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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.

I like the countryside, much more quiet and relaxing than cities, especially for vacation. Slight disadvantage one has to live with, though, is that 3G signal quality is often not very strong. I am at the Côte d’Azur at the moment in between Monaco and Menton in a house outside the small villages along the coast. As in previous cases, 3G coverage is non existent at desktop level but quite o.k. only a few feet above the desk. I am glad that instead of a PC card I took my Motorola V3xx HSDPA mobile with me which can be nicely attached to the window. The USB cable makes all the difference in reception quality. Data rates are excellent (*) even in such a cell edge case.

For worse conditions I have a 2m (6 feet) USB extension cable 🙂 For PC card owners I strongly recommend buying an external antenna with a similar cable length before going on vacation.

(*) My connection speed is around 400 kbit/s but not because the radio link could not support more but because my connection is throttled by the operator.

In a previous post I’ve put down my thoughts and practical experiences with roaming through Europe and staying connected to the Internet with prepaid GSM/UMTS SIM cards. While it works quite well there is the disadvantage that a different SIM card is required in each country. So I was asked how people can reach me when I change my SIM card every couple of days!? There are several strategies:

1) I have a SIM card dedicated to voice calls. My friends only know this number and the SIM card is in a seperate phone.

2) If I only want to carry one phone I activate call forwarding unconditional on that SIM card to the SIM card I am currently using for Internet access in a country. There is one problem with this approach: Some prepaid SIMs by default forward calls to the voicemail and this call forwarding can not be deactivated. So I always pay for an incoming call no matter whether I pick up or not. So I ususally prefer to carry two phones.

3) I have an ISDN fixed line at home. While I travel I forward calls to the SIM card I use. There is a web interface available so I can change the call forwarding from abroad when necessary

4) Skype is also an option, though I haven’t tried this yet: Get a Skype in number and then forward the calls to a mobile phone number when you are not online.

It’s a pity one has to go through all of this just because pricing models of operators prevent people from using a single SIM card for all purposes. But who knows, one day…

You might have noticed that I am blogging a bit less at the moment than normal. Among other things it’s got something to do with that I am currently on vacation traveling through Europe. Staying connected has become much easier in recent years but still requires a fair amount of self organization, a bag full of SIM cards and willingness to spend a certain amount of money. So how much do I spend for Internet connectivity during my 3 weeks vacation?

Things are complicated since I spend my vacation in four countries: Austria, Italy, southern France and Spain. For Austria I’ve bought a prepaid SIM from ‘3’ for eMail and Web access via my Nokia N93. Works well and details will follow in a seperate blog entry. Cost: 20 Euros for the SIM card and credit which lasted me for the time I spent in Austria. During 3 days I required full Internet access so in addition I used two Vodafone Web Sessions for 15 Euros each. Total amount spent in Austria: 50 Euros.

Next stop Italy. Here, things are simple. I already have a TIM prepaid SIM and use it for notebook and phone web access. 20 Euros buy me 500 MB. That’s good enough for the 5 days I am staying in ‘Bella Italia’.

Next, the south of France is on my agenda for about 10 days. I’ll use Orange’s prepaid SIM for eMail and web access via the mobile phone. That’s 6 euros. In addition I will probably need full Internet access during 4 days. That’s four Vodafone Websessions that add up to 60 Euros.

Final Stop: Spain. Just a weekend but it’s unlikely that I want to spend them disconnected. Maybe I will find enough open Wifi Access Points in the street. An alternative is a Yoigo prepaid SIM with web access for a euro a day. The SIM will cost a couple of Euros, too. Well, we’ll see.

Altogether, that’s going to be around 150 Euros. Definitely not on the cheap side. I wished ‘3’ would be present in all countries I (live and) travel to since they don’t charge extra for data roaming in their networks.

For the details on the prepaid SIMs I use, take a look on the left side on the blog for the link to the Prepaid SIM Internet Access Wiki.

Just read on Teltarif today that Vodafone Germany has launched a new product called "Visual Mailbox". Instead of saving voice mail messages on a central server the visual mailbox feature forwards voice mail messages via MMS to the subscriber. MMS is the multimedia cousin of the SMS message and can carry text, pictures and, quite useful for this service in particular, audio files. The advantage: The user does not have to call the voice mail system anymore but listen to voice messages by selecting an MMS message in the incoming messages folder of the mobile phone. Reminds me of the voice mail functionality of the iPhone.

Vodafone Germany offers the service for no additional charge. How nice 🙂

Today I saw reports for example here and here that Illiad has brought forward the necessary papers to get the fourth and final batch of France’s 3G licenses in the 2.1GHz UMTS band before the deadline expired yesterday.

Illiad is the mother company of ADSL Internet provider "Free", certainly one of the most aggressive players in the French ADSL market. That gives me some hope that in case their bid is accepted and they are ready to go for it there might finally be reason for hope that competition could finally arrive in the French 3G market. Also, Free might have more of an Internet and IP angle than the local 3G incumbents so they might be more inclined to finally let customers use their network for Internet services for an attractive price rather than to let base stations sit around only producing hot air.

According to the report of Les Echos linked above the stock market was not quite happy to hear that Illiad has put their name in the hat. They see mobile as a risk rather than an opportunity. Short sighted bunch…

I have to admit I had William Webb’s latest book „Wireless Communications – The Future“ at home for a couple of months before I finally came around to read it back to back. A mistake, as it turned out, to wait that long. As title suggests, the book deals with the future of wireless telecommunications, over a period of the next 20 years.

Webb, working for Ofcom and a newly appointed fellow of the Royal Academy of Engineers draws an interesting picture of how he sees wireless technology evolving. His drastic conclusion is that fourth generation wireless will not make it off the ground. His main reasons for this are that he sees no need for systems that go beyond what’s possible in terms of data rates with 3.5G and the evolution these systems will undergo in the future. Note that he also counts LTE and similar technologies as 3G+ technologies. The second main reason at arriving at his conclusion is that today’s wireless technologies are already close to natural boundaries in terms of available frequency bands and efficiency. In short he sees continuous evolution of existing wireless systems rather than a new radio technology beyond OFDM revolutionizing wireless telecommunication in the next two decades.

Throughout the book the author discusses his own predictions such as how fixed and wireless networks will converge, industry inflection points where current vertical wireless vs. fixed network operator / content provider silos break up and new business models are required around horizontal structures with companies dealing with the network, companies dealing with the service and companies dealing with the applications on top. Also, Mr. Webb has invited a number of outstanding industry members to share their visions of the wireless future and discusses how these views integrate with his visions.

For every statement I agree with in the book there is at least another prediction which I vehemently disagree with. But I guess that’s just natural when trying to predict the future. Here are some statements which I found of particular interest and fully agree with:

• “The concept of lengthening time between generations of cellular technology being bridged through evolution of standards is now becoming increasingly accepted. This has the implications that moving to a new generation is not as urgent a need as it has been in the past […]”

• “Some [DSL] users […] are unlikely to achieve data rates above 1 MBit/s [in the future] unless there is a substantial infrastructure upgrade”

• “… a new service or product might take anything between four and ten years to reach mass adoption…”

• “Once almost all users have access almost everywhere to average data rates of several hundred megabits per second in active periods, their senses are no longer able to make use of more data and higher data rates become irrelevant” (Simon Saunders)

• “Some data measured by a large European ISP on their broadband customer base in 2005 showed that 50% of their customers were shipping less than 600 Mbytes per month” (Stephen Temple)

• “Video calls will become increasingly attractive as the ‘Metcalfe rule’ applies…”

• “The extent to which these services actually emerge will be set by industry structure and the ‘boldness’ of the strategies deployed by the key players”

• “Users will have found that the combination of 3G with its falling costs and improving data rates, and nomadic W-LAN coverage when static provides the best combination of cost and utility.”

These quotes are just the tip of the iceberg and although I do not agree with everything in the book I can say it is a real page turner and well worth a read. I learnt a great deal, I scribbled a lot of notes into the book so I can compare in 5 or 10 years from now and the book has definitely inspired a lot of new thoughts.

For those who are interested here’s a link to book’s page on the publisher’s website.

Enrique seems to have had a tough time lately when changing his blogging software. Thus, it has taken a bit longer than normal for the carnival to open its doors this week. As always, the carnival is the place to go to find out what has been written by bloggers on mobile topics in the past week. So go over and check it out.

Back in 2002 the verdict on GSM from most was pretty clear. GSM just celebrated it’s 10th birthday in the real world, UMTS was at the doorstep and looking at lifetimes of analog wireless system it seemed certain that in another ten years (2012) GSM would be a thing of the past. Well, today 2012 is just 5 years away and I think GSM in Europe will stay much longer than that.

So what has changed then since 2002? I think quite a number of things:

Equipment Refresh: In 2002, GSM equipment started to age a bit as the hardware used in the network did not change a whole lot. But since then virtually all network vendors have completely refreshed their network equipment from base station to core network router. This was not only a desire but a straight forward necessity as the parts for aging designs (e.g. 486 processors) were no longer available at reasonable cost. Hardware evolution also meant lower prices. GSM Base Station Controllers sold today, for example, are no less capable than the latest 3G Radio Network Controllers in terms of processing power, memory or storage capacity. GSM Base Station prices and sizes also keep shrinking and shrinking so networks become cheaper and cheaper.

New Entrants: Another reason for refreshing aging hardware designs were surely also Chinese companies like Huawei and ZTE entering the GSM and 3G market with new hardware and lower prices so established vendors could not afford to continue selling expensive hardware.

New Markets: I think only back in 2002 it was not clear to most that GSM would have such a tremendous success in emerging economies in Asia, India and Africa. Compared to the 2.5 billion or so GSM subscribers there are today, the few (hundred million) 3G subscribers almost seem like a single drop of water in the ocean. This created economies of scale beyond anything imagined at first.

Continuous Evolution: Back in 2002, it was assumed that most R&D would be put into the development of 3G networks. This has been true to a certain extent but instead of being dormant, GSM has continued to evolve. Compared to 2002, GSM hardware is much more efficient due the technical and economical hardware refresh described above and new features such as EDGE for higher packet switched data rates have pushed the GSM standard far beyond the circuit switched network it was once designed as.

Network Refresh: Just like the PC at a consumers desk, network equipment such as base stations, controllers, switches and routers have a limited lifetime and need to be replaced. The cycle is a bit longer than the 2 or 3 years for consumer PCs but after 10 years or so, base stations have to be replaced because of aging components or due to their inability to support new features such as EDGE. Also, their power consumption is much higher than that of new base stations so at some point the price of replacing a base station is absorbed quickly by reduced operational costs.

3G Networks Coverage: Even in the most advanced 3G countries such as Italy, Austria, Germany and the U.K., 3G network coverage is nowhere near the almost countrywide GSM coverage. This is different from the 1990’s where GSM coverage quickly came close coverage levels of the analog networks.

Roaming: In analog days, there was no roaming. With GSM, international roaming is a major benefit. Even in the future the majority of roamers will still have a GSM only phone. Switching off GSM networks makes no sense as revenue from roaming customers is substantial.

So what are we going to see in Europe by 2012 then?

In five years from now I expect the majority of subscribers in Europe to have a 3G compatible phone that is backwards compatible to 2G. In urban areas, operators might decide do downscale their GSM deployment a bit as most people now use the 3G instead of the 2G network for voice calls. Cities will still be covered by GSM but maybe with fewer number of available channels / bandwidth.

Such a scenario could come in combination with yet another equipment refresh which some operators require by then for both their 2G and 3G networks. At that time, base station equipment that integrates 2G, 3G and beyond 3G radios such as LTE could become very attractive. The motto of the hour could be "Replace your aging 2G and 3G equipment with a new base station that can do both plus LTE on top!"

I wonder if it is possible by then to only use one set of antennas for all three radio technologies!? If not, adding yet another set of antennas on top of an already crowded mast is not simple from both a technological and psychological point of view.

Once upon a time the wireless world was a happy and simple place for bean counters to put together their statistics. The Average Revenue Per User, or ARPU, was invented as a measure of how profitable and successful a network was operated and marketed. Back then, things were simple, one SIM card per user and only two services: Voice and SMS. In this environment, looking at the ARPU made sense. Today, however, the world looks much different and ARPU is quickly becoming an irrelevant key figure.

Use of several SIM cards

There are several reasons for this. First, people in many countries have started using several SIM cards because each SIM card offers an advantage the other doesn’t. The average revenue per user is now split between two SIM cards. Is the business less profitable because of this? Probably not, but the revenue of that user is now split over two SIM cards and that looks quite bad on the ARPU scale.

Same thing for business users: Many of them these days use a SIM card for their mobile phone and a second SIM card for the 3G data card that connects their notebooks to the Internet. The Average Revenue Per User should contain the sum of both. In practice that’s difficult to do because there is usually no way of knowing that both SIM cards belong to the same user, especially if the SIM cards were bought by a company.

Subsidies and Prepaid:

Second, MVNO’s (Mobile Virtual Network Operators) in some countries have started to offer cheap voice minutes but sell SIM cards without phones. So which ARPU is better, 30 euros a month generated with a contract which required a 300 euro subsidize for a cool phone which spread over  24 months reduces the real revenues achieved to €17.50, or 20 euros a month generated via a prepaid SIM without subsidies? Surely the €30.- ARPU looks nicer on the paper but the operator probably makes more money with the prepaid customer and a €20.- ARPU.

Wide Range of Services

Third, mobile networks offer a wide range of services today from voice calls to high speed Internet access. So which customer is more profitable for the operator?: A customer that spends 30 euros a month on voice calls or a customer that spends 30 euros a month for Internet access? In most cases the voice ARPU is probably more profitable than the data ARPU. However, prices for voice minutes keep falling and falling except in countries where there is no real competition among operators (n’est-ce pas? 🙂 So in the end the data customer could eventually become more profitable.

Alternatives

On the long run I guess ARPU has to be replaced by some other, more meaningful key figure adapted to the continuing changes. Maybe it would be a good idea have a range of key figures such as:

• Average revenue for a voice minute, based on all voice minutes sold in the network over the period of a month.
• Average revenue per megabyte for mobile services, i.e. web surfing and other Internet activities from mobile phones
• Average revenue per megabyte achieved with high speed Internet access from notebooks
• SMS and MMS should also be treated in the same manner.

I wonder if operators would be willing to go down that route!? In the end, these number would give a lot of insight… Also, compared to calculating the ARPU as done today, getting to these numbers would be a bit more difficult. However, if network operators have problems getting this information out of the call data records, they could ask Google or Yahoo to do it for them. They know how to process terabytes of information.

Alternatives, thoughts, anyone?