Business Rationale Behind 12 Month Prepaid Data Offers

Previously, I reported that Vodafone UK is the third operator I know that has now started to offer a prepaid package for wireless broadband access that includes a gigabyte of traffic and is valid up to 12 months. When only looking at the 12 months, it would seem that this is rather a bad deal for the network operator or in other words, not a lot of revenue opportunity. However, I think quite the contrary is the case.

Let's take Austria for example: If you take a post paid contract for wireless Internet access from mobile network operator Three for example, 3 gigabytes per month are now available for 9 euros. Compared to the 15 to 20 euros others like A1 and Yesss charge for the one gigabyte per 12 months, is only a fraction. So the 12 month offers are attractive for infrequent users and travelers who would otherwise not spend anything at all, as even the 9 euros is too much for them. So it is better to get that 15 to 20 euros revenue than not getting it at all. And by doing so, your margin is much higher compared to the contract offers.

I guess a lot of people taking the 12 month prepaid offer will not fully use the gigabyte so the bottom line is even better. And for those that do, they are likely to buy a top-up, thus increasing the revenue once again. A win-win situation in any case.

How Can LTE Reduce the Cost Per Bit?

Recently, a question was asked in the LTE forum on LinkedIn how LTE can reduce the cost per bit compared to todays broadband wireless systems such as HSPA. I found it quite interesting that a lot of people immediately jumped at the greater spectral efficiency as the means to reduce the overall cost. But I think there are also other innovations which will drive down cost:

  • There are no Radio Network Controllers (RNC) anymore, i.e. fewer network components
  • The backhaul network is radically different. While E-1/T-1 connections (cable, microwave) are still heavily used today, LTE will be rolled out with Ethernet over fiber / VDSL and microwave. Huge cost advantage here. It's not spectral efficiency operators worry about today, it's the rising E1/T1 backhaul costs.
  • In all fairness, it has to be said, that current HSPA networks are changing towards this as well in terms of backhaul and network element (e.g. one tunnel architecture) but it is not built in and the RNC is still required.
  • Another reason why LTE has a cost advantage over today's deployed networks is that technology has advanced and allows smaller base stations to be built which require less power, less space. These will be deployed from day 1 and in many cases will be put inside existing base station cabinets or mounted besides.
  •  Also count in remote radio head technology that will probably be used heavily with LTE to drive the cost down.
  • In the mid- to long term, I think LTE access will be the catalyst to have multi radio base stations with a common Ethernet based backhaul thus also driving down the cost of 2G and 3G systems to some extend that will remain in place for the time to come.

Anything else you can think of?

Lots of Wi-Fi in Smartphones These Days

When Nokia started to put Wi-Fi into smartphones about three years ago they were pretty much the only company doing that and they were looked at suspiciously by both the competition and network carreirs. At the time a lot of people said they were not sure if Nokia would prevail with their strategy and that carriers would strongly oppose such phones.

If you look at the market these days I think it has prevailed quite well. All Nokia N-series phones have Wi-Fi built and virtually all competing mobile device vendors have followed their lead. Apple has it, HTC has it, RIM now has blackberries with Wi-fi and even Sony Ericsson has now started to put Wi-Fi into their camera feature phones (e.g. the new C905).

The way I see it, Nokia has made good use of their first mover advantage and currently offers the widest range of services over Wi-Fi. Here's how I use the built in Wi-Fi in my N95:

  • Mobile web browsing (the number one application for every Wi-Fi enabled phone I guess), both the built in browser do a great job for surfing the web in general, using Google Reader for my RSS feeds, mobile banking, etc.
  • My second killer application: VoIP telephony with the built in SIP client. I guess Nokia is the only company that has so far integrated a full VoIP client integrated in their software. It's fully automatic. When I get home, the N95 senses my home Wi-Fi and automatically connects. It's fully replaced my landline cordless phone by now.
  • Automated podcast download: The podcasting application runs in the background and automatically downloads the latest podcasts when they appear. A very nice application and I've configured it in a way to only do it over Wi-Fi but not over cellular.
  • Mobile Web Server: Very cool application to access my phones address book, calendar, camera etc. via my notebook's web browser. Here are some more details in case you never heard about it before.
  • Picture upload to Flickr: When I travel to countries in which I only have an expensive mobile data subscription I rather wait to upload pictures to Flickr until I reach the cover of a Wi-Fi network. Shozu does a good job here with queuing pictures marked for upload and automatically sending them when a configured network becomes available.
  • e-mail: When at home, my e-mail client (Profimail) uses the Wi-Fi instead of the cellular connection. Very convenient and cost saving.
  • When I am traveling, I have my dongle dock with me and instead of communicating with the 3G network directly, most applications use Wi-Fi to the dongle dock which then sends out the data via 3G. Helps to save cost because in many country data over data only SIMs is much cheaper than a data add on to a SIM card with a decent voice tarrif.
  • Some people us the 3G connectivity and the Wi-Fi as a Wi-Fi bridge for other devices. I prefer my dongle dock but I am sure such a solution appeals as well.

To see how the competition has reacted in the meantime here's a question to those with a non-Nokia smartphone: Which applications does your device offer today and which of those do you use?

The Real Time Web And Connected Home Services

Here's a link to a very interesting presentation of fellow book author Paul Golding about the real time web and it's impact on mobile. A powerful train of thought and I would summarize what he calls the real time web as follows:

  • Today, the web (or the Internet in general) on mobile devices is still dominated by polling, i.e. the user requesting web pages.
  • Paul foresees that news and events happening around the world in real time will be pushed automatically to both mobile devices and of course also to desktop PCs and notebooks. Desktop and idle screen widgets based on web technologies is one possibility for this.
  • Information is meshed up on the Internet before it is pushed to the user on his mobile or stationary device. An example of this for example is TweetNews that sorts Yahoo search results with input from Twitter to increase the relevancy of breaking news that is spreading mach faster via social media than via the traditional channels.
  • Content is not only created by others and put on the web for public use, but everyone is creating content that while being private should be pushed into the web as well so it is accessible by its creator and owner from different devices and can be mashed-up with other content. An example for content that should be accessible from everywhere is the calender or address book.

I think that his ideas are great and many of them are already worked on by Google, Nokia and others. However, for the last bullet point where I would like to add a different idea. While I like the idea of mashing-up lets say my address book with information about online instant messaging availability of other persons, I don't really like my address book information in the hands of anyone else but me. In other words, I don't like my private information to be stored on a server on the web, I want it stored on a device under my control.

And I think that this is where mobile network operators with fixed line assets can come into play. Instead of having my private information stored in the web, it could also be stored in the user's home network. Fixed/Mobile network operators have all the pieces of the puzzle together to make this work and not much competition to fear. They are in the unique position to sell the following bits and pieces together to their customers:

  • A DSL modem / Wi-Fi / Femto box (also known as a home gateway)
  • Services running on that box or via that box accessible from within the home network and via a secure connection from the outside
  • Wireless Access
  • Preconfigured devices with connected home services that use the cellular / Wi-Fi / femto depending on where they are to access that information.

Of course network operators can't do it on their own, they need device manufacturers to deliver home gateways and software for mobile devices capable of doing that. It's a great possibility to compete with similar services that are web based, a territory where network operators have difficulty to compete in. And the best, the customers will love them for it, since they offer such connected home services with more security and privacy than what is possible on the web.

And for the mash-up part of the scenario it doesn't really matter if a central server mashes up the content or if a service in the home network do that.

Decomissioned SIM Cards

Retired-sims
I heard somewhere, but forgot exactly where, that the German C-Netz mobile network back in the 1980's was the first network that separated subscription from device via a SIM card. Since then we've come a long way and all major mobile network standards these days have implemented the concept. From my point of view this is the most important thing to foster competition between network operators.

As a frequent traveler I use lots of different SIM cards for both voice and data and I love the concept of just inserting a new SIM card into my devices when I arrive in another country or when better and cheaper offers become available.

Evidentce of this is the heap of SIM cards I've decommissioned over the last couple of months as shown on the picture on left:

  • Two years ago, SimplyTel in Germany, a MVNO of T-Mobile started a pretty good voice minute offer for the time. Unfortunately, they haven't kept pace with others and there is still a good data option missing. Also, they've started to introduce a 1 or 2 euro fee per month if the SIM is not used which bugged me since I used one in the block heater of the car for incoming calls only and the other one in a mobile I give to visiting friends from abroad. Now that their accounts have reached 0, I've retired them and replaced them with SIM cards from other MVNO's.
  • The AT&T SIM: This one's a forced retirement as I haven't been in the US for 6 months and the SIM has probably been deactivated already by AT&T.
  • The YESSS SIM: About 18 months ago, YESSS started a prepaid mobile broadband offer in Austria with a validity time of 12 months. In the meantime the year has expired and I have made good use of the offer. Now, however, I've replaced the SIM with one from A1, as they have started a similar offer in the meantime and their network has a wider reach.
  • The A1 SIM: This is the SIM I replaced the YESSS SIM with. Adding a further GB worth of data traffic is 5 euros more expensive than buying another SIM card for 15 euros that already includes a GB worth of traffic. A bit strange but then I don't really care if I buy a top-up voucher or a new SIM.
  • The WIND SIM: This Italian SIM card was deactivated and I haven't quite been able to figure out why. I went to a WIND store but there they could not really help me and told me to call the hotline. I decided it was faster to dump the SIM and buy a new one instead. Much less trouble than to discuss the matter over the phone with a helpdesk lady.

So in short: SIM cards = Power to the consumer!

Vodafone Makes UK Second Country with 12 Month Prepaid Mobile Broadband Offer

When Austrian network operator ONE started offering a SIM card for prepaid mobile broadband access that is valid for a year about 18 months ago it was a dream come true. In the meantime, Austria Telecom (A1) has followed and has a similar offer. Both are easy to get, you just walk into a 'Hofer' supermarket or A1 store, lay down 15 or 20 euros and you are all set.

Now Vodafone has started a similar offer in the UK as Zahid on his '3G and 4G wireless' blog and Andrew of 'London Calling' have already reported. For 39 pounds you get a 3G USB modem and a SIM card with one gigabyte of Internet traffic valid for one year already included.

Unfortunately, the offer seems to be a bit more complicated to get started with as the SIM card is not available without the 3G modem. I've asked a bit around and found out that the SIM can be used in another 3G stick as well and additional credit can probably be added by calling the phone number given here and using your credit card. Can't wait to try it out next time I am in the UK.

For the details and configuration, see the Vodafone UK page on the Prepaid Wireless Internet wiki.

I am glad to see this happening outside Austria in countries which are not at the very forefront of the mobile Internet revolution. I hope that during 2009, operators in additional countries will follow. The chances for this happening is not so bad, as competition for customers in the mobile Internet domain is picking up steam in other countries as well.

Mobile World Congress 2009 Preparation Update

Time is flying and the 3GSM Mobile World Congress in Barcelona is now just a mere month away. My plane tickets and hotel room are booked but there are still a couple of things to prepare and organize to make the best out of the event.

Back in December, I've re-opened the 3GSM Mobile World Congress Events Wiki for sharing  knowledge and since then a number of new users have joined and have put in the first information about on- and off-site events and evening gathering/parties. Thanks!

Interestingly enough, the first to add themselves to the list of people/organizations reporting from the event was Nokia Siemens Networks. I know they have some great internal bloggers and I look forward to see how the congress looks like from their perspective.

The Wiki also has a page for job seekers and offers, so if you are looking for people on site to help you with the organization, it's a good opportunity to offer/find help. So far there is one job seeker looking for a job as booth hostess, event organizer, or similar. She's fluent in English, French, Italian and German and has previous experience with booth management at the MWC.

So, there we go. If you want to know what's happening alongside the congress or know of something yourself, head over, take a look or add your info. You can also use the wiki to organize your own event and invite people. Have fun and see you at the congress!

3GPP Mindsets: Voice and Data – Past and Present

Quite often I discuss with colleagues and friends what went right and wrong over the years in 3GPP standardization. We usually agree that the first version of UMTS didn't get the data part quite right and that the first version of LTE has a serious problem with missing voice capabilities. Recently a friend said 'When 3G was designed, data was forgotten. When 4G was designed, voice was forgotten'. At first, I agreed to this but after some more reflection I think it doesn't quite hit what's happened.

I still remember vividly that when the 3G UTRAN (UMTS Terrestrial Radio Interface) was first designed, it was done with the purpose to add data capabilities beyond what was possible with 2G GPRS at the time. From that point of view, 3GPP has succeeded, because the 384 kbit/s downlink speed reached by first networks was an order of a magnitude higher than what was possible with GPRS at the time. However, the mindset at the time was still very much focused on dedicated channels on the air interface. So this was the method of choice for data transmissions despite the rest of the network being packet switched. Unfortunately, this lead to a very inefficient use of the air interface for packet data transmission such as web browsing with the resulting limitation in speed and number of simultaneous users. The situation was eventually fixed with the introduction of high speed shared channels, known as HSPA today.

Fast forward 10 years and we are now in the days of E-UTRAN, aka, LTE standardization. This time, the mindest was on packet switched only, at any cost. The cost was the 'down to earth – works out of the box' voice capability, which is sadly missing so far. I am sure there are quite a number of reasons for this but I think one of the main ones is that a majority of the companies in 3GPP are pushing for IMS and have been vehemently against any other form of voice capabilities. Other companies have made good suggestions, such as connecting the MSC to the E-UTRAN but so far the suggestion went nowhere.

Well, I guess it will be as in the case of UTRAN: A second round might be required before LTE can truly succeed UMTS.

My Latest Book is Available Now!

B3g-book
After a year of hard work, it's a great pleasure to be able to announce the general availability of my latest book "Beyond 3G – Bringing Networks, Terminals and the Web Together". If you are a regular reader of this blog you can probably already guess what it is about. While the topics discussed in the book are similar to those I write about here, a book offers the opportunity to discuss them in much more detail and show the interactions between them.

O.k. so what's it about?

I start with giving a sound technical introduction to 3GPP LTE and SAE by explaining the decisions taken during standardization while also examining the likely competition for LTE such as HSPA+ and WiMAX. Capacity considerations follow. Then, I describe the latest mobile device developments, voice and multimedia services and the mobile web 2.0. Throughout the book, I do not only analyze how the systems, devices and software work but also the reasons behind why they are designed in this particular way. How these elements strongly influence each other is discussed as well as how network capabilities, available bandwidth, mobile device capabilities and new application concepts will shape the way we communicate in the future.

Some More Details

  • I examine current and next-generation network technologies such as UMTS, HSPA+, WiMAX, LTE and Wifi
  • Performance and capacity in practice are analyzed as well as future capacity requirements and how they can be fulfilled.
  • You get an Introduction to the current cellular telephony architecture and to voice over IP architectures such as SIP, IMS and TISPAN.
  • I look at mobile device hardware and mobile operating system evolution.
  • And finally, I examine the major global wireless standards for application development and the latest state of the mobile web 2.0.

Where Can You Get it?

If I've aroused your interest and you are thinking about picking up a copy, there are many places to get it. It's available at Amazon.co.uk for next day delivery and Amazon.com in the U.S. will start shipping it in the next couple of days.  You can also order it directly at my publisher John Wiley & Sons, their worldwide shipping department is very efficient. You can of course also go to a book store and give them the title and the following ISBN number: 978-0-470-75188-6.

Browsing The Book Online

For more details, Amazon offers a 'look inside the book' function and a keyword search which brings up a list of all pages where the word is mentioned. From there you can jump to a page and also see a couple of follow up pages.

There we go! If you like this blog, then this book is definitely something for you! As always, I am glad about feedback and I wish you happy reading!