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Mobile Breakfast Series – Startup Nation Roundup June 11, 2010

Posted by chetan in : 3G, 4G, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Privacy, Smart Phones, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

With the fourth Mobile Breakfast Series event yesterday, we completed one full year of hosting the popular quarterly event and each one has been sold out. Thanks to the outstanding speakers and an engaged audience, the program has grown since its inception last Sept. Thanks also to our wonderful sponsors - Motricity, OpenMarket, Openwave, WDSGlobal, and Clearwire for supporting the program throughout the year.

Also, thanks to our attendees. Proud of the quality of attendees we are able to attract. Over 250 companies have attended the event over the past one year.

The 4th MBS event was held at Columbia Club in Seattle which offers one of the best views in the country.

Our focus for this event was Startups in the Mobile Industry. We wanted to take a pulse of the innovation, competition, turbulence, opportunities in the mobile ecosystem through the eyes of 8 brilliant CEOs who are focused on different segments of the value chain and different segments and business models.

The startup DNA is quite unique to the US. While great ideas and technologies can come from anywhere, no country celebrates the risk-taking, failures, and successes of startups like the US. The entrepreneurial spirit burns bright and that’s what keeps the pace of innovation in the mobile industry at an all time high. I have witnessed that first hand in working with startup executives from the inception of the idea at the back of a napkin to multi-million dollar exits to shattering of dreams due to changing dynamics or strategic errors or just dumb luck. What’s most fascinating and inspiring is that these guys just get up and keep going. Obviously, not everyone is cut out to be an entrepreneur, some folks just can’t take the sensation of a plunge and the unknown. The event was to highlight and celebrate the successes of these startup companies.

The one thing that trips most of the startups is how do you “scale” in terms of transactions, users, or revenues. The startups at MBS have a keen understanding of that. They are ambitious, focused, and disruptive.

 

The participants were:

Mike McSherry – CEO, Swype

Swpe is reinventing how consumers interact with mobile devices. Founded by Cliff Kushler, the inventor of T9 that has ended in billions of devices, the company is looking to repeat the success by getting onto billions of devices over the course of next few years. Quite an astonishing feat if they are able to pull it off. They have had good success with the OEMs who have also become strategic investors. The management team has navigated the waters very well w/o raising any VC money.

Paul Palmieri – CEO Millennial Media

Millennial Media is known for its mobile ad network which is the biggest independent ad network. MM deals with billions of ad impressions across devices and Paul has grown the company from the early days in 2006 by keeping the focus on technology, the team, advertisers, and publishers. They seem to be well positioned to take advantage of the current turbulence in the mobile advertising market. Will have more on it at a later date.

Dr. Sailesh Chutani – CEO Mobisante

Many people don’t realize that “mobile devices” represent a computing platform that can start to do amazing things. Mobisante is trying to take advantage of that by using the platform to provide a cheap ultrasound solution. This can be enormously disruptive and beneficial. Hundreds of people die every day because they don’t get diagnosed properly or on time. With a device like what Mobisante is developing, can you imagine the number of lives saved, the improvement in the quality of life, and the health care cost savings.

Paul Griff – CEO Root Wireless

Root Wireless has a unique value proposition – collecting network and device data to help consumers make informed decisions. “True” network data is really not available to the consumers, Root Wireless is changing that by turning the data on its head and making it useful to the consumers.

Kevin Foreman, CEO, PointInside

Location is red-hot, it has become an integral layer over which all content/transactions reside. While most of location players have justifiably focused on the outdoor position location, indoor location is still a challenge esp. in malls and airports, one has to still rely on kiosks and paper maps. PointInside is try to change that by providing a framework to create an indoor location platform that can be licensed and used to create transaction opportunities While SMS has been around for a generation, in the US, it really took off since the American Idol debuted. But have we done all we can with SMS?

Derek Spratt, CEO, Mobidia

Mobile data network issues have dominated the headlines for the last 18 months. We have discussed the topic in detail in our Yottabyte paper. I was intrigued by Mobidia’s approach to managing congestion, the technology can be used in all forms of network and allows operators to free capacity. Mobidia and Derek demonstrate their resilience as a startup in the infrastructure business which is very capital intensive and the sales cycles are measured in years but once you get cemented into the core, you are good to go. The journey is clearly not for the faint hearted. Derek has been shepherding the turbulent waters well.

Scott Kveton, CEO, Urbanairship

Urbanairship is exploited the push messaging phenomenon on startphones with over 470M notifications to 27M devices and 500K storefront transactions. They are also doing some clever rich media messaging and the model is transaction based so it can scale really well

John Lauer, CEO, Zipwhip

Zipwhip has an interesting application that sends SMS to both the device as well as the desktop so you can txt directly from the desktop. They have already gotten traction with some key carrier customers. There is no reason SMS has to be constrained to the device.

This group of brilliant entrepreneurs was ably supported by Bill Bryant, Managing Partner, DFJ and a well known investor in pacific northwest, Jeff Giard who has been a key supporter for us throughout the year and is Director at Clearwire, and Peter Wilson who has had successful stints at Accenture, Microsoft, and Google and now is on the entrepreneurial road himself.

The first panel was moderated by Olga Kharif, Senior writer at Businessweek who through her incisive questioning gets to the heart of the story. The panel touched on various aspects of the mobile ecosystem. Swype is focused on working the carriers and OEMs while Millennial sees diminished role for the operators. Out of the 10 billion impressions, around 100 million are from ondeck. The role of operators in the US with respect to media and content has slipped away as more smartphones came into the market, something we wrote about it in Mobile Advertising book in 2007. The situation is generally not black or white. There are areas for operators to innovate and be dominant while in others it is just hard to compete due to the changing circumstances and the entry of new players. Root Wireless was surprised by the open approach operators have taken to their offering by participating and collaborating in data analysis that can benefit all in the ecosystem.

One of the areas of exploration was – how do startups survive in the turbulent waters – by adapting as fast as they can to the changing dynamics and by having solid IP and unique value proposition. Swype has been developing the technology since 2001 and has multiple patents. Millennial devised a key server side technology to differentiate. Mobisante while new is tapping into a specific vertical and Root Wireless is trying out a new approach to measurement and performance analysis.

One of the other issue that startups face is that of expansion, which markets should they go after. Kevin mentioned that they are turning down six figure checks to keep the focus on their business – a very hard thing to do as a startup (turning down money that is). Millennial is more focused on the western markets because that’s where the advertising money is. Mobisante is likely to go after the rural market first because the need for their offering is the most in those areas.

On the hot topic of privacy, Paul from Root noted that there is a generational gap. He has been astonished how little the younger demographics care about privacy. They are easily willing to trade value for privacy. In terms of how the ecosystem is shaking up Paul from MM expected RIM and Amazon to come up with some interesting offerings in the coming days.

I hope this gives you a flavor of the event. You can also read Tricia Duryee’s column at moconews.

My thanks to all who attended, esp the speakers.

Our next event is Mobile Future Forward which has a stellar roster of speakers. If the future of mobile keeps you up at night, you wouldn’t want to miss this event. These guys personally are responsible for managing billions of dollars worth of investment and operations and their insights will be valuable. We will have more on that in the near future.

Be sure to check it out and register early as the Early bird expires on June 30th and 30% of the spots are already taken.

The quarterly event will resume in Dec 2010.

Calling all students: Mobile Future Forward 2010 June 8, 2010

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

We are super excited to launch a student paper contest along with our Mobile Future Forward Conference. It is in proud partnership with Intel.

Details below

The Event

Mobile Future Forward is an executive summit attracting some of the most influential minds who are shaping the mobile industry. The experts and visionaries from around the globe will discuss the mobile industry 2-5 years forward, envision what the user experience and use case scenarios look like, discuss and debate the challenges and opportunities in the journey to that vision.

The Contest

The best student paper contest is open to universities and research institutes around the world. Your task is to help us imagine new technologies, new experiences, new applications and services, new use cases, new business models of the mobile future. The paper can be on a specific technical or business subject within the mobile industry from mobile teleportation to fuel cells to a new enterprise collaboration tool and everything in between. The idea is to let your imagination fly without any restrictions and dream of what’s possible in the next 5-10 years. Papers can be about technical solutions to the most pressing problems, about new revenue models, about your vision of how mobile will be used in the future, etc. Paper length: 1000-1500 words.

The Prize

Authors of the top two outstanding papers will get a travel expenses paid trip to attend the conference and mingle with the who’s who of the wireless industry. Winners will also be eligible for more prizes. Please send in your entries by July 15th,2010 to contest@mobilefutureforward.com including a copy of your current student ID. Use of graphics and illustrations is encouraged. A panel of industry experts will vote on the best papers. They will be ranked on originality, ambitiousness, creativity, depth, and clarity of vision. The goal of the contest is to bring out and reward the best thinking from the leaders of tomorrow.

The Judges

Pankaj Kedia, Head of Mobile Ecosystems, Intel
Len Barlik, VP, Sprint Nextel
Jeff Giard, Director, Clearwire
Hank Skorny, SVP, Real Networks
Paul Palmieri, CEO, Millennial Media
Matt Oommen, CTO, Sprint Nextel

For more Info, please contact contest@mobilefutureforward.com

More information about the event at http://www.mobilefutureforward.com

If you work with students or universities, please help us spread the word about the contest. Thanks in advance.

In case you missed … June 4, 2010

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

Stories from May ..

GigaOM - Privacy as Competitive advantage in Mobile

Telecompaper - 3GPP mobile technology sees 81% growth in Americas

Thailand Business News - Thailand’s smartphone market skyrockets with Blackberry sales

IT Business Edge - Verizon shifting to tiered pricing for LTE network

BusinessWeek - Verizon’s 4G Plan Will Try Tiered Pricing

GigaOM - Verizon to Shift Usage Forecasting to Consumers With Tiered LTE

SeattleTimes - Game-changer at Microsoft

BusinessWeek - New Web Services Put Music in the Cloud

4gtrends - New balance of power in Japan as users convert to smartphones

GigaOM - America’s Amazing Rise to 3G Dominance

Businessweek - Billionaire McCaw’s New Mobile Bets on Profitless 4G Clearwire

Infoworld - Google and Facebook are violating your privacy

NYTimes - Cellphones Now Used More for Data Than for Calls

GigaOM - A Modest Proposal on Privacy

TMCNet - Network Data Traffic to Drive M2M Profits

TelecomTV - Softbank becomes first mobile telco to outsell voice with data

Mediapost - Verizon leads in Data Revenues

WirelessWeek - VZW Data Revenues Surpass DoCoMo

GigaOM - AT&T Verizon’s Future Is in Your Fridge

Fiercemobilecontent - US mobile data revenues exceed $12.5B in Q1

Telecompaper - US mobile data market up 22% in US

MobileMarketingWatch - US Mobile Data Exploding

MobileMarketing - iPad a Winner says Chetan Sharma

New Research Paper: Managing Growth and Profits in the Yottabyte Era 2nd Edition June 2, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, Carnival of Mobilists, Carriers, Devices, European Wireless Market, Federal, Indian Wireless Market, Japan Wireless Market, Location Based Services, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Patent Strategies, Smart Phones, Speaking Engagements, US Wireless Market, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments

 

Managing Growth and Profits in the Yottabyte Era

The year 2010 will be remembered for many milestones. One of them clearly will be the significant migration from voice to data services and revenues. In Q1 2010, the number three operator in Japan - Softbank Mobile reported 55% of its service revenues coming from data thus becoming the first major operator to have more revenues from data services than from voice. Over the course of the rest of the year, other operators like NTT DoCoMo will take this data leap as well.

US, the nation with the most mobile data service revenues went past $14 Billion in quarterly mobile data revenues and is expected to go past the $50 Billion mark for the year in 2010. The subscription penetration in the US is well over 94% and the mobile data usage is on the rise.

While the rate of new subscription addition has slowed down, the pace of innovation is going very strong. Just like Japan, other major economies will slowly transition from a voice-centric universe to the one where voice is just another application on the all-IP network. Operators will make significant transition from voice to data, from making calls to getting lost in applications and from voice communications to multimedia communications. Helped by the ever expanding wireless broadband networks, and release of hit devices every week, and the consumer’s insatiable appetite for information and content has brought us to the surge of a data tsunami that will shake the industry to its core.

With everything moving to digital, information repositories across the web are almost doubling every day moving rapidly to the yottabyte (YB) era. The information, the desire and the capability to consume oodles of data is increasing exponentially. As a result the traffic – both wireline and wireless is also increasing at a predictably fast rate.

In 2009, the global yearly mobile data traffic reached a new milestone – 1 Exabyte (EB) or 1 Million Terabytes (TB). In the US, the data traffic is growing so fast that we are likely to exceed the 1 EB barrier in 2010. By 2016-17, the global yearly mobile data traffic is likely to exceed 1 Zettabyte (ZB) or 1000 Exabytes. How does the industry go about managing such growth in a profitable manner when the cost of supporting such traffic will increase exponentially? Will the move to LTE offer some respite?

This paper is the second edition of the “Managing Profits and Growth in the Yottabyte Era” research paper. It discusses the research and analysis done by Chetan Sharma Consulting on the growth of mobile data traffic in over 45 countries (with a detailed look at the US market) and how the ecosystem can apply some strategies to manage growth and profits.

We have built detailed models to estimate the rise of mobile data network traffic and to understand as to how the margin per bit can be maintained. Over the course of the last year, we have worked with several global players in the ecosystem to deploy effective strategies and solutions. This paper also draws from this experience on the ground.

Download Paper

Your feedback is always welcome.

Thanks.

Chetan Sharma

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

Partner Event: PaidContent Mobile 2010

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

Another great event lined up by our partners at PaidContent on Mobile in NY on July 20th.

As friends of Chetan Sharma Consulting, you can use the code CHETANGUEST to avail your discount.

Partner Event: MobileBeat 2010

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

Our partner Venturebeat is putting together another great event in July – MobileBeat 2010 (July 12-13 in San Francisco)

As usual a great line-up of speakers and they are expanding it into a 2 day event. I moderated a panel last year and had a pretty good time listening to the keynotes and panels.

As friends of Chetan Sharma Consulting, you can avail a 15% discount using VB-Chetan as the discount code.

Speaker list here

US Wireless Data Market Update – Q1 2010 May 16, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Wallet, Networks, Partnership, Patent Strategies, Patents, Privacy, Speaking Engagements, US Wireless Market, Unified Messaging, WiMax, Wireless Value Chain, Worldwide Wireless Market , 5 comments

US Wireless Data Market Update – Q1 2010

http://www.chetansharma.com/usmarketupdateq12010.htm

Executive Summary

The US wireless data market grew 5% Q/Q and 22% Y/Y to exceed $12.5B in mobile data service revenues in Q1 2010 - on track so far to our initial estimate of $54B for the year.

In a significant milestone that went largely unnoticed, Verizon Wireless edged past NTT DoCoMo - the decade old leader in mobile data revenues to become the biggest mobile data operator by data revenues. Helped by its 93M subscriber base and high ARPU, the Verizon juggernaut is steamrolling. Rest of the 3 top US operators also occupy leading positions amongst the top 10 global mobile data operators.

The US subscription penetration was approximately 94% at the end of Q1 2010. If we take out the demographics of 5 yrs and younger, the mobile penetration is now past 100%. While the traditional net-adds have been slowing, the “connected device” segment is picking up so much so that both AT&T and Verizon added more connected devices than postpaid subs in Q1 2010. Given the slow postpaid growth in, operators are fiercely competing in prepaid, enterprise, connected devices, and M2M segments.

Data traffic continued to increase across all networks. US has become ground zero for mobile broadband consumption and data traffic management evolution. While it lags Japan and Korea in 3G penetration by a distance, due to higher penetration of smartphones and datacards, the consumption is much higher than its Asian counterparts. Given that it is also becoming the largest deployment base for HSPA+, LTE and WiMAX, most of the cutting edge research in terms of data management and experimentation with policy, regulations, strategy, and business models is taking place in the networks of the US operators and keenly watched by players across the global ecosystem.

We are starting to see the inevitable changes in broadband pricing starting with T-Mobile and MetroPCS. Over the course of this year, we are likely to see newer pricing models that tie usage to pricing and add multiple devices to a single data bucket.

The fabled iPad landed in the market and it is a winner. Apple’s latest gizmo has created a new user experience category of casual and couch computing that will foster growth in the connected device space. Kids of the now generation are growing with connected electronics that is fundamentally altering the behaviors and expectations of interaction, communication, consumption, and monetization.

Privacy brouhaha has been brewing for some time and the polity class is getting interested in stepping in. If people are really serious about tackling privacy, OEMs and carriers should build a physical/soft privacy button on the device with 3-5 levels (just like for the ringer volume) that allows users to open/close privacy across all applications and services with the touch of a button. All apps and services should adhere to the principle via APIs. The other mistake companies make about privacy is by treating everyone the same. Privacy is about the perception of control and transparency. If it is given back to the consumer, they are likely to engage more and have a more positive impact on revenue streams that are likely to flow.

In an another global milestone, Softbank became the first major operator to have more service revenues from data services than voice services. In Q1 2010, 55% of its service revenues were attributed to data services. (While Smart and Globe have been reporting 50%+ revenues from data services for a long time, the total revenues are not at scale with the leading global operators. Incidentally, for the first time in many years, the data revenue % slipped below 50% for the both operators in Q1). Based on current projections, US is likely to cross the 50% data revenue threshold in late 2012 or early 2013. NTT DoCoMo is next in line to cross the 50% mark this year.

All this has setup an absolutely fascinating period in the communication/computing industry. Convergence is everywhere and is leading to fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 8^th event – Mobile Future Forward which is bringing leading industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. Hope you can join the discussion.

What to expect in the coming months?

The pace of product introduction is accelerating with each quarter. Devices of all shapes and sizes are coming into the market. Players are having to re-evaluate their businesses and long-term strategies. Several new impressive handsets got introduced during the course of 1H of 2010. iPad finally launched and even the next generation iPhone walked into a bar.

Microsoft announced its comeback with the W7 launch though the time it is taking to launch is making partners nervous. The change in UI was refreshing though the inability for the OEMs to differentiate is not winning friends. HP acquired Palm in attempt to become relevant again in the mobile device space. Some other players missed out in buying an attractive IP portfolio. It has been an action packed 2010 thus far and we can expect more of the same for the remainder of the year.

2010 has also been active on the regulatory front as the national broadband plan was unveiled in March (our thoughts on the plan). The Comcast ruling delivered a blow to the FCC and any directives or policies will hardly have any impact on the ecosystem in the short-term.

With the looming spectrum shortage, regulatory bodies can have a significant impact on the competitiveness of a nation. Many countries in South America have imposed unnecessary spectrum caps. Others are behind in sorting out their spectrum allocations. The industry and regulators need to work hand-in-hand to make progress beyond speeches and paperwork.

To start planning for 4G, 5G, and beyond, US should think about rolling a 50 year broadband plan. While more spectrum is always helpful, will we have all the spectrum we need in 2050? or do we need to invent new technologies and business models that use spectrum more wisely? This topic will keep the industry occupied for some time to come. (Former FCC Chairman, Kevin Martin headlined our Mobile Breakfast Series event in March and discussed the Spectrum Crises. Our June 10th event is bringing CEOs of some of the most innovative mobile startups to discuss the ecosystem)

2010 is also the year of network rollouts. T-Mobile has been rolling out HSPA+ at an impressive rate, Clearwire has been expanding the network so fast that it has become the biggest construction company in the US, Verizon is betting big on LTE and AT&T has been adding backhaul, upgrading to HSPA+ and planning for LTE all at once. Even the smaller carriers like MetroPCS are looking for competitive advantage with quicker LTE launch and beat others by carrying the first LTE smartphone. (We will be releasing the next edition of our “State of the “Mobile” Broadband Nation” paper later this year)

As we had mentioned last year, the mobile data traffic kept on growing disproportional to the revenues. A series of solutions have come into the market from players big and small. We will be releasing the second edition of our in-depth research paper on data growth - "Managing Growth and Profits in the Yottabyte Era" later this month.

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 2010 US wireless data market is:

Service Revenues (Slides 7, 16)

• The US Wireless data service revenues grew 5% Q/Q to $12.5B in Q110. Compared to Q109, the mobile data service revenues grew 22%.
• Verizon and AT&T accounted for 60% of the increase in data revenues in Q4 2009.
• T-Mobile’s 3G drive is starting to pay off. While the net-adds were still in the red, it experienced the highest % growth amongst its peers in mobile data service revenues for the quarter.
• In a significant milestone, Verizon Wireless edged past NTT DoCoMo, the mobile data revenue leader since the late nineties. By the end of the year, China Mobile and AT&T are also likely to cross their Japanese counterpart in quarterly mobile data service revenues.
• AT&T and Verizon now account for 69% of the market data services revenues and 62% of the subscription base.

ARPU (Slides 8-11)

• Overall ARPU decreased by $0.17. Average voice ARPU declined by $0.84 while the average data ARPU grew by $0.67 or 4.6% Q/Q.
• As expected, the average industry percentage contribution of data to overall ARPU crossed the 30% mark in Q110 and is likely to get past 35% by end of the year.
• Verizon led in (blended) data ARPU with $17.06 followed by AT&T and Sprint. In terms of % contribution, all the top three operators exceeded the 30% mark. T-Mobile ended the quarter with 23.70% of its revenue coming from data services.

Subscribers (Slides 12-14)

• In Q409, the net-adds had increased from past several quarters, however, in Q110, the net-adds declined again.
• The texting see-saw between US and Philippines continued in Q110. US average was around 615 messages/user/mo just behind Philippines.
• In a sign of the times, for the first time, AT&T and Verizon reported more net-adds from connected devices than postpaid subs.
• T-Mobile and Sprint improved their net-add declines from last quarter though it was primarily from the prepaid segment. T-Mobile’s 21% and Sprint’s 23% subscriber base is now prepaid. The national prepaid penetration is touching 20%.

Applications and Services

• Non-messaging services continues to grab 60-65% of the data revenues for the US carriers.
• There is a significant shift taking place in terms of app revenues. In 2010, there will be more revenues generated (globally) from off-deck than on-deck for the first time and while the on-deck revenues are in billions, the decline trend looks irreversible. In the US, this shift will occur next year. (We released our mobile apps economy research paper last quarter)
• The usage and data consumption trends are enabling carriers to accelerate their 3.5G/4G plans and develop long-term business and technical strategies.
• The news reports of resuscitation of the media industry by iPad were premature.

Handsets

• Nokia sold 108M units in Q1 2010 including 21.5M smartphones. Samsung again had a solid quarter with over 64M devices sold increasing its market share to 22%. LG Electronics at 9%, Sony Ericsson at 3.6% rounded up the top 4. For the first time, Motorola didn’t figure in the top 5 device makers. Android, Apple, and RIM made gains as well.
• The constant drumbeat of new devices continued with Droid, Nexus One, HD2, EVO, and iPad.

Open

• The battle for “Open” is breaking out in the street with latest episode being Apple vs. Adobe. We tend to forget that open is a means to an end, not an end in of itself. We are experiencing a fascinating period of transition in the mobile industry and some of the biggest brands in computing and communications are right in the middle of it.

Data Traffic (Slide 15)

· As we noted in our last update, the data traffic is now significantly more than the voice traffic. The good news is that there are several solutions that available and are being invented that will help manage the data growth. The question is how fast will the operators deploy some of these solutions.

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 2010. The next Global Wireless Data Market update will be issued in Sept 2010.

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

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

Mobile Breakfast Series: June 10th: Startup Nation May 14, 2010

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

Hope you are enjoying the summer. Just wanted to get you up to speed with the June 10^th MBS event which is shaping up really nicely.

We are excited to welcome OpenMarket as a supporter and sponsor for the event series.

Generous Sponsors: Motricity, OpenMarket, Openwave, WDSGlobal. Many thanks for your support

The theme for the morning is “Startup Nation” and we are going to hear from CEOs of some of the most innovative mobile companies in our ecosystem. We have tried to bring a broad cross-section of expertise so we can get a good pulse of the industry – from mobile advertising to mobile health, carrier-centric to OEM-centric, D2C to B2C, location-based to messaging-based, push messaging to crowd-sourcing – we got it all.

One of the key areas that these CEOs are focused on is “scale” whether it is billions of ad imprints or saving billions of dollars for the carriers or the health industry or being on billions of handsets. The expert panel consists of folks who have been around the block a few times. We will learn from their experience and insights – so really excited about the program.

The two panels are:

Panel I - Mobile Opportunities and Challenges through the Eyes of Startup CEOs

Olga Kharif, Senior Writer, Bloomberg Businessweek (moderator)

Paul Griff, CEO, Root Wireless

Sailesh Chutani, CEO, Mobisante

Paul Palmieri, CEO, Millennial Media

Mike McSherry, CEO, Swype

 

Panel II - Startups - Engage the experts

Kevin Foreman, CEO, PointInside

Derek Spratt, CEO, Mobidia

Scott Kveton, CEO, Urbanairship

John Lauer, CEO, Zipwhip

Jeff Giard, Director, Clearwire

Bill Bryant, Managing Director, EnvisionVentures

Peter Wilson, Ex-Google, Ex-Microsoft

The program will be as follows:

07:30 - 08:30 - Registration, Breakfast, and Networking

08:30 - 09:30 - Panel I
09:30 - 10:30 - Panel II
10:30 - 11:00 - Networking

As you can see we are altering the format a little bit so please try to be on time as it will be a busy morning.

Location: Columbia Tower Club, 701 5^th Ave, Suite 7600 (entrance is from the 75^th floor), Seattle, WA 98104 (Directions)

There is parking available in the building but it is a bit pricey. There are several other parking options available nearby. Good public transportation options are also available in case you want to ride in.

If you plan to attend and haven’t registered, I will encourage you to do so at your earliest convenience. This will help us in capacity planning so we can accommodate as many people as possible. Registration Link

If you have any questions or suggestions, please do let me know.

Thanks and looking forward to seeing you all on June 10^th.

In case you missed … May 2, 2010

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

Here are stories from April

April

Bizrepot - MerchantCircle launches location-based app service

BusinessWeek - Social Phones Offer Shortcuts to the Web

Mediapost - Vanity vs. Sanity: Putting Apps in Context

TelecomTV - Technicality stops Skype on Verizon Android phones

NPR - Mobile Apps Market Scales Up From Zero to Billions

Bloomberg Law Reports - Why Continue to Invest in Patents?

Moconews - Microsoft’s Kin: Too Little, Too Late

Mobile Entertainment - Android rising in Japan

The Globe and Mail - Talk isn’t cheap in world’s biggest cellphone market

Mercury News - Apple: Enhanced multi-tasking will be added to iPhone software

FierceMobileContent - Portals, Entertainment, Travel lead Mobile Advertising Spend

Econsultancy - Mobile: Less phone, more data

Telemanagement - Mobile data is king: surpasses voice

GCN - Mobile data volume exceeds voice traffic for the first time

Nasdaq - Seismic shift in mobile use

Jerusalem Post - Android in Japan

Hot Hardware - Mobile Data Surpasses Voice Traffic for First Time

Phone+ - Analyst: Believe it, iPad will Strain AT&T’s Network

AllThingsDigital - A New First in Mobile: Data traffic Outstripped Voice Traffic Last Year

Business News Network - iPad and Mobile Networks (video)

Mediapost - US Led in Mobile Data Growth in 2009

PaidContent - A new first in mobile: Data traffic outstripped Voice traffic last year

Pluggd.in - Mobile App Stores - Asia leads the download race

BusinessWeek - AT&T may find Apple iPad Strains Network more than expected

BusinessWeek - Verizon joins AT&T and others in Booking Costs from Health-Care Law

The impact of Connected Devices April 16, 2010

Posted by chetan in : US Wireless Market , 2 comments

Millennial Media released its mobilemix device index this morning and something jumped out for me and that is the % share of the connected devices.

Pretty soon it will eclipse feature phones and give smartphone run for its money. Tremendous impact on how advertising is done and thought about

i will have more on this in the future

NPR: Mobile Apps Market Scales Up From Zero To Billions April 14, 2010

Posted by chetan in : US Wireless Market , 2 comments

Had  a chance to talk to Wendy Kaufman of NPR on the apps economy and our apps research

Mobile Apps Market Scales Up From Zero To Billions

by WENDY KAUFMAN

Listen to the Story

Morning Edition

[4 min 20 sec]

Roughly 3 billion apps have been downloaded for Apple’s devices. Analysts say Apple has helped expand the app economy from a market offering free apps into one with annual revenues of up to $6 billion.

April 13, 2010

Apps are now big business.

Three years ago the industry barely existed. But recent studies suggest the app economy is growing rapidly and could top $20 billion — the amount Americans spend on children’s clothing — in just a couple of years.

Roughly 3 billion apps have been downloaded for Apple’s iPhone, iPod Touch and iPad.

Greg Anderson, a senior software analyst atThe Seattle Times, creates apps for mobile devices. He’s also an independent app developer.

"You know, when Apple recognizes you or when you get up in the morning and you see all the downloads, it’s like Christmas everyday," Anderson says. "It’s like caffeine because people appreciate what you’ve done, so you want to do more."

The Advantage Of Free Apps

Anderson’s new app, which converts Celsius temperatures into Fahrenheit, can be downloaded free. That means he’s not making a penny from this app.

"I think every developer will tell you — you’ll get 10 to 15 times more downloads for free than if it costs money," Anderson explains.

Roughly 80 percent of all apps are free. Many of the rest cost just 99 cents.

So how did a market, which focuses on free and almost-free apps, grow into an industry with annual revenues of $5 billion to $6 billion? Analyst Chetan Sharma offers a one-word explanation: Apple.

"Apple really changed the game in many ways. They made it very simple for developers to get their application to the App Store in front of the consumers," Sharma says.

And once it was easier, faster and more lucrative to develop apps and sell them, more developers began to create them. The promise of a digital Swiss army knife became a reality.

But making money from apps is another story.

Charles Golvin, a senior analyst at Forrester Research, says developers who sell millions of their apps — even for a tiny price — can turn a profit.

"It could be someone as big as Electronic Arts, the largest gaming publisher, or could be two guys in a garage," Golvin says.

And the guys in the garage who are giving their app away free may be hoping to eventually sell a premium version — or sell something that goes with it.

Developers typically get 70 cents of every dollar spent to download their app. Golvin says the platform provider — like Apple — gets the rest. And then there’s a separate stream of revenue from advertising.

Advertising Dollars

Developers get most of the advertising dollars, but companies that that serve up ads make money as well. Zumobi, a Seattle-based company, creates apps and places advertisements to go with them.

"We have several apps coming out focused on the female demographic, parents, [and] that audience is obviously very attractive to advertisers," says John SanGiovanni, a co-founder of Zumobi.

The company often partners with big content providers like NBC and Motor Trend.

Ken Willner, Zumobi’s chief executive officer, suggests that being big in the app industry has some advantages.

"As a publishing network, we can cross-promote aggressively all of our applications," Willner says. "For example, you’ve downloaded our Motor Trend App; we will also suggest our NASCAR app — very, very big advantage and frankly something the two guys in the garage can’t take advantage of."

As the number of apps has exploded, it’s becoming more difficult for small guys to get noticed.

In case you missed … April 2, 2010

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

Stories and articles in March

GigaOM - Why Featurephones are the new Black for Mobile Apps?

BusinessWeek - Freeing the iPad from AT&T

WirelessWeek - VCast App Store Opens

WirelessWeek - National Broadband Plan - A Work in Progress

GigaOM - In the App Economy Does the Mobile Browser Matter?

RCR Wireless - America pushes the boundaries of broadband

FierceWireless - Breaking down usage-based data pricing

GigaOM - How Mobile Network Operators Must Evolve as Data Ramps Up

FierceWireless - User appetite for apps continues to surge

NY Times - LTE may heat up mobile net neutrality debate

PC World - LTE may heat up mobile net neutrality debate

Our Mobile Apps Research received unprecedented global coverage with hundreds of stories, here is a sampling ..

---

AFP - Mobile apps a $17.5B market by 2012

BBC - Mobile application sales to reach $17.5B by 2012

Business Insider - Number of Apps Stores Grew from 9 to 38 in 2009

BusinessWeek - Americans Pay More for Mobile Apps

Cellular News - Mobile apps to be worth $17.5B by 2012

Connected Planet - Apps trump CDs - but do we really need 38 app stores

Connected Planet - Mobile apps explode, but what about the little guys

Communities Dominate Brands - So what do we learn from Chetan Sharma’s Report on Mobile Apps

CNET - Mobile app demand to explode by 2012

Datamation - Mobile Application Sales to reach $17.5B by 2012

Ecommerce Times - Consumers go gaga over apps

eWeek - Apple-led apps market to hit $17.5B by 2012

Fast Company - Mobile Apps Sales to Hit $17.5B by 2012

FierceMobile - 50B mobile app downloads in 2012

GigaOM - Mobile Apps are hot, but don’t forget emerging markets

GoMo News - Growth in mobile apps may have hidden dangers

Guardian - Mobile Apps will outsell CDs by 2012

Information Week - Mobile Apps get top dollar in US

Mashable - Mobile App Market to Surge to $17.5B by 2012

Mobile Marketing Watch - Mobile Apps to Soar to $50B downloads by 2012

Mobile Entertainment - Mobile apps to outsell CDs by 2012

Moconews - Evidence that Apple is Onto Something

Msearchgroove - Chetan Sharma first to map app economy and landscape

NPR - App Store Study

PC World - Study’s forecast of Mobile App Explosion are Overblown

PC World - Apps are a goldmine for developers

ReadWriteWeb - Mobile App Marketplace: $17.5B by 2012

Seattle Times - Mobile apps $17B market soon, app seller claims

Techcrunch - Mobile app sales will overtake CD Sales by 2012

TelecomTV - Study forecasts $17.5B apps store revenues

Venturebeat - Mobile apps industry to hit $17.5B by 2012 with 50B in downloads

Wireless Week - Mobile apps will outsell CDs by 2012
WSJ - Studies Forecast Rapid Growth in Mobile Apps

---

FCC - National Broadband Plan

BusinessWeek - Clear’s Mobile Users Really Use the Service

US Today - Media Morning (MBS)

Seattle Times - Glaser on mobile biz, Apple and the Sesame Street problem (MBS)

Seattle Times - Former FCC boss on fed’s free wireless proposal (MBS)

Techflash - RealNetworks’ Rob Glaser on why Apple’s model must be stopped (MBS)

Techflash - RealNetworks advice to startups: It’s better to be lucky, than good (MBS)

Moconews - Former RealNetwork’s CEO Rob Glaser Says For Now Apple Has Won(MBS)

Moconews - FCC Former Chairman Says Agency Lacks Control Over Handset Makers(MBS)

GigaOM - Rob Glaser Defines the Superphone and Predicts the Mobile Future (MBS)

GigaOM - Former FCC Chair Lays Out the Limit on the Agency’s Authority (MBS)

PC World - Former FCC Chair Says More Fiber Will Help Wireless Crunch (MBS)

PC World - Rob Glaser Thinks Mobile Is the Next Big Thing (MBS)

B/OSS - Mobile Data Doesn’t Have to be Expensive

NPR - SXSW and Mobile Data Network Traffic

TMC - Enterprises to Find Increasing Challenges with Wireless Networks

GigaOM - The Disconnect Between Subscriber Growth & Revenues in Broadband and Mobile

Reuters - Telecom groups sit uneasily on client data gold mine

NY Times - Do All Small Businesses Need a Mobile Strategy?

FierceBroadbandWireless - New report enforces why operators are talking usage-based data pricing

GigaOM - Mobile’s Data Usage and Revenue Disconnect

GigaOM - US Mobile Market: Highly Competitive and iPhone Still Rocks

Techcrunch - In Mobile, Fragmentation is Forever, Deal With It

Mediapost - Coming Soon To A Wireless Store Near You

iPad and Network Congestion: BNN and Business Week April 1, 2010

Posted by chetan in : US Wireless Market , 2 comments

It will be fascinating to see how the user behavior develops over time with iPad. It is likely to surprise us and challenge some of the base assumptions. AT&T’s pricing will pave the way of further granular and tiered pricing for mobile data. I had a chance this morning to discuss some of this on Canada’s Business News Network and with BusinessWeek.

How I wish the 3G version was arriving tomorrow as well.

http://watch.bnn.ca/market-morning/april-2010/market-morning-april-1-2010/#clip283844

AT&T May Find Apple iPad Strains Network More Than Expected

AT&T executives, betting that iPad users will mostly connect via Wi-Fi, may be underestimating the likely impact on their 3G network, analysts say

By Olga Kharif and Amy Thomson

Publishing professional Peter Costanzo is out to redefine telecommuting. The 45-year-old online marketing director for Perseus Books Publishing in New York has ordered a 3G-capable version of Apple’s (AAPL) iPad tablet computer. He plans to use it during his 75-minute morning commute from Long Island to read the paper, buy e-books, make notes, retrieve e-mail, and, he hopes, glimpse the future of publishing. "As publishers, it’s really important to see how the device performs," he says.

Consumers like Costanzo could give AT&T (T) a headache in coming months. AT&T’s 3G cellular network is already swamped with data traffic from millions of Apple iPhone users, especially in New York and San Francisco. Users have complained of dropped calls and slow Web access.

Some tech industry analysts fear the iPad could exacerbate the problem. AT&T Chief Executive Randall Stephenson said at a Mar. 2 investor conference in San Francisco that he expects the iPad to be mainly "a Wi-Fi-driven product." Some analysts have interpreted those comments to mean that AT&T could be surprised by higher-than-expected use of iPads on its 3G cellular network.

The iPad "is extremely bandwidth-intensive," says Craig Moffett, an analyst at Sanford C. Bernstein who has a market perform rating on AT&T’s stock. "It could set up users for a disappointment." The iPad’s large screen lends itself to bandwidth-hungry applications like watching movies, Moffett says. That means a 3G iPad could wind up consuming double the network capacity that an iPhone does. "AT&T seems to be convinced that most of the time users will be connected to [a] Wi-Fi network," he says. "That’s a pretty big stretch, given it’s a new device nobody’s used before."

CRUCIAL FACTORS: SALES, EXTENT OF USE

Independent wireless industry analyst Chetan Sharma estimates that a 3G-enabled iPad will consume about two-thirds as much network capacity as a 3G iPhone. If Apple sells 2.7 million 3G iPads this year, as Piper Jaffray & Co. (PJC) analyst Chris Larsen forecasts, that could be the equivalent of 1.7 million iPhones hitting AT&T’s network. The iPad "certainly could put a strain" on AT&T’s network, assuming that consumers use its Internet capabilities extensively and sales match his forecast, says Larsen, who has an overweight rating on AT&T shares. "If they were to get into a situation where they again got behind the capacity, it would damage their reputation," Larsen says.

To be sure, the iPad likely won’t bring a large telecom network to its knees. And until consumers start snapping them up—analysts’ estimates range from 2 million to 6 million iPads sold in 2010—the industry won’t know for sure how extensively iPad owners will stream video and perform other bandwidth-intensive tasks. Many users may opt for less expensive Wi-Fi-only versions of the iPad and use them in hotspot-laden areas such as their homes, airports, and coffee shops.

Three initial versions of the iPad, which go on sale in the U.S. Apr. 3, will communicate using Wi-Fi wireless Internet technology. Three additional models due later in April will communicate over 3G. Buyers of the 3G-enabled iPads will be able to access AT&T’s cellular network for $15 per month or $30 per month depending on how much data they plan to consume. Those plans will also include access to AT&T’s more than 20,000 Wi-Fi hotspots in the U.S. "We feel very good about where our network is," says AT&T spokesman Mark Siegel.

AT&T, APPLE FORESEE FEW PROBLEMS

Glenn Lurie, AT&T’s head of emerging devices, says the iPad’s ability to gracefully hop between cellular and Wi-Fi connections will help ease any network strain. "We’re giving you the ability to have a very nice experience," he says.

Apple spokeswoman Natalie Kerris says users aren’t apt to experience network congestion. "AT&T is a great partner and they are offering a landmark deal for iPad customers with no-contract data plans at great prices," she says.

Still, many users could consume large amounts of bandwidth by watching videos on the iPad’s 9.7-inch screen. A two-hour movie would likely send three to five times more data to the iPad than watching a similar video file on an iPhone or iPod would, estimates James Brehm, a senior consultant at Frost & Sullivan.

The files would be much larger than those containing electronic books, which have been the predominant use of tablet-style devices like Amazon.com’s (AMZN) Kindle.

Jonathan Schildkraut, an analyst with Jefferies & Co. (JEF) who has a hold rating on AT&T shares, says that the iPad "could be a network hog." "Longer term, you could see it causing network congestion," he says.

Kharif is a reporter for Bloomberg BusinessWeek.com in Portland, Ore. Amy Thomson is a reporter for Bloomberg News in New York.

Global Mobile Data Market Update 2009 March 31, 2010

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CTIA Roundup 2010 March 26, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, MVNO, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Traffic, Mobile Usability, Patent Strategy, Patents, Smart Phones, Speaking Engagements, Strategy, US Wireless Market, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment

CTIA hosted its annual networking party in Vegas. I can appreciate what Bill Murray must have felt like in ground hog day for sometimes I can’t tell which year we are in at CTIA.  Of course, things are moving forward with all the advances and services but the messaging and value props reappear from the dead. In any case, it is always good to reconnect with colleagues and wander around on the show floor to get the pulse of the industry. The highlight of the show was the release of the HTC Evo 4G device by Sprint to mark the entry of the first WiMax smartphone. Not to be outdone, Samsung announced SCH-r900 (who comes up with these names) - the first LTE handset to be launched later this year on the Metro PCS network. Like at the Mobile World Congress, it was clear that industry is courting the “developers”  though few have figured out how to help them with a healthy revenue stream. There was a lot of discussion on 4G, Mobile Advertising, Mobile Web vs. Apps, Femtocells, Smart Driving Solutions (it had its own pavilion), HSPA+, A/V Reality, Spectrum, Congestion management, National Broadband Plan, Taxi lines, and more. This note summarizes the observations and opinions from the event, discussions, and briefings.

My trip started early as I was moderating a panel on Mobile Advertising at the packed Mobile Web and Apps World forum. I am finding that the pre-shows generally have better attendance than sessions during the show. MTV’s Joe Lalley mentioned that the number of RFPs that require mobile advertising as a component have grown 3-4 times in the last 6-12 months. One of the areas that has been lagging is the “industry consensus on metrics” as without consistent numbers across all ad networks and service providers, many in the advertising industry will stay on the fence or will work with only select players in the ecosystem. Gary Schwartz, who is on IAB’s Mobile Marketing Committee updated on the collaboration done between IAB and MMA and we should be seeing some of the work soon. To some extent the story of mobile advertising is playing out exactly as we had imagined in our Mobile Advertising book and once many of the pieces are in place, the use of mobile in advertising will become so pervasive that we will wonder what took so long. And as I mentioned before, Apple could help redefine mobile advertising.

It is good that CTIA is thinking of some diversity when designing their keynotes. Iñaki Urdangarín, René Obersmann, Padmasree Warrior, Michelle Caruso-Cabrera, James Cameron, and Biz Stone were a welcome change not that there is anything wrong with other speakers. It is better to look at the industry from multiple angles. However, the lack of developers on the stage was acutely felt. The consistent message across all keynotes was: tremendous growth ahead and we are barely scratching the surface. That was hardly in doubt, the question is who benefits from it and who goes home.

T-Mobile announced the launch of its HSPA+ upgrade along with many smartphones to launched soon. Per Cole Brodman, CTO, T-Mobile US, this makes T-Mobile the US operator with the fastest network (did you know T-Mobile has more cellsites than Verizon?). With WiMAX and LTE smartphones coming in the next few months, we can expect a good tussle for mindshare. However, as the FCC quoted in its National Broadband Plan from our paper  “State of The (Mobile) Broadband Union” - there is a difference in advertised vs. actual speeds especially on smartphones. We will be doing some more research on the topic later this year.

The highlight of the show was Sprint’s release of the “mother of all smartphones” (from the spec point of view)- the HTC EVO 4G. Consider this: 1GHz processor, 8/1.3MP camera, 720p HDvideo, HDMI out, Hotspot capability (upto 8 devices), 3-6 Mbps (wimax)/.6-1.4 Mbps(evdo), 1GB ROM, 4.3” capacitive display, etc. Full specs here. Of course, the pricing and street performance will determine its success but clearly a milestone for the industry. The device came to the market earlier than most expected and will let the competitive fervor to go up a notch.

A couple of days later, Samsung announced its SCH-r900 (who comes up with these names) - the first LTE handset to be launched later this year on the Metro PCS network. Had it been on Verizon or AT&T, it would have gotten more attention. In any case, Metro PCS is trying to cement its place for the bragging rights. We can expect a number of new LTE smartphones coming into the market early next year. Voice and actual performance are still an open question.

Congestion management remains a big issue for the industry. I was glad to hear that the industry is coming around to the realization that “a holistic approach” is required to solving the problem, something we first outlined in our widely referenced paper “Managing Growth and Profitability in the Yottabyte Era.” Ralph de la Vega, speaking in his capacity as the Chairman of the CTIA and executive at AT&T embraced the principles of a sustainable model - complementary technologies, application efficiencies, network efficiencies, and available spectrum. We should add pricing efficiencies into the mix as well. Chetan Sharma Consulting will be releasing an update to the Yottabyte paper in the next couple of months, so stay tuned.

There was clearly a lot of focus on developers and attempts at giving them more voice and attention. As I alluded to in my talk on the appstore ecosystem at last CTIA, the various appstores need to focus on how to make their ecosystems more vibrant and profitable for the developers, else, we will start seeing them drop like dead flies in the not so distant future. A week prior to the CTIA, we released our research on the appstore economy which was well received. While a number of developers had booths at CTIA, there was no useful traffic. Better forums were organized WIP Connector and OMS.

With the imminent arrival of iPad next week, there was plenty of discussion and display of eReaders/tablets and how it might drive another category. While we won’t see the iPhonesque like sales numbers, it is clearly an exciting introduction to couch computing. I will have more to say on the subject once I get my hands on the device next month. It is also quite apparent that the category of extending the display beyond the device is going to take shape this decade. The interactions and content doesn’t need to be in the confines of the small display. 3D video also surfaced as something many players are working on.

Video was touted as the killer app for 4G though I wondered who will be the hunter and the hunted. I remember the same argument for 3G and mobile video went from the darling of the show to a pariah that no one wanted to touch in a matter of two years. Is video over cellular really the best use of resources? Am sure, the debate will continue for the foreseeable future.

Activity in the mHealth segment is picking up. It was mentioned several times in the various keynotes as well as the number of startups tackling the capture and processing of medical data is increasing. One of them was Mobisante which presented on a VC panel I moderated. They are building a low-cost ultrasound imaging device that uses smartphones.

Some of the other news worthy items were:

• As expected, the wireless industry lauded the call for more spectrum in the National Broadband Plan. My column “National Broadband Plan - A Work in Progress” was published by Wireless Week during CTIA.

• The role wireless communications can play in emergencies was highlighted from the rescue efforts and lives saved in Haiti. John Stanton proclaimed the country to be the first copper free telecom nation

• Androids keep multiplying like gremlins

• CTIA released its semi-annual industry survey results. Highlights: $22B in data revenues (second half), 50M smartphones, 257M datacapable devices, 1.5T Txt messages, 24.2B MMS, 285 subscriptions, daily MOU 6.1B (boy! Do we talk a lot). Our 2009 year roundup here.

• Ericsson announced that the data traffic globally grew 280% during each of the last two years and exceeded global voice traffic in Q4 2009. We announced similar trends in our 2009 roundup earlier this month

• Probably the biggest M&A news - Amdocs bought MX Telecom for $104M

• There was buzz in the M2M segment

• Cisco’s Chief Technology Officer Padmasree Warrior said, there will be 1 trillion devices, 1.5M apps, 5.7M security threats, and 486 Exabytes of data consumed by 2013

• An interesting startup I ran across was Invensense - motion based device interaction

• Ericsson had its connected tree on display. In case you were wondering how we get to 1 Trillion devices ..

• Femtocells are trying to remerge after a disappointing year - it’s the pricing _____!

• Obermann: US growth is far better than that of Europe. US T-Mobile is performing much better than the other properties of Deutsche Telekom so why sell.

• The word revolution was used 45 billion times during the conference.

• More CTIA coverage at Wireless Week, Moconews, RCR Wireless, CNET, etc.

We will be discussing many of the future topics in much more detail at our upcoming conference “Mobile Future Forward.” More details to come.

Thanks

Chetan Sharma

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

Wireless Week Article: National Broadband Plan – A Work in Progress March 25, 2010

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

The piece appeared in Wireless Week Show Daily today at CTIA.

Last week, the FCC unveiled its long-awaited “National Broadband Plan.” The plan gets a number of things right and there are some tasks that need more attention.

First of all, the FCC must be commended highly for the process of arriving at a broad set of recommendations, for making the proceedings as open as they can be and for inviting participation from all players - big and small through a variety of forums including face-to-face meetings. I attended one such meeting in person and caught several online and can attest to the quality of the debate and the openness of the forums.

Second, by putting a goal for the nation, there is a visible target that everyone can rally around. One of the best thing the plan does is to equate the necessity of a broadband infrastructure to that of electricity and begins the plan by saying “Broadband is the great infrastructure challenge of the early 21st century.” Hopefully, this will magnify the urgency of developing a plan that enables sustainable leadership in broadband infrastructure for the US. And challenge breeds opportunities.

Third, by defining the plan as a work in progress, FCC affords itself the flexibility based on the conditions on the ground, be it continued spectrum shortages or the introduction of new technologies.

Fourth, one of the key elements introduced was “transparency” and “measurement” of broadband variables in the market, something we have advocated for a long time (see our paper “State of the (Mobile) Broadband Nation” which was referred in the FCC’s national plan).

Finally, the document does a good job of integrating the plan into specific verticals esp. the ones that the government can have a major impact on, namely - Health, Education, Energy, Public Safety, Governance, and Economic Opportunity in general.

The main highlights of the plan are:

1. The plan sets the goal of 100 Mbps for 100 million households (practically everyone) by 2020

2. It sets the goal of 1 Gbps to anchor institutes like schools, hospitals, etc.

3. It seeks to expand broadband coverage to 90% of the nation

4. It ups the broadband definition from “faster than dialup” to “at least 4 Mbps” (significant improvement)

5. It looks to make the broadband connectivity affordable to rural communities, etc, through the use of the Universal Service Fund

6. It seeks greater transparency in performance, pricing, and competition

7. The plan recognizes the shortage of spectrum and seeks 500 MHz spectrum by 2020 of which 60% should be available in 5 years

8. It looks to provide enough spectrum and infrastructure for the first responders and public safety

9. It seeks to reduce the red tape and expedite reviews and approvals that the government is responsible for

Setting ambitious goals is laudable. However, the devil is always in the details - the hows and whens of the plan. The biggest challenge for the commission is going to be in procuring the spectrum in a timely fashion. It will run into both legal as well as political challenges.

As we go about refining the plan and executing on the recommendations, the industry will need to keep a few things in mind. First of all, the additional spectrum is not going to be the panacea for the mobile broadband consumption, especially in the short-term. By the time the first batch of spectrum becomes available, the consumption would have more than quadrupled, so the industry needs solutions for the immediate future.

Next, industry needs to figure out ways to build the infrastructure that is not utterly dependent on the additional spectrum. So, we must invest in R&D that provides breakthroughs in using existing spectrum more efficiently to provide more throughput. Also, fiber penetration will matter a lot as it can be used to off load a good majority of the mobile data traffic on an as needed basis.

The plan does a good job of connecting the critical vertical industries to the broadband infrastructure. However, this is where the other sectors need to step up and enmesh their evolution with progress in the broadband infrastructure. For example, unless the health industry fundamentally changes the way it goes about doing its business, any amount of bandwidth will have no impact. Almost all of the medical institutions don’t even communicate to its customers via TXT, using broadband as a tool is too farfetched for many of the old guards. The situation is similar with education, public safety, energy, and governance.

The plan will also benefit from more intermediate milestones, so we can measure the progress. If the goal is to make the nation competitive and progressive, then, the congress needs to be onboard ASAP. The FCC perhaps needs more regulatory authority to navigate the maze and help prioritize the various efforts during the course of this decade. If this effort is not coordinated well and if we spend too much time on debating rather than doing, we will still be bickering about what broadband means in 2020 while the Japanese go past 100 Gbps.

Chetan Sharma is President of Chetan Sharma Consulting a premier management consulting and strategic advisory firm in the mobile space. He is also the author of 5 books on mobile including “Wireless Broadband: Conflict and Convergence.” www.chetansharma.com

LTE May Heat UP Mobile Net Neutrality Debate March 19, 2010

Posted by chetan in : US Wireless Market , 1 comment so far

Talked to Stephen Lawson of the IDG News Service about LTE/PCRF and he does an in-depth article on the subject which appeared in several places including the NY Times

LTE May Heat Up Mobile Net Neutrality Debate

By STEPHEN LAWSON of IDG News Service\San Francisco Bureau,IDG

Published: March 18, 2010

Fine-grained network controls that are coming with next-generation mobile technology could make some demanding mobile applications such as video perform better but may also raise net neutrality concerns.

LTE (Long-Term Evolution), the fourth-generation mobile technology expected to be most widely adopted by carriers around the world, is designed to boost wireless data speeds and more efficiently serve subscribers. But along with that standard come others that define the IP network behind the cell towers. One of them, called PCRF (Packet Core Routing Function), will give carriers much more fine-grained control over how well applications and services perform.

PCRF has also been extended to 3G, and some vendors and carriers want to use the new technology to deal with growing demands on mobile data networks. On Thursday, Alcatel-Lucent extended its PCRF software, which was introduced last year, from LTE to 2.5G and 3G infrastructure. The company said Thursday that its 5780 Dynamic Services Controller, which can perform PCRF for both 3G and LTE networks, is in trials and will be available in the second half of this year. Alcatel is only the latest in a long line of vendors to offer PCRF software, which is part of a set of network management technologies called EPC (Evolved Packet Core).

EPC is very new technology — it has generated no measurable revenue, according to market research firm Dell’Oro Group — but all the drivers are in place for it to be widely deployed over the coming years, said Dell’Oro analyst Greg Collins. Demand for mobile data is growing fast, and carriers would like to control how the applications offered on their mobile networks perform. PCRF could have a major impact on carriers’ businesses and subscribers’ mobile experiences. Among other things, the technology could be used to give certain applications and users better performance than others. Carriers could even sell preferential treatment to application providers, where that practice is legal, vendors and analysts say.

But because the technology can define grades of service for both subscribers and content providers, it may run headlong into the growing debate in the U.S. over wireless net neutrality. For example, the idea of selling priority to certain providers of over-the-top applications and services, even if that priority were offered to any providers that could pay, has drawn the ire of some net neutrality advocates.

The need for tighter network management is growing out of the rapid increase in demand for mobile data services, the same trend that made LTE itself necessary. As more wireless subscribers try to use ever more bandwidth-intensive applications, carriers want mechanisms to ensure that the most important or sensitive uses of the network don’t get trampled. EPC gives them tools to control, to some degree, the speed or QOS (quality of service) of individual applications.

"I can allocate QOS to a voice channel, or a data channel … or a television service, for example," said William Guinn, chief technology officer of Amdocs, which makes back-end systems for carriers. "If you’re downloading movies, for example, I might want to make sure you get [good] voice quality even if your downloads may take a couple of seconds longer."

Carriers could use PCRF in a variety of ways, according to Chetan Sharma, an independent mobile analyst. It defines nine levels of quality of service based on network delay and packet loss, four of which are guaranteed, he said. When the network is heavily loaded, users with a more expensive plan could get their Web pages and videos faster than those with lower-priced plans. In addition, the carrier could dial back performance for certain types of applications, no matter who was using them. And when subscribers reach the monthly download limit on a particular plan, their connection performance could be dialed back.

Software vendors are developing a variety of tools for controlling services based on policy. Bridgewater, a mobile network management vendor that already offers PCRF software for both LTE and 3G, says it can extend policy-based controls out to the radio access network. Later this year, Bridgewater plans to introduce software that can selectively offload cellular traffic onto faster networks where they are available, said Joanne Steinberg, Bridgewater’s marketing director. Customers with higher-grade plans might find their data connections automatically shifting to Wi-Fi when the cellular network becomes congested, if the carrier considers that a benefit, she said.

Managing users’ performance based on policies could allow carriers to smooth out the peaks in data demand, producing annual cost savings of more than 10 percent for U.S. operators by 2013, according to analyst Sharma.

As long as the terms of those "gold, silver and bronze" plans were clearly spelled out, it would be legal to offer them in most places, Sharma said. The main barrier would be consumer expectations in countries such as the U.S., where all-you-can-eat service has been the norm. For that reason, shoppers are likely to find separate classes of service in Europe first, he said.

Priority for over-the-top application providers could be a trickier proposition. Using PCRF, a carrier could put certain applications or services on a higher tier to ensure a smooth user experience even at busy times, Sharma said. For that assurance, carriers could charge a fee or a percentage of the application provider’s revenue, Alcatel and other vendors acknowledged.

"I can negotiate with a carrier to get the type of service I’m looking for," said Amdocs’ Guinn, giving the hypothetical example of a health-care company that gives patients medical monitors that send data over a mobile operator’s network.

As long as the carrier didn’t use the policy tools to give its own applications an edge over those of third parties, it wouldn’t violate current net neutrality rules in the U.S., which involve blocking or impeding a particular company’s service, Guinn said.

However, to some critics, this idea raises the specter of carriers as gatekeepers on what should be an open marketplace of online applications.

"That has incredibly harmful impacts on competition and … consumer choice … and innovation," said Chris Riley, policy counsel for Free Press, a U.S. media reform group that has fought against blocking of certain applications by service providers. Also, if a carrier can charge for priority access to a congested network, it has less incentive to invest in a fatter pipe, he said. "They are managing scarcity and creating an environment of scarcity to sell this enhanced access."

The FCC’s net neutrality guidelines only cover wired networks today, but the agency is now considering stronger rules, including ones that would extend into the wireless world. The FCC is already proposing rules that would ban carriers from charging third-party service providers for better performance, Riley said.

"There’s a good argument to be made that this kind of prioritization does basically disadvantage new entrants" to the mobile application world, said Fred von Lohmann, senior staff attorney at the Electronic Frontier Foundation. That argument and others about wireless net neutrality will probably play out over the next three years or more, von Lohmann said. "We’re not going to get a clear, final answer for some time," he said.

Copyright 2010 IDG. All Rights Reserved.

March Madness

Posted by chetan in : US Wireless Market , 1 comment so far

Coverage of our Mobile Apps Economy Paper and this is just from the first day

· 901am http://www.901am.com/2010/mobile-apps-download-to-grow-by-92-until-2012.html

· AFP http://news.yahoo.com/s/afp/20100317/tc_afp/usitinternetsoftwaretelecomstudygetjar_20100317073633

o Brisbane Times http://news.brisbanetimes.com.au/breaking-news-technology/mobile-apps-a-175-bln-market-by-2012-study-20100317-qfg5.html

o Calgary Herald http://www.calgaryherald.com/technology/Mobile+apps+market+2012+study/2694140/story.html

o France 24 http://www.france24.com/en/20100317-mobile-apps-175-bln-market-2012-study

o The Insider http://www.theinsider.com/news/3240655_Mobile_apps_a_17.5_bln_market_by_2012_study_Agence_France_Presse

o Ottawa Citizen http://www.ottawacitizen.com/technology/tech-biz/Mobile+apps+market+2012+study/2694140/story.html

o MSN Arabia http://www.arabia.msn.com/News/technology/AFP/2010/March/1295543.aspx

o Yahoo News Australia http://au.news.yahoo.com/queensland/a/-/technology/6946456/mobile-apps-a-17-5-bln-market-by-2012-study/

o WA Today (Australia) http://www.watoday.com.au/breaking-news-technology/mobile-apps-a-175-bln-market-by-2012-study-20100317-qfg5.html

o Hundreds more

· BBC http://news.bbc.co.uk/2/hi/technology/8571210.stm

· Business Insider http://www.businessinsider.com/mobile-apps-are-hot-hot-hot-even-more-so-than-you-thought-2010-3

· BusinessWeek online http://www.businessweek.com/the_thread/techbeat/archives/2010/03/americans_pay_m.html

· Connected Planet http://blog.connectedplanetonline.com/unfiltered/2010/03/17/apps-trump-cds-but-do-we-really-need-38-app-stores/

· Communities Dominate Brands http://communities-dominate.blogs.com/brands/2010/03/so-what-do-we-learn-from-chetan-sharmas-report-on-mobile-apps.html

· CNET http://news.cnet.com/8301-30686_3-20000626-266.html

· Datamation http://itmanagement.earthweb.com/daily_news/article.php/395202/Mobile-Application-Sales-to-Reach-175bn-by-2012.htm

· eWeek http://www.eweek.com/c/a/Mobile-and-Wireless/Apple-Led-Apps-Market-to-Hit-175-Billion-by-2012-Report-761201/

· Fast Company http://www.fastcompany.com/1586453/mobile-apps-sales-to-hit-175-billion-by-2012

· FierceMobile http://www.fiercemobilecontent.com/story/forecast-50-billion-mobile-app-downloads-2012/2010-03-17

· GigaOm  http://gigaom.com/2010/03/17/mobile-apps-are-hot-but-dont-forget-emerging-markets/

· IntoMobile http://www.intomobile.com/2010/03/17/mobile-apps-could-generate-17-billion-by-2012.html

· Mac Observer http://www.macobserver.com/tmo/article/mobile_app_market_set_for_growth_spurt/

· Macsimum News http://www.macsimumnews.com/index.php/archive/study_mobile_apps_will_outsell_cds_by_2012/

· Marketing Pilgrim http://www.marketingpilgrim.com/2010/03/study-predicts-mobile-app-market-will-show-significant-upward-mobility.html

· Mashable http://mashable.com/2010/03/17/mobile-app-market-17-5-billion/

· Mediapost http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=124435

· Mobile Burn http://www.mobileburn.com/news.jsp?Id=9014

· Mobile Entertainment http://www.mobile-ent.biz/news/36394/Mobile-apps-to-outsell-CDs-by-2012-claims-GetJar

· Mobile Marketing Watch http://www.mobilemarketingwatch.com/forecast-mobile-apps-to-soar-to-50-billion-downloads-by-2012-set-to-outsell-cds-5747/

· Moconews  http://paidcontent.org/article/419-evidence-that-apple-is-on-to-something-theres-38-app-stores-with-more-o/

o Y! Fianance http://finance.yahoo.com/news/Evidence-That-Apple-Is-On-To-paidcontent-1446337249.html?x=0&.v=1

· Msearchgroove http://www.msearchgroove.com/2010/03/17/podcast-report-by-chetan-sharma-first-to-map-app-economy-getjar-reveals-strategy-play-to-monetize-apps-plus-why-app-shortcuts-could-be-the-real-money-maker/

· Neowin.net http://www.neowin.net/news/mobile-apps-to-be-a-175b-industry-by-2012

· PaidContent http://paidcontent.org/article/419-evidence-that-apple-is-on-to-something-theres-38-app-stores-with-more-o/

· PC World http://www.pcworld.com/article/191791/studys_forecast_of_mobile_app_explosion_is_overblown.html

· PocketGamer http://www.pocketgamer.biz/r/PG.Biz/GetJar+news/feature.asp?c=19167

· Pulse2 http://pulse2.com/2010/03/17/mobile-applications-expected-to-be-a-17-5-billion-market-by-2012/

· ReadWriteWeb http://www.readwriteweb.com/archives/mobile_app_marketplace_175_billion_by_2012.php

· RedOrbit http://www.redorbit.com/news/technology/1837810/mobile_app_market_could_top_17_billion_by_2012/

· Seattle Times http://seattletimes.nwsource.com/html/technologybrierdudleysblog/2011367573_mobile_apps_17_bil_market_soon.html

· Softpedia http://news.softpedia.com/news/Mobile-Apps-Industry-to-Top-17-5-Billion-by-2012-137720.shtml

· StrategyEye http://digitalmedia.strategyeye.com/article/a6304a6755/2010/03/17/Mobile_app_market_worth_USD17_5bn_by_2012/

· TechCrunch http://techcrunch.com/2010/03/17/getjar-mobile-app-sales-will-overtake-cd-sales-by-2012-video/

· TechDigest http://www.techdigest.tv/2010/03/mobile_apps_to.html

· TelecomTV http://www.telecomtv.com/comspace_newsDetail.aspx?n=46116&id=e9381817-0593-417a-8639-c4c53e2a2a10#

· TMCNet http://iphone.tmcnet.com/topics/iphone/articles/78903-study-mobile-applications-market-reach-175-billion-2013.htm

· Unwired View http://www.unwiredview.com/2010/03/17/study-predicts-rise-of-17-5-billion-mobile-apps-market-by-2012/

· VentureBeat http://mobile.venturebeat.com/2010/03/17/study-mobile-apps-industry-to-hit-17-5b-by-2012-with-50b-in-downloads/

· Wireless Federation http://wirelessfederation.com/news/23431-apps-revenue-to-increase-manifold-by-2012-getjar/

· Wireless Week http://www.wirelessweek.com/News/2010/03/Mobile-Contnet-Mobile-Apps-Outsell-CDs-2012-Mobile-Applications/

· WSJ.com http://blogs.wsj.com/digits/2010/03/17/studies-forecast-rapid-growth-in-mobile-apps/

Millennial Media’s SMART numbers March 18, 2010

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

Millennial Media released their monthly numbers today. Some interesting data that caught my eye – cause marketing and fund raising is on the raise in large part due to Haiti and Chile disasters. This might have some tangential benefits to the industry – consumers getting used to paying with mobile (in addition to of course helping the cause and raising money)

The second interesting point was the rise in Android impressions in a month. Could it be Nexus One or Droid or both?

You can download the full research at www.millennialmedia.com/research

from the release -

Special Section – Mobile Cause Marketing:

1. We featured a third-party study focusing on the growth of mobile fundraising and its audience’s demographics. The study conducted by Convio, Edge Research and Sea Change Strategies analyzed findings from a national survey of US charitable donors that was conducted the week after the earthquake in Haiti occurred.

2. According to the research, “Prior to January 12, 2010 little more than $1M had been raised via mobile text…close to $50M has now been raised though this channel” in the aftermath of the earthquake in Haiti.”

Engagement & Targeting:

1. Mobile behavior trends saw an uptick: January’s average user session time of 4:57 (min:sec), increased to 5:14 (min:sec) in February, the longest session time we have seen since our June ’09 S.M.A.R.T.™.

2. Advertisers continued to heavily leverage mobile-specific campaign actions such as Application Download, Place Call, Subscribe Purchase, M-Commerce, and Store Locator.  Application Download and Place Call represented the top two in February with 31% and 29% of calls to action respectively.

3. Together, Traffic to Site and Application Download represented 65% of all campaign destinations on our network, further validation that advertisers continue to develop a persistent mobile presence

Devices:

1. Two new Quick Stats were added to our February S.M.A.R.T.™ - RIM and Android network impressions. Android impressions increased 25.3%; the largest month over month increase the OS has had on our network.

2. Apple increased once again and remained the number one device manufacturer with approximately 39% share of impressions.

3. Following Apple’s impression share lead, the Touch Screen category increased 17% month over month within the Device Input Method mix and led with a 54% share of impressions.

4. Wi-Fi also retained the largest impression share of the U.S. Carrier Mix in February and held 26% share of impressions. 

 

 

Mobile Broadband Revisited March 17, 2010

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

I am working on a piece on the “National Broadband Plan” but thought it might be useful to revisit a couple of articles I wrote for RCR Wireless. Some more thoughts in the next few days.

Defining Broadband

The Vision
Mobile broadband is the network connectivity environment, where networks of different shapes and sizes collaborate to provide users unfettered access to the information they seek, the content they want to engage in, connect people in new and exciting ways, where time and distance are all but collapsed to provide access to anyone and anything, faster than the speed of thought. At least, that’s the vision.

In 1991, the late Mark Weiser of XEROX PARC, considered the father of ubiquitous computing, dreamed of an always on, always connected world in which humans and computers are seamlessly united. In 2002, my friend and coauthor Dr. Yasuhisa Nakamura, then CTO of NTT DoCoMo wrote in our book that his vision of mobile broadband is when wireless infrastructure becomes indistinguishable from air - omnipresent. It is just there without us consciously searching for it. Here we are in 2009, where the FCC is engaged in the noble task of defining broadband and various players are quibbling over a few kbps speed requirements. But as the national debate on broadband reaches a fervent pitch, one has to come back to the task at hand and figure out what defines "mobile broadband."

Defining Broadband
FCC’s current definition of broadband is stated as "The term broadband commonly refers to high-speed Internet access that is always on and faster than the traditional dial-up access." Faster than dial-up doesn’t really conjure up an image of a 21st century ready infrastructure, so, how do we go about defining mobile broadband, what benchmarks are meaningful, and most importantly, what factors would yield sustainable competitive advantage to service providers.

First of all, we shouldn’t mix wireless and wireline for some time. The inherent cost structures, economics, and physics of the two mediums are quite different. By expecting wireless to deliver wireline performance and pricing, we are setting ourselves for disappointment.

Real speeds, coverage, and spectrum
The speed of the network has long been the main benchmark for mobile broadband, esp. the peak rates possible using a given technology. For e.g. in the GSM family of technologies, GPRS roughly equates to 114 Kbps, EDGE to 474 Kbps, UMTS to 2 Mbps (stationary), HSPA to 7.2 Mbps, HSPA+ to 28 Mbps, and LTE to 100 Mbps (of course, there are differences in upload, download, peak, off-peak, min, max, etc.). However, the real-life network speeds experienced by average consumers are typically 40-60% of the peak rates. During peak traffic times, the speed drops even further.

We should be looking at the bandwidth requirements from the eyes of the consumer. Someone living in Bellingham, Wash., only cares about the coverage and the average bandwidth available to them at any given moment. What ultrafast networks are deployed in Washington, D.C., is of little interest to them. So, we need to measure coverage and consistency in performance across the nation. Also, one needs to keep the spectrum scorecard for we can deliver 100 Mbps but the spectrum required under current set of technologies is just inadequate. Hence, the benchmarks for mobile broadband need to be closely correlated to the national spectrum dedicated to mobile.

As a first step, we need to take the discussion away from peak rates to average rates and measure the average throughput at any given time across various markets. Any issues with the backhaul network will also be reflected in these numbers and thus will help us understand the state of the mobile infrastructure at a more granular level. Japan, Korea, and Australia are investing heavily in upgrading their national mobile infrastructure to stay ahead of demand. Progress in these countries will clearly serve as a guiding principle for the U.S. and other economies.

Latency
As we move into the 3.5G and 4G mobile network arena, latency (along with jitter) will start to become an important benchmark as well. Reduction in the time to fetch content enables better user experiences. An all-IP network introduces a flatter network architecture which in turn reduces the latency in the network. Better user experience paves the way for more usage and higher content consumption which in theory yields informed citizens and higher productivity.

Consumption
We should also keep track of the average bandwidth being consumed by users on a monthly basis. By keeping an accurate measurement, the ecosystem can plan better. Some other regulatory agencies like the Hong Kong Telecommunications Authority regularly publish mobile data usage. While the task is much bigger in the U.S., some measure of the pace of growth is necessary for the ecosystem to appreciate the risks and the opportunities.

Pricing
Next, we need to keep track of the average price paid by consumers for mobile broadband and mobile data consumption over time and the choice of providers available to consumers on a national basis. The above also needs to be measured from a demographics point of view by looking at the numbers for a wide variety of user populations. Additionally, these measurements need to evolve over time as our understanding of what’s important to the consumer changes.

Intelligent Platforms
Finally, while the debate is focused on how to deal with the data growth, little attention is being paid to how to use the terabytes of data that is being generated. In other words, there is a lot of focus on data creation but little on intelligence extraction. Most service providers are consumed by network upgrades, move from WCDMA to HSPA+ to LTE and so on and so forth but little investment is going into understanding the consumer and their mobile data behavior - how are they consuming data? what are their preferences and unmet needs? how do you tailor content, value added services, and pricing plans at a subscriber level? how to leverage mobile as a media channel? etc.
Don’t get me wrong, carriers absolutely need to build a robust network that can stay ahead of the consumer demand but they also need to continue to innovate on several key fronts. By focusing too much on network build out and too little on building intelligent platforms that can harness the power of these networks, many service providers are leaving the door open for others to extract more value out of these network upgrades. Sustainable competitive advantage can only be built by understanding the consumer better, mobile affords that opportunity. Players who are focusing on measuring intelligence of their networks are the ones who will be able to withstand emerging business threats better than those who are investing little in building out the platform. And, intelligence is something the FCC can’t regulate but consumers will see the difference.

Solutions for the Broadband World

In the last column I talked about setting the goals and defining mobile broadband. While we are still a ways away in defining what constitutes broadband, another key debate has emerged in the past few weeks and that is how do we go about the solving the increased capacity problem. FCC Chairman Julius Genachowski has done a masterful job of outlining the principles, of holding public hearings in an open and transparent manner, of creating the urgency of dealing with the broadband issue, and of embarking on a practical national broadband plan, and of getting support of his fellow commissioners and industry leaders, the four key principles being:

1. Most importantly he described the spectrum shortage as a looming crisis and that additional spectrum capacity is needed to handle the demand of data traffic from data cards and smartphones (something we have illustrated in detail in the paper "Managing growth and profits in the Yottabyte era")
2. Removing red tape to allow wireless carriers to build their network faster, for example, the work with cell towers
3. Codify and enforce net-neutrality policies
4. Open Internet

To some in the industry, the broadband capacity problem equates to the lack of spectrum. In fact, the Chairman has spoken out about the "looming spectrum crisis" in great detail on several different occasions. It is apparent that to achieve 50-100 Mbps, new contiguous spectrum is needed. However, it will be a mistake if the dominant solution for the broadband capacity crisis is more spectrum, for the following reasons:

1. There isn’t enough spectrum, especially the right spectrum
2. It takes 7-10 years to procure the spectrum for wireless use
3. By focusing on spectrum only, we will be just postponing the current crisis
4. By giving out spectrum too soon, industry won’t have the opportunity to learn to thrive within its means and let new technology and business innovation show the way to handle the increased data consumption.

Like with all tough problems, to find an effective and a lasting solution, one has to break down the problem into smaller bits and find solutions that address not only those individual pieces but the problem as a whole. We know the following for a fact:

1. Broadband data cards (external or internal) account for over 73% of the data traffic (2009)
2. Smartphones esp. with full browser and media capability account for roughly 24% of the traffic (2009)
3. There are a small percentage (< 3%) of heavy users who regularly have very high data consumption
4. Majority of the data usage takes place in an indoor environment (60-80%)
5. Video and browsing are the two biggest application categories for data consumption (accounting for over 70% share)
6. Consumers launch full applications (or browsers) to get minor updates because that’s the only way to get access to those updates on the mobile devices. Alternate strategies like the one implemented by INQMobile series of devices and Motorola Cliq are good examples of rethinking applications
7. There is no incentive for the user to change behavior on content consumption
8. To cope with the data congestion issue, all three major elements of the network need to be upgraded - RF, core network, and the backhaul. Only RF portion of the network is predominantly dependent on the spectrum allocation (while some backhaul solutions require spectrum, the direction of the industry is towards laying fiber or adopting solutions that don’t require any additional spectrum)
9. Competition breeds innovation, legacy spectrum allocation regimes might have an opposite impact
10. Doing broadcast video over cellular is not economically feasible
11. Number of devices/user is increasing, however, not all connections need high-speed real-time availability
12. True 4G bandwidths (50-100 Mbps) are not possible without additional spectrum
13. Backhaul requirements for LTE will increase in the 200-500 Mbps range within the next 5 years
14. LTE is not going to have a major impact on the data consumption problem in the short-run (2010-2013)
15. LTE smartphones might not be in the market until 2012-13

To address the data consumption issue in light of the above facts, one has to figure out a set of solutions that work in concert with each other. Just focusing on one solution only gets you so far, however, a range of viable solutions that address each of the above problem elements are likely to prepare the industry much better for the long haul. Some of such solutions are discussed below:

1. Offloading traffic without impacting the user experience or requiring user intervention. Leverage existing WLAN footprint and invest in femtocells and WLAN expansion.
2. Congestion management through caching and intelligent buffering
3. Incentivizing users to shift consumption to fill the network troughs
4. Implementing network optimization across all media and application types, especially, video and browsing
5. Adopting broadcast mobile video solution
6. Tightly integrating highly used applications like Facebook and Twitter into the handset
7. Introducing tiered pricing plans so that light users pay for broadband connectivity relative to their consumption. This will also bring in a new set of users into the broadband fold who have been sitting on the sidelines due to pricing
8. Upgrading of the backhaul capacity irrespective of LTE
9. Investing in analytics to better understand user consumption behavior at a micro level to plan appropriate strategies, solutions, and pricing plans
10. Creative bundling of data plans to bring more users into the data ecosystem.

By considering such solutions in parallel, the industry will be better off in the long-run. It is the only way to tackle the problem in the short-term since neither the additional spectrum nor the announced deployments of LTE are going to make any meaningful dent to the data usage costs and margins. Wireless is one of the industries where policy can have a significant impact on the direction of the industry. By focusing too much on the spectrum, we will miss the opportunity to cultivate a better network and business ecosystem and to invent new technologies and revenue models that will have a far stronger impact on the evolution of the mobile industry.

Links to the original articles

Defining Broadband

Solutions for the Broadband World

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