Wednesday, December 17, 2008

2009 predictions (well, everyone else is at it!)

As the year winds down with yet more gloom (though whether Voda's decision to stop sponsoring the England cricket team is credit crunch driven, or a result of their woeful result against India this week, it's hard to be sure), looking forward to 2009 has to be a bit more cheerful ... doesn't it?

So, in no particular order, what will be some of the themes for 2009...

1. Femtocells will be revealed as the emperor with no clothes. It's all the rage, all very trendy, but anyone actually have any idea on how the price point will come down to where it can be a consumer product? Will they actually solve the technical issues that are starting to come out of the woodwork as operator trials come to a close? They've been great PR fodder this year, but 2009 will see femtocells starting to talk the LTE story. Surely recognition that they've missed this first boat and are having to refocus on a technology that is still another couple of years off. Which means theme two will be ...

2. Start-ups running out of cash. Talk about self-fulfilling prophecies, but Sequioa seems to have single-handedly frozen the whole VC market. If companies were expecting revenue this year but see this pushed out, we'll surely see some bright ideas staying as just bright ideas and never coming to market.

3. Self-optimising networks (SON) have been talked about for a while, but now operators are starting to join in. Cutting OPEX will be a key focus in 2009 and, with the RAN accounting for the single largest expense, operators will look to move SON from theory as they look cut costs out of their business, while still delivering a true mobile broadband experience for subscribers.

4. LTE-this, LTE-that ... the down in the weeds techies will have their moment in the sun in 2009 as the underlying protocols on which LTE is built get their airing. From DPI to GAN, we'll see three letter acronyms flooding the market to explain other three letter acronyms. What's not to love about telecoms!

5. Mini-notebooks ... already a growing phenonoma, this new form factor will become the mobile broadband device. Embedding HSPA into the devices and bundling them with operator contracts will become the norm.

Friday, December 12, 2008

We're doomed Captain!

I was optimistic for a while (or is that naive?) ... when the big bad credit crunch hit I made the argument that the mobile sector would be relatively protected. Afterall, after the last telecoms crash cut out the fat in the industry so it's already lean and mean. Also, the research by the Joseph Rowntree Foundation in July claimed that a mobile phone had now now from being a 'luxury' to an 'essential' item in people's lives. Getting rid of your mobile phone just isn't an option.

But of course it cuts deeper than that and the news today that AlcaLu is cutting jobs is all part of the general doom and gloom.

So what does it all mean? Well, we're all going to have to work alot harder to make the case for the business benefits of technology. In a recession, you have to cut costs out of a business and technology is the path. Hence we're seeing debates around, for example, Unified Communications develop from being focused on productivity gains to have a clear recession-busting slant.

How technology plays into these 'new economics' will be the key battleground, I suspect, of 2009. And as we know, if you frame the debate, you have a much better chance of winning the debate!

Thursday, December 11, 2008

Top 10 Mobile Brands

Today, Mobile Communications International has published a list of the "most valuable operator brands". In many ways, it's a list of the usual suspects, Voda is #2, followed by the T-Mo's, Oranges and Verizon's of the world. However, seeing China Mobile at #1 struck me as interesting ... and I can't help thinking it's a bit skewed. Yes, China Mobile has got a growing list of subsidiaries around the world (for example in Pakistan), but ranking a brand by value when the quirk of fate has it operating in the largest market in the world does seem to distort things.

So, what's the unscientific 'top 10'? The list of the top 10 operators who are 'most interesting'?

#1 - T-Mobile US ... forced to act like the new entrant, their 3G roll-out has happened at world record speed and are using UMA technology to deliver aggressive homezone priving and services to grab market share. Oh, and don't forget they're right out there at the forefront with the Google phone.
#2 - Orange ... they're pioneering FMC strategies and, with services like Unik, at the bleeding edge of technology
#3 - Softbank ... to be honest, I don't know much about these guys apart from the fact that if there's something new to try (e.g. femtocells), they're bound to be at the head of the queue of operators trying to work out how the hell they can make money from it!
#4 - China Mobile ... ok, ok, I'll defer to the 'pros' and put them high up the list. They're big. They're the 800lb gorilla to watch. So they're on this list because we should forget about them at our peril!
#5 - Sprint Nextel ... bless 'em, they're trying to build a business case for WiMAX. They deserve points for at least trying, don't they? Certainly by the criteria of are they "interesting", they certainly make the list.
#6 - NTT DoCoMo ... the Frank Sinatra of the industry ... yep, you got it, they'll do it their way!
#7 - Reliance ... anyone of a host of the Indian operators could make the list, but Reliance have always been the ones to grab my attention at least. Real innovators in some of the services they're delivering, making massive strides in terms of growth and definitely one to watch.
#8 - O2, AT&T (and any other operator who took the iPhone) ... if you're making enough money to be able to give a huge chunk of change to Apple, good luck to you. But when you look at some of the stats coming back (certainly from AT&T whose network has been crushed by the data usage driven by the iPhone) they are demanding attention
#9 - Telefonica ...They could (they should?) be up there with Orange / FT ... they've got it all, the mobile, the fixed, the geographies ... a sleeping giant
#10 - Vodafone ... maybe I'm just deliberately contrary, but god are Vodafone boring. Technology innovators? Hell no. Most interesting as a brand because increasingly that seems to be all they are. And just who are they competing against?

You may quible (and I'm sure you will) with who's in the list and where, but the point is this... if you're looking at who the innovators are, who are the operators who are leading, rather than following, you start to see a different list.

Leadership can obviously be defined in all manner of ways. But what ever definition you use, when you put your PR hat on, there's only one measure that matters ... are you interesting!

Wednesday, December 03, 2008

Better late than never?

Finally. Nokia has come out with what is purported to be its response to the iPhone. Oh, and its response to the Android-based G1 from T-Mobile/Google. Oh, and to the Samsung touch screen phones. Oh, and to the ...

Can you see what it is yet, as Rolf Harris would say?

For a company that is the market leader, Nokia's complacency has been stunning in many respects. It seems to have been either blindsided by Apple and Google, or just been unable to demonstrate the rapid innovation that propelled it to its current position. While Nokia has nailed the business market with the E and N series, in the consumer market the threat from the new guys has been a sharp one.

There are clearly some constants emerging across all these devices that point towards where the mobile industry sees (hopes) mobile data will come from. No longer is video the great hope. Social networking and widget-based applications are now the big thing.

If you look at the sort of data usage being reported back from operators who are supporting (and that also means bankrolling giving the slice of cash they have to hand over to Apple), it's clear that these devices are the catalyst for a dramatically increased data usage by subscribers.

Of course, Nokia is making a much bigger play that just shipping shiny phones. Just looking at the other announcements it made at its Barcelona event where it unveiled the N97, and there is news around Nokia Maps, Nokia Messaging and its acquisition of Symbian.

Google v Nokia. It's an OS war. It's a handset war. It's a content war. And looking at the pace of innovation in both companies and their ability to really understand the consumer and where they are heading ... you'd be crazy not to have at least an each way bet on Google to win.

Tuesday, December 02, 2008

Mobile set to beat enterprise VoIP to the punch

Interesting report out today from Analysys Mason which claims that as businesses look to cut their communication costs, it is fixed-mobile substitution and not enterprise VoIP that will hold sway.

Interestingly though, we're not looking at WiFi voice (ie enterprise FMC services) here, but rather mobile operators slashing their wholesale costs so the rates for large business customers are plummeting.

According to analyst Margaret Hopkins: “As fixed–mobile substitution continues, enterprise interest in FMC is still being driven by a desire to reduce mobile bills, especially for calls from fixed to mobile, and for roaming charges. The opportunity for integrating Wi-Fi and cellular voice depends on these charges remaining high.”

So, mobile operators are responding to the challenge of VoIP. Well, that's a good thing, isn't it?

Yes and no. They're responding by cutting margins not by cutting their costs. If Analysys Mason is right, the fixed line guys like BT will continue to struggle and the mobile operators will win the battle for the building. But at what cost?

Mobile operators need to do more than just cut call charges ... that's all a bit too much like the fetish with 'eyeballs' and to hell with what the revenue ie. And we all know where that ended.

But if they can be a bit more innovative then they really can land the sucker punch. Maybe it's a case of extending UMA-based services from the consumer to the business market? Or maybe offloading traffic on to the enterprise network so they can reduce their costs by using the customers IP network instead of their own backhaul. If the operators are winning this battle, it's a good sign for the companies in the business of these sort of technologies.

For the vendors doing enterprise VoIP though, well, it's a less promising lookout.

Friday, November 28, 2008

EU Roaming ... but what about the fraud?

The EU has finally bitten the bullet today and announced it will introduce measures that will slash the cost of sending a text while abroad and reform the way phone operators charge for data calls made when customers roam.

For the subscriber, this is clearly great news. But for the operators? What does it mean?

Well, if you look at the issue of roaming fraud, it soon becomes clear that squeezing the margins on roaming could have a significant impact. Roaming fraud represents one of the most prevalent forms of revenue leakage for mobile operators today. A constantly growing and mobile population of subscribers is incurring losses for operators largely down to outdated roaming processes. A ccording to a GSMA survey in 2007, operators are routinely suffering losses in the region of EURO11.1 million over a two-year period, making it a very real threat to an operator’s bottom line.

A retail cap of €0.11 per roamed text message (down from an average of €0.29) on the 2.5 billion text messages sent every year by roaming customers in the EU is bad enough. Add to that the wholesale cap of €1 per megabyte of roamed data also announced and it’s clear that operators need to get their houses in order and put in place the revenue assurance systems that will enable to them to wring every last cent out before the revenue stream is throttled.
India ... some good news on a bad news day

While the world's attention is focused on the shocking events in Mumbai, it's easy to be drawn into a spiral of doom and gloom. India is a country I know well and love even more. A country full of diversity in all the best and worst that that implies. But it's richness is something one can't deny.

The potential of the country is similarly unarguable.

The Telecoms Regulatory Authority of India (TRAI) has just announced that 10.42 million mobile subscribers were added in October alone. This follows on from 10+ million in September and over 9 million in August ... making a staggering 92.1 million new mobile subscribers in 2008 so far and a total of well over 325 million nationally.

It's easy to see both why the likes of Vodafone and Telenor are making big moves on the market ... and on the flip side why behemoths like Tata are now undisputed global companies.

Ultra-low cost handsets will undoubtedly further drive the unquenchable growth in Indian mobile subscribers. But is that enough? Is it enough to just add more and more subscribers ... especially when the ARPU per subscriber is going to get ever smaller as less well off communities become connected?

India, however, can also give us much to learn about mobile content ... a continent with such a passion for music, where Bollywood stars make the Hello Magazine faces of the West seem anonymous in comparison; with such a passion for sport, where cricketers are not only megastars in the true definition of the word but are reinventing a sport and, despite the poverty in parts of the country, contributing over 70 percent of the money in the sport globally ... such a market is going to offer up rich potential for mobile content.

Well, provided the networks can cope, the pricing and business models make sense, and the right sort devices are in the hands of subscribers.

So, while there is understandable concern about the recent violence in Mumbai (and don't get me started on that ... Indian history and politics is my first love and I could wax lyrical for hours!) the potential of India remains undimmed.

Thursday, November 27, 2008

It was only a matter of time ... the great branding machine that is Apple has been pulled up by the regulator. Only its the advertisting regulator (the ASA) not the telecoms one (OFCOM) that's done the deed.

Apple may be redefining the mobile user experience with the iPhone but it's also had to finally accept that it can't control the whole experience. It's dependent on the mobile operator and their network.

So what does this all mean? Well, Apple is taking a risk with its brand. Suddenly, the Apple experience (or is that the "i-xperience"?) isn't controlled end-to-end by Stevie J. There's a crucial link - the mobile network - which has a massive impact on the user experience and is beyond their control.

Not only that, but if you look at the stats being reported back by the likes of ATandT about the impact the iPhone is having on their network, and you realise that the mobile network is creaking under the strain. The mobile operator's getting hammered. The iPhone experience is getting hammered. And now, finally, the regulator has stepped in and pointed out to Apple that there is a real world out there, inhabited by real people who are using the iPhone to do real things.

So let's applaud Apple for doing what they do best ... creating and sharing a dream. But let's also remember that dreams can be interpreted in multiple ways. And how the subscriber interprets it will depend on the quality of service on the mobile network to which they are subscribed.