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MBS Seattle – Operators and OTT – The Way Forward May 29, 2012

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Mobile Breakfast Series

http://mobilebreakfastseries.com/

Operators and OTT: The way forward

Seattle, June 7th 8:30-10:00am

Operator traditional revenue streams are under threat esp. voice and messaging. Access margins will continue to stay under pressure. OTT players are coming in fast and furious and it is not just the big ones like Google but also players like Whatsapp, Voxer, Viber and others. How do operators play in the new landscape – lessen the decline of their traditional revenues while investing in new areas that improve their overall margins and revenues. Do they play the role of an enabler, a utility player, or become the OTT player themselves? In a software-driven world, how do they stay nimble? On the flip side, what are some things that operators can provide to the OTT players that make them successful, take them to the market quickly and maintain a long-term healthy and mutually-beneficial partnership? Operators still generate 70% of the global mobile industry revenues, so they are an important part of the chain but how do they ensure they have an equally relevant share in the profits. The panel will discuss how operators and OTT players think about the challenges and the opportunities, the competition and the coopetition.

Abhi Ingle, VP, Advanced Technology Solutions, AT&T

Abhi Ingle leads the national Industry & Mobility Application Solutions team which has responsibility for solution sales to the business customer segment. Prior to this role, Ingle led the Business Solutions marketing and products organization, overseeing wireless data products and marketing programs for business customers. Abhi spent several years at McKinsey and Company where he served technology, consumer package goods and financial services clients on strategy, marketing and sales engagements.

Michael Shim, VP – Mobile, Groupon

Michael Shim is the Vice President of Mobile Partnerships and Marketing at Groupon. He is responsible for developing the company’s partnerships with wireless operators, OEMs, mobile platforms and developers worldwide in addition to overseeing mobile marketing in the U.S. Prior to his current assignment, Michael served as Vice President, Mobile Partnerships and Business Development at Yahoo!, where he was charged with developing Yahoo!’s mobile leadership and deep relationships with more than 100 mobile partners around the world. In addition, Michael has held business development and strategy positions at AOL and began his career as a corporate lawyer with Simpson Thacher & Bartlett where he specialized in M&A and securities offerings in the telecom, media and technology sectors. Michael holds a B.A. from Georgetown University and a J.D. from Cornell Law School.

Alex Samano, GM - Bobsled , T-Mobile USA

Alex is one of a handful of internal business entrepreneurs at T-Mobile USA. Over the last seven years he has been responsible for building out new business units as General Manager. Alex has raised over $34M for businesses now delivering $600M+ in annual revenues for T-Mobile including: Bobsled by T-Mobile, T-Mobile @Home, Wi-Fi Calling, and over 10 different T-Mobile branded applications. Alex’s work has led to over 25 patent filings by T-Mobile USA in the last 4 years, where he is listed as an inventor. The New York Times, PC World, Engadget, TechCrunch, CNET, and Information Week have featured Alex’s work.

Rob Glaser, Chairman/CoFounder, Sidecar

Rob Glaser has played an integral role in the transformation of the Internet into the next great mass medium. He founded Real Networks in 1994 and served as Real‘s CEO from February 1994 through January 2010, leading the company from scratch to a public offering in 1997 and over $500 Million in annual revenue by 2008. Prior to founding RealNetworks, Mr. Glaser worked for Microsoft for 10 years in a number of executive positions, including Vice President of Multimedia and Consumer Systems. In addition to co-founding Sidecar, in May of 2010, Mr. Glaser also became a Venture Partner with Accel Partners with a focus on digital, mobile, and social media. In addition to his commercial endeavors, Mr. Glaser is active in civic and philanthropic matters. In 1993, he founded The Glaser Progress Foundation which has made over $25 Million in grants focused on 4 program areas: Measuring Progress, Animal Advocacy, Independent Media, and Treatment and Prevention of Global HIV/AIDS.

Mary Jesse, CEO, Ivycorp

Ms. Jesse is a seasoned technology and business professional with 25 years of experience in product development and delivery. She holds Bachelors and Masters Degrees in Electrical Engineering and is listed as an author on more than 12 U.S. and International Patents. Ms. Jesse has held a variety of executive positions including Vice President of Strategic Technology for McCaw Cellular Communications, Vice President of Technology Development for AT&T Wireless, Chief Technology Officer and Co-Founder of RadioFrame Networks (delivering small scale wireless base stations and 2G/3G femtocells), and the Founder of Hexagon Blue Consulting (wireless systems and public safety communications consulting for police, fire and emergency personnel). Ms. Jesse was instrumental in developing and deploying the first large scale wireless data systems in the U.S. and has led development teams in the architecture, design and launch of numerous systems and products. Mary Jesse is a Licensed Professional Electrical Engineer.

FiRE: The Future of Mobile Computing

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Last week i had the good fortune of moderating a panel discussion about the future of mobile computing with three really smart CTOs - Henry Tirri, Executive Vice President and CTO, Nokia; James Barrese, CTO, PayPal; and Gavin Michael, Chief Technology Innovation Officer, Accenture.

Courtesy of SNS (original piece here), the summary of the discussion:

HT: Mobile devices use different kinds of connectivity. Unlicensed bandwidth connectivity are higher ids associated with services like Facebook, Twitter. Connectivity doesn’t allow you to swap back and forth between the services.

Tying ID to device vs. tying it to SIM card.

JB: Huge opportunity to decrease friction when consumers try to pay merchants. See huge opportunity to build a digital ID that allows consumers to pay without even taking out their wallet, through digital recognition.

GM: Eventually we will be able to take ID data and use it to create a highly-individualized treatment of the customer. The problem now is that we don’t have the capacity yet. It’s starting, but it’s very small steps. No infrastructure yet.

“Who owns the data” will be a seminal challenge. At the moment there’s no working model, although people are realizing that they have to give up privacy in order to participate in this.

CS: Will different form factors emerge in 5 years?

HT: In the future your computer will consist of multiple devices, will accelerate the evolution. Energy consumption will become a factor. Using small devices that use very little energy to do smaller tasks and a higher variance of devices.

Next generation of computers have individual components that can be used separately, but when you put them together, they work as a whole.

JB: Explosion of innovation offline has met Amazon’s retail choice. Those walking around with devices in their pockets have apps that companies are using to track them.

DM: Consumers are more about tech they’re carrying. Empowered consumers are coming to work for the tech companies and demanding the same capabilities from their enterprise. Using sensor information differently to manage resources, maintenance in a different way. Mobile is affecting deep verticals as well as horizontals.

CS: Where is home automation headed in 5 years?

HT: From a tech perspective, a lot of this can be easily done now, in a cost-effective way: sensors that measure environment, etc.

There has to be some other incentives also. Understanding what people are willing to learn is the key to the status of home mobile. Technologically, it’s not a problem. But it produces a new value chain. Who will take care of and pay for maintenance of sensors? What if they take out your neighbors tv (radio-based)? It will take much longer than 5 years at a wide spectrum, but some user cases may come much earlier.

CS: Ecosystems and platforms:

JB: We’re seeing the full digitization of money and we need key operators to streamline the experience.

CS: Will platforms matter as much in 5 years?

GM: I think there will be two or three that dominate. Platforms will be doing everything they can to bring developers onto their devices. Our view of platforms will broaden. Some will be key in mobile. Others will focus on home automation, etc.

HT: Catastrophe happens when surges are unexpected or vice versa. Energy will be the fundamental unifying issue and limiting factor.

CS: GIven $10 million to invest, what would you spend it on?

JB: The field of payments is exploding. The whole world is being connected to the Internet and how will they trade with each other?

New Research: US Mobile Data Market Update Q1 2012 May 21, 2012

Posted by chetan in : 3G, 4G, AORTA, Connected Devices, Infrastructure, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

US Mobile Data Market Update Q1 2012

http://www.chetansharma.com/USmarketupdateQ12012.htm

Download PDF (2MB)

 

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Summary

The US mobile data market grew 6% Q/Q and 21% Y/Y to reach $18.7B in Q1 2012. Data is now over 40% of the US mobile industry service revenue. For the year 2012, we are forecasting that mobile data revenues in the US market will reach $80 billion.

For the first time in the history of the industry, the US operators had a net decline in postpaid subs. The top 7 operators lost a combined 52K postpaid subs. In overall net-adds, Sprint bested both of its bigger rivals for the first time since Q1 2002. That was exactly a decade ago when Cingular and Nextel brands were still around, before Google IPO and before Zuckerberg enrolled into Harvard. In fact, Sprint is the only US operator that has added more than 1 million subs every quarter since Q4 2010. However, most of these net-adds are coming from prepaid and wholesale segments. If we look at the net-adds over the last 4 quarters, AT&T comes out on top by a distance. In terms of postpaid net-adds only, Verizon is the clear leader during the same time period.

In terms of Y/Y growth, Connected Devices segment grew 23%, Prepaid 15%, Wholesale 10%, and Postpaid 1%. AT&T, Sprint, Sprint, and Verizon are number one respectively in these categories.

One-third of US consumers don’t use landline phones. The wireless only US population went past 100M subs in Q1 2012. Mobile will continue to increase its share of the household IT budget and thus improving the overall revenue picture. However, there will be fierce battle for the prized postpaid subs that have been slowly migrating to prepaid as a result of the economic doldrums. It is quite possible, they will come back but predicting the reverse migration is tough.

Q1 2012 will also be remembered for Samsung’s ascend to the top of the hill ending Nokia’s 14 year run. In terms of unit sales, it dominates the overall unit shipments and also the more lucrative smartphone segment. However, Apple dominates both the device revenues and more importantly just crushes the competition on device profits. It has only 8% of the global unit shipment share but over 70% profit share.

Apple has the complete stronghold on the supply chain and has sucked out the oxygen from the OEM world. Samsung for its part has done a credible job at keeping pace and in being competitive. As expected, the Chinese OEMs – ZTE and Huawei (and some new ones that you will hear about in the next few quarters) are coming on strong from the bottom. This means, the players caught in the middle face perilous times.

AT&T edged past NTT DoCoMo to become number two in global mobile data revenues rankings for the first time. Now top positions in the global rankings are occupied by the US operators.

Smartphone sales continued at a brisk pace accounting for almost 70% of the devices sold in Q1 2012.

Operator and OTT – The way forward

We are at a critical juncture of the industry evolution. The OTT phenomenon is shifting the tectonic plates at a rapid pace. What seemed like a minor irritant only a few quarters back is become a nuisance virus that is eating away the core. Some operators have gone into panic mode while others have stepped back, assessed the situation, embraced it, and will try to exploit the opportunity. The truth of the matter is that the two biggest apps – voice and messaging didn’t really evolve a period of two decades. When the last big invention was interoperability and that too a decade ago, you know things are ripe for disruption. Thanks to the availability of always-on IP networks, new and nimble players are pushing the boundaries of what’s possible. It is not that some of these concepts haven’t been around for a while. RCS has been around for the last 5 years and this year there has been some tangible progress. However, while the world waits for interop and wide availability, startups can offer similar and in most cases, better services now. They can iterate rapidly and reach scale at much faster pace. We are in software-defined world after all. Smarter operators are launching their own OTT services while nodding at the standards implementations.

It is such a critical topic for the industry that we are devoting two Mobile Breakfast Series events to this topic. The first in Seattle on June 7th with AT&T, T-Mobile, Groupon, Ivycorp, and Sidecar and the second in London on June 29th with Telefonica, Orange, Rebtel, and Horizons Ventures. We will also be delving deep into the subject at our annual mobile brainstorming summit – Mobile Future Forward on Sept 10th in Seattle.

Mobile First to Mobile Only

Couple of years, the realization in the industry set in that mobile is going to really dominate the world. Senior executives like Eric Schmidt at Google started to preach the gospel. Very quickly, we are at another pivot point wherein the mobile first doctrine is going to move to mobile only. It is not that the desktop world will disappear into oblivion. Far from it. But, the investments, strategy, and execution will be driven by mobile. As we said in our global research update last month, in 3-5 years, with few exceptions, if a company is not doing majority of its digital business on mobile, it is going to be irrelevant. There are already several data points to support the theory. Leading apps and services like Facebook, Twitter, Pandora are already operating in the world where mobile is driving majority of their user engagement. Expedia, Fandango and others are seeing the early signs of migration into the mobile dominated world.

Postpaid Doldrums

For the first time in the history of the industry, the US operators had a net decline in postpaid subs. This is because of the shift to prepaid in recent times as well as the increased competition for the last few potential postpaid subs. So, the question emerges, where will the net-sub and net-revenue growth going to come from in the next few years. The smartphone penetration in the US was at 43% as of Q1 2012 so the significant opportunities are in the upgrades and non-data to data conversion. Family data plans (see below) will help in bolstering data revenues as well. Multiple devices/consumer will increase the sub penetration which is at 110%.

Family data plans

We have been big advocates of family data plans for the last 2 years and they are finally coming to the US market in the next few months if not weeks. Like gravity, it’s inevitable. Consumers want simplicity and common sense. Family data plans doesn’t necessarily mean that all family members will be forced onto a single data plan but rather the consumers given the opportunity to combine data usage under the same umbrella if they wanted to. If all in the family are heavy data users, initially, some of the data tiers might not make sense but for the vast majority, there are always going to be devices or family members who don’t need a separate full-fledged data usage plan.

When I talked to CNBC earlier this year (Jan), I said that there is a 90%+ probability that the family data plans will be introduced in the US market in 2012. I discussed this more with Bloomberg andUSA Today last week. Verizon and AT&T have been preparing the media and the consumers for this eventuality. Once one operator opens the door, expect rest to follow. Our Atlanta Mobile Breakfast Series will touch upon this topic during the discussion on Connected Devices, the Cloud, and the Consumer (with AT&T, Synchronoss, and CNN).

Mobile Data Growth – The Gigabyte Generation

The smartphone data consumption at some operators in the US is averaging close to 800 MB/mo. As we move into the 1GB range along with the family data plans getting introduced shortly, you can expect the data tiers to get bigger both in GBs and $. Mobile data traffic growth continued unabated doubling again for the 8th straight year. We expect the mobile consumption to double again in 2012. Data now constitutes over 85% of the mobile traffic in the US. As new devices and new network technology roll-outs continued in 2012, the data traffic will grow at the expected pace. The signaling traffic is growing at even a faster pace, 3 times in some cases. Stay tuned for our research paper in the Yottabyte paper series on the topic later this year.

Platform wars

Now that Google’s Motorola deal is approved in China and Facebook’s stellar IPO is behind us, we are going to witness a contentious platform battle between the fab five. Google is preparing to get deeper into handset business while Amazon and Facebook are tinkering with their own handsets. Microsoft is banking on the Lumia success and the release of Windows 8 and its impact on the ecosystem will be closely monitored. Samsung is putting some resources behind Tizen to hedge its bets in case things go south with its current partnerships. The platform narrative is still being defined by Apple which has the commanding mindshare of the developers, operators, and the profits. Follow the money and the puzzle unravels in front of your eyes.

Mobile Patents Landscape

2011 was the most active year for mobile patents in terms of disputes. All the major players were active in filing and protecting their turf for the future battles. IBM topped the industry in the most number of mobile patents granted in 2011 in the US followed by Samsung and Microsoft. The rest of the top 10 in order included Sony, Qualcomm, LG, Ericsson, Panasonic, Broadcom and RIM. Of the major players, Nokia occupied #12, Intel #13, Apple #16, Motorola #21, and Google #23 spot in the top 50 ranking. Amongst the mobile operators, Sprint was the leader with 323 patents granted in 2011. We have more research coming out later in the year that shows the relative patent strength of the various mobile players.

Market Consolidation

The AT&T-T-Mobile merger might not have gone through but that doesn’t stop industry to play the M&A speculation parlor game. Except for a few impossible scenarios, all sorts of deals are being contemplated. The market economics is clearly crying out for more consolidations. However, in an election year, there is an uneasy uncertainty that is gripping the market. The smaller M&As won’t move the needle and bigger M&A are not going to be on the table until we get into a new calendar year.

Connected Universe, Monetizing Opportunities

While 2011 was the year of figuring what the opportunities are in the new connected era, 2012 is starting to focus on how to monetize those opportunities. That will be the theme of our Mobile Future Forward Thought-leadership summit in Sept. More details to come. Almost all the vertical industries are benefiting from the connected devices and ubiquity of broadband networks – security, health, retail, utility, transportation, entertainment, and others. We will take a deep dive into the issues, the best case studies, the opportunities, and the players. We are assembling industries who’s who to help you figure out where the industry is headed next.

What to expect in the coming months?

All this has setup an absolutely fascinating 2012 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems.

As usual, we will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q1 2012 US wireless data market is:

Service Revenues

ARPU

Subscribers

Applications and Services

Handsets

Mobile Data Growth

Global Update

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Aug 2012. The next Global Wireless Data Market update will be issued in Nov 2012.

Disclaimer: Some of the companies mentioned in this paper are our clients.

Family data Plans coming to the US May 17, 2012

Posted by chetan in : US Wireless Market , add a comment

I have been calling for family data plans for sometime. Like gravity, it’s inevitable. Consumers want simplicity and common sense. When i talked to CNBC earlier this year (Jan), i said that there is a 90%+ probability that this will happen this year. I discussed this more with Bloomberg last week and some of the comments were published in this piece below. Yesterday Verizon CFO provided further clarity.

 

AT&T, Verizon Face Off Over Rollout of Family Data Plans

By Olga Kharif and Scott Moritz on May 16, 2012

Verizon Wireless and AT&T Inc. (T) (T) are both preparing to roll out shared-data pricing plans this year. Whoever makes the first move will transform the way the industry charges for wireless service.

The new shared plans, which may be announced as early as next month, would let customers split one bucketful of Internet data between their phones, iPads and other wireless devices, providing an economical option for families, small businesses or people with a lot of Web-connected gadgets.

With billions of dollars at stake, Verizon and AT&T are hesitant to test the waters first, said Chetan Sharma, an independent wireless analyst. Getting the approach right could reduce customer turnover and get more users to embrace data plans, which brought in $62.7 billion industrywide last year, according to trade group CTIA. A wrong move would lower the amount of money that subscribers pay, while increasing network traffic and the cost of maintaining networks.

“They are watching each other,” said Sharma, who covers telecommunications from Issaquah, Washington. Once one U.S. carrier introduces a shared data plan, the rest of the industry, including Sprint Nextel Corp. (S) (S) and T-Mobile USA, won’t be far behind, he said.

Consumers have a growing appetite for data plans, which let people surf the Web and use other Internet functions on their devices. Apple Inc. (AAPL) (AAPL)’s iPhone has fueled demand by making it easy to use data-intensive features, such as online applications and the Siri voice-activated personal assistant.

Canada’s Example

While U.S. carriers already offer family plans to consumers, they’re more focused on calls. Each user and device is typically assigned an individual data plan, often at $10 to $50 apiece.

For carriers, the rewards of offering shared data can be huge, said Reade Barber, a vice president at Rogers Communications Inc. (RCI/B), Canada’s largest wireless carrier. His company would know: It adopted the strategy in 2009.

“The number of people using data at Rogers just exploded,” he said. More than 25 percent of Rogers’ family-plan subscribers use shared data plans, he said. “We attracted a lot of new users of data.”

The approach can entice consumers who only pay for voice or texting plans to pony up for data, bringing extra money to carriers. Or a family might shell out more for their data plan to let the kids have Internet access on their phones. Families may boost monthly bills by $15, said Susan Welsh de Grimaldo, an analyst at Strategy Analytics in Newton, Massachusetts.

Risky Bet?

The risk for carriers is that customers who are currently happy to pay for separate data plans — say, for their kids or an iPad — will consolidate them and lower their bills.

The approach also may increase network traffic and costs. Today a consumer may pay for 2 gigabytes of data a month but only use 500 megabytes, said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York. With more devices tied to the same data plan, the unused portion would shrink. That could force carriers to ramp up capital spending, he said.

“The business may be getting more capital intensive,” Moffett said.

Still, it would benefit carriers if consumers become more dependent on their data plans. Today, most wireless customers only use their carriers for their phones. If the price is right, they may add an iPad, laptop or some other hardware.

Health Monitors

The shared-pricing approach is part of a push to get users to pay for wireless service for everything from health monitors to Internet TVs. There will be more than 250 million active devices on shared plans globally by 2015, up from a few million in 2011, according to Infonetics Research Inc.

“When billing and service plans are a little more user- friendly, customers will be more interested in adopting more devices,” said Shira Levine, an analyst at Campbell, California-based Infonetics.

Sales of the iPhone and other smartphones could get a boost as well. About 15 percent of all smartphones sold by 2015 will be part of shared-data plans, according to Infonetics. At Rogers in Canada, a typical smartphone user pays twice as much as a voice-only user.

While U.S. carriers already offer some Internet-sharing plans, they generally work with Wi-Fi access — not cellular connections. Sprint’s MiFi 3G/4G Mobile Hotspot by Novatel Wireless product provides Internet connectivity to as many as five Wi-Fi devices located nearby. Plans start at $35 a month. A tethering plan at T-Mobile lets a smartphone function as a Wi-Fi modem, supporting as many as five gadgets for $15 a month.

Verizon’s Motivation

Verizon may have the most urgency to take the shared-data approach because it wants to spur users to add more devices, such as tablets, Sharma said. AT&T has made more progress in that area, in part because of the iPad. Apple picked AT&T as the first U.S. carrier to offer iPad service when the tablet debuted in 2010, though Verizon now supports the product as well.

In the first quarter, AT&T added 230,000 connected devices. Verizon doesn’t break out those figures.

Verizon, based in Basking Ridge, New Jersey, has said it plans to offer shared-data pricing in the next few months.

“We are probably going to launch data share plans this summer,” Chief Financial Officer Fran Shammo said in an interview. “We think we will be the leader in this category. It will be a new innovative pricing plan for data. You can expect tiered pricing.”

LTE Phones

Shammo updated the strategy today in a presentation to investors at a JPMorgan Chase & Co. conference. He said the company will start shared-data plans on new LTE devices, which means people upgrading from the 3G standard would have to give up their unlimited plans. Upgraders would be “moving away from, if you will, the unlimited world” and shifting into a tiered shared-data plan, Shammo said.

AT&T, which ranks second to Verizon in U.S. wireless customers, is less specific.

“We’ll have something later this year,” said Ralph de la Vega, president of the Dallas-based company’s mobility division.

The shift will probably change the way consumers use tablets, Sharma said. Only 10 percent to 12 percent of tablets sold today use cellular connectivity, with most relying on Wi-Fi links, he said. Attractive pricing plans could boost that number to 50 percent, Sharma said.

Users of shared-data plans also tend to stay with their carriers longer, Rogers’s Barber said.

“It helps our churn,” he said. “People have a plan they believe is good for them.”

Surprise Bills?

For now, Sprint and T-Mobile aren’t supporting the switch to shared data plans. The two companies, ranked third and fourth in the U.S. market, say the approach will make it harder for families to track how the data is being used. That may lead to more surprise bills for consumers, said Will Souder, vice president of operations and business planning at Sprint.

Still, more than 60 percent of smartphone owners are interested in shared plans, according to Strategy Analytics. That may make the change unavoidable for the industry.

“Data pooling is inevitable and makes all the sense in the world for the carriers,” said Dan Hays, a consultant with PricewaterhouseCoopers LLP. “It creates an environment where people can use more devices without having to think about it.”

Mobile Breakfast Series – Atlanta – Connected Devices, the Cloud, and the Consumer May 16, 2012

Posted by chetan in : US Wireless Market , add a comment

Connected Devices, the Cloud, and the Consumer

June 22nd

Location: Commerce Club of Atlanta, 191 Peachtree Tower, Atlanta

Time: 7:30-11am. 7:30am – Registration, 8:30am – Discussion Begins

http://www.mobilebreakfastseries.com

The connected devices segment is the fastest growing category of the market and is also the most profitable due to higher margins. Consumer behavior is changing as they consume and interact with content across multiple devices. Broadband access combined with Cloud Computing is creating disruptions of tremendous scale. It is also impacting a rethink in virtually all key verticals – healthcare, housing, travel, entertainment, communication, energy, and others. Mobile broadband and the cloud is also changing the traditional value chains and revenue models. Which segments are yielding the highest ROI? Does computing fundamentally change forever or are connected devices just a part of the PC hub? How does M2M fit into the world of smartphones and tablets? How are businesses and solution providers taking advantage of the growing connected universe? What’s most important for the consumer and what are their expectations on design, pricing, and connectivity? From connected cars to wireless pill bottles, our world is going to change forever. Meet the leaders who are shaping the growing connected devices ecosystem to get insights that will inform your strategy and decide your future revenue streams.

David Christopher, Chief Marketing Officer, AT&T Mobility and Consumer Markets

David Christopher, chief marketing officer of AT&T Mobility & Consumer Markets, leads product strategy, marketing and execution across AT&T’s extensive portfolio of wireless and consumer communications, entertainment products and services. Previously, David served as chief marketing officer for AT&T’s wireless business unit–where he led all marketing functions and drove the company’s strategy to introduce groundbreaking devices and applications. He also served as vice president of product management for AT&T’s wireless unit. David currently serves on the Ad Council’s board of directors and its executive committee.

Louis Gump, VP, CNN Mobile

Louis Gump is vice president of CNN Mobile, responsible for managing CNN’s mobile business globally. Recognized internationally as a seasoned leader in the mobile marketplace, Gump directs CNN’s mobile strategy and development to meet consumer needs and grow overall reach, usage and revenue. Before joining CNN, Gump worked at The Weather Channel, where he led their mobile business. Since 2003, Gump has served on the Board of Directors for the Mobile Marketing Association (MMA), where he is past global chairman as well as past global treasurer. Last year, he received the MMA’s first annual Lifetime Achievement Award for his leadership.

Biju Nair, EVP and Chief Strategy Officer, Synchronoss

Biju Nair has over 18 years’ experience as an entrepreneur and technology industry leader. In this role as CSO, Mr. Nair is responsible for leading the strategic vision of the connected devices and cloud computing for profitable growth of the company’s product portfolio. Prior to joining Synchronoss, Mr. Nair was the Chairman & CEO of Sapience Knowledge Systems, Inc., a venture backed wireless software company (acquired by Synchronoss Technologies in 2011). Previously, Mr. Nair held the position of Senior Vice President & GM of the Connectivity and Security Group at Smith Micro Software (NASDAQ: SMSI) and Corporate Vice President & GM and founder of Mobility Solutions Group at PCTEL, Inc. (NASDAQ:PCTI) which was acquired by Smith Micro in 2008).

Chetan Sharma, President, Chetan Sharma Consulting (moderator)

Chetan Sharma is President of Chetan Sharma Consulting and is one of the leading strategists in the mobile industry. Executives from wireless companies around the world seek his accurate predictions, independent insights, and actionable recommendations. He has served as an advisor to senior executive management of several Fortune 100 companies in the wireless space and is probably the only industry strategist who has advised each of the top 6 global mobile data operators. Chetan is the author or co-author or editor of seven best-selling books on mobile and over 100 articles/papers related to mobile.

CTIA Wireless 2012 Recap May 14, 2012

Posted by chetan in : 3G, 4G, AORTA, CTIA, Carriers, European Wireless Market, Infrastructure Providers, Mobile Breakfast Series, Mobile Future Forward, Mobile Operators, Worldwide Wireless Market , add a comment

CTIA Wireless 2012 Recap

http://www.chetansharma.com/ctiawireless2012.htm

CTIA returned to New Orleans after many years and it was great to see the city revitalized and ready to host the wireless show. Overall there were no big announcements, no blockbuster deals, no zingers from speakers that made the headlines. However, it was good to take the pulse of the industry. We met with several prominent industry executives, long-time colleagues, and new entrepreneurs. This note presents the summary of my observations from the show.

Mobile Web and Apps – I had the opportunity to chair the Mobile Web and Apps event and kick off the proceedings with an opening keynote on the State of the Mobile Industry. It was based on our recent global market update that we released last week. In fact, many CEOs and speakers including FCC Chairman Genachowski frequently referenced from the research throughout the show. Wireless Week did a nice cover story based on the talk. There was good discussion and debate about what’s working and what’s not, how developers try to create demand and monetize eyeballs, the issues of security and privacy. Mastercard announced its payment developer APIs program. In fact, the show had the presence of all the major credit card companies. Payments, wallet, and commerce were the big talking point.

Operators vs. OTT – The theme of Mobile World Congress continued at CTIA with the topic dominating in both open forums as well as behind closed doors. While most of the ink has been focused on how OTT players are killing operator revenue streams, there is the untold story of operator collaboration with the OTTs. I wrote a piece on the topic for Synergy magazine “Mobile Operators and OTTs: Building a win-win.” The manner in which operators respond to the OTT opportunity/threat will end up defining their future in the years to come. Some operators like TeliaSonera have reacted by throwing their hands and just charging extra for OTT services while others like Telefonica are launching innovative services. We have looked at this topic in-depth for many years and have some more new research coming out in the next few weeks. Stay tuned.

The challenge for some of the operators is in stark display. While T-Mobile’s Bobsled app garnered (95% users non-TMO customers) 1 million users, Viber announced the 70 million milestone. To be a relevant app, one needs scale. Operators have the advantage of providing better call quality. The call quality on many mobile VoIP services is subpar and enterprise customers (and consumers) will pay a premium for better call quality.

Digital Life and New Revenue Streams – In the US, AT&T dominates the connected devices spaces. Indeed in terms of rolling out new services, it is a step ahead of the competition. AT&T has been showing the Digital Life concepts at Mobile World Congress and at CTIA they announced the trial and actual product availability in 2013. This clearly bodes well for the industry for there are many adjacent industries where operators can play an important role. Other operators should pay close attention. We will be discussing the Connected Devices opportunities in detail at our Atlanta Mobile Breakfast Series Event on June 22nd with AT&T, Synchronoss, and CNN.

Traffic Growth and Signaling storm – As we have mentioned in our various research papers and research updates, mobile traffic is roughly doubling YOY in most major markets including the US. While data traffic hogs the headlines, signaling is becoming a menace to network management esp. Android which tends to be more inefficient in handling network resources. We will have a more in-depth discussion of these topics in our upcoming Yottabyte research paper.

TMO Acquisition – Last year, AT&T’s proposed acquisition of T-Mobile rocked the industry and kept the regulators busy for better part of 2011. While there were no blockbuster announcements, T-Mobile’s acquisition of MetroPCS along with Nokia and RIM’s long-term prospects remained popular water cooler topics.

Nokia’s revival – Nokia has a lot to prove. Its future is riding on the success of the Lumia series of devices in 2012.  Though it hasn’t exactly set things on fire, the sales are actually doing fine. It is amongst the top selling devices at AT&T and is showing stickiness. However, Nokia is getting crushed in other markets, so the net impact on overall cash position can be significant if it is not able to arrest the downfall in the next 3-4 quarters.

Small Cells – A couple of years ago, small cells and HetNets were just talking point. Now, operators are weaving them into their execution plans as they lay out their 4G networks. Given that mobile data growth is going to stay front and center for the foreseeable future, expect to hear about small cells and HetNets for some time to come.

TMO $4B network deal – Generally, the network deals of this size takes many quarters to iron out. T-Mobile moved fairly quickly to iron out its LTE rollout plans and its vendors.  Not surprisingly, the spoils of the deal went to Ericsson and NSN. In light of the collapse of LightSquared, this deal might provide NSN a lifeline to continue operations for a few more years.

Mobile Wallets and Mobile Payments – While 2012 will not be the year of mobile payments; it certainly is the year of mobile wallets launches and lots of them. Every financial institution worthy of its salt has launched a wallet. We are just going through the early turbulence cycle of this new segment. However, the opening up of the payment APIs from the financial industry is leading to some compelling experiences and use cases.

NFC was absent – The talk of NFC as a payment solution was noticeably muted. We have always said that NFC will have more impact from other solutions than payment.

Verizon – LTE – Competing on LTE, the fight to build the fastest and biggest LTE network is on. Verizon has an early formidable lead but in 2013 rivals will start to catch-up.

Messaging innovationAs I mentioned to the NY Times and discussed it in our annual global mobile update, messaging revenue has started to decline in some countries. Some operators in Europe are in a state of panic. Chaos creates new opportunities. While operators have just given up on fighting the OTT war, others are gearing with new apps and services of their own (TU Me from Telefonica, Bobsled from T-Mobile, On from Orange). Several startups are also helping the operators innovate on the messaging front. SMS was invented in the early nineties but operators didn’t really take messaging to the next level for the last two decades. I met with a number of companies which are doing some interesting work on the messaging side – like ZipWhip, Maxx Wireless, OpenMarket, and others. Some of these companies are still in the stealth mode and expect to make some waves in the coming months. We will be taking this topic head-on in our Mobile Breakfast Series in Seattle (w/ AT&T, Groupon) and London (w/ Telefonica, Orange, Horizons Venture, Rebtel)

Sprint Guardian, and other apps – in line with generating more revenue form other apps, Sprint guardian was launched with Safely and the service is seeing pretty good traction in the early days and might be able to increase the lifetime value of the customer. Other US operators have similar services available on their network as well. Operators will have to invest heavily in VAS ecosystem and services to arrest the declining revenue in other segments.

FCC, Spectrum and Regulations – FCC continued to make its case for more spectrum via incentive auction. With a change of guard expected next year, it will be interesting to see how some of these efforts pan out. FCC should create parallel incentive programs like a $1B prize for tangibly solving the spectrum crisis w/o the need of new spectrum.

Absence of large players – The lack of any major announcements was only rivaled by the absence of the former CTIA heavyweights like Samsung, Alcatel-Lucent, Nokia, Motorola, and Microsoft. Others had fairly low-key presence.

Regulations – Regulations lag the technology industry progress and it is getting to the point that they might end up hindering growth esp. related to communication, privacy and monetization of network assets. It is time to consider bringing all communication, and data privacy rules under the same umbrella so both the telecom and Internet players are guided by the same set of principles.

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Nov 2012.

Disclaimer: Some of the companies mentioned in this paper are our clients.

Mobile Breakfast Series - London May 1, 2012

Posted by chetan in : US Wireless Market , add a comment

Our Mobile Breakfast Series in London is taking shape nicely. Program below. If you are in the area, hope to see you there. Please tell your friends about the program. Thanks

June 29th, 2012

Venue: Wayra, Telefonica. Shropshire House, 11-20 Capper Street, London, WC1E 6JA

Registration: http://www.mobilebreakfastseries.com

Operators and OTT: The way forward

Operator traditional revenue streams are under threat esp. voice and messaging. Access margins will continue to stay under pressure. OTT players are coming in fast and furious and it is not just the big ones like Google but also players like Whatsapp, Voxer, Viber and others. How do operators play in the new landscape – lessen the decline of their traditional revenues while investing in new areas that improve their overall margins and revenues. Do they play the role of an enabler, a utility player, or become the OTT player themselves? In a software-driven world, how do they stay nimble? On the flip side, what are some things that operators can provide to the OTT players that make them successful, take them to the market quickly and maintain a long-term healthy and mutually-beneficial partnership? Operators still generate 70% of the global mobile industry revenues, so they are an important part of the chain but how do they ensure they have an equally relevant share in the profits. The panel will discuss how operators and OTT players think about the challenges and the opportunities, the competition and the coopetition.

Frank Meehan, Horizon Ventures

Frank Meehan is part of the successful Horizons VC team, representing Mr Li Ka-Shing’s private investments. Horizons was an early investor in Skype and holds investments in Facebook, Spotify, Second Market, Waze, and SIRI before it was sold to Apple. Frank also founded INQ Mobile, a Hutchison Whampoa venture which won best handset at MWC 2009, and he is currently on the boards of Trapit, Tripboard, Tout, Summly, Magisto and the TOM Group.

James Finn, Director, Product Design, Telefonica Digital

James Finn currently works at the newly formed Telefonica Digital as the Director of Communication Product Design after a string of internal roles at Telefonica including Chief Fire Stoker @ The Lab, GM of Jajah for Europe and New Business Development at O2 UK. During this time he has launched several products within the Telefonica Footprint such as International Favourites (O2 UK), Global Friends (O2 DE), Social Call, Virtual International Numbers (Telefonica Spain), Calling Card App (O2 UK) and
O2 Connect (Telefonica Digital). Previous to O2 he has worked for a number of startups such as RingRing Media (Acquired by Amobee), Thumbplay (Acquired by ClearChannel), Zingy (Acquired by For-Side) and also spent a time at Ericsson running global sales for the Napster Mobile Product.

Andreas Bernstrröm, CEO, Rebtel

Andreas has overall responsibility for company strategy and direction. Andreas works to ensure that the business runs smoothly now and in the future.  Prior to Rebtel, Andreas has been COO of Taptu and of TradeDoubler, where he was responsible for 600+ employees and more than $500 million in revenues  Prior to that Andreas spent three years at Goldman Sachs.

Patrice Slupowski, VP, Digital Innovation, Orange FT Group.

Patrice Slupowski, VP Digital Innovation, is heading NExT.com, the innovation team of the NAC Division of the Orange FT group. The team runs projects on mobile, PC, TV and tablets like Orange actu revue, TVcheck,  Newsblend with a strong involvement on social networks, recommendation, social TV or personal data agregation. He started in ticketing then development then founded Waptoo in 1999, (mobile services & QA) and sold the company to Lagardere in 2004. Patrice is a graduate in Information Science and Technology from Paris-Dauphine.

Chetan Sharma, President, Chetan Sharma Consulting (moderator)

Chetan Sharma is President of Chetan Sharma Consulting and is one of the leading strategists in the mobile industry. Executives from wireless companies around the world seek his accurate predictions, independent insights, and actionable recommendations. He has served as an advisor to senior executive management of several Fortune 100 companies in the wireless space and is probably the only industry strategist who has advised each of the top 6 global mobile data operators. Chetan is the author or co-author or editor of seven best-selling books on mobile and over 100 articles/papers related to mobile.