Could Technology Have Helped Contain the Devastating Impact of the Alberta Flood?

July 9th, 2013

By Dawood Khan

Red Mobile Consulting, Toronto, Canada

TORONTO — On June 20th 2013, Alberta, Canada experienced heavy rainfall that initiated catastrophic flooding. The flooding impacted Calgary, High River, and several areas across southern Alberta. Estimates of damage range between $3 billion and $5 billion. Over 100,000 people were evacuated as their homes were damaged or destroyed by vicious currents and flooding. This is the 2nd so called “100-year storm” to hit Alberta within 8 years. Residents and officials reported that the floods came with little or no warning.

On June 27th 2013, a major Canadian Pacific Railway bridge broke down in Calgary, Alberta. Several oil tankers carrying highly flammable content, were left stranded on the bridge. The calamity was due to faulty piers at the bottom of the river. It was the speed of the flood that scoured away the gravel under the support. The support gave way and the tracks buckled under the weight of the train. This occurred despite the fact that the 101 year old bridge had been inspected 18 times since the start of the flooding.

Government officials have claimed that it may take 10 years for Calgary to recover from the event.

Early warnings through the use of smart technologies and investment in intelligent infrastructure can greatly help authorities and communities deal with calamities by preparing for them in advance. Through the use of sensors and wireless connectivity, it is possible to measure rapidly rising water tables, eroding construction materials, and support systems. And to alert or even take pre-emptive measures to minimize the impact of an impending disaster.

While one doesn’t know if the Alberta flood warning would have come soon enough for authorities to fully operationalize a flood emergency plan, but it certainly would have provided some heads up to at least initiate measures such as starting to sandbag the most vulnerable areas, and issue public alerts to provide the public some time to plan ahead of the evacuation.

Certainly, in the case of erosion of materials or support mechanisms for bridges, warnings can be provided to trains, and even pre-emptive measures can be taken automatically to ward off trains from proceeding on the line.

A sizable number of Canadian infrastructure are believed to be over 40 years of age.

By 2027, 50% of Canada’s existing infrastructure will have reached the end of service life

Canada’s new Economic Action Plan proposes to set aside $50B for infrastructure over the next 10 years through funding programs including the Building Canada Fund, Community Improvement Fund, and P3 Canada. As these new infrastructure projects are planned, it is imperative that intelligence be incorporated into them from the very start of the initiative rather than as an after-thought.

Infrastructure is typically designed to last generations, making it even more critical to the advance planning. It is interesting to note how far Information and Communications Technologies (ICT) and services have progressed over the life span of most infrastructure.

Making infrastructure intelligent by incorporating smart technologies and progress in ICT and big data analytics can allow local, provincial, and federal authorities to not only track infrastructure decay, but also enable preventive maintenance when required. This can greatly enhance the useful service life of such infrastructure, reduce cost of repair before it is too late, and avert recurring costs as a result of damage to individuals or property.

NFC World Congress – Highlights & Insights

September 21st, 2011

By Dawood Khan

Sophia Antipolis, France, September. 19 – 21th 2011

NFC – At tipping point!? … Well, perhaps, almost there

The launch of the NFC World Congress kicked off with claims of NFC approaching a tipping point and prediction, albeit many laced with caveats, of imminent success. Perhaps, some of the enthusiasm was premature, but nonetheless, it shows that the area is starting build momentum with NFC capable handsets coming into the marketplace and with the beginnings of contactless readers being introduced, in some markets more than in others. For its first session, the Congress was well represented by vendors and to some degree MNOs and the payment schemes. However, key participants of the ecosystem, at least from a payments perspective, namely the banks and merchants were ever elusive. To be fair to the organizers of the Congress, merchants are a tough group to engage at the best of times, especially true if the value proposition is not clear to them.

You could not help but feel the speakers preaching to the choir, at times, it almost felt surreal. “NFC has the potential to create life with a gesture – the wave of a hand”, said François Lecomte, the Chair of the conference and Managing Director of the Mobile Contactless Services Forum. NFC enables users to experience secure, context-based interactions.  From an end-user perspective, vs. other options such as QR codes, NFC is accurate, faster, and simpler to use. Despite their lack of presence, merchants would also gain through NFC via enhanced CRM and marketing capabilities, in addition to supporting payments. NFC allows the sharing of content between devices, and advanced applications that trigger activity based on an NFC interaction, i.e. a kid uses his NFC phone to enter the home, and a text is sent confirming this to the parents; or as you tap the NFC handset to enter a movie theater, you can complete the ticket purchase, and the handset can automatically be entered into a courtesy mode, so that it doesn’t go off during the movie. Yes, truly earth shattering reasons for the enthusiasm, but what did you expect from a bunch to techies getting together to strategize and pitch useful businesses and use cases to the rest of the believers? While the applications positioned for NFC were endless, the key areas for focus are Payments, P2P interactions, and NFC tags for information.

To be fair, several challenges were also discussed. Given that NFC is clearly not yet arrived at a tipping point yet and that it is still in early infancy stage (from a global perspective and not just for Niece or Istanbul) , the challenge with NFC is true to the introduction of any new technology, i.e. getting NFC into the hands of end-users, in order to offer services that appeal to them, and to arrive at sufficient critical mass for it to be usable in our daily lives.

While a lot of the market has thus far been focused on the Business Model for NFC, some claim that it’s time to move on and create appeal for end users, who, in turn will drive business models to follow. A recent study conducted by Edgar, Dunn and Company, which, at least for proximity based contactless and NFC payments, suggests that the limited number of contactless terminals, little merchant demand, lack of contactless cards, and handful of options for NFC enabled devices, out rank MNO/bank business cooperation as key barriers to contactless and proximity based mobile NFC payments. However, the same study also points out that for remote mobile payments, MNO/bank cooperation comes first as a hurdle. Personal experience suggests that while the identified barriers are common, the relative position of each type of barrier varies across countries and regions, as well as with time. What may have been true in the US with the initial launch of ISIS, polarizing the MNOs from the banks and not showing sufficient value to merchants through cost savings, has evolved considerably over the last year. The recent application by Rogers in Canada for a banking license, has, likewise, changed the status quo of apparent inaction, and at least for now, be seen as a threat to existing banks and other MNOs.

The major technology enablers of NFC include the antenna, the chipset, and the secure element on the device, as well as support for software platforms and IOT. While good technical progress has been made in all of these areas, there will continue to be need for further work, especially in relation to security and interoperability.

NFC market trends

Also, as with any new technology cycle, we see an incredible element of excitement and therefore hype isn’t unexpected. Predictions from pundits were shared of the incredible growth of NFC enabled payment revenues, and the range is rather wide.

  • NFC will be in the top 10 consumer mobile apps by 2012, Gartner
  • NFC Transactions to hit $50 B by 2014 according to Juniper Research.
  • NFC to enable $680B of mobile payment value by 2016, Edgar Dunn and Co.
  • There will be 860 million NFC enabled devices by 2015
  • NFC tags will come down to 1 -2 cents per tag as we get to the several Billions of tags from the current 20 to 25 cents.
  • Contactless PoS to grow by 30% in 2011, after a 50% growth in 2010 (this is limited to some markets in Europe and Canada, most of the world is lagging here)
  • 85% of PoS will support contactless by 2016, ABI Research

How is NFC driving global opportunities?

The current situation of NFC, according to Koichi Tagawa, NFC Forum Chairman and General Manager Global Standards and Industry Relations at Sony, is that business models are starting to take shape, through MNOs and FIs in discussions, and various verticals starting to take some interest. Transport, sporting sites, and governments are showing interest in safe, secure and fast transactions. Trials and early deployments show the propensity of users wanting to tap for transactions. Anywhere between 70 and 90% of the users involved in several NFC trials that were polled have suggested that they would continue to use NFC.

The chicken and egg scenario with NFC was the lack of devices as one half of the problem. However, several phones are coming out this year with plans for this to grow. Samsung recently demonstrated an NFC tablet as well. There is also a potential for NFC in other consumer devices to such as laptops, set-top boxes, etc. to enable users to tap and connect. While this may vary from market to market, in general, contactless terminals have been slow to gain acceptance and given the lack of merchant interest, I think that terminals are likely to take longer to deploy in markets than it would take operators to seed a market with NFC devices. While this doesn’t hinder all the other applications of NFC from taking place, retail and transit are two of the corner-stone must have applications for NFC to achieve sufficient critical mass in a market.

The NFC Forum has developed Specifications for NFC and a global compliance program for NFC interoperability. The current set of specifications took six years, and was completed in late 2010.  To date, there are 16 specifications, defining 3 modes of operation. Card emulation; Peer to Peer; and Reader/writer mode. The Forum has also brought the various ISO specs (18092 and 14443 type A, type B + Felica) together to enable interoperability. Key developments include to securing NFC communications, and supporting RFID tags (ISO 15693). Another element that is key to the success of NFC, is the ecosystem, and the NFC Forum is keen to leverage any existing specifications to allow work with that portion of the ecosystem. The NFC Forum has developed the N-mark, for license free use, and is developing the brand book to outline the rules for co-existence with other marks, and usage of devices.

From a global launch of NFC perspective, several successful deployments of NFC were discussed, including that in Nice, Turkey, and Japan. On the Canadian front, John Ambrose of the Ambrose Connection and a past contributor to the Canadian Mobile Payments Thinktank, presented an insightful view of Canada’s roadmap to NFC and shared the challenges of getting there. He positioned the potential for a mobile broker in Canada to manage the myriad interfaces needed between all the actors in the mobile payments space. The recent announcement of Rogers Wireless applying for an issuer license in Canada was discussed by several speakers during the Congress. The dynamics in the Canadian market have moved from behind the scene posturing, and one can only speculate how this would impact the level of cooperation between MNOs and banks moving forward. On the US front, as discussed earlier, while the ISIS launch in the US was initially seen as polarizing the banks and the MNOs, the position now is seen as more open to bank participation and slightly more appealing to merchants. A realization perhaps, that to be of value, this has to be an ecosystem level play.

The 2010 Cityzi trial and subsequent launch of NFC services has been on-going in Nice, while take-up and growth in the rest of the Country has been slow, expectations of several other 20 cities joining, including Paris, over the next few years were expressed. The Cityzi launch has been a collaboration of service providers, led by MNOs and in cooperation with banks and with the Government’s support. While a blueprint of the overall collaboration model has been issued by AFSCM (and available at ), each party is free to negotiate its own business terms with other partners. Thierry Millet, VP of mobile payments and contactless services at Orange spoke about deployment experiences of NFC. He highlighted that this requires collaboration on multiple levels with stakeholders who must move forward in a synchronous manner. No one party can just implement NFC successfully alone, he said. When the Cityzi trial happened in 2010, a handful of partnerships existed with limited services and one device. However, customers liked the offering, and now, there are 150,000 subs with capable NFC devices, and a goal to have 500,000 by year end. Furthermore, mobile marketing will be added to the exiting mobile payments offer.

What is needed for NFC to get to a tipping point? A GSMA Perspective

Anne Bouverot, the Director General and Member of the Board of the GSMA, believes that NFC is at a tipping point. She added that the next magic moment (post mobile browsing and social networking) will be when users can use NFC for ticketing, payments, access control, couponing, etc. Given that 75% of people don’t leave their home without their mobile phone, and almost the same number of users, see NFC as a positive technology that they will use once introduced, the future is promising. The GSMA’s interest is a SIM-secured approach to the implementation of NFC, allowing portability of services between devices, security and interoperability everywhere it is implemented, according to Ms. Bouverot. There are, of course, caveats here, she did highlight the fact that many MNOs still subsidize devices and hence may lock the user out from porting their credentials and services as they churn prior to end of their contracts. Some may offer users an option to buy out the remainder of their contracts in such cases.

The ecosystem, according to the GSMA starts with the mobile industry, which needs to support NFC devices and SIM cards, which requires an investment on part of the MNOs. MNOs compete, but they have to work together for a successful NFC launch, such as in South Korea and Japan as well as in the US and France. She also believes that governments have an important role to play. In the case of France, the government has set aside money to help cities implement and promote NFC.

While there are many ways to implement NFC including stickers, micoSD cards, embedded, and SIM-based, the position of the GSMA is whole-heartedly SIM centric. While stickers are easy, they have no interaction with the phone and are not standards based, they only support one service provider. While microSDs may seem easy to attach to existing devices, but only support 1 service provider, and are not standardized. Embedded supports multiple devices and OTA, but is not portable to other devices. The SIM based approach allows for portability.

eSIM – The GSMA perspective is that the SIM card is paramount to enable security and applications. Given the capabilities of SIM cards such as in the case of M2M, where the SIM is far from the user, they are in a meter or a truck and used for many years. In such cases, the SIM needs evolution to support updates in a secure and standard way, and the GSMA supports embedded SIM in these instances.

 Did anyone mention banks?

And where are the banks anyways, and for that matter, the Retailers, the Transit Authorities, and other verticals such as Government?

Jean-Claude Deturche, Senior VP Financial Trusted Services as Gemalto discussed the differences in the mobile and financial sectors. He positioned Mobile as an industry has been seeing exponential growth in its relatively nascent history relative to the Banking industry, which started in the 7th century BC, with coins. This dichotomy of industry culture is not conducive to an obvious scenario for trust between these parties and for collaboration, which is why MNOs and banks will have to each step up to the plate to support NFC.

Jorn Lambert, Head of Emerging Payments, MasterCard Europe discussed the Regulatory framework requirements for successful NFC through two use-cases. The first being mobile payments. His synopsis was that there isn’t enough money in interchange fees today to split with additional parties. The issue here has been the payments model has been a high volume, low transaction-cost approach (some would contest this claim, did I ask where the merchants were?), and this ecosystem is now being faced with another entrant in the value chain. He shared the example of France and the UK for interchange fees, as indicated below:                   

                                                France                  UK

Ave. spend on card         7000 Euros          3000 Euros

Spend /Paypass                                10%                        10%

Merchants                          700 Euros             300 Euros

Ave. Interchange             0.55%                    0.8%

Therefore, he said that the amount of value is not a lot to further share from.

What happens beyond payments? In the US, 67% of consumers looked up a product on their mobile device and then made the purchase in person at the store. While users spend 28% of their time on the internet, it only gets 13% of the advertizing revenue. Thus, the second use case he proposed was to close the loop for merchants, who can use mobile advertising to issue coupons and support redemption, and monitor success of their campaigns, while strengthening their CRM capabilities. Some MNOs would like to manage this data and then offer it as a value-add service to merchants, finally realizing double-sided value models (note that the GSMA’s One API approach to offer usage trends data to 3rd party app developers has not been very successful, albeit, it was a little late in the game).

So, what needs to happen next? This sounds like déjà vu all over again

According to several industry experts, key obstacles that must be overcome for the successful launch of NFC are as follows.  Given that we are now seeing handsets and standardized solutions, PoS terminal penetration needs to increase, as well as the collaboration between ecosystem players. The 64 million dollar question yet to be answered is “what’s in it for retailers and how can they be better engaged?” Lastly, both national and global ecosystems need to develop in order to achieve interoperability. As much as these sound like motherhood statements, this is the current reality of NFC.

Follow on discussion?

If your organization is looking for help positioning itself to leverage NFC and to develop a pragmatic business strategy and implementation plan to successfully leverage NFC, or if you would be interested in participating in the Mobile Payments Thinktank, please contact us.

MWC Wrap up: The Wireless Industry is Alive Again!

February 17th, 2011

Dawood Khan, Barcelona

This year, after a long time, I must admit that the mobile industry feels distinctly exciting again. The excitement is not for the hype that one must always wade through, but for the pace at which new opportunities and associated challenges are being created. This has been the year of many “this is the year of …” This is the year of NFC, the year of mobile advertising, the year of smarter smart phones, tablets, mobile broadband, context aware applications, mobile enterprise, data growth, HSPA+, operator M&A, the push to harmonize LTE spectrum … the list can go on. If this industry is a giant, it just woke up!

Smarter Internet: Eric Schmidt of Google summed up the pulse of the sentiment best, “everything is changing again,” he said in reference to the way technology is impact us. “Technology is going to serve humans vs. humans serving technology,” said Eric of the way he sees our future. Google has transformed the mobile industry, if its dominance wasn’t appreciated by some, they would have been convinced of it at MWC this year. Andriod was everywhere. With over 300,000 android devices being activated daily, a choice of 170 devices from 27 device vendors, Eric hoped that Nokia will also eventually join the bandwagon. If users so choose, Google could not only determine that you need a new pants, but that you could purchase them cheaper from the store 50 feet from you on the right hand side. In fact, the pants could be hung up in the change room, ready for you to try, or your favourite colour can be packed, ready for you to pick and go.  Yahoo’s CEO Carol Bartz said that the days of the yesterday’s noisy internet are gone. Its all about contextually applicable content. Scary, yes, to many this is, but who would have thought 5 years ago that the power of people’s leveraging social media could topple a 30 year plus dictatorships in days.

NFC represents a Euro 120 B (number varies drastically depending on assumptions and what counted)  opportunity by 2015 according to a Frost & Sullivan study, and projections NFC devices to grow to 457 M by 2015, a 139% CAGR over 2011. With successful market launches in Europe; Korea, China and Japan starting to work towards cooperation on NFC deployment; the ISIS JV in the US taking form, NFC may be ripe for major growth. The interest on this topic was both evident at the Mobile Venture Forum, where Investment Analysts and VCs discussed the promise of m-payments and other NFC enabled capabilities; to the NFC discussion at the conference today.

Devices, devices and even more devices, and they are all connected and smarter than before. According to NSN’s CTO Hossein Moin the smartphones we’re beginning to see “are essentially smarter computers with intelligence such as location, camera, and eventually NFC capabilities built-in….Dongles and smartphones have exploded, with the entrance of newer, less expensive devices, this explosion will continue.” With 45 tablets launched in the market to date, there was no shortage of all shapes, sizes and capabilities evident at the show. The LG Optimus promises users a 3D experience; The RIM Playbook a fully WiFi/3.5G/4G  experience with support for Flash, HTML5 and open internet standards; to name a select few of the choices out there.

Broadband network investments in HSPA+ and LTE. I have already discussed this topic on previous blogs, but needless to say, this discussion was fueled by the double digit growth of data traffic experienced in many parts of the world.

Spectrum harmonization, as discussed in previous blogs was positioned as critical for cost-effective devices and deployment of globally viable LTE networks. However, everyone sees that between at least 5 and 10 band solutions across FDD and TDD will likely be coming into play.

Spectrum Crunch & Net Neutrality @ MWC2011

February 16th, 2011

MWC – Highlights & Insights

Dawood Khan, Barcelona

Networks Reaching a Breaking Point?: Improving spectral efficiency; deploying smaller, smarter cells; offloading, but still have challenges

According to Telstra, while LTE increases the spectral efficiency between 30 to 60% over HSPA+, and it opens up the spectrum, reduces latency which all improve customer experience, by itself, it’s not going to resolve the loaming spectrum crunch challenges operators will face worldwide.  The traffic demand is growing much faster than spectrum availability. 10 % of cell sites using over 50% of capacity today in Telstra net, over 90% using less then 50%

While governments are working on making spectrum available, it looks like different geographies will have different bands available. Many will use 700 – 800 MHz (Digital dividend spectrum), 1800-1900 MHz, as well as TDD bands, etc. This will cause cost increases in devices that will need to support multiple bands for global roaming. This is why its important to try to harmonize band allocation for LTE globally.

Several operators have suggested that traffic management is going to be critical to controlling network traffic; policy control and QoS will make a significant difference in delivering services to users in a reliable, high quality manner. For instance, a real time VOIP service will only utilize 50% of allocated network resources without QoS, whereas with QoS will have 90% utilization, which allows for much better utilization of the network.

Femtocells: The debate on these is still open, while many have touted the benefits of femtos , it seems that the value proposition is tailored not only to end benefit of offload and coverage, but also the message it delivers to the market. There are two main market messages:

  • User deployed femots: Some operators don’t like this as it send a message that the operator hasn’t got a good network; In many such areas, already have wifi indoors so don’t really help with offload.
  • Operator deployed femtos: for NW cost reductions in conjunction with macro and pico cells, these make sense in specific areas. Therefore, some carriers aren’t as positive on the promise of femtos.

Offload Strategies: Questions & Answers

Q: How much of a bottle neck exists that needs to be fixed with off-load?

  • AT&T saw 3000% growth over last 3 years in data, and has continued to grow wifi network
  • Designing for capacity isn’t simple, the concept of typical busy hour has evolved. Need for capacity changes based on location at different times of day – office during day; home during the PM, and the home traffic is rising

o   Cisco says that 200% growth p.a. in data growth at home, and by 2012 a large percentage of the traffic will be from homes

  • Capacity Crunch will occur in several areas (Cisco), must have an end to end solution:

o   Radio: Spectral efficiencies via LTE; offload

o   Backhaul: still TDM, ATM and early stage Ethernet, which doesn’t scale economically. Ethernet and IP increasingly growing in this space

o   Packet core: not all traffic needs to be in the packet core, consider network offload using intelligence in network to steer away non-montizable traffic

o   Data center: as video becomes more prevalent, intelligent content delivery and distribution networks will help

Q:  Whats best for offload – wifi or femto?

  • Wifi is built into devices pervasively and there is a possibility to use wifi as an offload option
  • Femto can be of value as a result of things like the RNC capability in the femto, which allows to offload the network.
  • Un-managed offload of traffic to date from cellular is between to 25-35% based on Cisco visualization matrix

Net Neutrality & Spectrum Regulation: Operators have to prepared to consider spectrum and network sharing for LTE

Gabrielle Gauthey, EVP ALU discussed her perspectives on net neutrality. The crux of her message was that while regulators need consider the practicality of requirements such as transparency when it comes to wireless, but that carriers also needed to become more innovative and embracive of business models. Summary of points:

  • By 2015 will have 13000 smartphones/ vs. 400 smartphones/ today in urban cores
  • Decoupling of traffic and revenue has occurred and will continue to change
  • Much of the innovation and growth comes from over the top players who enjoy latitude in business models, global models, and high valuations vs. operators who are usually local
  • Net neutrality should not hamper new business models – in the UK as long as there is transparency and non-harmful discrimination, wireless is excused from net neutrality vs. wireline. However, there are challenges with providing full transparency with mobile, advertized vs. random bitrates; laws of physics challenges in throughputs adjusting with location and cell loading; impacts of offloading to wifi, etc.
  • Traffic management is the only way to manage traffic congestion and provide good data throughput to subs for critical services
  • To increase capacity
  • Densification of cells via femto and pico – lack of space for towers, etc. so operators need to consider the incentive to share and sites
  • Landline usage via wifi offload
  • Spectrum – will be limited, we need to be prepared to share spectrum and revisit our business models
  • LTE is the only technology that uses 20 MHz channels, to use the technology most effectively. But difficult to see the duplication of 3 or 4 parallel networks in high urban areas.
  • Therefore see spectrum, network sharing across LTE by carriers

How can over the top providers work effectively with operators?

  • Even though video consumes the most traffic, its number four on priority for users behind browsing and email. So some users would be looking to have pricing based on services they most value. Net-neutrality – FCC doesn’t want operator to charge of differentiation, people may not pay for differentiation but do pay for access.
  • Netflix video represents 20% of traffic, Level3 and Comcast were pointing to each other saying that the other had to cover the cost. We have to revisit our business models

MWC – Day 2: Sound-bite summary: Mobile broadband everywhere, app & cloud everyone, and connect everything! Spectrum crunch loaming with mobile broadband to be as air!; Olive branch from Google’s Schmidt ?; Regulation & net-neutrality; – and somebody please tell the GSMA that data crunch on MWC’s WiFi network has already arrived!

February 15th, 2011

MWC – Highlights & Insights

Dawood Khan

MWC, Barcelona, Feb. 15th, 2011

Interesting metrics:

  • ICT market to grow by 4.4% in NAR, 5.4% for in APAC.
  • Mobile broadband to grow by 30% over 4 years.
  • As we grow to internet of things, expect 50,000 M devices by 2015.
  • By 2015, smartphone growth to reach 665 M devices, 32% growth in emerging markets and growth of 27% in developed markets.
  • one dongle generates data traffic equivalent to that of 10 smartphones and a 100 feature phones
  • To support data traffic needs of 2015, the network will need to support 10 times the capacity of today.
  • SIM based NFC to enable a $100B market by 2015
  • Between 25% to 40% of data traffic to being off-loaded to Wifi and femtocells
  • Vodafone: despite the 44% increase in smartphone growth and near doubling of data traffic over last year, only 35% of the network capacity being utilized as a result of network investments and offload of data traffic
  • AT&T: LTE will be deployed mid-year 2011 in the 700 MHz spectrum with billions of end points (instead of millions today) to support tablets, gaming devices, video cameras, automobiles off of this network

The growth of smartphones and rapid extension of connected devices; further intelligence being added to device such as SIM based NFC to enable a $100B market by 2015; Industry-wide operator initiatives including Rich Communications Services, a standards based approach proposed by several carriers for the next generation of services; Harmonization of FDD and TDD for LTE; an evolution towards an open ecosystem; and Net neutrality and regulatory environments are all dynamics that the Industry is coming to terms, with the unprecedented growth in data traffic loaming overhead. Challenges include the greater than doubling of data traffic YoY, which is expect to grow at an even faster rate. Operators are seeing additional competition from those outside of the traditional carrier world, using emerging models and opportunities enabled by new technologies to deliver services to customers.

Several carrier executives summarized their view points:

Updates from Chairman Wong Jianzhou, China Mobile: Deploying 1 M Wifi hotspots to off-load traffic

China Mobile has 590M subs of which 80 M are smartphone users. While 98% of the market has coverage, and 100% penetration exceeded in urban cores, rural markets still will see growth. With experience showing that on average, one dongle generates traffic equivalent to that of 10 smartphones and a 100 feature phones, China mobile started to use WiFi to off-load traffic. It is now developing large scale WiFi hotspots (1 M hotspots within next 3 years) nationwide. In their experience they found deploying a large scale WiFi network more difficult than cellular in several ways. Handsets must have embedded WiFi to maximize the scale of WiFi, and many of their devices didn’t have this. WiFi authentication must also be made easier, as difficulties in authenticating causes users to stay on the mobile network. Therefore, Korea, Japan and China are working on consolidating the login and authentication process for users as they roam. LTE evolution is accelerating with a build out in 6 cities. Harmonization and convergence of FDD/TDD is a given now, to make global roaming across a single terminal possible. He said that as one goes from voice through SMS and VAS to the mobile internet on the mobile side; and from the PC to the smartphone and tablets from the ISP side of things, there are business model challenges as a result of emerging entrants.

View from the Digital Optimist: Vittorio Colao, CEO of Vodafone – “This has been a year of growth in traffic, choice of devices for customer, services and monetization opportunities.”

The industry has regained confidence through growth in emerging markets, in Americas, and in some parts of Europe. Vodafone saw a 44% increase in smartphones, with half its new adds being smartphones. While it experienced 80 to 100% data growth rates, Vittorio said that this still represented 35% capacity utilization of the network, as a result of network investments and tiered data pricing. His outlook included the growth in the deployment of femtocell, picocells and MiFi, wireless set top boxes, etc. He said that all of these will provide new opportunities for carriers to reach out to their customers. Smart initiatives with energy, etc. are the future with M2M and auto manufacturers are coming on board with services. He said while there was a time, given the experience on internet news, media and music that things had to be given for free, now people are paying for content. This has been a year of growth in traffic, choice of devices for customer, services and monetization opportunities.

He also commented on regulatory environment stating that the net-neutrality approach in Europe has been good, and US should follow this (However comments on how difficult it is to have transparency in mobile systems from ALU below, indicate that even this approach has its critics). He suggested that in order to support the investments needed to keep up with demand, a regulatory environment that allowed for investment competitive openness was needed. Now have in-app billing (Apple), such scenarios may result in vertically closed systems. Spectrum policies in India (emerging markets) to re-tax frequencies that were giving out a time ago, this has not been investor friendly. He indicated that mobile termination rate cuts in Europe happen each year automatically. He suggested that more fine-tuned and industrials policies for regulation were needed vs. regulation on auto pilot.

An update in the LATAM Market, Daniel Hajj, Movil: 600% growth in data access expected over 4 years with 80% of devices being (low-end) smartphones.

Latin America has 600 M people with a GDP of $4.3 trillion. The region trailed with 12% fixed and mobile penetration 10 years ago, with no data, not even SMS, which came in 2003. By 2010, MS penetration was at 100%, representing an 8% growth, compared to 2.4% in the US. 550 M subs compromise 80% prepaid clients. Practically GSM networks everywhere, and data service revenues at 20%, with 90% of the population having access to mobile service. ARPM has come down by 80% over 10 years, now at 5.4 cents per minute (80% prepaid). Recent trends in the region have seen a growth in data revenues, despite that a small portion of subs have UMTS devices. This is starting to grow as a result of a low cost smartphones solution with UMTS, at a 3rd of the high end smartphone costs. New wireless devices such as tablets expected to grow wireless data traffic. The population of over 15 year olds is expected to grow by 30 million over 4 years, this allows for new opportunities. Only 65 million people have access via fixed/wireless to broadband. There are 540 M with no direct access to fixed data services. Smartphones expected to reach 400M over 4 years, and a 600% growth in data access over 4 years to 400M. As people gain access to data and hence access to the internet and information, this will improve their living conditions and society in LATAM. There are 3 times as many wireless subs as there are bank accounts in LATAM, this enables the value prop for a mobile wallet and mobile banking.

Randall Stephenson, Chairman and CEO AT&T: Mobile broadband will be as pervasive as air in many places worldwide”

Mobile broadband driven by smartphone phenomenon has been one of the fastest transformations in history to date. LTE will be deployed mid-year 2011 in the 700 MHz spectrum with billions of end points (instead of millions today) to support tablets, gaming devices, video cameras, automobiles off of this network. Mobile broadband will be as pervasive as air in many places worldwide. Cloud capabilities emerging quickly, and will be a key element of the ecosystem. Study of content consumption showed that about half the people are consuming the same type of content (FB, game, etc.) on 3 or more types of devices. People don’t care what device or access medium they use to access content. With 4G networks coming everywhere, and cloud growing, open and pervasive connectivity becoming quickly possible. Communications with mobile broadband will be as open and pervasive as text messaging. An example of this is Amazon going from a Kindle platform into an App, so users can download and read a book on their Kindle device, an iPad, etc. Media and music have also becoming independent of device, load once use anywhere across devices. Video content is becoming 50% of downloads, however, the download once use anywhere, is being slow to be adopted by industry and customers are expecting this. There is a tidal wave coming carried by 4G networks and cloud. Customers are going to do what they want, so operators must create an open and seamless environment. HTML 5 will allow an app to be created once and use it across multiple platforms. Increased spectrum, light regulation and seamless access to content and apps are key to future success. Spectrum policies need to be harmonized to allow for interoperability. The investment needed is dramatic across 5 to 10 year horizons. A predictable regulatory environment is critical to driving this. An open ecosystem is needed.

Keynote 2: The Power of Apps

iPhone, iPad, iTouch experience downloads (DL) of 60 apps DL/device vs. 10 app DL/device last yr.; 17.7 B DL expected by YE 2011; worldwide app store revenues are to surpass $15B via DL and advertising, over 100% increase since 2010. Free DL will represent 81% of DL by YE 2011, and in-app advertizing is expected to continue to grow. Who makes money on apps outside of Apple? Most revenue generating app is $ 30M. There are three ways to generate apps revenue: sell apps; in-app rev; upsell products. The average  rev share is 70% going to developer; publishers use advertizing via mobile channel and can use location based targeted advertizing. Ebay only did 4% of its transactions via mobile. Tipping point for growth of mobile coming soon. Consumers spend 28% of their time on line, and a small portion to date on mobile. Will mobile eclipse TV?

Global smartphonebase grew by 44% yoy in 2010. 5.2 B apps were DL, generating 1.1 B Euros in rev. Today WAC has 68 members over last year, it will grow to HTML 5, and support content and services via common billing, authentications, and communications services (voice and text). It will support  Android, Windows, WAC, etc. Developers will write once and deploy across multiple operators; allow for billing, etc. across all deplpyments;

Hans Vestberg, CEO Ericsson

Moving towards a fully connected society  – anything that can be connected will be connected. Have mobile everywhere today, next will be broadband in most places, and cloud. The next 20 years will see totally different business models, need to re-invent ourselves. 11B DL create a value of $25 – $35B.

Mobility: 5 B subs now, by 2015 – 7-8 B subs w/o M2M with over 80% of the pop. Covered. It took 100 years to get to 1 B fixed PSTN subs, 5B in 20 years on mobile.

Mobile Broadband: for everyone 1000 BB connections, 80 new net jobs are created on average across the globe; for every 10% of BB penetration get a 1% increase in GDP. Fastest growing BB is mobile. 0.6B MBB subs today, 1B MBB subs by YW 2011, 5 B by 2015.  Last year, 600M data users used more of the network than the remaining 4.4B non-data users.

Cloud: access to apps is quick and efficient. If you have mobility and broadband then can allow for cheaper devices to access info in the cloud. In the US, 20% of smartphone users DL a new app each day, it is a sticky experience. 45% believe they can do work more efficiently with MBB.

MWC – Day 1: Highlights & Insights

February 14th, 2011

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Dawood Khan, MWC, Barcelona, Feb. 14th, 2011

Microsoft, Nokia, and Twitter

Microsoft CEO Steve Balmer’s message was that the mobile industry is moving from a battle for devices to a battle for platforms. He predicted 2011 to be a busier year for Windows Phone 7 than years before, especially in light of the Nokia announcement. Stephen Elop (President and CEO of Nokia) joined Steve to eco the message, saying that Nokia will drive the choice of a viable 3rd ecosystem (Google, Apple, and now Microsoft). with its choice of the Microsoft platform.  With the first Nokia Phone 7 device expected by YE 2011, he said that Nokia provides Microsoft with global reach, and Microsoft provides Nokia better access into the US market.

Thoughts: It is highly likely that Nokia will become a major player as far as Microsoft is concerned and that will give Nokia influence over Windows, which may not fit well with some of Nokia’s competitors Some wonder if other smaller OEMs will consider focusing more energy on alternatives (i.e. Android) and move away from Windows, much like they did with Symbian once Nokia started to dominate that space.

Microsoft’s message was nothing earth shatteringly new, actually, with Steve talking about voice search integrated with location, and recognition being done in the cloud, it reminded me of Google’s presentation from last year. The main message revolved around Windows Phone 7’s smart design, which makes access to information easier, and hubs, which organize information across services to enhance the experience easier.

An enhancement to smart design will be the ability for users to multi-task, allowing for users to switch between tasks while another runs in the background, for instance, play music in the background. Similar to the computer based IE 9, which uses HTML 5 to render a user experience that is tailored to the device capabilities, Microsoft announced IE 9 for the phone platform, which allows for much better rendering than existing browsers. Microsoft compared the mobile IE9 performance to an iPhone on Safari, and there was a noticeably significant difference. They also announced plans to have the mobile-phone working as a companion to Kinnect.

Microsoft seems to have integrated the cloud functionality well into the experience with both SharePoint for Office users and Skydrive for consumers.

Dick Costolo, CEO of Twitter #dickc

Dick’s message was simple, and in about 140 characters it is summed up as “we used to create experiences for users, now users are creating experiences for themselves”. He spoke about the vision for Twitter as creating value for users. Interestingly, only 40% of tweets are from mobile devices, I would have thought that mobile would have dominated this space, like SMS. So, to grow mobile usage, Twitter is looking to create a simpler, more engaged experience by closely working with carriers and OEMs. In order to grow international adoption, it plans to crowd source translations.

Given the recent events in the MENA region, he discussed how well Al Jazeera, the Qatari based news channel, ran its viral campaign to demand Al Jazeera in the US. He said that during the recent events in Tunesia and Egypt, Twitter and other social networks enabled people to move towards their dreams and what is meaningful to them.

There are three sources of revenue for Twitter today: promoted trends allows companies to talk about a topic that people are tweeting about; a promoted tweet allows a firm to position ads to their followers related to a search a user does; and promoted accounts allows firms to follow accounts that share their interests.

HSPA, LTE – Success, Data Usage and Spectrum

If data crunch was obvious, it was so at this year’s MWC event, where free WiFi was offered courtesy of Cisco, unlike previous years where certain types of users including analysts and the media, etc. were offered dedicated WiFi access. This resulted in issues of people trying to do updates (yes, hence the lateness :-)).

HSPA and LTE are both taking front and center this year. HSPA growth has been phenomenal, with the GSMA reporting the there are over 400 million HSPA connections globally, with 17 million new connections being added a month. Activity in evolution to HSPA+ has also been strong with 76 live networks to date and 52 launches in the works.

Carriers including Telecom Austria and Australia’s Telstra indicated that despite the rise of smartphones, smartphones represent a small portion of the overall data traffic, which is represented by dongles connected to laptops. However, what smartphones do is to add signaling load on a network when applications connect for a short time to establish a data connection. This problem will only grow with the ability to multi-task, leading to the need to quickly connect and detach from the network using fast dormancy, as well as for better optimized applications.

They also noted that with HSPA, they are finding more usage in rural areas than in urban centers, as HSPA provides a broadband connectivity choice to users. This is a trend that is largely different from adoption of previous technologies and capabilities. An analysis of DC-HSPA+ was presented, showing  throughputs close to those of LTE, promising the potential for extending the existing HSPA investments further to address the challenges faced by some operators as a result of data crunch. These technology investments were also shown to have save operators significantly on a cost per bit bases.

With LTE connections expected to rise from 4.2 M across 24 countries (YE 2011) to 300 M across 55 countries by YE 2015, the GSMA also positioned the need for LTE spectrum and proposed that 2.5 – 2.6 GHz and the 700-800 MHz bands are best suited for this. Globally harmonized spectrum is important for LTE, but its ability to support TDD and FDD operation offers carriers many options, thereby making it more challenging to harmonize globally on spectrum, despite ITU’s fore-mentioned spectrum bands suggestions.

What To Expect @ MWC This Year

February 11th, 2011

MWC – Highlights & Insights

Dawood Khan, Feb. 11th, 2010

Key themes to look out for:

Focus on verticals – but who’s creating value for whom? : While there is some interest in the technology of networks (HSPA+, LTE, NFC, etc.), the real focus of this year’s MWC builds on last year’s themes around monetization of the recent and on-going network upgrades through deployment of user-centric mobile services and applications across verticals including Mobile HealthMobile Money, and  Mobile Advertising. In addition, both ApPlanet and the Mobile Venture Forums promise interesting opportunities.

Several of the themes are ecosystem-wide with several players across the value chain (Mobile money involves carriers, financial institutions, regulators, etc.; Mobile Advertizing involves carriers, brands, agencies, content providers, etc.), sometimes with competing agendas and challenging business models. It will be interesting to hear how far the Industry has matured to appreciate its position in the value chain as well as that of other players. Strand Consult asks a good question: “the question is whether there will be focus on who is creating value and for whom. How the mobile value chain will function and how people expect to create a healthy ecosystem? …. whether anyone will try to explain how Facebook, Twitter, Google and other Internet market players are creating value for mobile operators, customers, the media etc?”

Growth in data rich devices leading to spectrum crunch? The surge in the number of data rich connected devices and the potential impact on usage will likely continue as a hot topic from last year. It is estimated that the number of smartphones will rise from 500 million globally today, to almost two billion by 2015. Despite some stories of  up to 30%  of  smartphone users only using them for voice and SMS, the remainder of the users are said to consume on average, five times more data capacity than users of ordinary mobile phones. All of this prompting the ITU Secretary-General Dr Hamadoun Touré to say that accelerated fibre roll-out and greater spectrum availability will be imperative if network bottlenecks are to be avoided. It will be interesting to note what success carriers have been able to achieve through data offload to wifi.

Key sessions to look out for:

Microsoft CEO Steve Balmer’s keynote on Monday (4 PM, H5.1) will be interesting, given the launch of WM7 and the recent developments with Nokia. Microsoft has had its share of challenges in light of Android and others, in convincing handset manufacturers to choose its platform.  Android seems to becoming a major threat to several players in this space, Nokia being just one of those who have suffered. Despite the likes of Nokia and HTC, the Microsoft cannot lose focus of the impact of Android.

Dick Costolo, CEO of Twitter follows Steve on Monday (5 PM, H5.1), if people were at all debating the power of social media and its impact on mainstream life as we know it, I think Mr. Costolo will remind us for the “twitter revolution in Egypt and elsewhere”.

Google’s former CEO Eric Schmidt will also be back for this year’s congress and speaking on Tuesday (5:45 PM, H5.1). It will be interesting to see how Google’s Mobile First strategy will continue to evolve and how Google and the carriers view each other place in the value chain, as even though last year, Eric suggested Google was carrier-friendly, the carrier response seemed more aligned with Google wanting to convert them into pipes. Read our analysis of Google’s Strategy >>.

Facebook Losing Market Share in USA

May 6th, 2010

StatCounter Global Stats reports that Facebook is the primary source of traffic to global websites with almost half (48%) of Social Media hits followed by StumbleUpon with almost a quarter (25%).

In the following figure is a compilation of Facebook’s market share of social networking websites worldwide. Over the past year, Facebook has gained 14 % market share in Canada. By contrast, in the USA, it has lost 4 % mostly to StumbleUpon. In Asia it has gone up by an amazing 30% to almost 80 % while In Europe it has tripled to 75 %.


Mobile Access

According to ComScore, on the mobile front, in January 2010, 25.1 million mobile users accessed Facebook via their mobile browser, up 112 percent from the previous year. These figures do not include access of the social networking services by the nearly 6 million mobile phone owners who do so exclusively through mobile applications.

Facebook to compete with Google for Ad Revenue?

Several articles and blog postings over the past few weeks have started to outline the intensifying competition that is expected to emerge between Facebook and Google, this has been intensified by the inclusion of Facebook integration into third party websites, in addition to a ‘Like’ button. Facebook’s CEO estimated that they would be serving 1 Billion ‘likes’ every 24 hours! This position favors Facebook‘s capability to push selected advertising to compete with Google. If we also factor in the ‘iAD’ factor on the mobile front with an estimated one billion ad impressions per day, we find that competition for advertising competition is heating up and it will definitely create some interesting changes in the online advertising market.

REASONS Why Google is attractive

April 15th, 2010

According to a recent article in the Globe and Mail, Google is attractive from an investment standpoint due to the following reasons:

Mobile Strategy

“The search engine giant’s emergence into the mobile device world through its Nexus One and Android software stack, which includes an operating system, has been a hit. Google recently announced that 60,000 cell phones equipped with Android are shipping on a daily basis. Additionally, advertising on the Android continues to increase. According to advertising firm AdMob, U.S. ad impressions on Android devices have increased to 42 per cent in February from 27 per cent in November and worldwide ad impressions have increased by 2 per cent. What makes Google even more appealing on this front, is that it appears to be taking advertising share from Apple’s iPhone, which has seen declines of ad impressions to 44 per cent from 55 per cent during the same time frame.”

Cloud Strategy

“A second factor that is likely to support Google’s strength is its upgrade to its online package of word processing and spreadsheet programs, Google Docs.”  This highlights Google’s goal to dominate the cloud services provider market.

Android strategy 

“Another factor likely to bolster Google’s attractiveness is the recent talk about developing a tablet device based on its Android operating system software. The New York Times recently reported that Google has been working with numerous hardware makers to construct the perfect tablet device to compete against Apple’s iPad and the Amazon”

In addition, Intel announced yesterday that its Atom chips would support the Android OS, which is exciting news since it supports the tablet initiative and increases consumer options for netbooks and smartphones, although it does cast some doubt on the future of the Chrome OS.


For more insight into Google’s strategy, please click here to download our reports >>


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iAd: Mobile Marketing Heats Up

April 8th, 2010


As part of its iPhone OS 4.0 release event, Apple announced the iAd platform for in-mobile, in-app advertising. Steve Jobs debuted Apple’s own advertising network. He said that the average user spends 30 minutes a day in apps, and that soon the iPhone would have the capability to serve a billion ad impressions a day , “an incredible demographic.” iAd will seemingly use location as a main ingredient to deliver ads. iAd will actually be run directly from iPhone OS 4.0 and users will not actually ever leave the app that they are in. From what Jobs showed, Apple wants to focus on video ads.

This is the latest step in the competition heating up between Apple and Google for the mobile advertising market. Many analysts view this offering as a direct competitor to Google, especially in light of Google’s recent acquisition of Admob followed by Apple’s acquisition of Quattro Wireless.

Steve Jobs directly addressed Google’s mobile strategy by saying:

“On a mobile device, search is not where it’s at, not like on the desktop. They’re spending all their time on these apps — they’re using apps to get to data on the Internet, not generalized search” It is worth mentioning that Google has more than 97 % of the mobile search market.

It will be interesting to see what Google’s counter-move will be especially in light of the expected exponential growth of the Android platform.