Thursday, March 26, 2009

Big is beautiful

Yesterday the guys here put on a great press conference for ZTE, and certainly the content seems to have struck the mood of the current climate. The Financial Times has reported on ZTE's "confidence" that it can maintain double digit growth in 2009 and, with a $15 billion line of credit from Chinese banks, can really drive market growth in the infrastructure market in Western Europe.

Indeed, it's this ability to offer vendor financing that Reuters picked up on as being the secret sauce for ZTE right now. With possible deals ranging from $100 million to $1 billion, it really is a game changer. If you can provide access to [affordable] financing, you're way ahead of the game.

The rationale behind the Chinese banks using ZTE as a route to overseas investments is fascinating yet simple ... Chinese banks have foreign currency which the government insists has to be invested overseas. But they don't know the international markets. They haven't got the presence, the heritage, the local understanding so how do they identify those investements? Simple. Partner with a company who does know the market, who understands the operators in the region and who can act as a channel.

While ZTE also launched a new touchscreen handset with T-Mobile UK yesterday (see pic on left) and reinforced its growing strength in the handset market (currently 6th, but targeting top three in next five years) it was a simple statistic which really brought home to me why the Chinese market is so fundamental to the shape of the telecoms landscape.

There are currently about 600,000 3G base stations globally (22,000'ish in the UK), and it took about five years to get to this number. China Unicom in the first phase of its 3G network roll-out will have 100,000 3G base stations.

This scale changes the economics. A 3G base station will become commoditised and the unit price will innevitably fall through the floor as vendors scale up production lines to meet this massive increase in demand. Oh, and ZTE is the largest 3G infrastructure vendor in the Chinese market. Do you see where this is all pointing ...

Tuesday, March 17, 2009

Follow the money

All of a sudden, mobile banking seems to be coming of age. Juniper Research has just put out a study predicting that the number of mobile phone users that use their phone for mobile banking transactions will exceed 150 million by 2011.

According to Juniper Research, mobile banking market is currently most advanced in the Far East, but that growing numbers of mobile banking services are being offered in North America and Western Europe. The developed nations of the Far East, North America and Western Europe are forecast to account for over 70% of the user base by 2011.

Also this week, and indicating that mobile banking isn't just about saturated mobile markets, MTN has announced plans to launch SIM-based mobile banking services in 21 countries across Africa. While regulators locally are a challenge they need to overcome in terms of agreeing just how these services will operate, the biggest issue is making the service usable and intuitive for the average subscriber.

So it's the user experience which is critical in driving mobile banking and mobile payments subscriber adoption... and with this we're seeing new companies like Pocit and Masabi emerging who are helping to change the rules of the way mobile phones can be used.

Developed by Aricent*, the mobile component of the Pocit application allows anyone with a credit card or bank account to make payments directly from the mobile application via a cell phone without having to know the recipient's specific banking details. Once registered with Pocit, a user can receive, send, request and store money. Optimising the processing and memory limitations of older devices while maximizing the features of new devices such as touch screens is no mean feat, but a critical factor if the app is going to be actually usable.

Masabi designs and builds secure applications mobile phones and is the leading developer of transactional software for the constrained environments of today's mass market mobile handsets. It's team of usability and security experts are working with national and international organisations in transport, banking & finance, theme parks & events, gaming and car parking in the provision of transactional payment and ticketing applications. Indeed, when it comes to using the mobile phone as a mechanism for micro-payments, the possibilities seem endless. (If you want a sense of what usability means in the world of mobile payments, check out the video of the Masabi mobile ticketing system.)

So with all the signs pointing towards mobile banking and payments technology maturing to the point of being ready for the average subscriber, it really is time (as MTN put it) to make the service available to as many consumers as possible and see what happens!

* Aricent is an AxiCom client

Monday, March 16, 2009

Here we go again

It's like a bad case of deja vu. As if we've learned nothing from the past, NTT DoCoMo is trumpeting its success in pumping an LTE test network up to the point where it can deliver 120 Mbs.

Amazing. Brilliant. Mobile broadband will never be the same again, right?

Well, maybe. But don't expect that speed on a network anywhere near you soon ... or indeed on any commercial network. The incredible speeds were realised in a "special testing area", using base stations straight out of the lab (not off the shelf) and only to a single device. Not exactly 'real world' now, is it.

It's an already accepted rule of thumb that in a commercial network the most a user will ever get is about half of the advertised 'peak rate'.

So while the headline lab-test speeds are great headlines, for a subscriber it is a still a bit of a moot point. Fixed line DSL guys have already got in trouble for failing to deliver on their broadband speeds, so mobile operators would do well to be realistic and tempered in the language they use to describe their own capabilities now that they are talking the language of mobile broadband.

Friday, March 13, 2009


Is there no end to it? Is there nothing Google won't touch? The launch of Google Voice signals the aptly named "web monster's" next move as it munches its way pacman like through anything that comes within even a whiff of the Internet.

The technology behind it is Grand Central, and when Google acquired them in 2007, it certainly gave an indication what was to come. And while eBay may have failed to work out what to do with Skype, that's because it was a service without an application. Skype is cheap voice ... and when I'm selling stuff on eBay, the last thing I want is people calling me. If I wanted to do that, I'd advertise in the local newsagent.

But Grand Central is different. It's an application. The hosted PBX model is almost limitless in the sort of applications it can let users access, giving the user complete control over almost every aspect of their experience, from ring-back tones to voicemail, from a single number that follows you across mobile, home and work phones to permissions and profiling of different caller IDs.

Ultimately, this is what it comes down to. If VoIP is just about trashing the cost of calls, then Skype is your answer ... and operators will hate it as they have no response. But if VoIP is about applications, about wrapping additional service wrappers around the basic call, then all is not lost for the operator. They have a way to fight back against Google Voice ... afterall, when it comes to voice, no-one knows that better than a telco.

Thursday, March 12, 2009

What's a network operator without a network?

It seems like a stupid question. I mean, if a network operator doesn't actually operate their own network, what's the point?

News today that Vodafone and O2 may be about to strike a network sharing deal means that there could in effect only be two mobile networks in the UK.

Such is the pressure on margins - and the cost of building and maintaining a network - the network sharing seems to be an innevitable endgame in markets such as the UK. With new spectrum auctions looming for '4G' services and the cost of LTE network build-out already causing nervousness among mobile operators, it seems the obvious thing to do.

But what does it all mean? One can't help thinking that by surrendering even a little control over the network, the operators are simultaneously surrendering some control over their own destinies. Will innovation run at the same pace? Will we end up stuck with a lowest common denominator network?

With evidence from people like Actix* suggesting that operators can slash OPEX by up to 30% through automating network status management and, ultimately, moving towards a self-optimising network, are things really so bad that operators have no alternative but to share networks?

OK, as in life, there may well be degrees of sharing (what's yours is mine, what's mine is mine etc.), but for network equipment vendors and landlords of tall buildings currently seeing a base station as their best bet for a tenant in the current economic climate, it's probably not the best of news.

* Actix is an AxiCom client

Wednesday, March 04, 2009

Another one bites the dust

It's always a sad day when a favourite brand bites the dust, and the demise today of RCR Wireless in the US is one such occassion.

After 25 years, in which it's covered pretty much everything that the telecoms industry could throw at it, RCR has shut up shop with immediate effect. On the day that ITV has announced worse than expected job losses, it's a sobering time for anyone in the media as the fall in advertising spending starts to bite.

Of course, in the case of RCR, there's also the double whammy of the shift from print to online and the fact that they were now facing a plethora of new information sources. How we consume our news is undoubtedly changing and publishers, just like the advertisers and PR peoople, have to move with the times.

Tuesday, March 03, 2009

Is broadband a utility?

The news today at OFCOM has given a green light to so-called "ultra high speed" and "super fast" broadband in the UK is long overdue. Not only has apparently been the norm for a long time in places as far flung as Corsica, but the fact is that even "average" or "walk paced" broadband would be a start for many in this country.

In fact, last time I did a broadband speed check at home, I registered the almighty speed of 90kbs. Oh yes. Dial-up speeds. And that's when I can even get my beloved Tiscali DSL connection to work.

However, while OFCOM CEO Ed Richards goes on the record as saying there are now "no regulatory in the way of investment in super-fast broadband", it's not really that easy, is it. For while the regulator may be waving the green light, or whatever the correct analogy is, the market needs to bite the bullet and make that investment.

BT's 21CN is of course, the first play to this end. And the growth of a wholesale market off the back of it will open up the market, are we seriously going to see the return of companies raising millions in capital to only then bury it under the street and hope that demand will be arrive before their money runs out.

At the end of the day, broadband access really is becoming a core utility. It's like your gas or electric ... a modern home can't operate 'off grid'. So while the government is busy pumping billions into saving the banks, maybe it's time they looked somewhere else to find the investment that will help pull the country out of recession and provide a launch pad for recovery.

Government investment in the Internet infrastructure of the country anyone?

Monday, March 02, 2009

Has Nokia lost its way?

It never used to be this way. They were unassailable. The undisputed grand fromage of mobile handsets.

So news today that Nokia has had to pull its new flagship device, the Nokia 5800 with touchscreen that was touted as the response to the iPhone, really is a sign that the times are a changing. The problem, it seems, is with connection to US 3G networks. While Nokia has never really had quite the same penetration in the US as in Europe, this is clearly a blow to a company suddenly playing catch-up in a market it had always led.

As if that isn't enough, operators are also losing faith in Nokia. Orange and O2 are, apparently, both "furious" at Nokia's plans to preload Skype on the upcoming N97. While some commentators venture that this may just be posturing by O2 which is obviously an iPhone house, just the fact that the operators are publicly lambasting Nokia is a sign of the times. Personally, I still struggle to see Skype on the handset as being a major threat to operator revenues, but it is definitely a sign of the wolves at the door for the operators.

So where now for Nokia? Well, the move into the music services play (again looking to play Apple at its own game) seems to be where they're heading. It has always been a battle of the brands between Nokia and the operators, but the battle for the subscribers' cash is also hotting up.

Sunday, March 01, 2009


WiMAX is fighting back. In-Stat has forecast that for at least the next few years, WiMAX will outpace LTE as fixed wireless operators come to market first with broadband services. Similarly, ZTE* has gone on record as predicting a WiMAX 'boom' in 2009, despite some of other major equipment vendors exiting the market.

That WiMAX will do better than LTE in 2009 is, of course, something of a truism. With the exception of Verizon which is ploughing on, operators are putting LTE roll-out plans on ice as the reality of the network build-out CAPEX hits home.

In-Stat reckons that HSPA+ will end up being WiMAX' biggest challenge ... and the same could be said of LTE. With Telstra already delivering 21Mbs and promising 42Mbs mobile broadband, the case for LTE from a pure speed perspective seems moot. OK, so the spectral efficiency of LTE means that ultimately, as mobile data traffic grows, they will have to migrate to LTE or else face diminishing returns as the cost of keeping the HSPA+ network at full throttle outweighs the revenue it enables... but at the moment, that's a problem of which operators can still only dream.

* ZTE is an AxiCom client