Mobile Broadband

transcript

Mobile Broadband – New Applications and New Business Models

Brough Turner

IMT-2000 Vision (for 3G) includedLAN, WAN and Satellite Services

Satellite

MacrocellMicrocell

UrbanIn-Building

Picocell

Global

Suburban

Basic Terminal

PDA Terminal

Audio/Visual Terminal

The Internet is the killer platform

• Mobile Internet access driving 3G data usage

• Future business models an open question

– Walled garden ?

– Advertising ?

– Other 2-sided business models ?

Leading Apps don’t depend on 3G

• Voice ― still the largest revenue source

– Bar none!

• SMS ― 2nd largest mobile revenue source

• Voice SMS, picture mail & video mail coming on strong

Content !

Mobile TV

Mobile social networking

Mobile Content

• More music sold on-line than off-line in both China and Korea

• Ringback tones– Created by SK Telecom in Korea in 2002; 30% adoption in

just 9 months

• Ringback tones today– Korea: ~55% adoption

– China: ~50% adoption

Mobile Content

• More music sold on-line than off-line in both China and Korea

• Ringback tones– Created by SK Telecom in Korea in 2002; 30% adoption in

just 9 months

• Ringback tones today– Korea: ~55% adoption

– China: ~50% adoption Any G,

1, 2, 3 or Fixed

Japanese Music Revenues

Source: Infinity Venture Partners

Mobile TV

70% of new handsets in Japanare Mobile TV enabled

Only Japan and Korea have multi-million Mobile TV subscriber bases

Mobile TV

70% of new handsets in Japanare Mobile TV enabled

Only Japan and Korea have multi-million Mobile TV subscriber bases

Broadcast services independent of 3G

Mobile Social Networking

Source: Benjamin Joffe, Plus Eight Star Ltd.

2000 2004 2006 2007Mobile launch:

50 M 6 M 10 M 3 M

Mobile users:

2000 2004 2006 2007Mobile launch:

50 M 6 M 10 M 3 M

Mobile users:

2000 2004 2006 2007Mobile launch:

Profit (USD):

$225M ~$100M ~$35M ($50M)

50 M 6 M 10 M 3 M

Mobile users:

2000 2004 2006 2007Mobile launch:

Profit (USD):

$225M ~$100M ~$35M ($50M)

“3G” Services

• 3G-324M Video telephony

• Location-based services

• Push-to-Talk (VoIP w/o QoS)

• Rich presence (instant messaging)

• Fixed-mobile convergence (FMC)

• IP Multimedia Services (w/ QoS)

– Video sharing (conversational video on IP)

• Converged “All IP” networks – the Vision

“3G” Services

Limited adoption

“3G” Services

Limited adoption

Bypassed !

No traction

Still waiting …

Mobile operators miss the boat

• Location-based services (LBS)

• Required in US for 911 services

• Fully implemented (after multiple delays)

• Not made attractive for 3rd parties

Result:

• All US location-based services based on alternate location approaches

– GPS, Cell ID, Navizon, Skyhook

Mobile operators slow the boat

• Billing Services

– Mobile operators have efficient billing systems & own the customer relationship

– DoCoMo showed (I-Mode in 1999) the enormous potential of affordable billing services

– Yet billing still offered only via premium rate #s

• Result:

– 3rd party content is paid for via 3rd party billing systems or (multiple) premium rate SMS(s)

Mobile Broadband Access

US prospects for “over the top”access to the open Internet

iPhone traffic per month

iPhone � glimmer of what’s possible

• Controlled eco-system

– Applications approved by Apple

– Must meet unpublished standards under contract between Apple & AT&T

– E.g., can’t run VoIP over 3G, only over Wi-Fi

But, $30/ month flat rate data plan(on top of $40+ phone plan)

• Explosive growth in web usage

Mobile Internet Access

• Available for PC’s with restrictions, e.g. no servers, no P2P, no substitution for private lines or frame relay

• AT&T: 5GB @ $60/mo

• Verizon: ditto

• Sprint: ditto

• No US operator offers flat rate unlimited plans

Breaking Oligopolies

• Four or more viable competitors is what it takes; more than four and it can be rapid

– Many examples in mobile voice telephony from around the world

Breaking Oligopolies

• Four or more viable competitors is what it takes; more than four and it can be rapid

– Many examples in mobile voice telephony from around the world

• 2009: Three established US 3G operators

– AT&T Mobility, Verizon Wireless & Sprint PCS

– Flat rate data plans exist; but with caps

– No unlimited open Internet access

Additional US 3G/4G Competition

• USA (well financed)

– Paid $4.2B for AWS spectrum in 2006 and committed additional $2.7B for initial rollout

– Currently spending almost $1B per quarter, 3G had reached 1/3rd of cell sites as of 3Q08

• (build out partially financed)

– WiMAX on Clearwire and Sprint spectrum

• (build out partially financed)

– WiMAX on Clearwire and Sprint spectrum

Potential for affordable flat rate mobile broadband in the US in 2010

Subscribers & Applications

• Historically, only applications pre-installed on handsets had any traction

– “On-deck” applications and content offers

• Apple iPhone application store is on-deck

– Provides access to 50K+ applications

• Andriod store, RIM, Nokia, Qualcomm, Palm, Handango, Adobe, Samsung, …

Subscribers & Applications

• Historically, only applications pre-installed on handsets had any traction

– “On-deck” applications and content offers

• Apple iPhone application store is on-deck

– Provides access to 50K+ applications

• Andriod store, RIM, Nokia, Qualcomm, Palm, Handango, Adobe, Samsung, …

Application stores are the new “deck”

Handset diversity

Remaining obstacle to widespread deployment of 3rd party applications

IMS doesn’t solve inter-operability

Handsets more & more diverse

• Browsers – Openwave, Opera, Safari, …

– Using: WebKit, Netfront, Presto, …

• Runtime environments as several levels

– Adobe AIR, .Net/Silverlight, Brew, JavaME, …

• Operating systems

– Symbian, WinMobile, Android, OpenMoko…

• Hardware capabilities

– CPUs, supported codecs, screen size, …

Mobile Software Frameworks

Mobile Facebook by:

http://www.flickr.com/photos/philiphubs/

Internet will win in the end, but…

Important trends

• App stores!

– Easier distribution; Easier discovery

• More and more smart phones

• Richer browser capabilities

– Approaching PC browser functionality

• New access to device capabilities

– User data (contacts, logs, …), events (incoming calls) and core functionality

Uniquely Mobile Internet

• Phase 1 – cut down web, e.g. WAP

• Phase 2 – full web accessible on mobile

• Phase 3 – designed-for-mobile web

– Optimize the mobile user experience; speed ups

• Phase 4 – client-side mashups

– telephony, address book, location, camera…

• Phase 5 – apparent persistence

– Despite battery limitations; widgets; push; …

Challenges

• Handset diversity

• Pace of change

• User interface – minimum clicks; max speed

• Battery life – “chatty” apps drain power

• Application concurrency

– Manage events over browser, native & helper apps

• Persistent user experience across multiple applications

Dealing with handset diversity

• Browser-based application first

• Optimize for top N phones by market share

– For most applications, N likely equals 1-3, not 10-12

Source: StatCounter

SmartPhone market share

Smart Phones & Feature Phones

• Smart Phone adoption soaring

– Nokia, Blackberry, iPhone, RIM, WinMobile, Palm, Android, …

– Moore’s law suggests it will only get better

• 85% of US phones are “feature phones”

– Higher percentage in emerging markets

• Application environments emerge

– Java, Flash, Qt and ever richer web runtimes

Expectations are clear

Camera

Media Player

PhoneMobile

Telephony

BrowserMobile

Expectations are clear

Camera

Media Player

PhoneMobile

Telephony

BrowserMobile

WebMobileWeb2.0

Browser

Camera

Media Player

PhoneMobile Telephony

Tomorrow

The initiative has passed to application developers

Biggest Take-Away

Dumb Pipes or New Service Opportunities?

How operators can profit while providing open mobile access

to the Internet

Advertising won’t cover lost voice $

Source: Telco 2.0 Manifesto, STL Partners Ltd.

Two-Sided Markets

• eBay connects sellers and buyers

• Nightclubs: women get in free

• Media

– Newspapers – low prices for subscribers facilitates sales of advertising

– Broadcast TV – free attracts viewers facilitating sales of advertising

• Akamai caching benefits

– Free to ISPs; Paid for by content providers

800 numbers

• The original telco 2-sided play

• Bell system provided retail phone service to essentially all US consumers

• Offered “800 service” to businesses, helping them connect with their customers and prospects

Billing Service

• Most operators cautious about partnering– Fear of “dumb pipe” � slow roll out of new services

• DoCoMo i-mode 2G data service launched 1999– Small screens, slow (9.6 kbps) data rate

• But i-mode business model was wide open– Free development software kits; No access restrictions

– DoCoMo’s “bill-on-behalf” with 9% commissions

• i-mode big success in first 24 months– 55,000 applications, 30M subscribers !

DoCoMo i-Mode: 2-sided business model

• Subscribers pay for data access (flat rate monthly bundles)

• Application providers pay DoCoMo for billing services

DoCoMo’s i-mode

• Open to any application developer

• Optional billing for a 9% commission

DoCoMo’s i-mode

• Open to any application developer

• Optional billing for a 9% commission

Results:

• Over 100K new applications in first 3 years

• Over 15K applications use billing service

• DoCoMo has highest data revenue per user, in the world, consistently for 10+ years

Operator Assets

• Brand, PSTN numbers

• Location (motion, context, …)

• Fine-grained billing systems

• User data

– Name, address, age, devices, …

• Rich presence

• Customer relationships

Telco Platform

Customers: Revenue Side 2

Customers: Revenue Side

1Developers

Retailers

Government

Brand Advertisers

Content Owners

Telco – Retail

B2B VASB2B VAS

DistributionDistribution

Millions of Customers

Thousands of Segments

Millions of Customers

Thousands of Segments

Opportunities on all fronts

Rich mobile applicationsare coming

Opportunities on all fronts

Rich mobile applicationsare coming

business models will change, significantly

Brough Turner

Ashtonbrooke Corporationhttp://www.ashtonbrooke.com

Blog: http://blogs.broughturner.com

Email: broughturner@gmail.com

Skype: brough

Thank you !Thank you !

Mobile Broadband

Technology