Part 2: How Can Incumbents Respond to Disruption?

August 8th, 2016

3 Questions to Ask!

By Dawood Khan

When it comes to disruption and the introduction of disruptive practices in a particular market, we should keep in mind what renowned Canadian communication and media theorist Marshal McLuhan said in 1964 about the heavy reliance of newspapers on classified ads and stock-market quotes. McLuhan said that “should an alternative source of easy access to such diverse daily information be found, the press will fold.” But as we all know, the demise of classifieds in print media did not happen until just a few years ago. And even more than a decade after the advent of the internet, many print publications did not care to invest in digital technology and transition to online publications. As a result, many of them suffered royally at the hands of startups and a few incumbents that had the foresight to make the transition and disrupt themselves.

Netflix’s transition in 2011 from DVDs to streaming is well documented. The company suffered 80% drop in its stock price as it transitioned to online streaming, but it eventually paid off as evidenced by a 134% spike in its stock price over the last 12 months, causing the cable industry to lose more than 6.7 million subscribers over the last five years[1], and driving BlockBuster, its arch-rival at the time, out of business. Another testament to Netflix’s success: the number of hours many of us spend on weekends, binge-watching our favorite shows.

” The challenge for incumbents is the task of preparing for the day when their cost structure won’t be aligned with alternatives in the market. The preparation can entail taking measures against some of their current operations with subsequent hits to their profitability. But those measures may eventually pay off handsomely. The challenge is that it’s difficult to predict accurately what may and may not work.”

The questions then are:

  • What is an incumbent to do as it prepares for emerging disruption – Is there a way to know what will work and what may not?
  • When should it act – while timing is important, is it possible to get the timing mostly right with a high degree of certainty? and
  • How it should bring its new approach to the market?

As no one really knows what approach would work best, or how to predict market reaction, prudent organizations are tackling disruption as a transformative journey rather than a discrete action at a point in time or the proverbial “destination.”

A Digital transformation journey means that these organizations are continuously experimenting with new business models, emerging technologies and ways in which to engage and interact with their customers.

As part of this journey, organizations are increasingly looking at determining how an approach may be desirable (do people want it?), design thinking - ideoviable (is there a business case/model that will work?), and feasible (is there a technical solution?). These three elements form the foundation of design thinking, as illustrated in the image courtesy of IDEO. Which, when used as part of an organization’s digital transformation journey, allows an organization to rapidly identify opportunities, test them through quick and iterative proof-of-concepts, refine the approach or move forward.

For anyone, and especially incumbents, it is important to accept market realities. Disruption is inevitable. In order to survive, organizations have to be prepared, and the way to do this is via a journey towards transformation. While many call this “digital transformation,” people (customers and organizational culture) form the core of any successful transformation. An innovation-focused culture that is open to employing a human-centric approach to solutions, rapid prototyping, and experiencing failure, is the corner-stone of success in addressing the ongoing disruption in the market.

[1] “Can Netflix Survive in the New World It Created?”, New York Times, June 15, 2016

How Can Incumbents Respond to Disruption?

August 4th, 2016

Part 1: Start by Accepting that Disruption will Happen!

By Dawood Khan

It is well-known that incumbents in any industry seldom feel the impact of an early-stage disruption on their core business for many years or even decades. This is even truer for those industries that are heaviCryptocurrencyly regulated, as regulation creates a barrier to new entrants. Hence, in such situations, incumbents are typically highly profitable and may not feel threatened. They may prefer to remain on the sidelines for an extended period of time, often somewhat skeptical of the degree to which the disruption may impact their business. In this period, they may experiment with new technologies and business models, or hedge via investments in emerging start-ups. In some cases, they may take a wait-and-see approach. The question is at what cost?

As an example, one could say that FinTech is another oft-hyped, early-stage technology. But a look at alliances, investments, FinTech-focused technology accelerators, and the growing number of Fintech Unicorns suggest otherwise. Exponential growth in global FinTech investments attests to the industry’s path toward acceptance. Over a span of five years (2010-2015), global investment in FinTech reached $49.7 billion. In the U.S alone FinTech investment doubled from $4.05 billion in 2013 to nearly $10 billion in 2014 and by June 2015 it skyrocketed to $31.6 billion[1].

Today a new breed of FinTechs is focusing on crypto-currency, which are powered by blockchain technology.  Crypto-currency is a blockchain technology that involves financial transactions based on encryption technology. Blockchain is on its way to disrupt a wide range of transactions in the financial industry such as stocks, bonds, loans, and payments with a subsequent transformative impact on the banking ecosystem.

From a financial perspective, blockchain technology keeps all transaction records permanently on thousands of computers from various networks distributed around the world. Each of these computers attests to the authenticity of transactions with no single entity controlling them as they all run on open-source collaboration. Hence the arrival of frictionless transactions and possible disappearance of intermediaries. Blockchains can be used to record transactions of asset exchanges (or “value”) among owners. Transfer of assets, buying and selling of stocks and properties, private banking, and lending will all be disrupted. These are what blockchain FinTechs are focusing on. 2015 U.S investments in blockchain-focused FinTechs stood at $400 million and over $150 million in Q1 2016[2].

The global FinTech Unicorns (20 and rising) are bound to make their impact felt at the corporate boardrooms of incumbent banks. However, it may appear that there is a lack of urgency among incumbents, this is because their market share has not, and may not be impacted for some time to come.

By now, you may have already asked the proverbial $64,000 question: How will the incumbents react?

Part 2 of this piece looks at this question and provides an approach to addressing on-going disruption.

[1] The State of Fintech Industry as We Know It Infographic:

[2] Quartz, “Money keeps pouring into blockchain startups”, April 19, 2016

How Different Sectors Adopt Digital Transformation?

June 2nd, 2016

Digital transformation (“DX”) is inevitable!

According to a McKinsey & Co. finding, 40% of Fortune 500 companies will not exist in 10 years, if they fail to transform. However, there are vast opportunities for those who take action!

The first Canadian Digital Transformation (“DX”) Think Tank session was led by RedMobile Consulting in Toronto on May 25, Dx Journey Pic2016. Select business leaders from a diverse cross-section representing public and private sector organizations participated. The participants examined various aspects of digital transformation and underlined the significance of anticipating and embracing disruption, and the threats posed if digital transformation was ignored.

>> Contact us for more information

Are FinTechs making Banks Endangered Species?

May 5th, 2016

By Dawood Khan

Taking on water

I recently bumped into an old friend – a respected financial industry leader whom I had worked with on mobile payment initiatives almost a decade ago. She asked me something quite interesting. “We all hear that FinTechs are disrupting the financial industry, that this is forcing established banks to rethink the way they do business. These institutions are revamping their services, pricing Image1models, and trying to embrace digital channels, but I wonder if you think this will be enough? I mean, with a changing customer demographic – do all the positives traditionally associated with incumbents just become an ever-tightening noose around their necks? Do you think incumbents can successfully compete?”

The glass can actually be half-empty!

Her questions made me think of what we associate with an incumbent financial institution (FI). An established FI has well engrained processes, tested business models, an experienced workforce, a history of compliance with regulations and policies, infrastructure, and we are familiar with their services. But are all these legacy capabilities holding them back?

As an example, over-the-top players are offering digital wallets (e.g., Google wallet, Apple Pay) that are starting to result in incumbent FIs losing margins in some of their most profitable products. According to a McKinsey & Co study[1], by 2025 – FIs could lose up to 35% in profits from payments alone, Canadian banks can lose up to 70% of their margins in traditional retail banking, and wealth management can lose up to 35% of profits.

While a recent report by PWC[1] concurs and states that by 2020 consumer banking, transfer/payments, and private wealth management will be the sectors most impacted by FinTech.

But all that water’s got to go somewhere!

McKinsey & Co.[2] has reported that global investment in FinTech surged from $2.6 billion in 2012 to $12.2 billion in 2014, a whopping sixfold increase. As if it wasn’t a big enough surge in investment, 2015 finished with global investment in FinTech companies totaling $19.1 billion, with $13.8 billion invested into VC-backed FinTechs[3].

A recent report by KPMG and CB Insights[1] also shows that nearly 20 FinTech Unicorn companies globally are taking on two of the most lucrative segments of the industry: payments and lending. (Unicorns are startups with a market valuation of over $1 billion).

Clearly incumbent FIs have their work cut out for them – both organizationally and operationally. Among other things, incumbent FIs need to:

  • Innovate services and business models or at least react quickly when they trickle down the financial services food chain;
  • Evolve from legacy technology and infrastructure, practices, organizational capabilities, to meet evolving customer needs;
  • Secure significant corporate buy-in from key decision makers to support transformation.

Water – what water? Just drink the kool aid!

To stem the rising tide against them, many incumbents are investing in promising FinTech startups, setting up corporate venture capital (CVC) arms in search of startups whose products and services are in line with theirs.

But is this sufficient to reverse the tide? Yes and no!

With rising pressure on margins, the loss of market share, and the prospect of customers migrating to FinTech-based services, incumbents have no option but to invest in FinTech. However, for most this will not be enough.

These are dramatic shifts in the FI fabric, and incumbents must prepare to make monumental changes, they have no option but to transform on multiple fronts –business, customer and technology.


Twitter: @redmobileconsul             Facebool:

[1] Fintech funding hits all-time high in 2015, despite pullback in Q4, KPMG and CB Insights, March 2016

[2] Blurred Lines: How FinTech is Shaping Financial Services, PWC Global FinTech Report March 2016

[3] Cutting Through the FinTech Noise: Markers of Success, Imperatives for Banks, McKinsey & Company Global        Banking Practice, December 2015

[4] The Pulse of Fintech, 2015 in Review, KPMG, March 9, 2016

Digital Transformation – Getting Lost is Easy!

April 19th, 2016

By Dawood Khandx5

Digital Transformation – Mobile, Cloud, them Things, and that really Big Data

We’ve all heard that the Internet of Things (IoT) and data analytics are essential to future success of organizations. Almost every day, like me, I am sure you’re bombarded with a new event on the topic. Having spent a long time in the emerging technology and innovation area, I thought I’d attend one of the more established IoT conferences and see what all the fuss is about. I inherently dislike paying good money and spending valuable time at an event to hear nicely concealed sales pitches. But at this IoT event, to add insult to injury, I actually found myself lost half-way through the event. I thought I was alone in this, so I casually broached the topic at lunch with several other people. It turned out that they were in the same boat. The conversations over breaks, evening networking sessions, and hallway chats only reaffirmed the general sense of bewilderment. And this audience was mainly people in the tech-innovation space.

After hearing from 250+ different IoT platform vendors, half a dozen different interoperability/ standardization bodies, and many dozens of vendors who made sensor chipsets, “things”, radio networks, gateways, and analytics engines – one realizes the problem. It’s a classic tale of technology hype and lofty promises of what “can be” on one side and the reality (some may call these shackles) of legacy business. Between the two sides, you’ll find confused decision makers.

Where do you start? A rooftop patio is a great place

Over dinner on a rooftop patio on one of our warm winter evenings, I had an eye opening moment with a client who manages a large number of complex and diverse infrastructure assets. We were discussing the value of data analytics and the role IoT could play. His view was that before his organization could think of big data, they had to get credible, reliable and usable data first. They had no shortage of data – it’s just that the data they had was inconsistent, in different formats, and resided in disparate systems. Hence the level of confidence they had in its efficacy for decision making was questionable, especially in a highly regulated industry. I asked him why? He explained that they couldn’t even consistently identify an asset because they used stick-on bar codes that would peel off, wash off, or just get scratched. So, in such cases, the maintenance staff would write the information on a paper and enter it into their system at a later time. Most of the time they could identify the assets correctly, but a large number of times they couldn’t. As a result, their degree of confidence in the large amount of data they had was limited.

Digital Transformation – Failure isn’t an option, it’s a requirement!

To me, the fore-mentioned discussion, illustrates a classic challenge organizations face. Their line of business operations folks have business problems, but don’t necessarily understand where to start their Digital Transformation (DX) journey or how to go about IoT and analytics. This is because, these things seem too far a stretch from the reality of where they are today.

The examples illustrate major barriers to adoption of IoT and analytics, and corporate-wide success of Digital Transformation. In addition, the absence of a return on investment (RoI), justifying implementation costs, and an inability to visualize tangible results, have also been cited as main challenges for adoption.

While the majority of large enterprises claim to be in the midst of Digital Transformation, the fact is that many of the same organizations, when asked to define Digital Transformation, couldn’t do so.

As an example, we can see the fore-mentioned dynamics at play in the banking sector. Financial institutions (FI) are generally encumbered with bureaucracy, legacy systems, and regulatory burdens. At the same time, they are faced with the onslaught of web and mobile-based offerings from a growing pool of financial technology (FinTech) startups. These over-the-top players are disrupting the traditional business of FIs.

As the business of FI’s is disrupted, much like Uber disrupted the taxi industry, the overarching question for the banks is whether or not there are compelling drivers to embrace DX. Justifying implementation costs and quantifying RoI may provide insight for decision making. However, becoming sidelined in your own industry, or being rendered obsolete, are business outcomes that can never be undone.

So, the risks are high – but where does one start? How does one really plan a viable DX journey? And how does one’s mindset and approach have to evolve to be successful?

You may never have all the answers, so start, start small, be open to failing, learn quickly, refine your approach, and iterate! That’s the “fail fast” approach in a nutshell, you go from concept to proof-of-concept in several rapid iterations.

What people may not tell you is that, this requires a certain degree of discipline, and an appreciation for the art and science of “Design Thinking.” While organizations are starting to rapidly prototype and willing to fail fast – it’s no fun if you fail fast, fail everywhere, and just keep on failing.

A disciplined approach using “Design Thinking” that accords the latitude to experiment, learn, refine, and improve through discrete iterations is an art and a science.

Fail fast and succeed fast by learning from everyone’s mistakes

So, a select group of business, operations and innovation leaders are invited to participate in a hands-on “Design Thinking”-based, Digital Transformation Thinktank and Workshop. Roundtable discussions with early-adopters who have already undertaken the Digital Transformation journey successfully, will provide insights from first hand experiences. The goal is that we will be able to identify opportunities to derive business value from Digital Transformation, and to identify specific use cases for proof-of-concepts (PoC).


Tesla: Driving Digital Transformation & Disrupting the Ecosystem

April 11th, 2016

By Dawood Khan

As organizations explore digital transformation (DX) and determine business value in light of the buzz around Internet of Things (IoT) and Big Data, it is essential to remember that DX is more than just a technology overhaul, DX is a journey that can transform business models, processes, and customer engagement, and can even impact unrelated industry verticals. The recent launch of the Tesla #Model3 illustrates this perfectly.

DX can have implications on different levels, from company-level impact, to impacting the sector, and even an entire ecosystem. Take Telsa as an example. Everyone knows that it revolutionized the way we look at electric cars, but until the recent launch of the Tesla Model 3, few could have imagined the frenzy of consumer buying. People lined up to buy the vehicle like they would buy a hot new consumer electronics product. Within 48 hours of its launch, the car had 276,000 pre-orders totaling $10B in potential sales, and $276M in deposits. Tesla has in fact revolutionized the business model in its sector. It has crowd-funded the partial cost of manufacturing the Model 3. While the actual process to reserve a Telsa Model 3 took all of 2 minutes on average, consumers who signed up are willing to wait a year and a half or more to receive their vehicles.

Image - DX.1

Not only is Tesla disrupting the auto sector, it either has already or will soon impact a range of other sectors. As a connected car – updates are done via software upgrades, “over the air”, using wireless carrier networks or WiFi, thereby creating revenue streams for an ecosystem of carriers, electronic SIM manufacturers, etc. And generally, the expected entry of self-driving vehicles will certainly impact how smart cities plan transportation systems, roads, traffic flow, etc. The insurance industry is already looking to assess the impact of such vehicles on policies, and one can imagine that changes to driving regulations are in order.

So, digital transformation is about more than harnessing a new technology to improve, revamp, and overhaul processes and operations; it is about identifying and creating new value propositions. And as we have seen with the likes of Tesla, Uber, and other disruptors, entire industry sectors and business models have been disrupted, in some cases, traditional ways of doing business have been rendered obsolete.

While most organization realize that it is imperative for them to assess and respond to changes that digital technologies bring in order to remain viable, the challenge many organizations face, however, is that with the rapid changes in technologies and the plethora of vendor solutions for the “Internet of Things” and “Big Data Analytics” – figuring out where to start the DX journey and navigate the landmines along the way is a challenge in and of itself. Starting and planning the DX journey the right way are essential to success.

mHealth – The Genie in the Lamp

December 11th, 2013

Tuesday, December 10, 2013

By Dawood Khan,

mHealth Summit, Washington DC

WASHINGTON, D.C. – mHealth – The mobile phone is Aladdin’s Lamp!

The mHealth sector is definitely in the initial phases of a hype cycle. It is rattled with endless point-solutions; thousands of apps, hundreds of wearable devices, no real idea of business models, a blatantly “patient un-centric” approach to mHealth, and unimpressive solutions showcased as the “latest mobile health technology” that would remind anyone in the mobile industry of 2006.

2006 was an era the mobile industry was full of point solutions, more content than anyone could find on carrier portals – a.k.a. walled gardens. The Blackberry was the pinnacle of a smart mobile device, an entirely un-centric user experience, and a business model that basically gauged consumers.

Then came Apple in 2007 and the mobile industry changed. Apple’s ingenious approach went far beyond technology in the iPhone. It came with a markedly consumer-centric approach from revolutionizing the content revenue-sharing business model, and an engaging end-user experience. Apple negotiated Digital Rights Management deals with record labels, content aggregators, and distributors. It allowed application developers to keep 70% of revenues. This was unheard of among Western MNOs, who kept 80% of application and content revenues, and controlled their portals.

In retrospect, Apple was the mobile industry’s genie.

Fast forward to 2013, and while anyone who has observed hype cycles in industries undergoing change can see that mHealth is all hype and little substance. At this time, there are some glimmers of hope, offering a potential to change the hype to hope.


Enter Mohammad Yunus – an unassuming, humble, simply dressed global change leader – A Nobel Prize winning inspiration for social change. Among many innovative ways of challenging social, business, and technology status quo, he established Garmeen Bank, acquired wireless spectrum and set up a cellular service provider in Bangladesh to serve the underserved. His target was the poorest women in the world. They were the “telephone ladies” – allowing villagers to make calls, conduct banking, etc.. He grew this to 400k “telephone ladies” within 5 years.

He dreamed of creating Aladdin’s lamp with a magic genie who would solve the problems of people – he believes the mobile phone to be that magic lamp with a digital genie – granting wishes, solving people’s problems, allowing them to make money to feed their family, access banking, and “dial a doctor”. In trying to achieve Bangladesh’s Millennium Development goals, Yunus has been working on addressing medical issues among the most vulnerable. Using mobile to offer “dial a doctor” service and even for portable ultrasounds. His current dream is to use the mobile phone as a portable Ultrasound device (instead of a tablet) with an ultrasound app that can be downloaded.

While applications exist for mobile eye scanning, ECG, and detecting certain types of cancer, his vision is that mobile collects info from the body in every way allowing machines to analyze trends over time and pre-emptively alert  you when there is a problem. In this way, diagnostics can be provided at a personal level without having to go to a doctor.

After this, speaker after speaker spoke of the best solution their company either enables or delivers. The challenge is that these solutions are all closed loop and not necessarily the best for consumers. In many cases, solutions don’t have a business model. Given the US centric crowd, the approach to funding was, as expected, US centric. And so, the discussions around what kind of business model will work still need to be thought through. In essence, what may work for a particular solution in one Country, will need to be totally reformed for another. Eventually, the players will sort things out.

mHealth – Will it Go Viral or End Up Bacterial?

December 10th, 2013

Monday, December 9, 2013

By Dawood Khan

mHealth Summit, Washington, D.C.

WASHINGTON, D.C. – In many ways, today was a day of juxtapositions.

While an impressive array of keynote speakers spoke about the incredible future as a result of innovative technologies and solutions, the audience of close to four thousand healthcare practitioners, entrepreneurs, vendors, service providers, regulators, sat patiently listening as the lights flickered at a state-of-the-art facility in Washington DC, experiencing electrical problems as a result of what many would consider a mild storm.

The mobile industry was revolutionized with the inception of the iPhone in 2007 and then Android in 2008 – the possibilities for healthcare from mobile are limitless. There are close to 6.6B mobile connections worldwide today according to the GSMA[1], and these are expected to exceed the human population shortly. According to the keynote speaker from Qualcomm, the Internet of Things (IOT) will be everywhere – even doorknobs can be made mobile. IOT is expected to generate revenues of $1.5T by 2017. The predictions on the number of connected devices vary between 25B and 50B connected devices by 2020 – admittedly a large window, but a difficult prediction to make.

The healthcare industry spends more than $6.5T globally on an annualized basis. An aging population with a growing need for chronic disease management represents roughly 860M patients worldwide. Some developed countries report spending close to 84% of healthcare spending on chronic disease management. A study for the NHS reported an almost 45% reduction in mortality from chronic diseases when telehealth was adopted[2].

The revenue predictions of the global mHealth market also vary. According to Transparency Market Research, the global mHealth market is expected to reach $10B in revenues by 2018, up from $1.3B in 2012 – representing a CAGR of 41.5% from 2012 to 2018. Majority of the revenues thus far have been from monitoring services contributing about 63% of the global mHealth market revenue in 2012[3]. According to research2guidance[4] the mHealth app market will reach $26B by 2017, with 50% of mobile users expected to download a health app by then. Today, majority of the apps have been lifestyle focused, with smaller, nimble app developers and innovators avoiding diagnostic apps as a result of regulatory concerns.

Speaking of regulation, the Food and Drug Association (FDA) in the US recently issued its final Mobile Medical Applications Guidance for the industry[5]. This is a first of a kind guidance. The FDA claims that innovation isn’t counter to patient safety, and has identified categories of devices to “focus only on the apps that present a greater risk to patients”. However, defining what “greater risk” is trickier than one would assume. So, a Food and Drug Administration Safety Innovation Act (FDASIA) Workgroup has been set up to provide expert input on issues identified by the FDA, Office of the National Coordinator for Health IT (ONC), and the Federal Communications Commission (FCC) to help develop a risk-based regulatory framework pertaining to health information technology including mobile medical applications. The framework promises to promote innovation, protect patient safety, and avoid regulatory duplication. The folks at HIMMS couldn’t wait for further regulatory guidance and have issued their roadmap version 2.0[6] for the adoption of mobile and mHealth devices. mHIMMS also launched its 3rd survey of mHealth today. Results of the previous survey indicate interest in consumer focused applications[7].

The CEA discussed its Wearable Devices Market Study[8], identifying that there is over a billion dollar industry of wearable fitness devices in the US by 2014, with products from companies such as Jawdrop, Bitfit. 75% of consumers who own devices are in the 18 – 34 years bracket. However, older more affluent shoppers also own fitness devices. Most purchase devices at brick-and-mortar sports stores rather than online – as consumers want to know how they feel. While price is the most compelling driver for selecting a wearable lifestyle device, battery life, form-fit and ability to keep them clean are important decision criteria for consumers.

So, why has mHealth been so slow to take off? Esther Dyson, the Chairman of HICCup likened these early days of mobile in healthcare to be like the late 80’s for Internet, when people thought it was very sleazy to put commercial traffic on the Internet, which was till then purely a research Network. “Mobile in healthcare is like that. But it is charging.” She said.

AOLs founder, Steve Case lamented that it took the Internet almost two decades to reach main stream, and mobile in health will also take time – especially as older and established stakeholders try to maintain status quo.

Major barrier to adoption of mHealth include the resistance by established Vendors and Providers of accepting new, unknown entrants with nascent, sometime unproven innovation. Clinician reimbursement models were also identified as a barrier for the US market.

Trust is a major concern. This can only be overcome through maturation of the mHealth Industry.  In terms of mPayments – how many people rip up the cheques after they deposit it? Only a handful, most hold onto it in case the deposit didn’t work well. It will take time for people to start trusting the app. As noted earlier, another challenge is that most firms want to stay out of the critical health care apps and stay in fitness and wellness to avoid being regulated.

Jordan Shlain, an MD and entrepreneur who founded HealthLoop – a startup focused on providing Clinicians the ability to follow-up with their patients digitally, put the situation of mobile in Healthcare well – “will mobile go viral?” he asked, and then responded “…like most things in health – I think it may end up going bacterial instead.”

Perhaps so – but only for the near term. I came to mHealth to see if the Healthcare industry was ready for the change, ready to move at a much faster pace, adopt innovation, and adapt its existing processes and regulation to meet the needs of a much faster moving Mobile Industry converging with a slow moving, established Healthcare Industry in. I am happy to report that I think that while we’re at the very early stages of the phenomenon, the trend is definitely irreversible. Exciting times ahead!

Is your enterprise looking for a mHealth strategy? Contact us at to receive a copy of the mobile enterprise strategy best practice paper for the Healthcare industry. You can also reach us to discuss how you can determine if your organization is ready to adopt mobile through use of our mobile readiness assessment.









Department of Defense Offer to Share Spectrum with Commercial Carriers – Could lead to a $12B Auction Value

July 24th, 2013

By Dawood Khan

Red Mobile Consulting, Toronto, Canada

TORONTO – The U.S Federal Communications Commission (FCC) confirmed this week that the Department of Defense (DoD) has offered to share spectrum in the 1,755 – 1,780 MHz band with commercial wireless carriers. In March 20, 2013, the FCC had notified the National Telecommunications and Information Administration (NTIA) of its plans to commence the auction of licenses in the 1695-1710 MHz band and the 1755-1780 MHz band as early as September 2014.

Commercial carriers, especially those with limited spectrum, such as T-Mobile, who have been struggling to keep up with demand for data services, have been advocating the pairing of the 1755-1780 MHz band with the AWS-3 (2155-2180 MHz) band. The FCC plans to auction the 2155-2180 MHz band by February of 2015.

In a study done by Brattle Group, The value of the AWS-3 band paired with the 1755 MHz band is approximately $12 billion. Pairing the military spectrum with spectrum in the AWS-3 band will provide complementary channels for the uplink and downlink through frequency division duplex (FDD). The 1,755 – 1,780 MHz band is used internationally for commercial wireless services, and the DoD has faced pressure from the private sector and the Obama Administration to open up the band for commercial use.

The DoD plans to clear portions of the spectrum, which it currently uses for pilot training and drone systems, and share it with commercial carriers. It plans to do this by relocating some of the current systems occupying the said band onto other bands, and by compressing usage of the existing band. This is expected to cost the DoD $3.5 billion.

At this time, it is not clear how the Department of Defense will share the spectrum.

The Wireless Industry – Here We Shrink Again!

July 15th, 2013

By Dawood Khan

Red Mobile Consulting, Toronto, Canada

TORONTO – Consolidation seems to be the global trend in the wireless carrier sector today. A combination of full or near-full market penetration rates; burgeoning consumer appetite for data services leading to pressure on spectrum; and the need for carriers to save costs in light of declining service revenues are all leading to the phenomenon. While acquisition activity is reducing the number of competitive players in the market, leading to better economies of scale and greater access to spectrum for carriers, regulators fear this resulting in increased pricing for consumers.

AT&T $1.2 billion bid for Leap Wireless’ 5 million pre-paid subscribers and PCS and AWS spectrum spanning 35 states is just the latest in a series of acquisition activity. T-Mobile, who recently acquired MetroPCS – competitor to Leap, is itself a potential target for takeover, with Sprint (anti-trust regulation permitting) pegged as a suitor.  This comes on the heels of Sprint’s recent acquisition of the remaining part of Clearwire, allowing it access to spectrum to offload broadband data, as Clearwire pursues deployment of its TD-LTE network.

According to the GSMA, recent consolidation activity in Ireland and Austria have given concern to regulators that these acquisitions not lead to reduced network investment or increase in consumer prices.

Canada has its own share of consolidation activity in the air, albeit at much smaller scale. Verizon’s potential entry into the Canadian market given recent rules allowing foreign firms to acquire Telcos with less than 10-percent market share, can lead to competitors Wind Mobile and Mobilicity coming under the Verizon umbrella. In the upcoming 700MHz spectrum auction, rules that favour new entrants which allow them to purchase twice as much spectrum at a fraction of the price will be in Verizon’s favour. Furthermore, the Canadian market is still growing. According to a Red Mobile Consulting report for Industry Canada – “Study of Future Demand for Radio Spectrum in Canada 2011-2015,” Canadian subscriptions are expected to grow from approximately 30 million to 35 million by 2015, leading to full market penetration.

Consolidation Now – What’s Next?

As carriers role out their LTE networks, the ability to actively share network assets including the base station, the radio front-ends, antennas can make the deployment of new networks much more economical and practical for carriers. In Canada, Bell and TELUS already share network access as part of a roaming arrangement, in addition to sharing towers and cell sites. Network sharing with LTE can enable carriers to provide access to customers of another carrier on that carrier’s spectrum through a common shared network.