In late November Google announced its participation in the final pre-launch funding round for O3b, a satellite network backed by SES and intended to provide broadband access to the developing world. The name refers to the “other 3 billion” – those of the world’s population without broadband connectivity – and the plan is to launch a constellation of Medium Earth Orbit (MEO) satellites that will provide low latency broadband to the area roughly between 45° N and 45° S.

Google was one of the founding backers of O3b, back in 2008, when it confidently expected to have its satellites in orbit by 2010. The first launch is now scheduled for 2012.

I mention this slipped schedule not to be snarky – I’ve missed the occasional deadline and so have you – but to recall the problems of a previous bold satellite venture, the Iridium system. Iridium was going to provide seamless international mobile coverage to business travelers, who would need only one phone and one phone number around the world.

• This was a great idea in the late 1980s and early 1990s when planning for the system started. A lot less great in 1998 when Iridium finally went commercial: vastly increased GSM coverage and global roaming that actually worked took a lot of value out of the Iridium value proposition.

Will this happen to O3b? Not necessarily, but the global broadband gap is narrowing.

• Until recently, the African continent was virtually cut off from the global Internet. Now, a frenzy of submarine cable building has people seriously talking about a repeat of the Great Atlantic Bandwidth Glut. True, this only means great connectivity at the landing points; getting bandwidth 500 km inland will be a challenge for a while – and an opportunity for O3b.

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• 3G service is growing in emerging markets, and is frequently used as a broadband access technology. Coverage is still limited, of course, and is largely unavailable outside urban areas.

O3B promotes the potential of its service as a backhaul technology, and in this it may find more traction than it does as an access method. There are complications, of course. Among other things, the fact that MEO satellites are not geostationary means that any uplink has to have active tracking antennas and some way of handling satellite to satellite handoffs.

And that, as my grandfather said about the automatic transmission, is a lot of stuff to go wrong.

On the occasion of America’s great festival of consumption and the official start of the riot of gift buying it seems appropriate to pause for a moment to consider Sharing.

I’m not talking about the last piece of pecan pie or the game controller. I refer to network sharing, which is on my mind because of a couple of recent stories:

• A Bloomberg report last week mooting interest on Ericsson’s part in owning networks and providing capacity to multiple operators, with Africa mentioned as a possible target area.
• A report in the Business Daily (Nairobi) indicating that Kenya was planning not to issue LTE licenses to private operators but instead create a public-private partnership to own and operate the network, leasing capacity to all service providers.

Africa has had some experience with infrastructure sharing already, and the pace may be picking up: American Towers just purchased 3,200 towers from Cell C, intending to lease back tower capacity to Cell C and provide smaller operators access to a national footprint. But what Ericsson and the Kenyan government are talking about goes a step beyond that, into a business model where every operator is a MVNO. Worried about becoming a dumb pipe? – forget it. We’ll be the pipe.

This model has attractions for the developing world. For one thing, it gets around the difficulty that many operators have in disengaging from the expensive arms race of network coverage. And it would probably speed rural development.

But it doesn’t change the fact that it will cost a lot of money to provide Africa with mobile infrastructure, and it doesn’t create that money. Both the Ericsson and Kenya proposals – sketchy as they are at this point – include unnamed partners who are presumably putting up some or all of the capital: Valter D’Avino, Ericcson’s VP of managed services, characterized the endeavor as “Ericsson plus a financial company,” and the private half of Kenya’s “public-private partnership” is likely to be asked to put up some cash.

So the question then is – and I apologize for the lack of holiday spirit – “What’s in it for me if I’m the money guy?” Governments may be able to justify infrastructure investment on the basis of business development; Ericsson obviously would see ongoing revenue from network management and equipment sales. Making the case for private investment in African mobile infrastructure may be a bit more challenging.

At CTIA in San Francisco last week, away from the fanfare around LTE rollouts and the next dozen tablet devices (ok, I exaggerate a little), Sprint had an announcement which will have significantly higher impact on mobile broadband adoption and revenues: Sprint ID. 

Sprint ID promises to up the ante on personalization and ease current feature phone users into the smart phone ranks.

Sprint ID offers instant personalization along key themes/packs where the operator has done the heavy lifting of identifying and group related applications of interest to different persona from wallpaper to ringtones to apps. While the one click marketing line is not quite matched by reality given pesky little things like accepting terms and conditions etc, Sprint ID is a significant breakthrough in my opinion as:

• it broadens the market appeal of Smart phones to current feature phones users with a simple to understand offer in a range of device price points including the critical $49 and $99 levels.
• it tackles one of the biggest weakness of all app stores: discoverability of content and simple personalization.

Three handsets were featured at launch of Sprint ID: Sanyo Zio™, Samsung Transform™, LG Optimus S™. These three devices cover key price points in the Sprint portfolio and provide customers with a range of form factors, industrial design and brand to meet their tastes. Interesting to note that both LG and Sanyo retain the right to put their own packs on their handsets as well. This is a big win for LG as its Optimus S™ will be available for under $50 with contract giving the vendor a much needed boost in the smartphone space. Samsung meanwhile continues to shine at Sprint occupying the lucrative $149 spot with its Transform™. All three devices of course require a Sprint Everything Data plan.

However, for me the more significant impact is that operators and oems are finally realizing that customers don’t buy phones or services or apps… what they really want are positive experiences

… be that socially connected, sports, education, health and fitness, fashion etc. This is something that our User Experience team has been evangelizing for the last 7+ years. Whether its 80k apps on Android or 250k on Apple store or 10K on RIM, one common experience has been exasperation at the huge waste of time, energy and emotions in finding ANYTHING!!! Which happens first, eyes glazing over or fingers cramping with so much scrolling? Either way the net result is often a disappointing experience which the early smart phone coolaid drinkers have learned to live with.

Newbies to the smart phone arena, will certainly have less tolerance and spend less time to personalize their device and enable applications. Sprint ID is well tailored to the next wave who are taking tentative steps into the smart phone space

David Kerr

dkerr@strategyanalytics.com

September 23, 2010

While there has understandably been a lot of attention given to consumer apps post iPhone and the plethora of application stores that have emerged, business mobility and enterprise mobility offer huge potential from horizontal to vertical applications and from smartphones to iPads and tablets to superphones.

In both NA and W. Europe, business customers account for under 30% of users but are the dominant streams of both revenue and profits for operators. On the device side, premium priced models from RIM, Nokia, and Microsoft Mobile licensees as well as the iPhone have long been key drivers of profits in a market where low single digit margins are the norm.  The explosion of smartphone choices has led to the battle ground moving beyond the corner office, to other executive and now increasingly the midlevel manager.

With a new range of devices competing for space in the corporate market, the issue of corporate versus individual liable has become an increasing priority for IT decision makers. Add on the complexity of managing an expanding list of OS (Android, iPhone, Windows Mobile, Symbian, Palm, MeeGo, Bada from Samsung) and the growing importance of mobile portable devices with access behind the firewall and one can already feel a corporate migraine forming…. And that’s before we even discuss device management, mobility policy, device retirement etc. etc.

I am looking forward to CTIA Fall (San Francisco October 5-7) and in particular to the Enterprise Mobility Boot Camp moderated by Philippe Winthrop of the Enterprise Mobility Foundation. The boot camp spread over two days will address many of the issue listed above with our own Andy Brown featured in an analyst roundtable on October 6^th.  I look forward to meeting you there. Don’t hesitate to contact Philippe for passes to this the deep dive enterprise mobility event.

David Kerr

David Kerr
Snr. VP - Global Wireless Practice
Tel: +1 617 614 0720
Mob: +1 262 271 8974

May you live in interesting times as the old Chinese proverb goes. Well in the information, communication and entertainment industry we certainly do. Some very interesting questions face our industry whether we look at:

• the outcome of much delayed Indian 3G auction or
• the battlegrounds around HSPA+ and LTE or
• the surging Android ecosystem vs. weakening Symbian or
• the upside potential for WebOS under it new owners
• the potential disruption caused by mobile cloud phones and device

Every major technology advancement has lead to a massive disruption in the handset and infrastructure vendor community.

• In 3G, Motorola’s slim myopia led to its near ruin and has provided huge growth for Samsung and a foothold in international markets for LG and SEMC.
• On the infrastructure side 3G was expertly grasped by Huawei and ZTE leading to a new wave of M & A and a new world order which counts Nortel as a victim and seriously challenges ALU.

So how will the migration to 4G change the playing field?

• Who will benefit most on the operator/service provider side?
• Will Cloud Phones be disruptive in LTE?
• Will operators find a path to realign the traffic/revenue mix with mobile broadband devices?

I would welcome your thoughts on these key questions. Also don’t forget to join our client webinar on Thursday May 27.

David

At last Bharti Airtel became the first Indian company to have presence in 18 countries. Bharti closed the Zain deal at $10.7 billion, which many equity analysts believe is an expensive deal, but Bharti’s African foray is a long term bet and only time will tell what future holds for Bharti in Africa. At the moment, Bharti is busy negotiating with Indian IT vendors for outsourcing African ‘non-core’ operations, something which it successfully did in the Indian market.

On the face of it, Bharti has got what it had been looking for years- presence in Africa, which it desperately needed, as its profit margins in India have been under pressure due to the massive domestic tariff war and the stiff competition provided by as many as 14-15 operators in each circle in India. Realizing the potential that African countries have, Bharti twice tried to acquire MTN but failed. Now, it has managed to get Zain in its kitty.

In January this year when Bharti acquired a majority stake in Bangladesh’s Warid, I wrote in my blog  ( http://blogs.strategyanalytics.com/gwp/?p=28 ) that Bharti would not benefit by foraying into small individual pockets like Sri Lanka and Bangladesh. Acquiring Warid immediately after the MTN deal was called off clearly showed that Bharti became much more aggressive in its acquisition strategy. At that time, Bharti was desperate and ambitious and looking for some big catch. I think Zain came at the right time as it fulfilled Bharti’s ambitions to become one of world’s largest operators. 

Challenges will always be there but Bharti’s presence itself in Africa is enough to give jitters to its competitors, especially MTN. After dealing with MTN, Bharti is very well aware of their operational strategies, which is an advantage to Bharti. Its competitors will feel the pinch with Bharti’s outsourcing and low-cost model. Don’t know how MTN will deal with it but Bharti has certainly made a right move.