long before it includes voice-based services?

Interesting announcement from Nokia & Vodafone today - easier access to both Voda Live! and Ovi services from Voda-ised Nokia devices.

"Customers will get faster and easier access to all of Vodafone's Internet and entertainment services as well as all of Ovi from Nokia services on a wide range of handsets"

"Accessible from a computer or compatible Nokia device, Ovi includes the Nokia Music Store, Nokia Maps and N-Gage, with more services to follow"

This is clearly very significant, and goes a long way towards validating the Ovi strategy overall. But I'll let others comment on its impact on mobile gaming, music etc as these are not really areas I focus on that much.

Instead, I'll fly a slightly more disruptive kite about this model....

I wonder... will Nokia ever be really controversial with Ovi and start to include VoIP applications on the platform? Perhaps not 'plain vanilla' VoIP person-to-person telephony, but maybe what I'm calling non-telephony VoIP (eg voice mashups with social networking, in-game communications, remote dictaphone capabilities, conferencing etc...).

I'd say it makes more sense for Nokia to do this sort of voice-based application than the operators themselves, at least in the medium term until HSPA+ or LTE is rolled out (which should have properly integrated & optimised VoIP)

This would also fit extremely well with the sort of operator/3rd-party partnership model I'm envisaging for innovative VoIPo3G services - which I'm forecasting could reach 45m users by 2012 in my new report on VoIPo3G Business Models.

Google's phone platform... how large is its addressable market?

I posted a few early comments on the Open Handset Alliance yesterday.


One thing that isn't immediately obvious is whether how much of the total handset market is serviced by the strategy of new OS + Google Apps + advertising + openness + maybe a direct subsidy from Google.

In particular.... will the model work for the majority of the planet's mobile users who have prepay phones, often bought from non-operator channels? And who are often anonymous, and don't have data plans?

There seems to be lots of very US-centric rhetoric from the company & innumerable observers about how this will 'break the strangehold of the carriers'.... which conveniently ignores the fact that that's certainly not true for the overall handset market anyway. Globally, it's about 50/50 sold through operator vs. non-0perator channels.

It's very easy to be seduced by big numbers in mobile - 3bn users, 1bn phones shipped and so on. But generally most of the smartphone propositions I see actually have a theoretical addressable market that is, at most, 30% of that figure.

Now, 30% of 1bn is still a big number... but when you take out about 100m Symbian devices per year, plus a bunch of other platforms used by the licencees, I'll take a wild punt that G-phone shipments will struggle to top 20m by 2010.

Open Handset Alliance - Initial thoughts

I've been absolutely buried in work, so I haven't yet had a chance to think through the full significance of Google's Android handset software, and the instigation of the Open Handset Alliance today.

Various people have been talking up the 'gPhone' and similar stories over the past week, so it's hardly a total surprise. What is interesting is just how many members the initiative has from the start.

I've written before that I didn't believe that the handset OS marketplace would conveniently consolidate to two or three platforms anytime soon, and with this launch, plus Apple and the recent resurgence of UIQ, I stand by that assertion.

Remember when the IT industry used to sporadically develop partnerships that under scrutiny were really "anyone but Microsoft" associations? Well, this one seems to be "anyone but Nokia or Microsoft"....

Biggest surprise for me is the Asia-centric nature - especially having both DoCoMo & KDDI onboard.

Semiconductor partners are probably the group with the fewest obvious gaps - although STMicro seems to have decided against pinning its flag on the Alliance on the same day it concluded its 3G chipset deal with Nokia.

Esmertec & Aplix add some Java flavour - and make me wonder whether SonyEricsson may be next on the Alliance's list of potential suitors.

LG, Samsung and Motorola are all notoriously promiscuous when it comes to handset software platforms, so it's no surprise to see any of them adding another OS notch on their corporate bedposts. HTC is a bit of an eye-opener, though.

It's noticeable that Google's tried to keep its distance a little bit - including itself alphabetically among the software members, although the liberal sprinkling of YouTube videos through the site is a bit of a giveaway. The fact that it's not openphones.google.com seems to suggest that this might actually be a commercial venture for the big G rather than another 'in Beta' testlab thing....

Last quick thought - there's no obvious enterprise-centric players (IBM, Oracle, Cisco, other usual suspects) in the list, so I guess that MS and RIM can sleep easily for now.

DPI #2 - Pudding Media in-call voice recognition... and I thought I was joking

"You heard it here first".

There's quite a lot of hoo-ha about the concept that a firm called Pudding Media has come up with. Basically it does realtime voice recognition on your phone calls, and tries to serve you adverts relevant to your topic of conversation.

Now where have I heard that before?

Afterthought - you could have some real fun with this type of thing hooked up to a voice synthesiser. I wonder if you could set up some sort of computer-based game of Chinese Whispers where the computer makes a phone call, says a sentence, receives some adverts, then uses character recognition or image processing on the advert images & feeds the description back to the synthesiser.....

I wonder if Comcast will try something similar, and terminate your call if it hears the word 'Sandvine' or 'Traffic shaping' being mentioned.....

Deep packet inspection getting another kicking

The Comcast / Sandvine saga seems to have been the catalyst for consumer awareness of the potential for packet inspection misuse.

To recap:

- DPI used to protect fundamental network integrity (eg stopping DDoS attacks, stopping P2P crashing individual mobile cells, managing unanticipated bandwidth spikes etc) = GOOD
- DPI use to block / degrade traffic you just don't like very much in the hope of negotiating/extorting (pick your point of view) money from an Internet company = BAD
- DPI policies not made transparent to your customers = ACTIVE CUSTOMER DISLOYALTY (ie being so annoyed about a service provdier that you tell everyone very loudly)
- Lying to your customers about DPI = DESERVING BANKRUPTCY OR LEGAL ACTION

There are now rumours that Comcast is playing funnies with traffic going to Google.com as well. It's also been reported that its customer service staff are denying the existence of SandVine DPI gear in the network - although Comcast is known as a customer (see page 21 of SandVine's AIM admission document) and by coincidence, a very high % of SandVine's revenue comes from (a) North America, (b) Cable companies and (c) A single customer (see slides 4,6 & 7 here). Obviously, Customer A is anonymous......

Amusingly, the term 'sandvining' has been coined as a generic term for inept and intrusive misuse of DPI.

I've been saying for a while that heavy-handed use of DPI would backfire competitively on the culprits. I didn't expect it to to get escalated to the US Senate quite so quickly though. I can't imagine Viviane Reding at the European Commission, or assorted other regulatory & competition folk to be particularly impressed if the same thing happened here, either.

Of course, this is all in the fixed domain. Limitations on spectrum (especially at a per-cell and backhaul level) mean that some forms of traffic management are going to be mandatory in mobile. I don't want my 999 emergency call (or any call for that matter) blocked by some local kids using BitTorrent on their smartphones.

But if I pay for a mobile Internet pipe (and I'm quite happy to pay a fair price), I want it to work with the service I want to use. If my operator thinks differently, it needs to be very explicit about this upfront. And incidentally, this applies just as much to any monkeying around with the handset's IP stack or OS, as well DPI as in the network.

A lot of enterprise FMC vendors still don't get it

The final panel session I attended at VON yesterday was on enterprise FMC.


There's plenty of good stuff I heard from an interesting range of participants, but fundamentally I still don't think that many of the players understand all of:


- Enterprise preferences
- Carrier requirements
- Handset design complexity
- User interface & behaviour


I still see plenty of 2002-vintage "one device, one number" rhetoric. Sorry, but while that may have conceptual elegance it's totally unrealistic. Many business users will have a business laptop as well as a phone. Many (most?) will have a separate personal handset & number - and although it is possible to have this as a 'profile' on a work phone, most employers won't want to be giving employees a new cool phone every 6 months, or start providing them in pink.


The numbering thing is similarly unrealistic, especially outside North America, where there are issues around fixed-to-cellular termination costs and SMS, that make it desirable to have both fixed and mobile numbers, even if they are bridged in the PBX or operator network. (Note: Vodafone's FMC team have 2 numbers on their business cards, as do many of Ericsson's employees. They've thought this through.)


Linked to this, there is also lots of rhetoric about the enterprise 'owning the number'. This might work for organisations that can be really 'proscriptive' and force employees to use their business device for all voice calls under pain of dismissal, irrespective of how clunky the extra software client might be. But real-world companies have to recognise that most user will have access to multiple devices, and that as calling rates come down, the issue of reimbursement becomes less of an issue than user experience. If I have 2 mobile devices (1 work, 1 personal), both with essentially unlimited minutes, I'll tend to use the one with the best UI (fewer clicks, intuitive menus, neat little features in the call register etc) and which looks the coolest when I want to impress my clients. And I'll use the clunkier one for things like messaging if it's got a QWERTY.

Also lots of talk about enterprise VCC. I'm not convinced it's that important from the enterprise's point of view. Certainly, there's no point worrying about the cellular-WLAN handoff at the front door of the building, if all the (many more) WLAN-WLAN handoffs inside don't work first. After we get good coverage & internal handover of voice-optimised WLANs throughout the typical corporate site, we can worry about the 2% of calls that occasionally transit the entrance lobby. Otherwise it's just putting lipstick on a pig.


There's also (so far) no real rallying call for enterprises to buy unlocked, 'vanilla' (or custom-build) smartphones. Yes, there's a lot of offhand comment that this is generally a good thing, but I'd like to see the enterprise FMC community put something collective in place to raise awareness in the same way that Nokia is pitching US consumers with unlocked handsets as an alternative to the iPhone.


Then there's something that I'm risking sounding like a broken record on. SMS. There's still lousy support for good SMS experience within most vendors' enterprise FMC implementations. No, it's not easy, but from a user behaviour point of view it is table stakes. If it doesn't work within the enterprise FMC app on the phone, the user will use the native SMS client - which will then naturally reveal the 'underlying' mobile number rather than the so-called enterprise 'single number'. Or they'll send the SMS from their personal phone in their other pocket. And guess which number the salesman's client will enter into his phonebook when he gets an SMS saying "in the taxi, be there in 10 mins". And no, IM or email are not alternatives from the perspective of a typical mobile user's entrenched behaviour patterns and expectations. For instance, you never know if someone outside your company is capable of recieving IM, or has a BlackBerry switched on. You can be pretty certain they can get texts wherever/whenever, though.

To be fair, there was some comeback to my question to the panel about SMS. In particular, Comdasys, a German FMC firm, mentioned integrating SMS gateways, which are probably the best way to solve the problem, at least on the server side. It's less clear-cut on the client side - I've heard some solutions that essentially put in a 2nd SMS client inside the handset's corporate PBX-facing application.

And lastly, coming back to my theme of the month, there's not much awareness yet of the possibilities of VoIPo3G, extending the full power of VoIP/unified comms over the wide area, as well as while the user is in the office WiFi coverage.

Overall, I'd say the enterprise FMC industry has come a long way in 2007 - but there's still a gap between what's deliverable today, and the sort of solution that will please both CIO and fit with the typical user behaviour of a person with a mobile phone (or two...)

3 + SkypeIn or SkypeOut

Quick thought....

The 3/Skype phone doesn't support SkypeIn & SkypeOut - presumably a function of both integration complexity, and the fact that 3 doesn't want to lose the outbound traffic minutes, or more importantly the inbound interconnect fees.

How long before someone comes up with a Skype proxy server that enables this, either running in the network, or even on your own PC at home?

You have "My PC" as a Skype buddy on your mobile, make a Skype-Skype call for free.... but your PC has a 2nd Skype client running on it with a different login (plus SkypeIn/Out) and bridges them together.....

Or if Skype doesn't let two instantiations run on the same PC, you use GoogleTalk or something else instead.

UMB - not dead yet

Lots of people seem to be taking glee in hammering CDMA Rev C / UMB at the moment, prophesying that LTE and/or WiMAX are inevitable winners, and that the CDMA roadmap is looking a bit questionable.

My view is that reports of UMB's demise are over-exaggerated. I think that these things are cyclical, and that over time the weight of opinion will swing the other way again.

Absolutely, there are doubters at the moment. Lots of people seemed to have jumped on Verizon's professed intention to converge with Vodafone's preferred architecture over time. Sprint is deploying WiMAX, which some interpret as kick in the teeth for its parallel CDMA network. Qualcomm obviously hasn't had the easiest year.

....and yet....

LTE is still a long way off from commercial deployment. We might see massmarket services launched in 2011, optimistically. And while the RF bit of the radio part of the standard is progressing, the sister part of the radio access network, SAE, is still mired in politics. Conversely, UMB is pretty well nailed-down and should be deployable in 2009-10.

Secondly, UMB is VoIP-ready, with a roadmap for early mobile VoIP within Rev A/B. If Verizon doesn't get any 700MHz spectrum, it's going to want to husband its existing frequencies more effectively in the medium term. UMB offers the ability to squeeze more voice and/or data into existing spectrum allocations. LTE will do this too, but is further away as already mentioned. Add to this the difficulty of running 2 networks in the interim period, and I see a strong likelihood that Verizon will stop bluffing, go for UMB initially, and hope to finally converge on a single, 4G-based, UMB2/LTE2 hybrid around 2012/2013 instead.

Thirdly, I can't see Sprint being able to push WiMAX down to small, handset-type devices in the near future. Possibly it'll decide that Rev A or B are good enough for phones running on its parallel network. Or possibly it'll decide to upgrade too, especially for reasons like improved voice capacity.

Then there's KDDI, and a bunch of other possibles, including future networks in places like India.

Overall - I'd say UMB doesn't look like the famous Norwegian Blue parrot just yet.