ARPU Is Becoming Irrelevant

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?

VoIP’s problem with Wifi

A couple of months ago I’ve been reporting about my experiences with the UTStarCom F1000G Wifi VoIP phone. It went back into the box basically because the software was too unstable. Another reason I didn’t like the phone at the time was that the Wifi reception of the phone was not very strong and voice quality suffered when only two walls were between the access point and the phone. At the time I thought this issue might be related to this type of phone only. Now one of my friends reports that he has the same problem with Nokia E-series phone he tried out. While stability was not the issue, voice quality degrades pretty quickly when moving away from the access point. He also came to the conclusion that the range is no match to those of DECT cordless phones. Looks like good Wifi antennas have not yet found their way into small form factor phones. However, I am afraid that’s a necessity to make VoIP over Wifi work.

Vodafone WebSessions Tested in A1’s 3G Network in Austria

As a frequent traveler I often use Vodafone Germany’s Websession offer which lets me connect wirelessly to the Internet in most countries in Europe and also in some countries overseas using 3G UMTS or 3.5G HSDPA. I’ve first reported about the details of the offer here and also posted reports of how well it performs in Italy, France and Switzerland in the meantime. This blog entry takes a look at how the offer performs in Austria:

A1’s 3G network (Mobilikom) coverage area throughout Austria is excellent and even in areas without 3G coverage, EDGE capable GSM base stations deliver throughput good enough for work and play. While in 3.5G HSDPA coverage, I reached top speeds of about 2 MBit/s when downloading three files simultaneously.

Single file download top speeds where at about 800 kbit/s. As in previous cases I am still a bit puzzled to why that happens as round trip delay time for the file download was around 230 ms. Together with a TCP window size of 65k, the throughput of a single TCP session should be 2.2 MBit/s. Note: For background information on the effect of the TCP window size and round trip delay times on throughput see here.

Nevertheless, 800 kbit/s per file is more than what I observed in Italy and France where bandwidth is throttled to around 500 kbit/s overall, independently of how many files are downloaded at the same time. Looks like Vodafone A1 does something differently with Vodafone Germany then the roaming partners in Italy (Vodafone Italy) and France (SFR).

So all things taken together the Websession performance in Austria is quite convincing, too.

WiMax Matrix A and Matrix B MIMO

Ever wondered what the difference is between WiMAX Matrix A and Matrix B MIMO? As a reader of this blog you just might have. In recent certification reports and functionality comparisons between WiMAX kit of different vendors these acronyms have sprung up but, as usual, without further explanations. Don’t fear, help is on the way! This article written by Shamik Mukherjee of Motorola and published on WiMAX.com gives a very good overview including a look at WiMAX beamforming.

So here’s a quick summary of Matrix A and B:

Matrix A: Coverage Gain

In a 2×2 antenna configuration (2 transmitter antennas, 2 receiver antennas), a single data stream is transmitted in parallel over the two paths. A mathematical algorithm known as Space Time Block Codes (STBC) is used to encode the data streams of the two antennas to make them orthogonal to each other. This improves the signal to noise ratio at the receiver side which can be used to:

  • Increase the cell radius
  • To provide better throughput for subscribers that are difficult to reach (e.g. deep indoors or moving at higher speeds).
  • For terminals which already experience good signal conditions Matrix A has the benefit that higher order modulation (e.g. 64QAM) can be used and fewer error correction bits are necessary which in turn increases transmission speeds to that subscriber.

Matrix B: Capacity Increase

This flavor of MIMO, also known as Spacial Multiplexing MIMO (SM-MIMO), sends an independent data stream over each antenna. Thus, in case signal conditions are excellent, the data rate is doubled, tripled or quadrupled depending on the number of antennas used in both the transmitter and receiver. In practice, WiMAX MIMO is defined for two antennas at each side.

Mandatory and Optional Features

For WiMAX Wave 2 certification, both 2×2 Matrix A and Matrix B capabilities are required according to the article. Beamforming capabilities, also known as Adaptive Antenna Systems (AAS), is optional.

A Wiki For the 3G Traveler

It’s summer time in the northern hemisphere and I keep getting eMails from people asking for my advice on how to access the Internet in countries to which they intend to travel. In the past I’ve reported on quite a number of 3G prepaid wireless Internet access offers mostly of operators in Europe. Prepaid is the important word in the previous sentence as travelers can not get postpaid contracts even if they are without a minimum subscription time or monthly fee.

Over time, these reports have become a bit difficult to find on the blog. Those that dig a bit eventually end up with this summary. However, it’s still not ideal to search through the collection of articles in the hope to find the right piece of information. Thus, I’ve decided to open a Wiki for everyone to participate and share information! All the information I have collected so far on how to wirelessly access the Internet with a prepaid SIM card can be found there now.

One person can not do it alone! So if you have additional information, please consider updating the pages or to create new ones. No login required, just hit the edit button. If you think this information is useful for others please consider linking to the Wiki or writing a blog entry about it! That’s the only way people will eventually find the information when searching on Google, Yahoo, etc.

Femto Technical Questions

UMTS Femto cell solutions are being announced lately by both startups and established players such as Nokia Siemens Networks. Leaving aside the question of whether femto’s make sense or not I tried to find out how femto’s can be integrated with the macro layer of the network. It seems not to much information is available about the technical part on the net. So here are my questions, maybe some of you know more. If so please consider leaving a comment.

Basically I’ve seen two approaches to femto. For both cases, the cells are connected to the network via DSL or cable:

Pure Base Station Approach

In this approach the femto cell is included as part of the overall radio network. This should require configuration of both the femto cell and the macro cell layer for handovers and cell reselection. I’ve seen some patent applications from Ericsson which describe that the pico cell is equipped with a receiver that can scan the environment for neighboring cells. The result is then reported to the network which in turn sends the required neighboring cell lists to the femto for broadcast. Nothing is mentioned, however, of how the macro layer is configured. If this is not done, I wonder how a mobile in idle mode can change to the femto cell.

Also, I wonder if it is foreseen to restrict access to a femto cell to the owner of the cell? After all, if I had a femto cell at home, would I want my 25 neighbors to also use it for free? If access can be restricted how is that done? Should the macro layer broadcast the cell info for my femto cell, others will see it as well. And if it doesn’t, how can my own mobile detect the femto cell once I arrive home and still have coverage from the outdoor macro cell?

Speculation: While a mobile has a connection established to the network it can be asked to report cells which are not in the cell info list (the so called "detected cells" broadcasting on the same frequency as the current cell). This could then be used by the RNC in combination with with my user ID to decide whether to hand over the connection to the femto cell, in case the owner of the mobile is the owner of the femto or to leave the call on the macro layer. This does not work when the mobile looses connection to the macro cell layer, however. In this case the network search of the mobile will detect the femto and the mobile will try to attach. How can this be gracefully prevented in case the femto only allows a select few users?

Scalability: If it can be avoided that the macro cell layer has to broadcast information about the femto cell layer then I don’t see scalability issues on the Node-B side. If it can’t be avoided then I wonder how the solution scales. A macro layer cell is usually designed for about 2000 users. If ‘only’ 50 of them use a femto cell at home I wonder how this can be accommodated for in the neighboring cell list!?

The Network In A Bottle Approach

Another femto approach used for example by 3WayNetworks is to combine the complete functionality of the network from base station to MSC into the femto base station. On their web site, 3WayNetworks mentions that the femto base station can use a different Mobile Country Code and Mobile Network Code and thus runs completely independent from the macro layer. This might make rejecting unauthorized users a bit simpler than in the approach above but still leaves open the question of how authorized mobiles find and use the cell in the first place in case the macro layer is still strong enough where the femto cell is to be used (e.g. to increase overall network bandwidth).

Speculation: Here, an old GSM trick could help which probably still exists for UMTS: For national roaming the mobile can be instructed to scan for the home network every couple of minutes. Femto subscribers could be given a SIM card which the femto’s MCC/MNC as home network. Thus, femto subscriber mobiles would keep looking for femto cells while other subscribers could automatically be barred. UMTS also knows the concept of equivalent network which might also help here (see 3GPP TS 22.011 chapter 3.2.2.5).

A lot of questions… If you have an answer, please leave a comment.

Wireless Internet Access: Consumer Theory and Reality

Due to my recent reports on high speed wireless Internet access via prepaid SIMs in Italy (like here, here and here) I recently got an eMail from somebody who will go there for some time asking for my advice. At first, I wanted to write a short and crisp reply saying “no problem”. Once I started typing, however, I realized there are actually more than just a few things to consider. So here’s my response:

[…]

The Theory

You know I’d really like to give you the following answer: Yes, no problem, go ahead, buy the HSDPA card, go to Rome, pick up a prepaid SIM and you are all set. Or even better, just take your notebook to Rome, visit a TIM shop and they’ll sell you a prepaid SIM, a data card for a reasonable price, and install it on your notebook while you are in the shop. Reality, however, is a bit more complex. Not because it has to be but because of a less than ideal way of how things are handled by the parties involved.

The Reality

Buying a Mobile Phone or PC Card

Buying an HSDPA Express card in the US and bringing it to Italy should work. Before you buy however, make sure of two things: For once, the card must not be locked to a specific network it must be open to all. Therefore, buying an HSDPA card from a network operator will not work as they are usually locked. […] Second, you should make sure the card supports the European UMTS band, which is 2100 MHz. The US uses different frequency bands so if the card is limited to them it won’t work in Europe. Third, you should also make sure you can get software updates via the web page of the manufacturer. It’s not uncommon that cards get pushed out the door with an unstable software version at the beginning so being able to update it is important.

Getting a SIM and Activating Mobile Internet Access

So let’s say you have a card and you’ve arrived in Italy. TIM definitely has the best HSDPA network for your purpose so I advise you to go for one of their prepaid SIM cards. Try to find a TIM shop with a helpful and friendly shop assistant and buy a prepaid SIM. Once you’ve got it, put it into a normal GSM phone and make a phone call which gets connected. This way the card is activated and only after that is it possible to put some more money on the account in order to enable the data option. Note: Just calling another party which does not pick up does not work, the call needs to be connected. Don’t ask me why. To top up, buy a top up card and be prepared to read the Italian instructions. In the TIM network you can top up your prepaid SIM by buying a scratch card and sending the secret digits via SMS to the network. Some shops also offer top ups by giving them the telephone number of the line. Works nice as well. Once there is enough money on the prepaid SIM you can activate the data offer. I think the offer is called WEB FACILE 500 MB so ask the shop attendant in the TIM store how to activate this option. Afterwards, happy surfing.

House Keeping

I don’t think TIM warns you when you are close to having used up the 500 MB or when the 4 weeks for which it is valid expire. God only knows why. So you have to check every now and then how much is left on your card by calling the TIM voice server and go to menu 3. If you are close to your limit, put some more money on the SIM card and extend the option. I am not sure how to do this as I tried as described and it didn’t work. An Italian friend of mine then called the TIM hotline and after 20 minutes of heated discussion in Italian they did it manually.

Another option is to buy a prepaid SIM card of WIND. They also seem to have an HSDPA network in Rome now. Their network performance is not as good as TIM’s when I was there but it probably also will do the job. However, you’ll get more bits for your buck  🙂  Their offer is called WIND MEGA NO LIMIT 15000.

In Building Coverage

As long as you have a window in the room and are not underground it should be all right. It’s still a bit of a gamble but you should be fine, Rome is well covered.

Misc Stuff

Other options: In case you can’t find an unlocked HSDPA card to buy in the US you can buy an HSDPA capable card or phone in Italy. If you buy a card it’s probably locked to the operator. USB adapters are another interesting alternative because you can place them in a good spot without moving the notebook if coverage is less than ideal. Phones can be bought unlocked, you might have seen that I choose to do this when I was there and bought a Motorola V3xx with a branding from TIM. As it turned out it worked fine in all networks except for TIM’s. Again, completely beyond me.

So I hope I haven’t discouraged you from going ahead with your plan. It can be done and if you have an Italian friend who knows a thing or two about computers and maybe also something about how to connect wirelessly to the Internet you should get it working without too much trouble.

Looking at it from the bright side I think one could say that there is lots of room for improvement. All it takes is the will and a bit of work from network operators…

Hope this helps,
Martin

So to me, how things could be (an not unrealistically so) sounds a lot nicer than how things actually are. As I said, there’s a lot of room for improvement…

Evolved EDGE: RED, HOT and HUGE

I’ve already reported back in November 2006 that a number of companies in 3GPP are seeking to once again increase the data rates for GPRS beyond what is available with EDGE today. The feature is commonly called evolved-EDGE. At this point in time there seem to be a number of working groups inside 3GPP dealing with the nitty gritty details and they’ve called themselves RED-HOT and HUGE.  Here’s what the abbreviations stand for:

  • RED-HOT: REduced Symbol Duration – higher Order modulation and Turbo coding
  • HUGE: Higher order Uplink performance for GERAN Evolution

Totally obvious… Here’s more on the 3GPP server.

Why Does The iPhone Not Have 3G On Board? – I Don’t Think It’s the Power Consumption

Carlo Longino points out on his blog that Steve Jobs has said battery capacities and immature 3G chipsets that take too much power are the reason the iPhone doesn’t have any 3G capabilities. If you want to build a phone these days that is designed for only being used for a two minute voice call once or twice a week, using a 2G chipsets is surely the right thing to do as standby power consumption is definitely lower than what 3G chipsets can do today. However, the iPhone is a multimedia device and is built for being used throughout the day for a myriad of purposes. Therefore 3G chipset power consumption is the least of your worries.

Compared to what the processor, display, background illumination, camera and memory consume during intensive use during the day, the additional power required for a 3G chipset while in standby is not worth mentioning. Even without a lot of network use my battery on the N93 is flat in the evening when I heavily use my phone during the day for taking pictures, navigating (NokiaMaps), taking notes, checking and responding to eMails, playing games, reading documents, etc. etc. All of this requires little to no network interaction. On days without a lot of activity the battery is still almost full in the evening, despite having been attached to a 3G network all day long. So 3G chipset idle mode power consumption is definitely not an issue if the phone / multimedia device is used heavily during the day.

But once you use the cellular network it doesn’t really matter if you use a 2G or 3G network. In both cases the battery is flat after two to three hours if I use the phone together with a notebook to access the Internet. I don’t think the iPhone is designed to do this but the same is true for using the network with the built in browser.

I wonder if Apple’s decision not to include 3G has more to do with the fact that you can count the number of 3G or 3.5G capable mobile phones (not datacards) in the U.S. on one hand these days. Compare that to Europe where 3G in mobile phones are already mainstream technology. If Apple had been a European company it could well be their decision would have been different.

How Do You Hand Over A 4G Voice Call to 2G?

WiMAX, LTE, UMB, etc. etc., buzz words in the emerging 4G wireless space. Different interests, standardization groups and politics but they all have one thing in common: All are based on IP and all will rely on Voice over IP (VoIP) in one form or another (e.g. IMS or SIP) to carry voice calls. With sheer bandwidth, IP header compression and optimized handover strategies between cells I can imagine it happening. But what happens when you run out of network coverage and only a GSM network is available to continue the call in?

A number of alternatives exist. The first one might be evolved EDGE which could deliver GPRS data rates high enough to sustain a VoIP call begun in a 4G network on the packet switched side of the network. However, I wouldn’t bet on this one happening everywhere. It’s more likely that the VoIP call must be continued in the circuit switched side of the GSM network. But how can that be done?

Voice Call Continuity (VCC) could come to the rescue. A first version is already standardized in 3GPP TS 23.206 and it can do this and many other interesting things. I’ve done a short intro on VCC before, take a look here. Yes, it’s standardized but it’s not a home run:

One of the problems with VCC is that the mobile needs to be connected to both the 4G network and the GSM network at the same time to perform a handover. This consumes more energy then only being connected to one network at a time. Furthermore, such a dual connection might be difficult to establish if the two networks use the same frequency band. If the 4G network is deployed in the 2.5 or 3.5 GHz band then this is not going to be a problem. In case classic 2G frequency bands (850, 900, 1800, 1900 MHz) are partly re-farmed and the GSM network to be handed over to is nearby then VCC will become a challenge. 3GPP Release 8 might yet get a work item to study the possibility of single radio VCC (SR-VCC) to deal with these issues and I am looking forward to see how handover speeds in the order of a few hundred milliseconds can be achieved.

Summary

All-IP wireless networks will be a great thing to have but solving the handover to legacy wireless networks to prevent calls from dropping is going to be a difficult thing.