I'm speaking at the Inst. of Industry Analyst Relations about blogs & social media

I'm speaking at the Institute of Industry Analyst Relations meeting in London tonight.

[Note - for readers outside the analyst "village", AR is a parallel discipline to Investor Relations and Press Relations within many technology companies, intended to deal with people like me. While there's many different sub-types of industry analyst, we all tend to be outspoken, hopefully influential - and occasionally prima-donnas with an over-inflated sense of self importance as well. So basically, many product vendors & service providers use AR professionals to act as a valuable interface point to the rest of the company.... and also as far as possible keep tabs on what we're saying, to whom we're saying it, and what company representatives are saying to us. The IIAR is essentially a trade association of AR practitioners].

Along with a couple of analyst peers, I'll be discussing the role of "social media" in the context of my work.

For me, that's mostly this blog, online b2b social-network 1.0 things like Forum Oxford and my relatively negative views of Twitter, Facebook etc as business tools. I'd also characterise my fairly prolific conference appearances as real-life social medium too.

In particular I will be talking about the implications for AR folk and how it impacts the way they should measure and engage with analysts. It's an area that polarises opinion quite a bit. Some AR professionals think it's relevant and improves relationships, others are more old-school and perceive tools like blogs and social networks as reducing control and visibility. It's a fine balance and one to which there is no single 'right answer'.

I know that as a regular and sometimes contentious analyst-blogger I risk being seen as a 'loose cannon' sometimes. Some seem to pigeonhole me as a blogger who analyses, rather than an analyst who blogs (hint: count the adverts on my site). I get few comments on the blog direct from AR people (unless maybe they're anonymised), although it stimulates a lot of offline email and phone calls. Sometimes I also get contacts from dedicated Blogger Relations teams too, which can be confusing but also gives me a second channel into key companies.

Ideally, I'd write a bit less on the blog and a bit more in paid research and consulting documents. This in turn would be picked up by AR and a virtuous, but mostly invisible, circle of 'influence' would ensue. But ultimately as an independent analyst, I don't have the corporate sales or promotional might of rival analysts from Gartner or Forrester. So to be as 'influential' as my peers, (and from an AR perspective to be seen as such), I need to use less conventional channels to increase my footprint throughout all parts of the mobile ecosystem and its customer base.

I know it's an uneasy balance at times. I'll often comment rapidly on announcements and tie them into ongoing research themes. My broad remit (and the nature of the medium) means that I can't realistically bounce every idea off executives to triple-check - I occasionally make mistakes. But my view is that this is very similar to the role I used to play as an equity analyst - I'd see the newswires announcements at 7am, and have to have some form of initial comment out on the email to investors at 8.15am, backed up, refined (and occasionally demolished) by later, in-depth reports. That said, I'm sensitive to the realities of AR and try not to tread on toes unnecessarily. And unlike some journalist-type bloggers, I know what's totally "non-disclosable" even if I haven't signed an NDA.

I also need to balance the analytic aspects of this blog, and my AR relationships, with the commercial realities of my business. This blog is one of my prime ways to reach existing and new clients - it generates research sales and consulting leads. (hint: Want strategic advice, workshops and forecasts on wireless operator business models, femtocells, mobile broadband or handsets? Congratulations, you're in the right place. Click HERE). I suspect this differs quite a bit from my larger-firm rivals, and also explains why I feel the need to update so regularly.

Overall, it should be interesting to hear from both my colleagues, and understand the AR professionals' view of what I do. Who knows, maybe they'll even convince me to start Twittering....

Financial market turmoil - impact on telecoms

James Enck has an absolutely heroic post on this topic.

As a former investment analyst myself, I've been watching this week's chaos on Wall St and in the Square Mile with a sort of detached horror.

And I've been watching tech & wireless stocks escape with (comparatively) little damage. Who would have thought, 7 years ago, that it would be banks' and insurers' turns in the firing line?

His comments about the gap between network operators' funding vs. necessary near-term capex are particularly interesting to me. Some additional thoughts:

- Now probably isn't a good time to be buying spectrum, especially if it's with the aim to build out entirely new networks. Maybe O2 & T-Mobile have, ironically, done both BT & the UK Treasury a favour, delaying the UK 2.6GHz auction through their legal action? Otherwise that would have been ongoing right now.
- I reckon that some particularly dongle-rich 3G networks are going to start feeling capacity squeezes over the next 12 months - a combination of the need to fire up extra 5MHz channels on existing sites, add new sites, and/or upgrade backhaul capacities. I hope all that's in the current spending plans....
- From a risk management point of view, all the signs are pointing more towards HSPA+ / HSPA Evolved as a cheap & safe interim step before LTE. If I was the CFO, I'd be asking exactly what LTE would add to the bottom line, and what the risks are that positive ROI might be delayed for a couple of years, because of "unexpected issues" like poor availability of devices and applications. I don't think the situation is going to do WiMAX or FTTH many favours in the near term either.
- I've talked about this before, but do mobile operators really want to start subsidising laptops at the current time? Given that a lot of the "Free Laptop!!! £30 a month subscription" deals look suspiciously like consumer credit arrangements, I hope you've checked your underwriters' fine print. And vice versa.
- I'm mindful of a new item I saw recently, saying that chocolate sales go up during recessions, as it becomes an affordable treat, chosen in place of more expensive luxuries like restaurants. There's a lesson there for certain "feel good" mobile services, surely.

Is the MID a market?

MIDs (Mobile Internet Devices) are being pushed by some notebook OEMs and silicon suppliers as the next big convergent handheld category. I've seen some presentations pitching the notion that they'll subsume smartphones, encroach on netbooks and UMPCs, and obsolete standalone GPS devices and media players.

There's no standard definition of a MID but the archetypes tend to be the Nokia N810, a long thin prototype device Intel's been showing, and according to some viewpoints, the iPhone. Most people think MIDs will have a 4-7 inch screen, a grade-A web experience, some form(s) of wireless connectivity, and plenty of memory and battery life. It'll probably have a lightweight OS of some sort (Linux, Android, Apple, some cut-down version of Windows etc), and is likely to have various consumer multimedia capabilities.

Many are quite likely to come bundled with some form of mobile broadband - either a familiar 'vanilla' operator Internet access, or perhaps a more under-the-hood wholesaled connection like an Amazon Kindle on steroids. Although the concept started as being quite WiMax-centric it has now evolved to 3G as well.

So far, so good. Basically a 2008-era PDA paradigm with connectivity built in and all the toys like GPS, right?

Maybe, but I'm less than convinced by the general-purpose MID concept. Anyone with a 6 inch device will have a normal phone as well (quite possibly a small smartphone itself), and their own or a shared family PC too.

Yes I'm sure there will be a few road warriors who want a day-trippable device rather than a laptop. Yes some teenagers with backpacks could have one instead of a PSP. If it's cool enough, the gadget fiends will be queueing outside the shops. But 100's of millions of units? Hmmm.

However.I can certainly buy into the idea that things like PSPs, TomToms, N810s, even iPod Touches could use some form of mobile connectivity. Not all of them, not all the time, maybe just for specific apps rather than general Internet services. Each category will adopt mobile at a different pace, and it will probably vary by country too.

Consistently, divergence has been more important than convergence for the last 10 years. For every two things that have combined, three new ones have emerged in their place - a consequence of Moore's Law and economies of scale.

So I see a small core market of converged general-purpose MIDs, really like mini web-optimised computers, bought as a 3rd or 4th device by urban techno-leaders. But that niche will be surrounded by a cloud of app-specific products, some wireless-enabled pseudo-MIDs, some WiFi only or remaining unconnected. Most of these will support decent browsers and extra secondary software clients too, but won't be optimised for them. Developers will face even more fragmentation than is the case for smartphones, but as the value for most of these products will be hardcoded 'out of the box' it won't matter too much.

For what it's worth, I'm still viewing the iPhone as a smartphone rather than a MID, as it can work as a primary phone and you don't look stupid holding it to your ear. (Its size is on the lower limit of MIDs, though, so I won't argue if you define it differently as part of the category - it's only semantics). Some of the larger WinMob devices, however, clearly fall into MID-land, which means WinMob7 will need to seriously step up the pace if Microsoft wants a role outside enterprise-type mobile products.

Overall - I'm cautiously optimistic about MIDs, but I see it as a fragmented movement towards enabling "mobile broadband computing" in a variety of different devices, rather than the genesis of a new generic computing segment.

Only about 2% of this blog's visitors using mobile devices

I've had Google Analytics installed on my blog for just over a month now, and it's showing up some interesting trends. Some are to be expected - peak usage is on Mon/Tues, most accesses come from US & UK, with a lot from India as well.

Now, obviously this is only the direct web hits I'm measuring - the bulk of readers use some form of RSS or other feed reader. It also misses out sites like Wireless Watch, and SeekingAlpha, that syndicate my posts, as well as assorted other 'unauthorised' aggregation and screen-scraper sites.

But unless someone tells me otherwise, I would have thought that people who access the blog directly on the Web are pretty representative of people who see a link on Google & think it looks interesting. Or who generally just prefer using the browser to read blogs.

So, given that I'm in the mobile industry and so are most of the people reading this, I find it pretty surprising that only about 2% of visits are from browsers on mobile phones. 0.6% from iPhones, 0.3% from Symbian, a handful of Windows users, what looks like about 0.3% of Opera Mini, and a proportion of the 0.4% of non-Firefox Linux users. iPod Touch users were another 0.2%.

And some of the mobile users were in fact me, checking the site looks OK.

Now, I'd hope and imagine that >2% of RSS users are mobile, but overall this really points to the fact that fairly normal, non-demanding web usage is still predominantly PC-based, especially in the B2B domain. It's certainly not a sufficient level for me to seriously devote time to optimising a mobile-specific version of the blog, or even worry whether the occasional graphics I add to the text will render OK on small screens.

A Theory of Convergence?

I've been watching and analysing various types of telecoms and computing "convergence" for many years.

One thing jumps out at me: not all expected types of convergence actually happen - and even more happen *much* more slower than anticipated. But some occur almost overnight.

I'm starting to think about patterns here - what converges successfully? And what remains "unconvergeable"? And how predictable are these?

(Mobile Phone + Digital Camera) is one of the fastest, most successful examples of convergence.
But (Mobile Phone + TV) is one of the slowest - and is arguably an outright failure.

In the enterprise market, IP-PBXs have slowly reached the mainstream, blending voice and data networks. But it's taken 12 years or so, and the convergence process still isn't complete.

Ideally, I'd like to develop a "Theory of Convergence". At the moment, I regularly try to predict what will/won't blend, but it's on a case-by-case basis. So for example, recently I've been assessing whether the PC and phone might converge - and based on numerous specific reasons like battery size, ergonomics and distribution/business model, it seems highly unlikely.

Some of the elements of such a theory would be:

• technical convergence of *most* components of the convergent products, not just the central computing or communications element
• ability to converge distribution channels (this delayed enterprise VoIP for 5+ years)
• ability to converge useability and user-experience
• ability to converge business models / purchase process
  

So for example, converging handsets with small digital cameras has relied not just on the phone's processor, but also convergence of memory on flash RAM, small/lighter lenses for basic digicams, the reduction of the importance of printed photos meaning that camera business model is now "convergeable", and a mostly low-touch distribution model for cameras (ie they can be sold on a standalone basis by unskilled staff in retail or online stores). And basic digicams have small, sub-1000MAH batteries.

Conversely, these factors don't apply to high-end cameras which are essentially "unconvergeable"

As well as batteries, to my mind, PC and phone also have other "unconvergeable" aspects around distribution and business model. In particular, PCs aren't sold with associated "services" and, particularly, are not locked or customised for a given "service provider". Distribution is also a challenge, as are various aspects of user-experience and ergonomics.

PC/dongle (ie PC/module) is a slightly different convergence situation (dongles don't have batteries), but also falls down in the business model / distribution stakes. For example, dongles have legacy SIM cards, and attempts to integrate them with notebooks' connection managers are clunky.

It doesn't mean these types of convergence won't happen at all - but just that the Venn diagram won't overlap that much.

I've still got quite a lot of thinking to do about creating a generic Theory of Convergence - but this theme of "convergeability" is one I'll be coming back to over the next few months.

Tethering...another approach to mobile broadband computing (MBC)

As if there weren't enough options for Mobile Broadband Computing (MBC) - dongles, data cards, embedded 3G, netbooks, MIDs.... - another concept is now starting to make itself felt.

It's "Tethering"

Which is what used to be called, more clunkily, "using your phone as a modem".

This isn't especially new - it's been possible since the days of GPRS at least. On the other hand, it's often been an enthusiasts-only sport, involving various configuration hassles (Bluetooth, non-standard cables and so forth), which while theoretically simple, have been enough to dissuade most potential users.

In the past, this practice has been viewed differently by different mobile operators. Some have actually encouraged it, because their “phone” data plans have been more expensive than their “PC modem” data plans. Others have limited the practice via terms and conditions, especially on uncapped “flatrate” data plans for devices like the Apple iPhone.

More recently, a variety of phones like the H3G Skypephone S2, and the Palm Treo Pro, have been designed specifically with tethering as a key usage case – they even enable the driver software to be loaded onto the PC automatically (rather than needing CD or separate download/install) and ease configuration through wizards and so forth. Some operators see them as a good way of enabling two devices via a single subscription – and help them upsell the user to higher bandwidth-cap tiers or faster speeds.

However, Disruptive Analysis believes that this approach (and other approaches to using ‘clusters’ of linked devices, for example in a “personal area network”) will remain in the minority. In particular, the use of a phone as a tether, attached to a PC on one side and a 3G connection on the other, is likely to exhibit a high degree of battery drain – although it possible that they could also draw energy from the notebook battery if a physical cable is used rather than WiFi or Bluetooth. However, where a cable is used, it makes it awkward to have a simultaneous phone call – and some implementations of 3G chipsets may not even permit two connections to run concurrently.

The price of modems/chipsets should come down to a point at which it’s just simpler to have multiple ones for multiple devices. Where it may become more important is in emerging markets, where a single 3G access could feed multiple users via WiFi.

Nevertheless, this approach gets around the issue of “lock-in” for embedded mobile broadband in notebooks – users tend to upgrade phones, and/or churn providers, once every 18 months or so, which makes it easier for the computing element to benefit from upgraded modems without disassembling the PC to the change the module. On the other hand, implementations of new wireless standards in phones often lag those in modems, especially in mainstream devices.

In a way, tethering could be a partial answer to the issue of session-based MBC without the need for a separate SIM card in a notebook or dongle.

Overall, the tethering approach using a handset is likely to appeal to some Mobile Broadband Computing (MBC) user segments and operators, but it seems unlikely to displace either external modems / dongles, or modules embedded in notebooks or MIDs. Disruptive Analysis is skeptical that tethering will be used by more than perhaps 10% of regular MBC users – although if useability becomes better, it may be used on an ad-hoc basis by a larger number of people with an occasional need for connecting a PC or other device.

How many people use PC in conjunction with their phones?

A few seemingly-unrelated things have occurred over the last few days, but have a common theme:

- I've uploaded some new pictures from my personal voice handset, to email to friends & put on the web
- I've been trying out Vodafone's FaceBook SMS plug-in
- I've had an update from NewBay about its operator-centric phone backup and social network platform
- I've topped up my 3 UK prepay SIM and paid for 2 months' flatrate mobile Internet access

What links them? They all involve using a PC together with a phone. Either locally connected via USB / Bluetooth, or by using a browser to access some sort of operator portal linked to your account.

It's made me wonder what proportion of users ever actually do something similar?

I remember several years ago talking to the guys at Palm, and they reckoned that most of their users synced via the handset cradle, but that that was unusual amongst even smartphone users at the time.

Today, I'd guess the situation is even more polarised with iPhone users linking to iTunes , but a long long tail of low-end handset users never even contemplating using both devices together. I suspect far more people "connect" by swapping out memory cards for sideloading, rather than installing PC-connection software or using operator portals.

Personally, I've stopped putting client software for phones on my PCs, as I switch phones fairly regularly and don't want loads of flaky OEM apps cluttering up my computer and maybe conflicting. I haven't even hooked up the new Palm Treo Pro which I'm playing with at the moment.

But on the other hand, I am using more web-type interfaces to get a window into my "mobile world". But I perceive that being inside the industry, I'm probably unusual in this - I'm not aware that friends or family do the same.

If anyone's got any hard stats on this phenomenon, I'd be fascinated, as done well, I think it adds a lot to both mobile & PC/Internet experience.

Remembering satellite services' role in mobile broadband

Reading this article has made me reflect how little focus gets put on satellite connectivity. Yes, we all benefit from GPS devices, and millions have Sky TV and its international equivalents.

But in terms of either two-way end user devices, or its use for cellsite backhaul, it's often overlooked. And yet services such as Inmarsat's BGAN satellite modems can often be cheaper than some of the more ridiculous cellular data roaming tariffs.

The latency argument in the article is interesting - many expect new radio technologies like LTE and WiMAX to make mobile web access (or VoIP) more useable by reducing the levels of delay. But for those devices connected to base stations beyond the economic reach of fibre or microwave, there's a big extra chunk of latency if there's a roundtrip to a satellite in geostationary orbit (not to mention any extra delay due to compression ). The new MEO network could be a significant factor in enabling real mobile Internet access from remote locations.

3G-embedded vs. 3G-embeddable notebooks

The world and his blog seems to have gone crazy over Dell's cute new Mini 9 netbook, which stacks up against the Asus eeePC and HP 2133 and a range of other upcoming mini-notebooks.

However, there is much disappointment in the US that the device won't necessarily come with 3G built-in, unlike Vodafone's loudly-trumpeted version for Europe.

I think this is something we'll see more of. I've been doing a lot of research lately on 3G-embedded notebooks and mobile broadband, and the simple fact of the matter is that (for now) it makes no economic sense to include a 3G module and antenna in a PC unless it's definitely going to be used for a mobile subscription. Otherwise it's just a costly lump of extra electronics - not ideal for consumer or retailer, and which would hurt the competitiveness of the PC in the marketplace.

At the top end of the market, 3G might start to become a "standard" feature, but if you're trying to sell a $300 low-end netbook with $50+ worth of unused tin inside, it won't make your gross margin look very pretty.

What we'll see is many notebooks coming with the possibility of 3G being embedded for specific markets and specific channels (ie mobile operators who want to sell/subsidise it), just the same as the laptop coming with the possibility of extra memory, or a red casing, or different preloaded OS and applications. (And no prizes for guessing that the slot might support a variety of other comms modules in future - perhaps WiMAX, EVDO, or one of Qualcomm's multi-standard Gobi's).

There might also be some clever ways of OEMs retrospectively paying (or getting a bounty) for the cost of a module if it's activated at some date after purchase, but I can't see that being too common a business model in the near term.

In other words, theoretically 3G-embeddable notebooks will be much more prevalent than actual 3G-embedded ones for the next few years at least.

Full web browsing on a phone? Not yet

The received wisdom in the mobile industry is that continued browser evolution is making handsets capable delivering a "full Internet experience", like that on a broadband-connected PC.

I think that's over-stretching the capabilities. Yes, the iPhone renders a lot of web pages beautifully, but it's still not supporting things like Flash. And that's the absolute pinnacle of web-on-mobile. When you move down to the next tier, you get options like Webkit-on-Series 60. Which is a lot better than a few years ago, and can do a decent job of many websites, but which gets seriously thrown off-course by some of the newer and flashier ones.

My E71 consistently crashes when I try to use my new favourite travel-booking website, Kayak - there's no way I'd trust it all the way through to a transaction. It's got plenty of other annoying niggles as well, such as the switching between multiple windows. Plus it's still dependent on a whole range of network-side issues (and maybe handset software or memory problems too) like click-to-see time, that make web surfing a lot less pleasant and immediate than on a PC.

It'll be interesting to see what Google does with Chrome on mobile. And yes, there's all sorts of widgety goodness and Operatic performances that make the best of the small device.

But at the end of the day, they're all still "best efforts" approximations to the proper web, on a proper computer. I reckon Apple & a couple of others will start to trend asymptotically towards real "web" experience, but that will take a couple of years. And for that sort of performance to reach down to the midrange of handsets and beyond? I'll be surprised if we see a truly first-class browsing experience on a $50 handset (and its typical host network) before the middle of next decade.

Femtos and Asia - news & event

Thanks to Andy & co at ip.access's 3Ginthehome blog for alerting me to this femto development from Japan. If I'm reading it correctly, NTT DoCoMo has been using a Mitsubishi femto since 2007for what appears to be network fill-in purposes, but is now "planning to use Mitsubishi's femtocell small base stations for its "Home Area" service, which links mobile phone networks with the broadband environment.". As far as I know, up until now there hasn't been a residential femto service launched in Japan, not least because of some tricky regulatory issues concerning the need for official inspection at commissioning of new cell sites. I'll be keeping a close eye on this one.

Unfortunately, I won't be able to keep an eye on it at Avren's next Femtocells Asia conference, which will be in Kuala Lumpur on 22-24 Sep, as I'll actually be at another event aimed at press/analysts (where I'm moderating a panel on - you guessed it - femtos).

The KL event has been moved from its original location of Bangkok because of the ongoing political turmoil in Thailand, but it's looking like a good line-up of presentations - not least from DoCoMo's competitor SoftBank. I'm expecting a few other early Asian adopters for femtos as well - most likely in markets like Korea, Taiwan, Singapore and HK, but also possibly Malaysia & Thailand too. 

[Disclosure: Disruptive Analysis is an analyst partner for Avren Events - although that's a reflection of what I think have been some really good conferences they've put on. I'm hoping to be at their next one in Dallas in December.]

Where is the asymptote for smartphone penetration?

Despite the hoopla about the iPhone and the upcoming launch of Google Android-based devices, there seems to have been a sudden bout of queasiness among the smartphone market participants (and their investors). As a share of total phone shipments, there seems to have been a bit of a stall at around 11%.

Various commentators are scratching their heads, and blaming the economy and a range of other factors. In recent months I've noticed an almost religious fervour based on the notion that "soon, all phones will be smartphones"... and now we're seeing the first cracks emerging amongst the faithful.

Much of the recent enthusiasm has come from the US, where there has undoubtedly been a sudden leap in the sales and profile of high-end devices, driven by the iPhone and continued acceptance of BlackBerries among a wider group of users. All operators now have 3G networks up-and-running, there are some sensible data plans, and everyone has WiFi at home and wants to "take their Internet with them". In addition, the various carriers have suddenly started stumbling over each other in an effort to be seen as the most "open".

In many ways, certain user groups in the US seems to have leapfrogged the high-end featurephone phenomenon seen in Europe and elsewhere. There haven't been that many midrange phones with 3MP+ cameras, memory cards, full Bluetooth, decent MP3 capability (with side-loading) and so on. Device have suddenly jumped from being locked-down, carrier-centric products to new ecosystems like Apple's.

This seems to have led some American observers (and some European smartphone enthusiasts) to assume the same trend has been mirrored elsewhere, and that consistent meteoric sales growth and penetration of smartphone OS's was inevitable globally.

In my view, the truth is rather different when taken at a global level, and explains what will probably just be a temporary plateau in smartphone penetration.

What's happened is that the growth statistics in recent years have been driven not so much by people wanting smartphones, as being given them without choice or (often) awareness. I posted in length about this last year. In recent years, Nokia Symbian S60 and NTT DoCoMo shipments have hugely inflated overall smartphone sales numbers, and Nokia and NTT have selected smart OS's largely for their own benefit, rather than because of specific demand by customers for "smartness".

The US market has long been different. Most US consumers buy smartphones because they actually want smart devices, rather than because they want a high-end Nokia, or a contract with DoCoMo. Yes, there have been plenty of "real", conscious, buyers of smartphones in Europe and Asia, but they have been swamped by a flood of other customers who haven't really cared, but have taken what they've been given.

What we're seeing now is this blip in the statistics being worked through. We're no longer seeing huge growth in high-end Nokia shipments (as last week's warning highlighted), and the Japanese market is pretty saturated too. None of the other major manufacturers has really shifted wholesale to smart OS's as a default platform, to carry on the S60-led growth in "under the hood" smartness.

There have also been some other statistical shifts - huge growth in low-end devices in emerging markets, for example. This is what's boosting the overall market to 1.2bn-odd devices, but dropping the average sales price to well below the entry point for smart OS's. And although it's changing, most phones are still not sold with data plans being available (or certainly affordable), especially on the basic prepay tariffs used by 70% of the planet.

My take is that it's going to take several more years to get smartphone penetration to above 15% of global shipments, and that for the forseeable future (lets say 2013) we should probably treat 20% as the asymptote. In developed markets, that figure will be considerably higher - perhaps 50% or above in places like the US or Scandinavia, or maybe 30-40% in markets like the UK, especially if mobile Internet access takes off further. But the notion that someone in Mozambique or Bolivia or Laos,buying a $20 handsets and with a $2 monthly spend, will be buying a 2013-equivalent of an iPhone is unrealistic.

It's very easy to plot hockey-stick charts - but observers from North America shouldn't leap to the assumption that the majority of people follow their specific local habits. Globally, more people play hockey on grass than ice. And most people who buy phones still don't actually care about smarts.

Petition against deep packet inspection

I've got to congratulate the folk at TelecomTV for their principled stance over misuse of DPI. They're running a loud & well-articulated campaign called "Throttle the Package", arguing against some of the more draconian terms in some upcoming European telecoms legislation. 

It's essentially the EU version of the US Net Neutrality debate, with the debate heavily skewed by legacy content providers' lobbying might. I'd recommend that readers sign up at TelecomTV's site to tell the Commission what right-thinking people believe. 

I'm not against the protection of copyrighted materials by legitimate means, but much of what is being proposed is illegitimate, heavy-handed, malevolent and ultimately doomed to failure anyway. And more importantly, it risks some fundamental "collateral damage" to numerous innocent and innovative business models.

I've written at length before about the use and misuse of DPI, and all of its numerous problems and the likely response.

In a way, I take the same view of European DPI issues as I do about US net neutrality - any service provider stupid enough to try something really egregious - like Comcast in the US - will get a suitable competitive, legal and/or technical kicking. But frankly, while I'm confident that in the long term, reasonable compromises will be reached, this really isn't the time to be wasting money and effort fighting the filtering fools.

Vodafone Connect to Friends for FaceBook

Despite what one of the comments on a recent post of mine might suggest, I certainly don't view all MNOs in a negative light. I've been particularly impressed by Vodafone's deepening understanding of Internet services over the past two years - it appears to "get" the Web in a way that many of its peers do not.

The latest thing to catch my eye from Big Red is a FaceBook plug-in application that enables users (not just existing Voda subs, either) to send SMS to their FB friends in the UK. It's on a pilot rollout at present. 

It's really pretty clever, as it allows you to use the UK operators' PayForIt system to charge to your own non-Vodafone mobile account. So as I use O2 for my personal device, but Voda provides my Facebook interface, charges me money for SMS credits, but gets the cash by using O2 as a billing channel. Given the pricing points, both operators make money, O2 retains my billing relationship, but Voda "owns" my Facebook Mobile user experience. 

Clearly, Voda is hoping that the convenience of sending SMS from my PC outweighs the extra cost versus sending them from my phone (I have unused hundreds of SMS in my monthly bundle). The fact that it works when I'm travelling abroad is a very clever option, too, as is the fact that it inserts my real phone number as a "Reply-To" contact.

And it gives Vodafone a fantastic database of people willing to try new Facebook / Social Network mobile comms applications - and presumably a good group to target FaceBook adverts at. 

Mind you, it glitched when I tried to install it first, and it doesn't seem to work on Google's new Chrome browser on my PC, but given it was only released last week, that's fair enough. It doesn't populate its phonebook from your friends' profiles (it doesn't have the permissions) so you have to enter them manually. And the fine-print terms and conditions suggest that "you should check these terms each time you use Connect to Friends" which clearly isn't the quickest user experience if you comply...   I'm also not allowed to link to it without Vodafone's consent, so you'll have to find it online yourselves.

But you know what? I don't mind that it's a bit flaky initially, or that some of the T's and C's are a bit overenthusiastic. It's a Web 2.0 beta on a PC - it's supposed to be flaky, and you're used to signing your rights away when you agree to use FaceBook in the first place. You can feedback comments on bugs and so forth. It's much better than trying to test it to death for a year, then release it & find something unexpected anyway. 

I've also seen an IMS-type FaceBook mashup app demo'd a couple of times, developed by the Fraunhofer FOKUS research centre in Germany. It also hooks in location for a friend-finder type app, an area which seems very buzzy at the moment. There's a demo on YouTube here.

This type of web-centric realism contrasts with the really sniffy looks I got from some telecom old-timers about network applications. When I suggested that the more "purist" IMS-RCS (Rich Client) would be an ideal Web 2.0 plug-in. I got the distinct impression that they thought that FaceBook should plug into IMS via a web service gateway, rather than the other way around. Well, maybe when there's an IMS community of 100m+ regular loyal users, it'll be the planet and FB will be the orbiting satellite, but at the moment the gravitational dynamics are the other way around.

Apparently, the application has been developed "in conjunction with the Value Creation Centre, a Vodafone joint innovation initiative with IBM, and the Vodafone Internet Services division at Vodafone UK" . That's pretty telling to me - if huge organisations like IBM and Voda can be this web2.0-centric, there's no excuses for any of the other old-world telcos to ignore new Mobile/Web realities either. 

Combined with other initiatives like the Dell netbook launch last week, it's also another pointer that the mobile industry is finally coming to terms with the PC remaining the central pillar of most developed-world Internet access for the foreseeable future.

There should be a SIM-free option for LTE

In terms of general market perception, LTE has been stealing much of WiMAX's thunder of late. Now obviously we've seen the ascendance of LTE coinciding with one of the periodic nadirs of enthusiasm around WiMAX, and we should start to see the balance redress somewhat when Xohm launches and other smaller deployments also start to come online of the next 4 months.

My current expectation is that by 2012/2013, we will see LTE user numbers for mobile broadband approach or even exceed those for Mobile WiMAX. And both sets of figures will be dwarfed by HSPA and HSPA+ figures.

But I can't help thinking that 3GPP risks leaving a certain amount of money (and usage) on the table for WiMAX. In particular, temporary, session-based access.

There are two ways to buy communications services - through an account (postpaid or prepaid) as seen with most of today's mobile and fixed services. Or on a one-off basis, as seen with WiFi hotspots, hotel broadband & TV, Internet cafes, pay-per-use web conferencing, even payphones of the past. In this circumstance, the customer uses a local service provider to fulfil a particular need.

Accounts make most sense when linked to a particular identity - especially a phone number. This means it is in the user's interest to establish a long-term relationship with a service provider.

Taken as a % of the overall telecoms market, the one-off payment proportion is tiny compared to subscriptions or SIM-based prepay mobile. But as a proportion of wireless/"on-the-move" data, it is rather higher.

The problem with offering one-off payments for mobile data in 3GPP technologies is the need for a SIM - or a roaming relationship with a home "account" supplier's SIM, who will probably charge a healthy (or often unhealthy) premium.

WiMAX (like WiFi, and indeed CDMA EVDO) does not require a physical token like a SIM card. You could flip open a laptop and (assuming it supports the right frequency bands), choose a temporary provider on an ad-hoc basis.

Besides the roaming approach, the only way I can think to do this with a SIM-less 3GPP device would be to have some sort of software-type SIM, or use a secondary SIM-based device such as a phone as an authentication token. Neither are particularly ideal solutions in my view.

Now, I don't think that this is the "killer application" for WiMAX which will defend it against the onslaught from HSPA and LTE. But it is a gap in the market for mobile connectivity services that is currently served poorly by the current cellular approach.

O2 offer of iPhone on prepay looks like a smart move

Regular readers will know that I'm a big fan of cellular business models in which upfront device purchase cost subsidises the service element.

I've also also talked about the challenges of getting prepaid subscribers to use data plans, something which has developed very quickly over the past 6 months.

And, lastly, I pondered about how the Apple's iPhone commission model would fit with prepay-centric markets.

Taking all this together, at first glance I'm pretty impressed with the way in which O2 UK is pitching its own new iPhone prepay offer. It's pricing 8/16GB variants at £350/400 inclusive of a year's data connectivity. (It's £10 a month)

It will be interesting to see how many people decide to use the prepay iPhone as a data-only mobile Internet tablet device & MP3 player, while keeping a separate phone for voice & SMS. If you treat the mobile data as being worth £10 a month, it's like paying £230/£280 for an iPod with full mobile web & email access. Compared with, say, a Nokia N810 or even some of the lower-end mini laptops (which probably would be used as a "second computer") that makes a lot of sense. 

In my view, it puts the iPhone centre stage in the new "MID" (Mobile Internet Device) category, albeit without some niceties like Flash support.  (Edit - Hmmm, I wonder if this is connected to the recent interesting in Flash Audio-based VoIP?)

(Yes, I know that many people will use it as a phone as well, but personally I like having a separate data device/contract that doesn't have an associated 'public' phone number I tell anyone, so I'm free to switch when something better comes along, with having to think about number porting)

The £10 a month for data in months 13 and onwards seems a bit pricy, compared to the £5 that 3 offers for a month's data on prepay SIMs in the UK (I have one), but I guess that predicted iPhone data usage is probably much 2x the average that 3 is expecting from its prepay data users. What's not unclear is whether the iPhone can be unlocked after Month 12, and a different operator's SIM installed.

Plenty of unanswered questions about the O2 NFC Oystercard trial

In general, my view of NFC is that it's interesting, but that it's far from certain to be a success. In some ways, it's a solution looking for a problem. It's not an obvious failure like some suggested future technologies, but neither is it a clear win. It will be more important than DVB-H or other mobile TV standards, but a bit less than WiFi and way lower down the pecking order than Bluetooth, memory cards, GPS and a range of other emerging handset features.

There has been much press ballyhoo about the results of an O2 / Nokia trial in London, which included subsuming the standalone "Oyster" contactless travel payment card used on buses and tubes, plus also the "PayWave" electronic-wallet function.

In some ways, I can buy the Oyster argument - in fact, it doesn't even need integration into the phone, a simple RFID sticker on the back or in the battery compartment could do the trick just as well. I see no advantage to the involvement of an operator in the value chain at all - apart from specifying NFC chips in future handsets. I don't buy the idea that Londoners would want out travel expenses appearing on the same bill as postpaid phone usage, and prepay users would almost certainly prefer two different "buckets" for transport and communications for ease of budgeting. Also, many postpaid mobile phone users are prepay Oyster users (me, for example).

But to be honest, nobody I know views the Oyster card as an encumbrance. It's simple, and it works - although most of us were extorted into using them in the first place by our former tyrannical mayor's policies on fare differentials. Integrating it with the phone gives one less thing to carry, yes - but also raises issues like whether the NFC would work when the phone was out of battery, or whether the thousands of people who lose phones on the Tube/Bus would then have the extra indignity of getting fined for riding without a ticket at their destinations. Roaming users would find it a pain, transferring balances to new phones/operators would be a pain, it would need to work seamlessly while phone was in mid-call, and so forth.

I see no upside, but it could probably work OK up to a point. Yes, the "survey" showed positive results but I've yet to see a clear breakdown of the triallists (are the representative of "average" Londoners or mobile users?), and the questions mentioned in the press release all seem a bit woolly. (I'd love to have a copy of the full questionnaire & results and see what didn't make it into the press release).

"87% said that availability of the service would be likely to influence their purchase of a new mobile phone" - I suspect that this was probably one of those questions that had options like "A critical influence", "A major influence", "A little influence" and "No influence". (And possibly "A negative influence"). And adding everything except "No influence" could yield 87%, but then with nothing to compare it to, it's meaningless - adding a flashlight or toaster function to a phone might yield the same result. It screams "PR soundbite" to me.

The mobile wallet function I am a lot more negative about. I've heard this mantra of "the mobile phone can subsume your wallet" more times than I can remember. I've been to numerous conferences & briefings, all of which are conspicuous by their failure to mention benefits to the end user. I can see why operators might want this (a slice of lots of payments), I can see why phone manufacturers might want it (more stuff to put into phones to keep up ASPs), and I can certainly just about guess why the army of consultants and integrators might be in favour.

Anecdotal feedback I've had from some PayWave merchants in London has been that it's been a dismal failure. Nobody uses it. It's not used for the card-based version that's being pitched, let alone the phone-based option. Transport for London has let BarclayCard/Visa have free sales pitches in various stations to tout the thing, and the people manning them have looked like the loneliest people I've ever seen.

Then there's a huge raft of issues about usability, security, theft, loss, financial regulations, ability to churn and so forth. It's a complete non-starter - even the Japanese use of Felica has been lacklustre. I don't buy the hype about this type of m-payment at all - although I have no problems with other forms like SMS-based for certain groups (eg people without bank accounts).

I think there is more chance of your wallet subsuming your phone, than your phone subsuming your wallet. NFC might eventually get some applications that are useful. Advertising hoardings and other information services - yes, although probably quite niche. Electronic keys (for doors etc) - hmm, maybe, but not anything really critical (imagine "divorcing" your operator when you churn, and having to change the locks....). Travelcard - possibly, as long as the operators can be distintermediated.

But payments and credit cards? I'm going to stick my neck out and say no.

NFC? Meh.

Cool and uncool in telecoms (lighthearted post...)

It is just possible that some readers of this blog are unaware of Top Gear, the car show which is without a shadow of a doubt is the world's best TV programme. Exported to countless other countries, it even has local versions being made in Germany, Australia and elsewhere, although these suffer without the wisdom of the demigod Jeremy Clarkson.

One of the most clever features on the show is the "Cool Wall", a section which plots cars on a scale of coolness. This isn't necessarily linked to performance, looks or other normal criteria. It is a separate axis which transcends these measurable characteristics and instead looks at the less tangible aspects of image and desirability. In particular, vehicles that are bought by people trying to be cool are always ironically deemed to be seriously uncool. By comparison, cars that are bought by people because they are sort-of interesting, unusual, functional or eccentric might be thought of as "sub-zero"

So for example, Audis are becoming seriously uncool, as they're being bought by people who used to want BMWs. Toyota Pious's [sic] are obviously in the same category for being sanctimonious. Conversely, Land Rovers are honest and unpretentious, and are therefore quite cool. Aston Martins are "sub-zero" unless you live in Chelsea in London, in which case you're just following the herd and you need to get a life. And so on. It's very clever, really.

So a hat-tip is definitely in order to James Enck, who has pointed me towards a telecoms industry extension of the concept.

I pretty much agree with the telecoms assessment, although I'd make a few amendments and additions.

(And before I get a zillion comments about analysts being uncool, please note that my tongue is firmly in my cheek with this. And iPhone fanboys - the lack of a sense of humour is by far the least cool thing you can imagine).

From the UK perspective, I'd probably boost 3 and Vodafone up a notch from "seriously uncool", as they're doing some fun stuff with Internet partners and so on. Orange probably deserves its own "so uncool it's almost cool again" category for its general old-school attitude to centralised control and things like IMS. The Apple iPhone (a very cool device on its own) is brought down firmly into "seriously uncool" as it's been bought & fawned over by so many geeky fanboys and wannabee-cool dullard hedge funders. Conversely, quite a lot of SonyEriccson phones are cool, which is probably why the company is on a warning from Sony over its recent lacklustre performance. All 3G dongles are cool as they aren't over-branded by the manufacturers.

The counter-intuitiveness and rampant subjectivity of the Cool Wall is its best feature.....

What else? Skype is now just merely "cool", as are most wireless VoIP companies, although geekiness is in danger of dragging them down. FaceBook is popular but useful, and doesn't have a "religious" aura, whereas Twitter is unbelievably try-hard and therefore uncool. UK regulator Ofcom is pretty cool, as is the FCC with its fairly principled stance on things like Net Neutrality.

I'd say that Qualcomm and Ericsson both qualify as "cool", as neither seems to mind an image of short-term conservatism as long as they reap long-term rewards. Nokia is a bit of a confusing mix - its hundreds of millions of self-effacing low-end phones like the 1100 are way cooler than its glossy-but-shouty E- and N-Series.

Any other suggestions?

Welcome back James Enck

The first blog that really made me sit up & take notice of how useful this whole blogging thing can be was James Enck's EuroTelcoBlog. At the time, he was doing equity research for Daiwa, covering European telecoms stocks, and writing pithy, controversial snippets that cut through a lot of the industry's B.S.

Unfortunately, he had to drop writing it a year or so back when a new employer's compliance department had less of a sense of humour than Daiwa's.

For reasons that James explains, that adventure has now ended. So he's now back in the blogosphere, and I for one would heartily recommend everyone here reads EuroTelcoBlog religiously.

Inflight cellular and inbound calls

In general, I feel that the world could happily live without inflight cellular, but I accept that with current fuel prices, airlines need every revenue stream possible if they're not to go the way of Zoom. And I absolutely no problem with the principle of availability of inflight WiFi for PCs, or SMS for phones.

But the big potential problem I see with inflight cellular is not outbound calls/SMS/VoIP - it's the inbound traffic & associated ringtones.

2-hour shorthaul flights are pretty noisy anyway, as they're in daytime, with announcements and catering trolleys and kids going on holiday. And I'd certainly imagine that few people would be so socially-unaware as to initiate noisy conversations during the hours of "darkness" on a longhaul flight. But the issue has to be sleeping in a cabin with 200 other people who could well be *receiving* SMS or calls from people (or computers) in their home timezone, unaware they're midflight.

If you work out the stats it starts to be quite scary - on a full 747 you can have about 100 people within earshot, say 10 rows around you - so I'd guess that during a 5-hour "lights off" part of an overnight flight, you could easily get 30+ inbound events with associated ringtones.

One option might be to make the inflight system accept outbound traffic only, during "dark" hours. Or just instigate a rule that all phones/PCs have to be used with headphones only, and that any ringtone offenders get moved to a spare "sin bin" seat next to the lavatories.

Nokia removing VoIP capability from N-Series phones?

Om Malik has caught Nokia apparently moving away from mobile VoIP a little, by reducing the native support in the latest set of N-Series devices.

Reading through various posts, my take is that the truth is a little more complex.

There are three main ways for developers/ITSPs to get VoIP software running on Symbian phones:

1) Use the native Nokia SIP stack & build your own application around it.

2) Use the native Nokia SIP stack and Nokia "Default" built-in Internet Telephony client, and build a much lighter application around these.

3) Build everything yourself, either with your own SIP stack or a proprietary mechanism.

Most wVoIP companies like Truphone have historically gone for options (1) or (2), although Fring is (I think) closer to number 3.

Lots of mobile conspiracy-theorists and bloggers are speculating that Nokia is somehow bending to the carriers' will by removing VoIP. I'm not to certain that's the main story. I think it's more likely that Nokia's decided that its default VoIP client is largely unused and fairly unloved, and in need of lots of expensive development and maintenance that isn't justified by customer demand.

Another possibility is hinted at on David Wood's (Symbian CTO) blog , which talks about competition vs. the iPhone. To me, this is a very telling comment:

"There are considerably fewer applications built into the iPhone than you can find in a standard S60 phone. That relative simplicity means that some feature-focused users will decide not to use the device. But the device taps into a new market that is arguably underserved by previous offerings. This is the very considerable market of users who don’t need every bell and whistle in feature-packed smartphones"

I'm wondering if Nokia is taking a hatchet to S60 overall, getting rid of some of the less-used features and applications that clutter its interface, in the hope of getting some more Apple-like useability. Pre-installed VoIP is certainly one thing I'd be thinking twice about in that context. If enthusiastic "featurists" want VoIP, they'll know how to get it. But for the masses, there's possibly more benefit in just getting rid of some of the confusing icons and menu items.

US elections and innovative mobile apps

Like much of the world, I'm pretty hooked on watching the protracted process of the US presidential elections. In the past, they've largely passed me by with a bewildering slew of wonk-ese jargon terms like caucus and primary and delegates. This time around, vastly improved TV and Internet coverage has made it all more accessible to an international audience.

So it's unsurprising that mobile technology has also been dragged into the media whirl of the election.

Tomi has a great post about the use of SMS notification by Obama, although from a European perspective I can't help thinking that it's not exactly innovative to use text messages for political purposes. This is from Spain in 2004, and this from Hungary in 2002. It's also helped Morgan Tsvangirai in Zimbabwe.

Obviously theres loads of blogging, YouTubing and Twittering going on as well. But the latest fad in the US, apparently, is for campaign ringtones. And perhaps more interesting still is the use of candidate-specific video ringback tones by Vringo.

I'm not certain how well these will travel. I can certainly tell you right now that anyone I call that foists a video of Gordon Brown on me at the next UK elections, will be getting SMSs instead of calls until they switch it off.

GSMA toning down rhetoric towards reality

It's always worth double-checking facts. I saw this headline ("Mobile to reach 100Mbps before fixed-line, claims GSMA") and was about to write a pithy response, mentioning awkward facts such as HongKong Broadband Network's residential Symmetric Gigabit service having been available for a year or so.

Then I read the full article, which includes sensible commentary from Dan Warren saying "obviously you never get the top speed and they vary with distance from the base station and interference". Further, the GSMA's recent press release of 50m HSPA subscribers cites "peak data speeds over HSPA are currently between 3.6Mbps and 7.2Mbps. This translates to an end user speed of more than 1Mbps".

In other words, the GSMA is actually being realistic about real-world speeds for mobile broadband, and is in fact now trying not to fall into the trap of equating a cell sector's worth of shared capacity (under ideal radio conditions) with the achievable throughput of individual homes' dedicated wired connections. Good - HSPA is becoming hugely successful anyway, and doesn't need an overdose of cringe-worthy marketing hype.

I can't find any quote which directly suggests the GSMA thinks that it will beat fibre to 100Mbit/s. And in any case, talking about the UK in particular, it's probably worth suggesting that the GSMA might want to have a word with a couple of its members to help this along. O2 and T-Mobile UK currently have legal action pending against Ofcom which is delaying the 2.6GHz spectrum auction. Given the crowded state of the UK mobile market, that frequency band is pretty much the only one in which MNOs are likely to get the requisite 2 x 20MHz channels needed for LTE to run at 100Mbit/s. And it's also worth pointing out that even when that happens, 2.6GHz will struggle with indoor performance in many places, unless helped along by femtocells connected to - wait for it - fixed broadband.

Femtocells and 3GPP Rel8 closed subscriber groups

I'm catching up on some of the recent developments in femtocell standardisation (3GPP still officially calls them Home NodeB's). In particular, I'm looking at what progress has been made about the issue I highlighted in my June report - that modifications to handsets will be essential for mid-term massmarket adoption of femtos.

The report included detailed analysis of what needs to change in handsets - both in the radio/protocol part of the phone, and in the OS/application layers.

My discussions with femto suppliers and operators recently have shown growing acceptance of the first part of this - that developments in 3GPP Release 8 specifications will need to be implemented in phones as well as networks. Most of the femtocell deployment models now seem to distinguish between supporting "legacy" pre-Rel8 devices, and the later, more capable ones.

Much of the work relates to the mechanisms for phones to register on specific femtos, avoid unnecessary attempts to register with unsuitable ones, and how certain femtos can be "preferred" - particularly the one in a given user's home or workplace.

The worst-case scenario is for a user to walk down a street with many homes with femtocells, and for the phone to attempt to connect to each one for the 5 seconds during which its signal appears strongest. This would kill the battery on the phone, generate a huge amount of signalling traffic and potentially lead to dropped calls. Various other scenarios are similarly unpalatable - for example, the phone not registering quickly with an expected femto (eg at home), and the user not receiving the promised discounted call rate.

The bottom line is that various new approaches need to be made to "white-list" particular femtos for particular devices, and aid the fast registration onto those cells. This will use a feature in Rel8 called CSG (closed subscriber group).

But while CSGs solve part of the problem, they also bring with them a whole raft of other issues. I discuss these in the report in some depth, but a key issue is how the user & operator can access and manage this white-list. Another issue is how a CSG-enabled phone can know when to look for a suitable CSG, without having to spend the whole time using battery power to scan for one.

Wading through various submissions to 3GPP, it strikes me that the majority of network-centric participants are not especially well-versed in the compromises that need to be made in phone design to accommodate these and other aspects. So you get lines in standards documents like "The user shall be able to request the UE to perform a scan for available CSG Identities." Well, that's great, apart from the minor question of "Yes, but how, exactly?" - presumably, this needs some form of connection manager application, a bit like using WiFi on a PC. Bear in mind that the average "manual network select" application on a phone is horribly primitive, rarely used, and usually buried 4 layers down in the menu structure.

As an operator, do you really want to be fielding customer support queries about provisioning guest access on femtos, on 100 different device and OS software types, with the user facing some clunky menu structure and indecipherable femto IDs that might look like WiFi SSIDs?

Based on both conversations and reading submitted material, the company that I see coming closest to "getting" both sides of the femto/handset problem at a radio level is Qualcomm. For example, this (zipped) document is a thoughtful analysis of the problems involved in finding femtos in various CSG scenarios. It looks at some of the issues around femto "public hotspots" and campus deployments as well as home-installed products. (It's also worth noting that Qualcomm invested in femto vendor ip.access recently).

One thing that Qualcomm is (corporately) very conscious of is the protracted timeline for getting any new handset technology into the market. As well as the network side of the industry, the phone and device chipset manufacturers need to get their heads around this issue ASAP as well.

On that note, I'll use this as a suitable opportunity to plug my Femtocell-Aware Handset report once again, and also that Disruptive Analysis is able to offer customised workshop and consultancy services on this and related topics. Please contact me via [information AT disruptive-analysis DOT com] if you're interested.

UMTS/LTE at 3.5GHz - watch out, WiMAX

One thing that 3GPP has been very good at is rolling out support for new frequency bands - arguably too good, some might say, as the number of available 3G/LTE bands now far outstrips the ability of chipsets to support all of them.

The latest in line is 3500MHz (and also 2300MHz), which until now has been the preserve of WiMAX and other similar fixed-wireless technologies. I suggested last November that this was a likely counter-strike by the invasion of the 2.5/2.6GHz band by WiMAX.

With the continued push towards a TDD profile for LTE, my view is that the WiMAX community is in danger of being further squeezed in some markets in terms of spectrum allocation.

The WiMAX Forum really needs to follow 3GPP's strategy and get profiles sorted for both FDD and TDD, in a broad range of frequency bands, as fast as possible. At the moment it is being extremely slow on this. It also needs to stimulate urgently the development of multi-band chipsets - it is probable that there will be only limited harmonisation at a global level, and even less on an operator-by-operator level. Frequency agility (and the ability to configure devices with different band permutations on the same silicon platform) will be critical for scale economies.

When is mobile VoIP not really mobile VoIP?

...when it's actually a circuit-switched call, that just uses an underlying packet bearer connection. So it's an IP "pipe", but the actual voice application is good old-fashioned telephony, without all the usual extra VoIP toys like presence.

I've talked before about CS voice over HSPA data bearers. I've also thrown cold water on the notion of using IMS Multimedia Telephony (MMTel) as the main long-term VoIPo3G / VoIPo4G service.

So there's an important question outstanding... if the long term trend is to move mobile towards LTE (and maybe mobile WiMAX).... how do we deal with voice? Will all phones and networks need to support GSM/UMTS in parallel, in perpetuity? It now seems clear that not all LTE networks will have an IMS core. Some will, but many will not.

My view is that there are three main options in the long term:

1) Some good (and ideally standardised) ways to implement non-IMS NGN VoIP applications over LTE. This doesn't need to be a dumb pipe approach, but could use assorted hooks for QoS, security and so on, if well-engineered.
2) Use LTE as a pipe, and put Skype's / Truphone's / Cisco's / BroadSoft's / whoever's VoIP over the top of it. Deal with issues like handover to other technologies in software in the servers and the handsets - perhaps under control of the operators, but perhaps not.
3) Develop some way to "tunnel" traditional circuit voice over LTE bearers, as we're already seeing with CS over HS.

Martin Sauter over at WirelessMoves has done some sterling work looking at this problem (he calls it the Voice Gap) recently. He's just posted on a proposal for Option 3, as well a related proposal for what's being called IMS Centralised Services.

The idea of re-using CS voice instead of a shiny new VoIP application is not new. Many fixed-NGN operators' VoIP services "look" like circuit-switched telephony to the end user. Many ordinary PSTN services have long transited "virtual circuits" in an IP-based transport network. UMA-based dual-mode VoWLAN does the same - the handset's telephony application remains unaware that it's being transported over WiFi.

Obviously, this is bad news for suppliers of VoIP application servers, whether IMS-based or not. They need to push hard to demonstrate the added benefits of "native" VoIP as an application, as otherwise they risk missing a big opportunity around LTE.

Truly Mobile VoIP - calling from the skies

I never managed to fly on a plane equipped with Boeing's ill-fated Connexion WiFi service before they shut it down. But there's a new airborne wireless service emerging now - Aircell. This is being rolled out in the US, providing in-flight WiFi access.

And despite the supposed VoIP-blocking mechanisms, my friend Andy Abramson has cunningly found a workaround.

At one level I really don't like the idea of on-flight cellular/WiFi voice. There's enough noise on planes from screaming kids and tedious announcements about duty-free goods. But I certainly applaud another success against the ridiculous packet inspectors and their heavy-handed nannying at an application-by-application level.

Aircell should forget about blocking applications, and instead use their application-aware boxes to scrutinise what their customers want to use. And then improve and tailor the service to meet those needs.

Andy's idea to use Flash Audio makes a hige amount of sense. And I can think of at least two other ways in which VoIP could be disguised to get past censors like Aircell's.

So what's up with the 3G performance in the iPhone?

Having been buried in work & on holiday for much of the past month, I hadn't really caught up with some of the news about the 3G iPhone. There seems to be widespread consternation about the performance of the device when connected via 3G, both in terms of connect speed and download performance.

About 200-300kbit/s seems to be a typical connection speed in the US, with some people reporting much worse performance (on the fringes of coverage). However, according to Wired's 3G iPhone performance map, many users in Europe are getting 1-2Mbit/s quite easily.

Various fingers of blame are being pointed - is it the AT&T network in the US? Is it the Infineon chipset?

Or is this just another manifestation of my favourite bugbear - the disconnect between mobile network designers and device developers (and thus by extension the 'real' user experience). It is simply the case that the original usage cases envisaged for HSDPA didn't include the type of rich, demanding applications (and implied traffic patterns) that iPhones generate?

Some thoughts:

- firstly, this could well be a manifestation of the HSDPA "idle mode" latency I discussed a few weeks ago. For iPhone users used to always-on, instant-connect WiFi, or even a nailed-up EDGE connection on a matured & optimised network - the initial "time to connect" could well be notably worse.
- secondly, in many countries, 3G is deployed in a higher frequency band than 2G (1900MHz vs 850MHz for AT&T, or 2100MHz vs 900/1800MHz in Europe). This means it will have shorter range, lesser coverage, and crucially worse indoor penetration.
- the audience of 3G iPhone users is fairly self-selecting: almost all actually use the data capabilities. While some of that is attributable to the phone's useability, it's also the case that it has attracted existing data-oriented users. It also tends to come bundled with data plans. This contrasts with most other popular 3G phones, for which only a small minority regularly use data (or even have a data plan). I'll bet the average Nokia N95 or SonyEricsson K-series user wouldn't notice lousy 3G signal, because they only fire up the browser once a month.
- various blogs have commented on the new 2.0.2 firmware release, wondering whether it contains changes to the radio stack. Some have claimed that they're seeing more bars of signal strength subsequently - although the cynic in me suspects it's easier to change the signal-strength indicator software, than the underlying radio.
- AT&T has not previously had the consumer 3G dongle phenomenon take off the same way it has in many other countries (reflecting different pricing strategies). So its network engineers may be a little behind the curve on dealing with massive, sudden ramp-ups of data traffic growth, often in new and unexpected geographic locations. They're probably faced with a whole range of optimisation headaches, and may even be needing to split cells & find new locations.
- Expectations of WiFi-like performance by end users reading about HSDPA's "headline" speeds may have been unrealistic. Normally, WiFi AP's only have 1-3 users attached simultaneously, whereas a 3G base station might have hundreds - with the available capacity in a sector shared amongst them all. Then there's another set of questions about the backhaul capacity from the cell site, in comparison with WiFi which usually has a home/office broadband connection to exploit.
- Somewhere there must be some side-by-side comparisons of an iPhone running next to another 3G handset (Nokia, Moto, whatever) connected to the same operator's network. If there was a big performance delta, that would point the finger of blame clearly at the phone/chipset rather than the network.
- It could be that the radio chip or antenna has worse performance on AT&T's 1900MHz band than on most European operators' 2100MHz for some reason.
- I'd imagine that the density of iPhone users in the US is higher than in most other countries, and thus more likely to put a strain on AT&T's network in dense urban areas.

Based on what I've been reading, I'm more inclined to point the finger at AT&T than at Infineon. Its 3G network has (to date) been geared more towards corporate PC + datacard users - and I suspect it's realising that massmarket consumer usage patterns are very different indeed.

Highlights from Ofcom's 2008 report on the UK Communications Market

UK Regulator Ofcom does a sterling job of putting out useful research documents about the real state of the market for communications services, including quite a lot of original surveys and analysis, plus extra detail versus the normal widely-parrotted stats on subscriptions and the like. It also seems to phrase its questions in consumer surveys in a fashion intended not to give biased views - something which is conspicuously different from much of the PR-led "research" that I see.

Ofcom's just released a huge new report on the current state of the industry, incorporating telecoms, broadcasting and related services.

Some interesting insights I've spotted so far:

• Quite a lot of discussion of the resilience of fixed-line comms in the face of the mobile onslaught. Rather than direct fixed-mobile substitution, it appears that the UK sees more mobile-initiated incremental use of voice. Fixed minutes have dropped about 17bn minutes in total over 6 years, but mobile call volumes have risen by 38bn minutes. The UK outbound call total is still around 60/40 fixed:mobile, and 88% of homes still have a fixed line.
• The proportion of mobile-only households has been pretty static for the past few years, currently at 11%. This is considerably lower than elsewhere in Europe (eg 37% in Italy), and is possibly reflecting the prevalence of ADSL. Most mobile-only users are from lower socioeconomic groups.
• 44% of UK adults use SMS daily, against 36% using the Internet
• More than 100k+ new mobile broadband connections per month in the UK in H1 2008, with the rate of sign-up accelerating. 75% of dongle users are now using their mobile connection at home.
• Nearly half of adults with home broadband use WiFi
• 11% of UK mobile phone owners use the device to connect to the Internet, and 7% use it to send email. (It looks like the survey Ofcom commissioned didn't define "the Internet", so this might include some closed WAP usage too - consumers probably don't have a full view on what "the Internet" is at a technical level).
• VoIP usage appears to have fallen from 20% of consumers in late 2006, to 14% in early 2008. However, I suspect that this masks the fact that many instances of VoIP (eg BT's broadband circuit-replacement service, or corporate IP-PBXs), don't make it obvious to the user.
• Over two-thirds of mobile broadband users also have fixed-line broadband
• UK mobile subscribers send an average 67 SMS per month (or 82 / month per head, taking account of multiple subs-per-person). MMS use is only 0.37 messages per user per month.
• Slight increase in overall fixed-line subscriptions in 2007 - attributed to business lines.
• Overall UK non-SMS mobile data revenues were flat in 2007 vs 2006 at £1bn. I reckon that's because the data pre-dates the big rise in mobile dongle sales, and also reflects price pressures on things like ringtones. Ofcom also attributes this to adoption of flatrate data plans vs. pay-per-MB.
• UK prepay mobile ARPU has been flat at £9 / month for the last 4 years. That's a big issue for operators wanting to sell data services to prepay subs in my view.
• 17% of mobile subscriptions in the UK were on 3G at end-2007, although there's not much detail on the actual usage of 3G for non-voice applications.
• Overall, UK households allocate 3.3% of total spending to telecom services. That's been flat since 2003 - ie the slice of the pie isn't getting any bigger relative to food/rent/entertainment/travel etc.
• 94% of new mobile subscriptions are bundled with handsets.
• 11% of UK adults have >1 SIM card. Among 16-24yo users, this rises to 16%. There's an estimate that of the second devices in use in the UK, 1m are 3G dongles, 0.7m are BlackBerries or similar, and 8m are genuine "second handsets". There's also another 8m "barely active" devices that are used as backups, or legacy numbers that get occasional inbound calls or SMS

Advertising and Mobile - Still a net spender, rather than revenue earner

In all the discussion about the opportunities for mobile advertising, it is interest to consider that at present, the wireless industry spends much more on advertising than it gains in revenue. According to this article, the US mobile carriers collectively spent $6bn in 2007 on ads.

I'd imagine that at a global level, the figure is probably $20bn or so - and that's without the handset marketing budgets as well, plus retailers & assorted others. This contrasts with about $3bn predicted in new mobile-based ad cashflow into the industry, which various observers expect to rise about 5x over the next 4 years or so.

In other words, the mobile industry is likely to be a net spender on advertising until well into next decade.

It also throws up another conundrum - how much mobile-operator advertising will go via the mobile channel? Will you get a Vodafone banner while surfing on an Orange-supplied phone?

Femtocells and MVNOs

ip.access' 3G-in-the-home blog highlights an interesting comment on Sprint's Airave femto service. Apparently some people have found that while installing Airave improves their Sprint handset performance and indoor coverage, it kills Virgin Mobile connections stone dead.

(Caveat - these comments are all 2nd / 3rd-hand anecdotes, so some harder verification of this would be useful).

The key thing here is that Virgin is an MVNO on Sprint's CDMA network.

I'm guessing that the RF components of the Virgin phones, when in range of an Airave, go "Oooh, what a strong signal, let's attach to that base station!". But then something in the Sprint femto gateway double-checks the provisioning system and says "No. You haven't subscribed to the Airave package, so get lost". And then for some reason the phone can't "see" the other macro cells nearby (interference? something else to do with cell selection?), and disconnects entirely.

It's made me think about the more general problems of MVNOs + host-operator femtocells. This is not something I've heard discussed at any great length, probably because most MVNOs today are 2G, but most femtos are 3G. But going forward, it's going to add another layer of complexity to femto business models and possibly the supporting architecture. It may also prove to be another reason for future femto-optimised handset modifications that involve improved mechanisms for cell selection and mobility.

Quick thoughts on Tunisia mobile & Internet

I've just got back from a week in Tunisia (hence the lack of posts). While I make a point of avoiding "work" as much as possible when I'm on holiday, I do keep an eye out for anything interesting mobile-wise.

I've spent most of the time in the coastal town of Hammamet, which attracts a mix of local North African (Tunisian & Algerian) & European tourists. I also spent a couple of days in the capital Tunis and elsewhere. For those that haven't visited the country, it's sort of "mid-table" in terms of economy and wealth - roughly on a par with emerging parts of Europe like Macedonia or Albania, or Latin American states like Peru and Ecuador, and a bit higher than China's average (but without quite the same urban/rural polarity).

The first thing to note is that both my phones (one on O2 and the other on 3) failed to access data roaming at all. Ordinary GSM voice & SMS worked fine, but with both steered towards the Tunisiana network, I couldn't even get GPRS access or WAP to work. Maybe there was some fiddling-about I could have done with APNs on the phones, but frankly I really wasn't that bothered to make the effort. In any case, the networks are only 2G - although the shops are full of 3G phones, as people seem to like high-end devices for other reasons.

As in much of the developing world, the main business model seems to be separate purchase of unlocked phones and SIM cards / top-ups. Phones are sold in air-conditioned & modern retail outlets (I saw a full range from basic $40 devices up to $1000+ smartphones), but SIMs/topups are sold everywhere from tiny grocery shops to travel agencies.

Apparently I could have got a prepaid data SIM, but that seemed like too much enthusiasm (and a temptation to remain "connected" when I'm supposed to be relaxing). Instead I turned my phones off, except for about 10 mins a day to check any personal SMS's and voicemails, and also made a 10-minute trip to one of the Internet shops to check my email on a proper screen. If you never switch your phone off except for when you're flying, you should try it sometime for a couple of days - highly therapeutic!

Interestingly, I didn't see any evidence at all of local people using mobile data. No people obviously using handset browsers. Apart from the airport, I saw no BlackBerries. All the numerous mobile advertising hoardings I saw focused on voice and SMS promotions. The Internet shops had a fair number of locals (young and old), and I saw a lot of advertising for ADSL services. In Tunisia at least, the oft-repeated concept of "first usage of Internet on a mobile phone" seems to be clearly untrue at the moment.

Inspecting the inspectors - reverse-engineering DPI

In October last year, after Comcast's heavy-handed DPI backfired, I wrote "I'm expecting quite a lot of Comcast-type attempts to be outed by people monitoring traffic flows and reverse-engineering what's causing problems."

Well, I see that a throttling detector has now been formally launched by the EFF.

I'm expecting Keynote-type live reports on ISP traffic-shaping tactics to emerge over the next year or two.

Eventually, it'll be a bit like a weather forecast "We're expecting some heavy VoIP blocking by ISP#1 this afternoon, with patches of throttled BitTorrent on ISPs #2-7 through the rest of tonight. The weekend looks pretty good though, with new neutrality laws from the US Congress and the European Commission coming into force on Friday evening".

Internet user base is growing faster than mobile in China

In recent days, I've seen a couple more stories along the lines of "The Internet will be dominated by mobile, especially in emerging markets". MobHappy wrote a post on how this might spell doom for Microsoft if the PC loses influence, and Tomi Ahonen has focused more on mobile as a media channel.

Regular readers will know that I'm rather skeptical of the supposed shift from PC to mobile devices, or from "The Internet" to more general mobile platforms for delivery of content or communications.

I've just come across something rather fascinating, which I'd argue backs up my point of view. China's Ministry of the Information Industry and Internet Network Information Centre both release copious quantities of statistics and reports on the uptake of different technologies. In particular, they publish regular stats on mobile subscribers and Internet users.

At the last count (a month ago, at end-June 2008), there were 253m Internet users, and 601m mobile subscriptions.

But there's an interesting twist. According to the CNNIC's last full report published at the end of 2007, "According to the survey findings of CNNIC, each mobile phone subscriber has 1.33
mobile phone cards [SIMs / subscriptions] in average". (It's on page 35 of the report, or page 36 of the PDF). In other words, there are about 450m unique individuals using mobile phones in China - considerably less than the 600m suggests.

I haven't got data on how that 1.33 number is trending, but it seems like multiple phone/SIM ownership in China is nothing new over the past year or two.

So I put together a quick spreadsheet on the growth in Internet users and Mobile users in China over the past few years, assuming that 1.33 number as constant. It makes interesting reading:

For those of you reading on RSS without images, it shows that over the last year, the number of Internet users as grown at a faster rate than Mobile users - 43m vs 41m in the last 6 months, and 48m vs 34m during the 6 months before that. By contrast, in the second half of 2005, it was 8m vs 23m.

What appears to be happening is that Internet use in China is being catalysed by wider availability of broadband, and more affordable PCs. 214m out of the 253m users are broadband-based. At the same time, there is some mobile use of the Internet - 73m users of the total access on phones - but virtually all of these are PC-Internet users as well. (There's no double-counting of mobile broadband as China doesn't have 3G yet). Looking at some of the charts on the CNNIC website, it looks like China's Internet use has hit a sudden point of inflection in the past 12 months, and is now on a steepening S-curve trajectory. Mobile is still growing extremely fast, but it doesn't seem to be accelerating at the same level.

This does not necessarily mean the same trends will be seen elsewhere in the developing world. It's worth noting that China is heavily pushing the rollout of fixed broadband - something which is much slower in markets like India and most of Africa. But it does suggest that China is extremely unlikely to have a future population of mobile-only Internet users.

One other interesting snippet from the CNNIC report - the average home Internet-connected PC has 2.7 users. This is worth remembering when considering all the stats on PC vs mobile handset shipments.

Reader survey: thoughts on Twitter?

I'm pretty skeptical of the value of Twitter.

Nobody has been able to construct an obvious reason why I should donate my time to get my head around it, play with it, update it, follow other people and so forth. When I've expressed this view at events and other online forums, the usual response has been "Oh, just start using it, and you'll understand the value over time".

I'm sorry, but that doesn't work for me. I don't like playing around with new social media tools "just for the fun of it", and my primary client-base isn't in the social media industry.

(Edit - the other argument I've heard is "You'll be able to have lots more conversations with lots more people". Which also doesn't work, as I already have more options for conversations than I have time. I unfortunately have to turn away briefings, conference speaking invitations, delay responding to emails and voicemails and deprioritise other interactions. I'd need to know that Twitter wouldn't just add to the problem, and that I'd be conversing with the "right" people more - ie the ones with unique and relevant knowledge, money to spend, or a good sense of humour).

I need a clear & immediate "win" if I'm going to take time away from other work or personal activities. There's a million bits of cool software, social media, or networking technology & events that I could invest time in, so what's special about Twitter? Would say, 4 hours "invested" in Twitter yield more revenue & value than 4 hours spent phoning or emailing some old contacts or clients, whom I haven't had a chance to catch up with in ages? Or 4 hours updating my website? Or 4 hours at something like Mobile Monday?

I'll contrast that with this blog, which I write because it yields obvious benefits in terms of visibility, interactivity with a knowledgeable audience, direct revenue and leads from new clients ("I read your blog regularly, can you also do XXX type of project or YYY type of event?"), and the ability to put down and "claim" ideas I have, when I don't have time to write up full reports.

On the other hand, Jonny Bentwood has highlighted just how many other analysts are Twittering away happily, so maybe it's time for a rethink.

(Socially, I'm totally disinterested in it - none of my non-industry friends have ever even mentioned it. Absolutely zero).

Now, I know that (obviously) quite a few people in the apps/Web part of my audience are avid Twitterers - but I have a variety of other avenues to reach them. Any comments on how you deal with analysts via Twitter would be interesting, nevertheless. But I'm more interested in people from the "techier" parts of this blog's readership - MNOs' radio and architecture and strategy teams, wireless infrastructure suppliers, device manufacturers, semiconductor vendors, regulators and so on. Do you already follow anyone "tweeting" on femtocells, or spectrum policy, or deep packet inspection?

Comments - either on this thread, or via email at FIRSTNAME.LASTNAME AT disruptive-analysis.com are very welcome. I'm willing to change my opinion on Twitter, but it needs to have a clear and demonstrable *business* return on my time. And the response "you won't understand until you've tried it" is unacceptable, as that generic argument could be applied to everything from religious evangelism to a new type of cheese.

Should device purchase subsidise connectivity, not vice versa?

Whether or not PCs come with 3G modems embedded (see the debate here) there seems to be a general belief that the way forward is to offer "free laptops" as long as someone signs up for a contract for either fixed or mobile broadband.

While I can see the appeal of this type of subsidy, I'm wondering if it is the wrong way around.

Given that millions of people seem pretty happy to stump up cash (or at least credit cards) for PCs at the moment, why try and dilute value in the industry by persuading them to get computers for nothing instead?

Why not try a different approach - have a $1000 (or $400) laptop, that comes with "connectivity for 2 years" included free in the price, or as a bolt-on upgrade option like extra memory? Lots of physical electronic products come bundled with some service element (eg a warranty) that eventually expires but could be renewed. Just like a warranty, you could have terms and conditions, excusions and policies.

The problem here for the MNOs is that they would no longer "own the customer". But so what? Customers are certainly not owned by the warranty company working with the dealer of their new cars either... but warranty companies are (generally) highly profitable.

This approach - "embedded connectivity" - and the reverse subsidy model of hardware purchase including "free service" isn't new in technology markets either. Telematics products like car tracking systems often come with a year's service included in the upfront price. Software may include a year's maintenance or upgrades.

This also gets around the thorny issue of monthly billing, as well as limiting the credit risk the mobile industry might expose itself to if it started to subsidise a good proportion of the world's roughly $100bn worth of annual laptop sales.