UK: SMS replacing Voice

Tomi Ahonen writes: “Consider that voice calls for the majority of UK users – prepay (voucher) customers declined over the past year by 28%. Voice calls by postpay (contract) customers declined by 22% last year. But over the same time SMS text messaging grew by 43% ! The UK now averages over 6 text messages per day ! That is rapidly catching up with world leaders where in South Korea they average 10 SMS per day per phone subscriber, Singapore averages 12 per day and the Philippines average 15 SMS per day. The European average is under 2 SMS per subscriber per day (and American averages are still near the one half text message per cellphone subscriber per day rate).”

Mobile Data Industry

Ajit Jaokar writes about the four holy cows. “which I think are not so sacrosanct on reflection. Inbuilt in these ideas is the belief that the Mobile Data Industry is a different incarnation of the Internet. So, here are the four principles, which we take for granted today, but are severely limiting the industry.”

– The obsession with Mobile Youth
– User interface(UI) is the key factors for success
– Quality of service(QOS) is a critical factor
– The Mobile Data Industry is different from the Internet

Mobile Phones and Economic Growth

The Economist writes about a paper by Robert Jensen, which has the story of how mobiles helped the Kerala fishermen increase incomes and pay for the mobiles:

Fishermen’s profits rose by 8% on average and consumer prices fell by 4% on average. Higher profits meant the phones typically paid for themselves within two months. And the benefits are enduring, rather than one-off. All of this, says Mr Jensen, shows the importance of the free flow of information to ensure that markets work efficiently. Information makes markets work, and markets improve welfare, he concludes.

Micro MVNOs

WSJ writes:

Sonopia Corp. allows any organization or club to start a wireless company “in 15 minutes or less” online. The company, based in Menlo Park, Calif., has signed up nearly 900 organizations to create their own service, with relevant features, news and content for members of their respective groups.

Sonopia helps each organization design custom phones based on existing handset models from major manufacturers, and it helps the groups lease network access from Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, to carry phone calls and data. Sonopia also manages monthly billing and customer service.

Most of the micro-niche providers aren’t in it for the money — and that’s a good thing, considering they only get about 3% to 8% of the revenue from monthly service plans. The rest goes to Verizon and Sonopia. Instead, most of the groups use the service as a self-sustaining way to promote themselves or their causes and keep members or customers engaged.

Open Wireless

VentureBeat has an article by Ram Shriram about the US market, but it applies equally well to the Indian market:

Wireless devices, meanwhile remain stuck in the walled gardens.

The same goes for applications, services and protocols. Opening wireless broadband to new market entrants with open devices, open software and open IP services is critical to continued innovation in new devices, new services and new mobile web applications coming out of Silicon Valley and elsewhere.

Similarly, to promote innovation in services and applications for consumers in the wireless world, a better model is needed than the current status quo. A key ingredient to change this is that competition should be fostered.

Mobile Handset Makers

Hampus Jakobsson writes:

Mobile phones will increasingly resemble platforms, but no one in the manufacturing part of the value chain will want a new Wintel, i.e. a singular platform. The manufacturer-operator battle is clear and a dividing line exists between the two the players above this line (operators and service providers) want all handsets to be the same for their applications, services, advertisements, etc. The players below (the handset OEM) dont want to become too platformized and end up like set-top-box manufacturers (I love asking people what the brand or even manufacturer of their set-top box is. Many answer TiVo or some other non-manufacturer; little knowing or caring about that it is built in Taiwan or China.

The way forward: handset OEMs are either building services or service platforms of their own, or are creating a flexible white label solution for third parties. Look at Nokia Ad Service, Content Discoverer as well as Motorolas Screen3. Rumors say that Google is having close talks with LG and Samsung, two hardware centric manufacturers, who should watch out for platformization. Why would Motorola not just use uiOne and why does Three remove the Nokia Active Standby? Because being able to enable third parties to monetize the mobile platform, but keeping control of the user experience will be a promising post sales revenue stream.

US Mobile Data Services

mocoNews.net writes about a study of mobile surfing habits in the US context:

Once users figure out they can search theyre likely to become power users. Put another way, users who dont use the mobile Web naturally dont know about or need mobile search. So, its up to the operators to encourage users to do both by introducing cheaper data rates and educating users about why (and how) they should use mobile search in the first place.

The real shocker is the overwhelming popularity of Internet search engines. Operators shouldnt give up trying to deliver search services under their own brand; they have to try harder. Users who search on their mobiles are likely repeating their PC search habits, and will continue to do so until operators can show them an alternative. Its a nascent market and there is plenty of room for made-for-mobile search engines and services. The burden is on operators and their white label partners to earn their place. As always, the best user experience will win in the end.

Mobile Operators and Third Parties

Ajit Jaokar discusses how should mobile operators integrate third parties into their network: “My view is: in an IP world, as the Mobile Internet mirrors the Internet, the Operator should focus on the core of the network and leave the edge of the network to third parties. Specifically, this means identify the elements that can be performed ONLY in the core and then abstract them through APIs. This approach gets us away from the dichotomy of the pipe vs. no pipe. It also means that the Operator retains control.”

Global Wireless Data Market Update 2006

Chetan Sharma provides an update: “# 2006 was a great year for mobile data. Revenues from mobile data were up in all major regions and for all major carriers with data contributing double digit percentage to overall revenues in most cases. The overall subscriptions rose to approximately 2.7B and we should be crossing 3B by the end of 2007. The wireless industry is on its way to gain the quickest billion subscribers within the next 3 quarters. Japan led the way with almost $20B in annual mobile data revenues. US and China were next with $15.8B and $9.2B respectively.”

Mobile Youth Report

Xen Mendelsohn talks to Savka Andic, Research Associate at the Wireless World Forum, about the report:

Geographically speaking, China, India and Brazil will continue to be key markets for the next five years, all three of them ripe for growth. In the more mature markets, mobile content is still very much an emerging market for youth with a lot of potential. Operators and content providers are not yet finding the best ways to satisfy youth desire for mobile content, with the notable exceptions of youth MVNOs such as Ampd Mobile in the US and the East Asian operators. Ampd Mobiles success shows the considerable appetite which youth have for mobile content: an ARPU four times higher than the US/European average and content revenues nearly ten times higher than the US/European average.

Nokia 1100 #1 Consumer Electronics Product

The Mobile Technology Weblog points to a Reuters report which says that Nokia has sold 200 million units since 2003.

In the consumer electronic charts, Apple’s iPod reached the 100 million mark last month, Sony’s PlayStation 2 had sold 115 million by end-2006 and Nokia’s earlier top seller, the 3310/3330, sold 126 million units up to its retirement in 2005.

With sales of more than a million phones a week, the 1100’s volumes are comparable to all the phones made by the world’s fifth-largest vendor, LG Electronics, and not far behind Sony Ericsson, the fourth-largest player in the industry.

Mobile Ads in China

Business Week writes:

China’s mobile advertising market was valued at just US$17 million last year, well below the US$40 billion spent on ads in total.

A new kind of mobile advertising technology, however, could be the key that unlocks the country’s 461 million mobile phone screens to advertisers.

The technology uses two-dimensional barcodes, a more evolved cousin of the humble Universal Product Code found on groceries, to create an advertising channel with an aura of science-fiction.

MVAS in India

The Mint has a story about mobile VAS companies going direct to consumers. There are a few quotes by me:

Rajesh Jain, founder and chief executive officer at software solutions provider Netcore Solutions Pvt. Ltd. said mobile content providers would find it difficult to go directly to the consumer because billing remains a problem and because of that, mobile phone operators will dominate.

Operators need to realize that the market can only expand when you let a thousand flowers bloom, he said. Only with an open publishing platform is made open, will you see the next jump.

In China, content providers get 80% and in Japan they get 90% of the revenue, noted Jain, whose company has its own mobile portal. These changes are still a pipe dream.

Economist Telecom Survey

The Economist writes: “New wireless technologies will link not just people but lots of objects too. That will be tremendously useful; but getting there will be tricky.”

In years to come, wireless communications will increasingly become part of the fabric of everyday life. David Clark, a computer scientist at the Massachusetts Institute of Technology who helped develop the internet, believes that in 15 or 20 years’ time the network will need to accommodate a trillion devices, most of them wireless. To illustrate what that world might be like, Robert Poor, the co-founder of two wireless companies, Adozu and Ember, uses a modest example: light fixtures in buildings. If every one of them contained a small wireless node, people would not only be able to control the lighting more effectively but put them to many other uses too. If the nodes were programmed to serve as online smoke detectors, they could signal a fire as well as show its location. They could also act as a security system or provide internet connectivity to other things in the building.

SMSing

Tomi Ahonen writes a letter to American executives to start SMSing. “I have the biggest key to your professional success, if you are an American executive today. Join Generation-C (Community Generation). Then the defining ability is not that you can Google, or set up a profile in Myspace or LinkeIn, or create an avatar in Second Life create user-generated content. No. Like we wrote in our book, the defining characteristic of Gen-C is addiction to SMS text messaging.”

Mobile Advertising

mocoNews links to a post by Chetan Sharma and writes:

Chetan Sharma…chaired at the PAN-IIT event on Mobile Advertising – Technical Challenges and Business Opportunities. An interesting thing to look at is what the mobile advertising industry was forecast to be by 2005 by analysts at the turn of the centurybetween $890 million and $6.8 billion. In 2006 the actual mobile advertising market was $421 million. On the panel everyone was bullish about the industry (not surprising since theyre all in the industry, Infospace, Medio, Google, Voicebox) but they cautioned it will take time because the reach is not there yet.

A comparison was made with Japan: Japanese Mobile Advertising market: Clearly, Japan has had more experience with Mobile Advertising than rest of the markets. In 2006, the average revenue/user/year stood at around $4. For US, this figure was less than $1.

China Mobile Numbers

For all who get excited about the mobile numbers in India, take a look at China Mobile. From WSJ:

The listed arm of China’s largest mobile carrier by subscribers reported net profit of 17.56 billion yuan ($2.28 billion), up from 14.36 billion yuan in the year-earlier period. Revenue increased 20% to 77.71 billion yuan.

The company added 14.89 million subscribers in the first quarter this year, up from the 14.08 million users it added in the fourth quarter. It added 5.12 million subscribers in March, up from February’s addition of 4.91 million subscribers. China Mobile had 316.12 million subscribers as of the end of March.

Average revenue per user per month in the first quarter fell to 85 yuan from 93 yuan a year earlier.

The company’s earnings before interest, taxes, depreciation and amortization rose 14% to 40.72 billion yuan. Its margin for earnings before interest, taxes, depreciation and amortization, or Ebitda, was 52.4%.

Nokia N95

Engadget has a review: “Cost aside, this is one of the best smartphones and perhaps the best S60 device we’ve ever laid hands on, but let’s be honest, $750 can be a tough pill to swallow — especially considering we get nothing better than EDGE data.”

New Broadband Network

AllwaysOn writes:

John Doerr asserted the FCC will approve at least one new broadband network in the next year, wresting broadband power from the current duopoly of cable and telephone companies. His prediction was the second of the night at the Churchill Club’s ninth annual Top Ten Tech Trends Debate.

Doerr was not shy about the impact of this imminent approval: It could be the single most important thing we could do for economic development in the next ten years: get more broadband freely available. And if it’s ubiquitous and nearly free, he added, mobile devices “are really going to displace PCs.”