Telecom TV has a good panel discussion of convergence and business model implications for telcos from over-the-top applications. The panelists are Alan Meehan, CEO of INQ, and Alan Nunn, Head of Services, Intelligence, Applications BT Innovate.
I guess there were four things that stood out to me, that:
- the walled-garden approach is not sustainable (not that I needed convincing of that)
- there is a clear drive to “make the Internet real” for mobile users
- we can expect continued innovation in communications from applications development
- innovation and growth is happening in the web and a lot of the focus is shifting to mobile connectivity.
From the INQ perspective, “making the Internet real” is in making it easy to use what their target market wants – Facebook, Instant Messaging and Skype. Now, what these applications have in common is that they are used to keep in contact with people. I suspect that Telstra’s “phone mum” advertising campaign actually resulted in a lot of those connections being over Skype or Facebook, not a phone call. In short, connectivity for many people these days does not involve making a traditional phone call.
Alan Nunn spoke about some going innovation, such as converting speech to text, arising from BT’s acquisition of Ribbit, an IP phone company.
There is also some interest insight about mobile network investment decisions such as stringing out HSDPA & deferring optic-LTE roll-outs, and the anticipated roll-out of femtocells. Nonetheless, the end-game is expected to be LTE, taking IP to the edge and cutting through the remnants of mobile operator walled-gardens.
It’s all another sign of the de-coupling of content from underlying infrastructure – a market-led separation in fact, driven by what the consumer is doing.
Following on from my recent “Mobile Internet’ posting, a message (some would say ‘vision’) - that the future is mobile – is one that the wireless industry has been on about for about four or five years now. It’s only recently that there are signs in Australia of the promise coming to fruition. But there are two distinct offerings at play.
3G operators like ’3′
offer mobile broadband dongles (modems) for as little as $20 month for 1GB (upload + download). Just plug the modem into your PC or laptop and away you go – just like fixed network broadband access. There is an article in today’s The Age
about the high demand for this form of wireless broadband in preference to fixed-line broadband. What’s more, the networks seem to have plenty of capacity to make these offerings – acting to stimulate demand rather than building more capacity (as the fixed line networks must do) in response to demand.
Meanwhile, 3G operators continue to offer mobile phone plans including voice, video/TV and data services…oh, and the mobile Internet.
The distinction is that mobile phone plans are run over the GSM cellular ecosystem (i.e. integrating service access, addressing and billing systems). This operating systems enables carriers to charge for every transaction, differentiating based on what the traffic is. It’s that charging capacity that carriers want to take forward to the brave new world of 4G with the IMS
(IP Multimedia Subsystem) standard. That appears to be the issue of so much concern to Joi Ito.
advertising captures this interplay between the two offerings well in its blurb “The Internet should be free”. Get their mobile modem for no charge….as long as you purchase the bundling home or mobile phone package.
In summary, there are two ‘mobile Internet’ offerings available – one that may well have content and voice service provision tethered to the network and one that is just another broadband internet access service (but one that is mobile). The broadband internet accesss offer resembles a commoditised utility service. The mobile phone plan offering is consistent with the more familiar telecommunications offering of any-to-any connectivity for voice, video, messaging and some data.
Here is an interesting posting by Joi Ito. The open, innovative and competitive nature of the internet is compared with the closed ecosystem of the mobile phone industry (an industry that is operated by comparatively few players). Joi essentially questions the ‘fit’ of the internet with the mobile sector.
In a world that has over 3 billion mobile phones as against 1.3 billion internet users, there is no question that the mobile phone and the internet are highly valued respectively. While the open nature of the internet has generated so much growth in the communications and media industry, people love the convenience and usefulness of their mobile phones. It will be very interesting to see how these two stand-out forms of connectivity will evolve over the next few years, and what will come from the influence of one on the other.
Susan Crawford has posted a useful perspective on the ‘open’ conditions placed on C Block spectrum (in reference to the recent FCC auction, USA) and what is possibly a strategy to get around them. Bear in mind that the intent of the open conditions rules is to decouple applications and devices from the underlying network, thereby promoting innovation and choice.
There are fundamental issues at stake here in the migration of voice and multimedia to wireless IP networks. Verizon’s strategy appears to be a reassertion of the telecommunications model of vertically integrated, fully managed and billed services. As Ms Crawford observed, that’s not the internet.
The strategy underpinning Verizon’s business model hinges on the successful deployment of IP Multimedia Subsystems (IMS). Developed by the mobile industry standards group 3GPP, IMS was developed as an evolutionary replacement to GSM (an ecosystem for cellular networks inclusive of billing systems). IMS allows for traffic discrimination, billed according to network operator requirements. As an industry standard – as with GSM – IMS is a standardised set of specifications for devices to connect to broadband wireless networks.
Susan’s posting also provides a view on government’s role in this context:
- In cooperation with industry, develop a standard set of specifications
for all devices to connect to broadband wireless networks
- Ensure the specifications do not unfairly discriminate
- Police the industry to ensure that industry effective comply with the
policy intent of de-coupling networks from applications and devices
Verizon’s mobile sector strategy in the United States is a test between vertically-integrated, fully managed networks vs. the open nature of the internet. What’s more, my understanding is that IMS could be deployed in wired networks as well. Will openness win over closed systems in the long-run?
The mobile industry is booming with service providers, making it easy for customers to access all kinds of media and information. The only problem is that the carriers are letting themselves turn into nothing more than information pipes for other companies to take advantage of, says Vodafone CEO Arun Sarin.
Exactly so, and supports my analysis. Innovation in the computing world is quick, user responsive and highly competitive – challenging for telcos indeed.
read more | digg story
Driven by high levels of growth globally, expanding functionality and high-levels of personal attachment that users have to their devises, it’s no wonder that companies like Google see mobile as their future. It is worth while taking a look at the strategic moves at play.
A clash between web-based and telecommunications business models and culture is evident. World-wide-web services are provided independently from the underlying infrastructure – at odds with tradtional voice and data telecommunications services. Google is promoting that same openness…to a mobile industry used to being in control. Web-based innovation and use is driven from ‘the edge’…while telecommunications operators do not want their services to be commoditized.
Looking more closely at telecommunications companies, those operating 3G networks manage end-to-end operations through specifications and standards developed by 3GPP the industry standardisation body. Radio-frequency spectrum bands for mobile networks are allocated to network operators under exclusive-use licences. Overall in the mobile sector, voice and SMS remain the highest revenue-earning services. There is a clear preference by at least some 3G service providers to control multimedia and web services. Telstra’s NextG service marketing promotes unmetered access to online directory, music, photos, TV and blogging services provided by…Telstra. Mobile network consumer behaviour and usages pattern information is usually restricted – far more so than the ‘world wired web’.
Things are changing of course. Standards developed by the computing sector (such as SIP) are being incorporated into the telecommunications industry adaption of IP-based networks under the so-called ‘next generation networks’ change program, delivering amongst other things multimedia, presence, instant messaging and voice-over-IP services.
Now, lets take a look at the web-perspective. According to Reuters carriers that Google has signed-up for Android (it’s open-source software to make the internet work better on mobiles) include Deutsche Telecom and T-Mobile. China Mobile, NTT DoCoMo, KDDI and Telefonica have all signed up to Google’s Open Handset Alliance. The momentum builds…but it is early days yet. The FCC’s open spectrum policy has yet to be tested.
In summary, different approaches are obviously at play…based on differing assumptions about the inter-relationships between networks, content and user innovation and choice.
User reaction to mobile web services will be very interesting. People are used to getting content of their choice. Apple’s experience with hackers making merry with i-Phone code is one example of this expectation expressing itself in very clear terms.