Author: Martin

Michael Mace looks at Ovi and Nokia Strategy

My boss today pointed me to an article written by Michael Mace over at his Mobile Opportunity Blog on Ovi, and Nokia strategy. While in my own article on the topic I’ve been concentrating on the potential struggles between Nokia and mobile network operators this move will probably provoke , Michael broadens the scope and puts Apple and the iPhone into the equation. A long article but a worthwhile read since it contains a lot of thought provoking observations.

Interestingly enough we come to the same conclusion in our articles: We both fear that the whole process could lead to another set of walled gardens. More colorful perhaps but still with walls. But then, a mobile phone can have more than one door…

The Cell Phone Network Hack Of The Decade

In 2005, the cell phone of the prime minister of Greece and those of 100 other people were secretly tapped by what in my opinion is the most extraordinary attack on a cell phone network that has been uncovered to date. The July 2007 issue of the IEEE Spectrum magazine has a very good summary of what happened, how the spy program was detected and the consequences. The article is also available online.

Here’s the elevator pitch:

  • Unidentified hackers design a secret patch for Ericsson Mobile Switching Centers and mange to insert the code into switches in the Vodafone Greece network.
  • The code checks all calls and taps conversations made over 100 selected phones. These conversations are in effect duplicated and forwarded to other mobile phones.
  • The hackers make a mistake when they update their spy program and logs are generated by the switch. This tips of Vodafone and Ericcson which then start an investigation.
  • And for the rest… read the article.

It’s one thing to program a virus or trojan horse for a Windows, MAC or Linux box. Secretly inserting code into a GSM Mobile Switching Center which does not run an off the shelf operating system, however, is quite another. It definitely shows why Cryptophones that encrypt a call from mobile to mobile are worth their money. I wonder, how many of those 100 people used one…

Femtocell Thoughts – Part 2

In part one of this miniseries on femtocells I’ve been looking at the benefits for mobile operators. This part deals with why users would put a femtocell into their home.

From the user’s point of view the advantages of femtocells are less clear to me. While the user shares all of the operator advantages discussed in a previous blog entry, increasing customer retention and thus churn is not necessarily in the interest of users since it could reduce competition. Also, it is unlikely that all family members use the same mobile operator and thus could benefit from a single femto cell.

In addition, mobile multimedia users are usually still early adopters which tend to use sophisticated phones, of which many include Wifi. With such phones a femto cell for multimedia content is not required since Wifi offers a similar or better experience for Internet content. Multimedia services offered by mobile network operators, however, are usually not available over Wifi which, from the end user perspective, is not a huge loss since early adopters tend to use Internet services rather than multimedia services of operators that are usually more expensive or come with limitations not acceptable to such users.

An advantage not mentioned before is that better 3G in-house penetration would increase call establishment success rate for 3G video calls since mobiles reselecting to the 2G network because reception quality is better can not be used for incoming or outgoing video calls. Thus, femtocells could become an important element in the future to make video calls more popular as the service still fights with the famous hen/egg problem of 3G network availability and number of users with compatible handsets.

Monetary incentives could persuade users to install femto cells. Operators could for example offer cheaper prices for voice calls that are handled via the femto cell. Also, the operator could propose to share revenue with femto ‘owners’ if other subscribers use the cell for voice and data communication instead of a macro cell.

Often the argument is brought forward that femtocells allow to market single phone solutions in which the user no longer has a fixed line phone and uses his mobile phone both at home and on the go. However, such solutions which use the macro layer instead of femtocells have already been available for several years in countries such as Germany (O2’s famous home zone for example) and are already very popular. Also, it is unlikely that mobile network operators would have competitive prices for all types of calls so many users would still use a SIP phone or software client on a PC for such calls at home. Calling a mobile number is still more expensive in most parts of the world excluding the U.S.A. than calling fixed line phones so single phone offers have to include a fixed line number for the mobile phone in order. Again, this is already done in practice for example by O2 in Germany for a number of years but femtocells might enable the mobile network operator to deliver such services cheaper than how it is currently done over the macro layer.

It should alsobe mentioned that using a femtocell would have a configuration and usability advantage over SIP Wifi phones. However, it is likely that the configuration process for SIP and Wifi on handsets will improve over the next few years thus decreasing this advantage.

To be continued

So much for now on the user’s point of view on femtocells. In the third part, to come soon, I will take a look at the technical background and hurdles.

As always, comments are welcome!

20 Years Ago The GSM MoU Was Signed

Both a long time and a short time, but 20 years ago on the 7th of September 1987 the GSM Memorandum of Understanding (MoU) was signed by 12 European nations on September the 7th. It took a bit after that but three and a half years later the first GSM network, today known as Elisa in Finland, opened its doors. Since then the mobile networks are constantly evolving and activities are still accelerating rather than slowing down.

For a long time, mobile networks were considered voice only networks and even SMS was only added to networks at the end of the 1990’s. Since then mobile data services have evolved in only a few years from speeds of a couple of bits per second to multi megabit 3.5G highspeed. Nevertheless, everything is still based on the GSM standards from back then, or 3GPP standards as they have been renamed to in the meantime.

The telecoms industry had a tremendous roller coaster ride during that time. For many people working in the industry the ride did not always go to the better side. After the .com burst at the beginning of this decade, tens of thousands of people in the telecom industry have lost their jobs. Today, unlike the IT industry which seems to have picked up steam again, the telecoms industry with some exceptions is still struggling and the turbulences are far from over. A challenging time for everyone in the industry which takes true determinism.

Looking at the user side it’s incredible to see the changes mobile networks have brought to the life of people in both rich and poor countries. Voice was the first revolution and today few people can still imagine a life without cell phones. Generation-C can probably not imagine it at all. After a number of iterations I can see mobile Internet access now also picking up with people around me and even some skeptics of yesterday are now using a Blackberry or HSDPA mobile data card in their notebook. Generation-C is next, pricing levels are close to become affordable for them!

Good sides, bad sides, but no matter happy birthday GSM!

Femtocell Thoughts – Part 1

There is currently a lot of hype around Femtocells, tiny user installable 3G cells for homes and offices. Surely an interesting technical concept but still with many question marks attached such as why would users want a 3G cell at home or at the office and what the benefits are for the operator. Here’s what I think:

Operator Benefits

3G networks are operated on the 2100 MHz frequency band in Europe and Asia and in the 1900 MHz band in the U.S. which is far from ideal for in-house coverage. Even in cities it can be observed that dual mode 2G/3G mobiles frequently attach to the 2G network because many GSM operators use the 900 MHz band in Europe which is much better suited for in-house coverage as lower frequencies penetrate walls much better. Some proponents of Femtocells claim that in-house coverage for voice calls are greatly improved by Femtocells. In cities however, this benefit is rather small since GSM in-house coverage is usually not an issue. The user on the other hand does not really care if his voice call is handled by the 2G or 3G network.

An improvement could be seen however in cases where the mobile can’t decide to stick with either the 2G or the 3G network due to changing 3G signal levels. This creates small availability outages while the mobile selects the other network type. During these times, incoming voice calls are either rejected or forwarded to voicemail.

Also, it can often be observed in practice that a mobile device with weak 3G in-house coverage changes to the 2G network once a connection to the Internet is established (e.g. to retrieve eMails or to browse the web on the mobile phone) and sometimes changes back to the 3G network during the connection. The reason for these ping pong network selections are the changing reception levels due to the mobility of the user and changing environmental conditions. Such network changes result in outage times which the user notices since an eMail takes longer to be delivered or because it takes a long time for a web page to be loaded.

Another solution to the issues described above is the use of the 900 MHz frequency band for 3G in Europe and Asia and the 850 MHz band in the U.S. It is likely that this will happen over the next few years since regulators more and more tend to open the 900 MHz band for 3G networks in Europe. It will take a number of years however before network operators will have deployed their 3G networks in those lower frequency ranges and until devices for these bands are available. It’s also likely that 900 MHz cells would first be used to cover rural areas instead of enhancing coverage in areas already covered by 3G in the 2100 MHz band. In the meantime, Femtocells definitely have the advantage.

As the above weaknesses of 3G in higher frequency bands show, femtocells can increase customer satisfaction. Putting a femtocell in the user’s home would have the additional advantage for network operators of reducing churn, i.e. customers changing contracts and changing the network operator in the process. Customer retention is all the more reinforced if the Femto comes in a bundle with DSL access as further described below since changing wireless contracts also has consequences for the fixed line Internet access at home.

Another advantage of femtocells is to reduce the gradual load increase on the 3G macro network as more people start using 3G terminals for voice and data connections. This could result in a cost benefit since if the right balance of macro and femtocells are reached, fewer expensive macro cells would be necessary to handle overall network traffic.

The question is how much these advantages are worth to a network operator since Femtocells do not come for free!?

More to come

So much for now. Part 2 to come soon deals with why users would put a 3G femotcells into their home and part 3 will look at the technical background and hurdles for femtocells.

As always, comments are welcome!

More On User Installable Certificates for Wifi (And WiMAX)

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Some days ago I have speculated how a WiMAX world might look like without SIM cards. It’s likely that certificates are going to be used to authenticate terminals and users to the network (and vice versa). The big open question is whether these certificates are pre-installed and can not be changed, i.e. the device is locked to the network, or if they can be installed by the user. This would have the advantage that a device can be used in any network that allows user installable certificates.

Wireless LAN already uses user installable certificates in WPA-enterprise mode and larger organizations are already making use of this. Here’s an example from a university that uses PEAP. To my surprise, my Nokia N93 phone already seems to support a large number of different EAP authentication methods today, see the picture on the left.

What’s worrying me a bit is the many different types of EAP methods. That’s going to create the heck of an issue for non-tech end users. Also, how do you keep a (software) certificate save? With a SIM card that’s much easier since it is a piece of hardware.

A Yoigo Weekend

I’ve been in Spain for a couple of days and I am glad that a number of people have told me about Yoigo, a new mobile operator in Spain,  which offers Internet access via Prepaid SIMs. So here’s a report from my weekend with Yoigo and Madrid:

How To Get The SIM Card

Once in Madrid the first mission was to get a SIM card. According to the Wiki, Yoigo SIM cards are sold in "The Phonehouse" shops. So before my departure I checked the web page and located the shop closest to my hotel. Buying the SIM card only took a couple of minutes. The SIM cost €20 euros and included €20  worth in phone calls and Internet connectivity. The price per day for Internet connectivity is €1.20 (€1.36 with taxes) for 2G and 3G access. It doesn’t sound like a lot but if used every day it amounts to about €40 a month which is on par with what other operators offer as well. However, charing daily certainly offers the door to new market segments.

Some people reported that Yoigo only covers a few cities with 3G so far, but Madrid was fortunately part of the list.

Mobile Phone And Notebook Use

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The first megabyte is billed by the kilobyte and all data traffic afterwards during that day is free. After each data session or phone call a USSD message reports usage and remaining credit. The picture on the left shows the message which reports a cost of €0.00 of a data session established after the first megabyte has been used. Previous reports were not quite clear if Yoigo requires the use of a proxy and otherwise blocks all other ports or if the connection is open and other services like eMail, etc. can be used as well. I can definitely confirm that the connection is open and I used the SIM for both web browsing, eMail and Shozu with the mobile phone and with the notebok to browse the web, check my eMails, Yahoo messenger, for IPSec VPN connections, etc.

Network Performance

Yoigo_throughput
Yoigo does not seem to have 3.5G HSDPA yet, as my phone just established plain UMTS 3G connections. While 3G comes nowhere near 3.5G HSDPA speeds, it’s nevertheless fast enough for most activities (384 kbit/s which equals about 45 kBytes/s). Unfortunately, Yoigo seems to have similar problems like Wind in Italy since I had a lot of IP layer retransmissions due to ‘duplicate acknowledgments" which indicate packet loss. I tried during different times during daytime and also nighttime but the problem persisted. Thus, it’s not a busy hour problem. I can also rule out terminal incompatibility as I saw the same behavior with a Motorola V3xx and a Nokia N93 in combination with a notebook. As a consequence web pages take somewhat longer load and file download performance is around 12 kByte/s instead of 45 kByte/s. Throughput peaks were at around 45 kBytes/s which indicates I got a 384 kbit/s bearer, while the low overall throughput is caused by the frequent retransmissions. The second picture on the left shows a pretty disastrous throughput graph of a file download.

I can’t say if this is a temporary problem or not since I’ve only been in Spain for a couple of days. If I lived in Spain, however, and the problem persisted it would definitely make me go to another operator. So I hope Yoigo takes a closer look and fixes the issue. If you like Wireshark traces of the issue, let me know 🙂

Summary

Despite the less than optimal performance I was quite happy with my Yoigo weekend experience in Madrid. In total I transferred about 60 MB during 4 days which is not much, but I have been on vacation after all 🙂 There are still about €13 of the initial €20 left on the SIM card which will probably be eaten up by the €6 per month minimum usage fees over the coming months. However, I hope that the SIM stays active till next February when I will probably come back to Spain for the Mobile World Congress (formerly the 3GSMWorldCongress) in Barcelona. Until then I hope Yogio will also have upgraded to HSDPA.

Nokia’s Ovi: Let’s See How The Key Looks Like

This weeks announcement by Nokia of the launch Ovi (Finish for ‘door’) to bundle and extend their mobile services has certainly caught the attention of a couple of people in the industry, even though many saw it coming for a while. For now the announcement did not go into the details of the who, when, where and what but that’s certainly going to change in the next months. I think it is a smart move that comes at the right time. Networks, devices, price plans and applications are close to having reached a level of maturity in many countries to offer an easy, affordable and fun way for people to extend their reach and to discover the world in new ways with the mobile Internet.

Nokia’s Advantages Over Network Operators

Nokia has a number of advantages when it comes to mobile services over network operators. First, they develop the devices that the services run on themselves. Thus they don’t suffer from the fracture network operators have to deal with since their strategy is that the services they offer must run on devices of different manufacturers. Take a look at Vodafone Live! for example and the constant struggle to make the menu structure, icons, etc. of phones of different manufacturers look alike. On top, Nokia has a great mobile platform with S60 that is far more capable than the common minimum denomiator of a multi vendor terminal approach. This makes it a lot easier to develop compelling and easy to use services such as NokiaMaps, which will become a part of Ovi.

Beyond the software platform, Nokia has launched great mobile phone hardware in the past 18 months with their N-series and E-series product categories. Most of these devices now include Wifi which I think is key to delivering services independently of a mobile operator. With Wifi the mobile phone, or rather the ‘multimedia computer’ to use a Nokia term, easily integrates into the users home and office environment.  The devices now also include a SIP client which (I think) can become active automatically when the correct WLAN is detected which again circumvents the mobile network operators monopoly and gives users more choice. Nokia didn’t say if VoIP will be part of Ovi but I think it would be a smart move for reasons discussed further below. Integrating into the users home and office environment with Wifi will go far beyond VoIP in future though, as first attempts with UPnP and the Nokia Mobile Web Server already demonstrate today. With the Wifi integration the device can interact with other local devices such as the TV, the computer, the hifi stereo, the network storage, etc. which is not possible at all in a 3G only strategy. Nokia’s cooperation with Microsoft might help further develop this opportunity in the future, too, if Microsoft is willing to cooperate despite their own ambitions with their Microsoft Mobile (Pocket PC) OS.

Economy of scale is also very important. Again, this is an advantage for Nokia since their platform embraces the Internet and can thus be available anytime anywhere. This is also a great tie-in with Wifi integration as some services might only be usable in some countries with still high 3G prices via Wifi at home due to the large amount of data that needs to be transferred (e.g. song downloads). Also, for travelers like me who are used to changing SIM cards several times a month, access to services is independent of operator and place. Mobile network operators on the other hand continue to struggle to recover their investments into their service portals and device adaptations since their user base is considerably smaller. Also, I think their innovation cycles must be a lot longer than what Nokia can do with Ovi since Nokia has to do operator specific adaptations of their software for a myriad of different operators which surely has a huge impact on number of people required and turnaround times.

I think Ovi comes a the right time because 2007 is definitely the year in which the mobile Internet has finally become affordable in many countries. On top, mobile Internet access is now also possible via pre-paid SIM cards in many countries. Early adopters like young people, students, hi-tech travelers etc. have waited for this for years. For Nokia this means that they no longer have to necessarily partner with mobile operators to deliver their services. Users can use pre-paid SIMs or Wifi at home. Excellent and almost unheard of only one and a half years ago! If I were Nokia, I would consider selling such prepaid offers in Nokia stores and on the web as a further kick-starter for devices and services.

The Bitpipe Clash

Inevitably this course brings Nokia even more head on with mobile network operators than before as many still have an interest on doing services themselves. Some might see the change coming and start partnering with Nokia. ‘3’ has made a similar move a couple of months ago and their X-series brand in essence is a co-operation with Internet service providers such as Skype and Co. With Nokia’s Ovi that could be much simpler in the future since an operator would only have to talk to Nokia and not to a myriad of different companies.

How Does The Key Have to Look Like?

I am looking forward very much at how Ovi is going to look like. Having good services is one thing, easy inital configuration is another. Ideally services are both usable from the mobile devices as well as from a PC. It should be possible to configure everything on the PC which is then pushed to the mobile device. Certainly not easy to do in a very very very user friendly way but not impossible. One could for example use SMS push,  Wifi or a plug-in for the Nokia PC suite. Personally I’d prefer web based services with SMS push configuration. No software installation would be required and it would be platform independent (think Windows, Mac OS, Linux,…)

And finally, I hope Nokia will stay committed to the S60 motto of ‘open to new features’ and follow a dual strategy of Ovi as a platform for their services alongside an open mobile OS platform for third party applications that can do the same and other things without the neat integration into one package.