Wireless

• 12Mar

  Whether Hot Trend or Hype, E-Book Readers are Making an Impact

  Uncategorized No Comments

   

  If you missed our webinar yesterday, you missed out on some great analysis and Q&A on what is happening in the hot topic of E-Book Readers, both from the perspective of consumers and vendors. (Don’t worry, we are making the presentation available on a complimentary basis and would be happy to answer your questions…stay tuned for the link to be posted tomorrow).

  More than just a niche product, E-Book Readers are defining a new page in the mobile industry.

  My favorite impact of EBRs so far is that Amazon with the Kindle delivered a new business model for mobile connectivity that really made the industry start thinking. Basically it brought “Free shipping” to the digital realm. By bundling the price of mobile access into the content delivery, Amazon made the purchase decision for the end user one of buying content, not paying for access. The operator gets revenue for the content transported, the company bundling the device and content gets a good margin, and best of all the consumer gets easy access and does not balk at a long-term commitment or an extra fee for delivery.

  The other impact of EBR is that it delivered one thing really well, and made it a good experience. Product design and roadmaps need to focus on the emotive value proposition to end users. EBRs provide a better reading-centric experience than an all-purpose smartphone (which of course may integrate with your EBR so you don’t lose your page) and not the more distracting environment of a netbook or tablet –after all many people in today’s generations still associate reading with curling up with a book to get away from the real world..

  As for where EBR are headed…more segmentation and technology advancements, of course, pushing up into the higher tiers and down into the lower tiers – and in doing so blurring the lines between product categories and being squeezed by the up and coming multimedia centric tablets (think Apple iPad).

  We are beginning to see segmentation of vendors into:

  • “ecosystem builders” who target the driving force of rich, interactive multimedia and higher end devices;
  • “specialists” that are more vertically focused with products targeting educational and medical uses;
  • and “bundlers” who bring lower entry tier products to target new user segments.

  For more on EBRs, check out our EBR website.

   

  - Susan Welsh de Grimaldo, Director, Mobile Broadband Opportunities (MBO)

• 10Mar

  Where is my Smart Phone?

  Wireless Devices No Comments

  No, I did not misplace my BlackBerry. This blog post is not about the “Find My iPhone” feature or any other innovations in device recovery. Rather, I would like to lament my disappointment with the general lack of true intelligence in so-called smartphones.

  Named so for their advanced (PC-like, Wikipedia suggests) capabilities, smartphones trump ordinary phones with their ability to tie in new services, run applications, and browse the real Web. But should being PC-like be the ultimate aspiration for handsets? After all, phones have a key advantage that not even the lightest of netbooks can have – phones are always with their users and, as such, they know a lot about them.

  • Using GPS and accelerometers, the phone can know where you are and whether you are moving.
  • With knowledge of your calendar, the phone can know if you are busy and whether it should interrupt you.
  • By monitoring your behavior, the phone can guess how you will behave next time a similar situation arises.

  Privacy advocates and conspiracy theorists will have a field day with this one, of course. But their fears can be assuaged with feature opt-in and with clear, published documentation of what data are stored and shared.

  Mobile context awareness is nothing new. Academics have been talking about it for over a decade. But, outside of downloadable (i.e., not truly integrated) apps and some barebones functionality (such as the “Automatic” ringtone profile on some WinMo phones, which goes to vibrate during scheduled meetings), there still is not a whole lot of context awareness in smartphones.

  Platforms like Android allow you arrange your widgets across multiple home screens.

  Powerful? Yes.

  You then have to flip through the home screens until you find the one with the right widgets.

  Smart? Not really.

  Why can’t your phone – knowing whether you are at work, on a train, or at home – give you the right home screen on its own? And switch wallpapers. And change the vibrate settings.

  

  This example only scratches the surface of the possibilities out there. Vendors looking to differentiate on open platforms such as Android or Symbian have a terrific opportunity in building a robust context-aware user experience. Tomorrow, this stuff will be table stakes. But today, we are still waiting for somebody to lead the way.

  Handsets are loaded with power: processors, sensors, round-the-clock connection to services. But where is the intelligence to tie all of this power together? Maybe we should call them powerphones until they start doing something smart.

  -Alex Spektor

• 08Mar

  Putting the Brakes on “mHealth” Hype

  Emerging Markets, Enterprise No Comments

  Hype surrounding mHealth is at an all time high. Mobile eHealth or mHealth encompasses the use of mobile telecommunications as they are integrated within the health care delivery systems and is part of a movement towards citizen-centered health service delivery. Major trade bodies such as the GSMA are firmly committed to mHealth through a partnership with the Continua Health Alliance, while mobile operators such as Orange are also involved in mHealth initiatives

  Every analysis of mHealth I have ever seen begins with the same argument: that there are 6.75B people in the world and 4.6B mobile subscriptions, and that developing markets are showing the fastest growth (obviously as penetration is so low!).

  Establishing mobile penetration does not in itself validate the mHealth concept! Moreover, many of the commitments are lukewarm, promising to invest in scalable solutions etc. However, mHealth has been around since 2001, and is clearly a valuable in the fight against illness and disease, but has failed to gain serious traction in that time, so what is next?

  Significant sums are being invested in supply chain optimization for suppliers, enterprise IT software (CRM systems), asset tracking, monitoring and proactive maintenance (tissue chambers etc). Moreover, regulation in developed markets such as HIPAA play a key role in the choice of solution. Cellular has a key part to play in these areas, but is only part of something broader. We are only now getting towards the stage where we can talk about monitoring devices or mobile phones in a user’s hand.

  

  To extract the true value from mHealth, mobile applications will need to be part of a broader set of business processes. What is clear is that the concept of mHealth is related to mBusiness as well as to eHealth and eBusiness:

  • eHealth refers to healthcare practice which is supported by electronic processes and communication.
  • mHealth is the mobile extension of healthcare applications into the mobile domain and is a subset of eHealth.
  • eBusiness represents all the technological applications and business processes that enable a healthcare provider to offer a service, including front and back-office systems, essentially the utilization of information and communication technologies (ICT) in support of all the activities of business.
  • mBusiness includes the tools required to enable eBusiness applications, such as a mobile application platform (MAP).

  mHealth will be extremely viable, and valuable, but it will need to be more than an application that displays a users symptoms on a handset (I will be doing a future post on applications in mHealth, but there are already reports on M2M in healthcare here and a report on mobile healthcare applications here). Indeed,  it will need to be part of a broader mBusiness and eBusiness strategy. Given that these rollouts require significantly more investment, it is clear that the mHealth that can bring real change will need to be part of a broader ecosystem.

  Andrew Brown

• 08Mar

  Podcast: Sports & the Internet – A gold medal winner?

  Wireless Media No Comments

  The Olympics are now over and hours of wasted time are being planned as March Madness nears. Moving content online has helped sports leagues grow revenue and now they are making the leap once again to the mobile device. Strategy Analytics analysts Josh Martin, Alex Spektor, Jia Wiu, and John Lee discuss these issues and more in this premier podcast.

  Sports & the Internet: A gold medal winner?

  About SA Podcasts: SA Podcasts will be recorded weekly and will be on a range of topics featuring a rotating panel of analysts. The podcasts will be uploaded to the blogs, they can also be found at http://strategyanalytics.mypodcast.com which offers subscription options. The final option is iTunes. You can subscribe using the button below.

   

  

• 05Mar

  Hurdles will continue to hound Bharti; but better luck this time Mr Mittal

  Emerging Markets No Comments

   

  Once bitten, twice shy.  Bharti chairman Sunil Bharti Mittal doesn’t believe in such clichés.  Unperturbed by the MTN debacle, Bharti is once again trying its luck in African with Zain, which undoubtedly is easier to grab than MTN. It’s actually imperative for Bharti to go for multi-country operators as domestic market has become overcrowded with 8-10 operators in each circle and more to come. We had in fact recommended in a recent report (http://www.strategyanalytics.com/default.aspx?mod=PressReleaseViewer&a0=4844) that Bharti should continue to look beyond India.  A couple of months back the government owned operator BSNL too showed its interest in Zain . At that time we said that the government owned operators should focus on domestic operations and warned that foreign acquisitions could turn out to be a disaster for them. (http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5097) Well, I don’t want to claim that Bharti and BSNL have gone by our recommendations but I certainly believe that they are taking the right approach: Bharti, by going aggressively for Zain and BSNL for withdrawing from it. Bharti has entered into an exclusive talk with Zain till March 25, but this US$ 10.7 billion deal is not as lucrative as it looks. There are some obvious hurdles, which I guess Bharti was expecting. A minority shareholder has emerged from nowhere to claim that Nigerian operations are not covered under this sale. Strive Masiyiwa, the CEO of Econet Wireless, which has a 5% stake in the Nigerian operations of Zain said that Zain gave an undertaking last year that it would not sell its Nigerian assets and he hopes that Zain has disclosed this to Bharti. If this claim holds up it is unlcear what Bharti will get from this deal. Nigerian operations are actually the main contributor to Zain’s overall revenue including Middle-East operations. In 2008, Zain generated fifth of its EBTIDA margins and 22% of its total sales from Nigeria. The other major headache is Zain’s license in
  Niger. The Niger regulator has reduced the duration of Zain’s license by five years citing poor quality of service, which essentially means Zain will have to wind up its Niger operations this year (Niger license was issued in 2000 for 15 years)or convince the regulator to revoke the decision .

  But I hope that this deal will see the light at the end of the tunnel and won’t turn out to be a disaster like MTN for Bharti.

  Rahul Gupta 

   

• 05Mar

  Hurdles will continue to hound; but better luck this time Mr Mittal

  Uncategorized No Comments

   

  Once bitten, twice shy.  Bharti chairman Sunil Bharti Mittal doesn’t believe in such clichés.  Unperturbed by the MTN debacle, Bharti is once again trying its luck in African with Zain, which undoubtedly is easier to grab than MTN. It’s actually imperative for Bharti to go for multi-country operators as domestic market has become overcrowded with 8-10 operators in each circle and more to come. We had in fact recommended in a recent report (http://www.strategyanalytics.com/default.aspx?mod=PressReleaseViewer&a0=4844) that Bharti should continue to look beyond India.  A couple of months back the government owned operator BSNL too showed its interest in Zain . At that time we said that the government owned operators should focus on domestic operations and warned that foreign acquisitions could turn out to be a disaster for them. (http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5097) Well, I don’t want to claim that Bharti and BSNL have gone by our recommendations but I certainly believe that they are taking the right approach: Bharti, by going aggressively for Zain and BSNL for withdrawing from it. Bharti has entered into an exclusive talk with Zain till March 25, but this US$ 10.7 billion deal is not as lucrative as it looks. There are some obvious hurdles, which I guess Bharti was expecting. A minority shareholder has emerged from nowhere to claim that Nigerian operations are not covered under this sale. Strive Masiyiwa, the CEO of Econet Wireless, which has a 5% stake in the Nigerian operations of Zain said that Zain gave an undertaking last year that it would not sell its Nigerian assets and he hopes that Zain has disclosed this to Bharti. If this claim holds up it is unlcear what Bharti will get from this deal. Nigerian operations are actually the main contributor to Zain’s overall revenue including Middle-East operations. In 2008, Zain generated fifth of its EBTIDA margins and 22% of its total sales from Nigeria. The other major headache is Zain’s license in
  Niger. The Niger regulator has reduced the duration of Zain’s license by five years citing poor quality of service, which essentially means Zain will have to wind up its Niger operations this year (Niger license was issued in 2000 for 15 years)or convince the regulator to revoke the decision .

  But I hope that this deal will see the light at the end of the tunnel and won’t turn out to be a disaster like MTN for Bharti.

  Rahul Gupta

• 03Mar

  Telecommunications Industry: Glass is ‘Half-Full’ in 2010

  Uncategorized No Comments

  March 3^rd. 2010, Newton MA. USA Tariff and Revenue Strategy(TRS) service looks at the financial outlook for service providers in 2010 and 2011.  Although growth will be slow, TRS expects telecommunications to outpace the economy. The glass is definitely ‘half-full’.

  Real US growth is beginning to come from the manufacturing sector. US Federal Reserve has announced that January 2010 was the 7^th. consecutive month of US manufacturing growth.

  Output of business equipment rose 0.9 percent in January, and information processing equipment increased 1.7 percent. In UK today’s strong service sector report is stimulating talk of positive first quarter GDP growth; and the February US numbers show stronger than expected service sector growth and continued manufacturing expansion.

  For the telecommunications sector in 2010 the substitution of telecommunications for travel and of messaging and email for business transactions should continue to increase penetration as a percent of overall industry activity. Because telecommunications increases labor productivity it will continue to outpace the slow economic recovery, even if there is little job growth.

  Slowing rate of job losses has not been great news – though this is exactly how things look just before the economy turns up . Think ‘sine wave’ and ‘positive first derivative’.

  The slow recovery is not slow enough however, to totally depress Communications Investment. Capital expenditures (CAPEX) for telecommunications equipment and network deployment are expected to recover significantly in 2010, even if the level may not get back above that of 2008.

  Even as operators are laying off thousands of employees to improve competitive efficiency, they are optimistic enough to announce significant 2010 CAPEX for broadband telecom (fixed and mobile) over the next 18 months. These operators expect next generation IP based infrastructure to leverage the hardware volume of the information industry and lower their overall cost of operations. BTW: It is hard to quantify the exact impact of these savings on operator financials – but TRS is working on it.

  In 2010 and 2011 we expect that mobile broadband and IP based infrastructure will have the performance to begin to fill the ‘Broadband Gap’.  Mobile Broadband at 2- 20 MBps may actually be the cheaper, better way to deploy broadband services in rural and low density areas around the world.

  This infrastructure deployment will itself stimulate further economic growth.

  As April comes and the weather improves the glass may very slowly start getting fuller.

  Sue Rudd - srudd@strategyanalytics.com

• 02Mar

  Take My Money, Just Don’t Hit Me in the Face

  Wireless Networks No Comments

  We are currently updating Q4 operational/financial data in our Wireless Operator Performance Benchmarking research, with the last 7 days seeing a large number of operators report results. There are two over-riding themes coming out of the results so far.

  Firstly, for most operators Q4 was better than Q3, which is great news. The slight problem is that this is better in the sense of “less worse”. If you get mugged two days in a row, the chances are the mugger will get less off you on the second day – you probably haven’t got a new phone and your spare wallet won’t have all your replacement cards/ID in it yet. So that’s obviously a much better mugging. So the fact that revenues and profits didn’t fall as fast in Q4 as they did in Q3 is equally good, right?

  Secondly, “relentless” cost control / management is a standard item in strategic directions for 2010. A few operators are predicting flat EBITDA for this year, many are expecting moderate single-digit declines. Mobile data remains the growth engine, but falling revenues from voice/termination/roaming will be hard to overcome. So its cost control that will save operator profitability in 2010: distribution mixes and device subsidies seem to be key items up for debate in most mature markets.

  I worry for an operator recovery in 2010. The recession will be officially over (it already is in many countries), but unemployment will increase, few workers will be banking on pay rises, private consumption will lag GDP growth (which is itself a real mixed bag across different countries), and governments will push through austere budgets. Plus everyone who put off upgrading their handset last year will want to do it this year, so we will see a higher share of mobile spend diverted to device vendors.

  Depressed yet? The debt crisis in Greece is perhaps a worst case scenario, though I’ll leave you with this sobering quote from OTE’s results last week: “In 2010, the OTE Group expects its revenue base to be further impacted by difficult economic conditions in all markets, lower consumer spending, intense competition, and regulatory constraints on its capacity to respond effectively to these factors. OTE management … will work hard to minimize revenue shrinkage and defend Group profitability.”

  OTE will not be the only operator to get mugged again in 2010.

  Phil Kendall

• 24Feb

  Dear China Unicom,

  Emerging Markets No Comments

  My late husband, the President of Nigeria, left me a large telecommunications company. I need someone of your skills and reputation to help privatize it. Please send me your bank information … 

  Well, it probably didn’t happen like that, but the flap about China Unicom’s alleged participation in a bid for Nigerian Telecommunications Ltd. (Nitel), Nigeria’s national telecoms carrier, does make you wonder if they should tune their spam filters a bit.

  The story, in brief:

  On Tuesday, 16 February a consortium called New Generation Ltd., which allegedly included China Unicom, was reported to have won an auction for Nitel, with a bid of US$ 2.5 billion. This was $1.5 billion more than the next highest bid. Bloggers muttered darkly about inside deals.

  Wait, it gets better.

  • On Wednesday, China Unicom denied being part of the consortium. It had only offered to serve as technical advisor, although it might eventually be interested in an equity stake. (Original reports cited a figure of at least 20% ownership, though China Unicom’s subsequent official statement confirming their interest did not quantify it.)
  • Interested parties then started trying to contact another consortium partner, referred to in the first press releases as “Dubai-based Minerva Group.”
    • I emailed the Dubai office of Minerva Financial Services, based in the Channel Islands. They were not the Minerva in question, did not know who was, and – reading between the lines – rather wished people would stop asking.
    • The Lagos Daily Champion got similar denials from two other Minervas in Dubai, including Minerva FZ, a wireless VAD, which is at least halfway plausible.
    • Reuters reports that calls to Minerva General Trading were not returned.
  • In case New Generation disappears, the second bidder, at $956 million, is scarcely a household word in telecommunications, either: Omen International, registered in the British Virgin Islands. Go ahead, Google them and see if you find more than I did.

  Entertainment value aside, what can we get from this mess? It would be tempting, but unwise, to decide that Nigeria should be avoided until it starts acting more like Switzerland. That could be a long time, and meanwhile Africa’s largest mobile market presents some real opportunities – along with equally real challenges. The fact that China Unicom – generally speaking, no dummies – would consider an equity position ought to suggest that serious players are weighing the risks and rewards.

  But don’t bring your checkbook to the first meeting.

  - Tom Elliott

  Update, 10 March 2010. In a development that should surprise no one, it has been reported today that the head of the Bureau of Public Enterprises, the agency supervising the sale, has been sacked. Well, technically “suspended,” but I suspect it amounts to the same thing.

• 22Feb

  Contactless payments: When, not if

  Wireless Media No Comments

  When I saw last week’s latest NFC payments trial announcement by the GSMA, I have to confess my immediate thought was - So what? Another day, another contactless payment trial.

  In 2006 I estimated that by 2011 mobile would facilitate $35 billion worth of contactless transactions, which has clearly been wildly off the mark! I hold my hand up and admit that I underestimated how slowly it would take to roll out mobile contactless payments. Despite this, it remains my opinion that handset based contactless payments will eventually support billions of transactions, driven mainly by strong convenience motives. Ever decided not to bother buying a snack or a magazine at a newsagent after seeing the length of the queue? Well, contactless payments should mean faster movement of queues; less waiting and greater likelihood you will complete your transaction. Importantly for businesses it will scale down cash handling costs. Yes, there are some competing contactless instruments, like contactless cards, but why bother thumbing through several cards in your wallet when you can just whip out your phone and be on your way?

  

  The technology implementation of contactless payments on handsets has been agreed on by operators and device vendors through the GSMA Paybuy initiative. Furthermore, facilitating contactless payment is part of the strategy of leading payment companies (banks and credit cards) like MasterCard, and Barclays. So what’s preventing full deployments? Operators are waiting for the handsets from vendors. The handset vendors are waiting to see when retailers upgrade their terminals to accommodate contactless payments. Meanwhile, merchants won’t invest in contactless technology until they see evidence of wider deployments of contactless payment instruments, so we’re in a deadlock situation. To their credit (pardon the pun) banks and major credit card companies are taking the lead by distributing and marketing contactless payment cards. Over time this will lead to growing adoption of contactless infrastructure among merchants and remove one of the barriers to take off.

  However, critical business model issues still need to be resolved. Operators want compensation for subsidising these new payment instruments into the market and they are in a position of control because payment applications will reside on SIM cards issued by them. Within an established ecosystem for payment accommodating an extra few mouths to feed will remain a key challenge, and an area which we intend to investigate further in up coming reports on contactless payments later this year.

  Nitesh Patel

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