MobileInsider

Mobile Operator Landscape 2014-18

2009-09-13T08:43:00.000-07:00

During the recent weeks, I’ve had the pleasure of catching up with many industry “insiders” and the discussion has centered on what the mobile industry will bring in form of changes in the coming years. The following 5 topics capture my own take-away -- with some sprinkles on top.

US Mobile Landscape

The world has chosen the “convergence” technology of LTE which means that within the next 5 years (2014), Capex focus is on bridging CDMA with WCDMA – in a move towards all-LTE networks by 2018 (a point in time where all devices/MID have LTE capability.
The hundreds of millions of subscribers in the US will be swayed by operators offering Ethernet-like experience whether mobile or fixed.
Players: Verizon will become Vodafone and Sprint will become T-Mobile and China Mobile will enter into the market either as an MVNO or through partnership with AT&T. One alternative is China Mobile or T-Mobile buy spectrum assets from Clearwire & Comcast to create leverage for roaming partnerships (and access to the home). Regardless, we will see at least 2 new entrants into the US market within the next 2 years (some of the “moves’ just started overseas in the UK…with T-Mobile/Orange (DT/FT).

Smart Phone Evolution

The personal experience we will come to expect will demand (from device manufacturers and operators) full mobility, multi-Mb access/experience, inside and outside – with full access to full-motion video and a sensory communication – at a price below $100 per month/sub.
Smartphones will become ‘smarter’ and whereas some like to use MID or netbooks to access content, people-on-the-go want to dock their ‘phone’ to keyboard and monitors (and “juice’) at airports, Starbucks/Peets, stadiums and conference centers.
Applications? Yes, we want it all and we want it now. Apps and Widgets (“Blur”) which bring our designated social apps together, will prevail over stand-alone applications. Enhanced “Cloud” access for mobile workers will help reduce cost and complexities for small, medium as well as large businesses.

Network Coverage & Capacity

Today’s mobile operators are faced with a network capacity dilemma which will only become more critical as more smart phones and 3G-enabled laptops and devices are sold throughout the world.

The growing usage and penetration of high-speed mobile wireless services for both voice and data have created new challenges and opportunities for mobile operators, enterprises, and consumers. The requirement for always-on, high-speed communications both indoors and out is creating a capacity dilemma in the densely populated areas where enterprises are located (office parks) and high-rise office buildings in metropolitan areas. This capacity dilemma is not easily solved by adding more macro cell sites outside to ‘blast inside’ considering the expense and inefficiency of deployment in this way. So, will the operators build out more Macro sites or go inside with PicoCell and Femto. Do we care as long as coverage and capacity improves? No. ‘How’ targeted capacity is added inside the enterprise and in dense metro areas will be in form of a combination of buy/install to reduce churn and improve enterprise ARPU and through ‘managed network services’ relationships with established players and enterprise channels. We will see some instances where enterprise companies are willing to cover the Capex of install to improve mobile worker productivity (integrated with PBX/Centrex services).

Network capacity will be needed to most macro sites to withstand the capacity demands from hungry data users (aka iPhone, Cliq, Blackberry device users). The business dilemma for the operators will center around Capex vs Opex or Capex/Opex and ROI. Which brings up…

Mobile Managed network Services

Why Capex if you can Opex? The total market for mobile managed services will double from $250B to $500B within 2-3 years. The savings for operators are tremendous and by outsourcing the communications networks, the company can focus on its core competencies (sell products and services it makes).

Customer savings range from 10-40% with outsourced managed services
Increase efficiencies for CAPEX and OPEX: Integrate new technologies and application without hiring specialists (multiple radios, network technologies, applications, etc). Simplify integration with networks, billing and outsourced application provider
Managed services are strategic to both operators and the managed network vendors: Vendor moves-up value chain from supplier to key partner (gains more control/influence). Vendors can sell hardware/software solutions for lesser margin and make it up with global service contracts
Consolidation in the industry secures scarce people resources to 3-5 key players (Operators are able to leverage vendors access to people, expertise and networks)

In a previous post, I stated that the market will reach $1 Trillion by 2015 – which means we should all carefully review the emergence of NSN, Ericsson, Alcatel-Lucent and Huawei as major infrastructure players and possibly also as network providers to mobile operators. Point in case, as of today Ericsson manages over 300M subscribers worldwide (for operators). See previous post

Emerging Mobile Operators

The day will come when AT&T, Vodafone, T-Mobile and China Mobile are you all-inclusive communication provider for IP-based video/TV/phone/mobility and e-commerce. No wonder the landline providers are wondering what to do next. BT, Comcast, and others may become part of the network and their brands disappear. Or, they go on the offensive and try to compete on a global scale as a consortium of players.

In a previous post I made a concluding statement (question/answer) that we should not be surprised if we someday see NSN, Ericsson and ALU branded mobile services.

So who will be my all-inclusive communications provider by 2014? In the US, I can imagine AT&T, Vodafone (after taking full ownership of Verizon FIOS and mobile spectrum) or possibly even T-Mobile (via Comcast fiber and Clearwire’s spectrum).

The landscape for mobile network services is changing. Today’s mobile brand may not be here tomorrow. As a consumer, all I care about is my experience and my monthly bill. As an insider, I care about eco system value creation. We can have our cake and eat it too.

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Enterprise Femto: "If you can dream it, you can do it."

2009-08-04T10:59:00.000-07:00

In light of recent roll-outs of consumer Femto access points in Europe and here in the US, I ponder the future of indoor wireless inside the enterprise. Clearly a different approach than a consumer Femto is needed for operators to establish themselves within the enterprise with a Femto-like solution to improve cellular communication for voice and data within the enterprise campus. With the subscriber density, an AP must be able to handle interference, multiple hops and handoffs between APs and adhere to stringent security requirements from both the enterprise IT teams as well as the operators.

The history of WiFi taught us that 'rogue' access points are 'bad' and that centralized management is good (Cisco & Aruba). Enterprise Femto should learn from the good, bad and ugly of WiFi enterprise deployment. Network and RF management are essential tools. With that said, we should also remember that IT teams are for the most part not very savvy when it comes to RF management - nor should they be. Very few IT teams possess the skills required to deploy multiple radio access points. WiFi is very easy because of the wide spectrum is uses at primarily 2.4 and 5.8GHz. But, even WiFi APs encounter interference when you have multiple people accessing few or many APs within a small perimeter. Add licensed spectrum to the mix and the pool of know-how people shrink by several magnitudes. Some context for the next few thoughts:

In Sweden, monthly data usage of an average mobile broadband subscriber has doubled during 2008 to 4.5 GByte. (article by Cellular News). Needless to say, broadband usage takes place anywhere and everywhere and considering that up to 70% of voice/data usage takes place indoors -- that includes the enterprise as well. The data consumption is not specific to Sweden. People will make use of all available bandwidth wherever they are. Recent studies found that people do not switch off 3G devices or dongles when they are within reach of WiFi. So whether you agree or not, like it or not, the great majority of subscribers do not actively switch from 3G to WiFi when WiFi is present and thus 3G data consumption will take inside the enterprise regardless of spectrum use.

For enterprise Femto to succeed within the enterprise, operators need a simple to install Femto solution which does not rely on the skills of IT management teams to deploy and manage. Simply put, Femto should be a managed network solution offered by the operators where little or no IT team involvement is needed. Why?

Recently published research from mobile systems integrator Cognito found that "while 86 per cent of IT departments have been charged with implementing a mobile strategy, nearly a half say their team lacks the skills needed to integrate business-critical applications with mobile devices." The research also found that 'security' and 'policies' are major factors of concern and that --- no surprise -- lack of " knowledgeable people as well."

Most departments look at enterprise mobility as a dreaded "do-it-yourself" project with the use of WiFi or personal 3G devices and dongles. In this model, enterprise IT departments are responsible for capital expenditure to acquire the enterprise WiFi equipment and for ongoing operational expenses (i.e., supporting, managing, and troubleshooting). The same goes for the cost of DAS and Picocell. If you want coverage you have to wait for it and pay for it. If IT implements Voice over WLAN (VoWLAN) services, the team becomes the enterprise’s “operator inside.” When calls drop, handovers fail, and client software does not work, the IT guy gets the call (day or night). So why bother with the expense if the IT teams are not equipped to handle mobility and RF management? The simple answer is...enterprise IT has no choice (either do it yourself or do not do it at all). Hopefully things will change in 2010 when Femto matures and more options are available for the enterprise.

CIOs will continue their focus on reducing OpEx and OpEx and it has become increasingly more challenging for the CIOs to justify and allocate budgets for internal enterprise mobility projects (we all know what a great success 'FMC' with WiFi has been) . This presents a great opportunity for mobile operators and their partners to offer indoor mobility as a service to the enterprise.

For the operators to get foothold within the enterprise, a properly managed Femto solution is the best course of attack (and then 'defend' the turf). The operators need to run the business case for the Capex burden and potential revenue uptake as result of providing reliable cellular access inside the enterprise. If done right, the operators have a re-occuring a future revenue path to upsell more access and application 'cloud' services to captive audience.

To quote the great Walt Disney, "If you can dream it, you can do it." Or in business terms, if the business case is there - do it!

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Mobile WiMAX - Where Art Thou?

2009-07-21T02:57:00.000-07:00

For years, I've had the pleasure of following the emergence of OFDM as a viable technology in the market place. I've been able to see, from the inside, how 802.16 and 802.20 works as the OFDM technology variants took on the massive 3G eco system. Though I love the technology, pragmatism always wins in my world (business case). The best technology does not always win. I will not bore you with examples (they are countless). What we can do, as consumers, businesses and industry insiders, is to appreciate the pressure OFDM has put on 3G to finally deliver on its promise. With HSDPA and now HSPA+, we finally have the experience promised by "4G" as early as in 2002 and every year since. Yes, I for one am tired of hearing "WiMAX will be here next year." I have heard that since 2002 (or maybe it was earlier?). I have moved on.

As outlined in previous blog posts, I believe WiMAX (mobile) had its chance. If the technology could have delivered half of what it promised (by 2007) the debate would have been over by now. Even with close-to-a-decade of funding and the building of a new eco system, money cannot win over logic and pragmatism. Too many operators delayed plans to move to HSDPA/HSUPA (then HSPA+) to see if mobile WiMAX could deliver. Sadly enough, even an estimated $7 Billion (yes, Billions) of funding* and underwriting of primarily Intel and Samsung, the technology (though excellent as fixed wireless) has not won over the eco system of mobile infrastructure and device providers (*estimates includes dedicated Fabs, engineers, investments, marketing, subsidies)

The consumers do not care which technology is powering its experience. If I can have 3-5Mb average experience when fully mobile for $50-75 per month and 1-5Gb consumption, and it works everywhere I go (USA, Europe and Asia) why would I care if it's 3G or Mobile WiMAX?

As Michael Thelander of Signals Research Group has found out over the years, technology does not win by itself. It's all about the consumer experience willingness/uptake and the business case for the operators. I cannot understand the business case for how $7B in R&D and investments can show a positive return with "maybe" $1B in revenue by 2013 (and that's 100% of the total market). Revenue wins over engineering's conviction - as history shows us (no offense to the engineering community)

Michael Thelander, founder & CEO of Signals Research Group puts everything in perspective when it comes to WiMAX's real competition and it's not LTE...

This is from his group's latest Signals Ahead report "Wassup with WiMAX?" from July 21, 2009 (reprinted with permission)

"...if one compares the sustainable WiMAX ecosystem with the sustainable HSPA ecosystem, then the advantage clearly lies with HSPA – both from the perspective of the number of companies that it can support as well as to the overall size of the addressable market. One could argue that the lack of a commercially-viable LTE solution means that there isn’t an LTE ecosystem, hence WiMAX has the advantage, but that would be a bit disingenuous to say the least while it would also suggest that there isn’t an 802.16m ecosystem in place, and that statement wouldn’t be correct either. And as we have argued in the past, the real competition for Mobile WiMAX is HSPA and not LTE. Once an operator deploys HSPA it isn’t going to look back and reconsider a switch it Mobile WiMAX. When the HSPA operator ultimately deploys LTE is an entirely different question, but it will ultimately be a question of when and not if."

He goes on to say: "At the LTE Summit in Berlin the GSA indicated that there were 1,470 HSDPA devices, including more than 260 devices that support HSUPA (these numbers have since been updated to 1,605 and 305, respectively). While we believe these numbers are inflated, since, for example, they appear to count each SKU for a notebook computer with an embedded module (323 notebooks and counting seems a bit high to us) and we seriously doubt there are 197 truly unique USB dongles (230 dongles as of last week) on the market today, it is still an impressive number and an area where the WiMAX community just cannot compete."

All I can say is -- well said!

I also urge you to read the consultancy's report “HSPA+: Up Close and personal – Down Under” from July 1 '09. See more @ www.signalsresearch.com

Have a continued great summer.

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Who’s My Mobile Network Provider?

2009-06-23T08:53:00.000-07:00

Managed Mobile Networks has changed the landscape for all communication, inside and outside.

Just recently, both Ericsson and Nokia Siemens Networks (NSN) announced monster service deals in Asia, Europe and in North America. With “monster deals” I mean any deal over $250M. Most of the larger deals extend over period of 3 to 5 years and thus the contract can be worth Billions.

In a previous post “Managing our Future” (April 20), I highlighted the tremendous growth we have seen for mobile managed services just since 2004 (5 years). The growth will continue to the point where more subscribers are indeed managed by vendors than operators. An article in NY Times last April did indeed put this into perspective highlighting that “a combined 355 million customers” are indeed networked managed by Ericsson and Nokia Siemens Networks even though their subscriptions are with T-Mobile, Vodafone, etc.

Recent reference points (June 2009) re: this trend:

• NSN Sees Managed Services as $277B Market

• AlcaLu, HP Combine on IT

• Ericsson exclusive contract with 3 Italia

From what I’ve been able to gather, managed network services continue to extend into North America. Though all details are not available, it’s expected that Sprint will continue to “sell off” its network to Ericsson and NSN (which begs the question: "for how much longer will Sprint as a brand be around?"). In fact, hundreds of Sprint employees will soon wear Ericsson badges and manage Sprint subscribers as part of an outsourcing deal between Sprint and Ericsson. Why stop there? Soon, NSN, Ericsson and ALU (and now with support from HP Global Services) will manage majority of network assets which change everything for box and software vendors alike. Who do you sell to when the network is managed by someone else? Is the operator in charge or is it the SI or the company who manage the network? Also, the services organizations from these larger OEMs may indeed send out cost competitive bids to its former competitors to get the best price for the network.

Even though the following ‘scenario’ would appear unlikely, it’s indeed feasible (an example).

Ericsson needs to expand and improve network services (capacity and # of subscribers to total 300M) for its Western Europe network where it serves T-Mobile, Vodafone, Telefonica, etc.

Solution:

• Core routers/security by Cisco

• BTS (Macrocells) and Metro Picocells by Ericsson

• Femto AP and SGSN/GGSN/gateways by ALU and NSN

• Installations: IBM Global Services + Ericsson

So, the day will come where an operator no longer can demand that ONLY “operator A’s traffic traverses the network managed by the Mobile Network Service Provider (MNSP). Much like Sprint is providing wholesale access to its CDMA network in North America, NSN and Ericsson (soon Huawei and ALU as well) will start to do the same.

The MNSPs will provide wholesale access to small and large operators who are willing to pay for per-subscriber or per Gb of traffic over its network. That’s right, “its network.”

The total market for mobile managed services will double from $250B to $500B within 2-3 years. In a previous post, I stated that the market will reach $1 Trillion by 2015. That’s not so far-fetched just a couple of months later is it?

I am now more convinced than ever before that the landscape for network services is changing forever. Network providers (will) hold the key and mobile operators become “marketing brands” to the consumers.

Who’s My Mobile Network Provider? Will we see NSN, Ericsson and ALU branded phones and services one day? You betcha!

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Sensory Mobile Communication & Devices

2009-05-20T10:34:00.000-07:00

What Makes a Smart Phone 'Smart'?

I like to read John Paczkowski's "Digital Daily" (All Things Digital) and today's post ("Smartphones Selling Far Better Than Dumb Ones") made me remember a 'vision' paper I did several years ago for a rather large wireless company. The paper was called "The Sensory Internet." In short, the paper stressed the importance of remembering how people communicate and interact in their daily lives -- when designing devices and creating new network infrastructure (5 senses: hear, see, feel, touch, taste)

Keep in mind the synonyms to 'communicate' which is what we do with 'smart phones' and laptops. Thesaurus.com reference the following words in context of 'communicate': acquaint, advertise, advise, announce, be in touch, betray, break, broadcast, carry, connect, contact, convey, correspond, declare, disclose, discover, disseminate, divulge, enlighten, get across, get through, hint, impart, imply, inform, interact, interface, keep in touch, let on, let out, make known, network*, pass on, phone, proclaim, publicize, publish, raise, reach out, relate, report, reveal, ring up, signify, spread, state, suggest, tell, touch base*, transfer, transmit, unfold, write

Let's take a historical perspective to Sensory Communication Devices (hear, see, feel, touch, taste) from a mass-market perspective (@ home and business)

We were first introduced to ‘sensory’ communication with the landline phone in the 50s (mass market). Note that I'm disregarding military communication, newspapers and going to the movies as I give this perspective. Having a phone (talk) at home, talking to grandma several miles away was "just like magic." Then, in the sixties, we saw the entrance of the black & white TV (see). Our seeing and hearing experience were further enhanced with the introduction of color TV in the 70s. Just a decade later or so, the "personal computer" (desktop PC) made inroads from business to consumer and desktop game devices were introduced (remember Commodore 64?).

We experienced a communication revolution in the nineties where phones, PCs, pagers and cell phones made it easier to communicate and reach each other. Add billboards and advertising (print and TV) and we found ourselves surrounded with visual images and electronic media. The nineties showed us that text alerts could change the way we communicate and this had a profound impact on productivity and response. Mobility of voice and digital communication improved our senses with regard to hearing while moving as did DSL and Cable to our homes (proliferation of online gaming).

From 2000 to 2005, mobile voice and mobile data showed us that we can be anywhere while communicating with the rest of the world. A rice farmer in Vietnam now has the same access to communication and information and a investment banker in London – sort of speak. By 2007, mobile broadband mirrored the LAN of the late nineties.

The impact of sensory communication has a profound impact on the network traffic of tomorrow. By 2010, 1 to 1, and 1 to many video communication and individual webcasting, will be the norm (big network impact). By 2012, we will see the beginning of ‘feel sensory communication where a Wii-like experience within devices where touch and feel enhances the experience (I do not count my vibrating phone as a sensory experience, it's more of an alert mechanism). By 2015, I predict we will be able to enable ‘touch’ communication using mobile devices (a sense of touch, not human like). There are labs working on this right now.

By 2020, today's 7 year olds will be able to communicate with touch, feel and taste – making use of all five senses (sensory) to communicate with the world.

It goes without saying that the demands on carrier's infrastructure (coverage, capacity and connectivity) will be detrimental unless we plan for the impact. Tomorrow will see today’s megabyte subscriber become a Terrabyte subscriber and the network traffic will be measured in hundreds of Zettabytes.

So, what makes a phone smart? Just adding applications to voice and thus the phone is smarter? No, adding 'senses' help enhance the mobile device experience. What we need is a new term as we develop networks and devices capable of sensory communication. Naming the Sensory device will be left to the marketing experts.

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NGN is the ‘ingua franca’ of the mobile world

2009-04-28T13:54:00.000-07:00

Earlier this month operators, vendors and industry insiders gathered to discuss Next Generation Networks. Unlike WiMAX, Femto or WiFi oriented events, NGN is not a “love fest” where everyone focuses on what could be – but rather meet to discuss and hammer out what needs to happen or take place for NGN to become a reality. This sober approach is reflected in most of the presentations from over 25 tracks where the majority of the focus was on 3G-LTE (Long Term Evolution) or “4G” if you really want to differentiate between today and tomorrow and the indoor user experience.

First off, let me be clear when I say that there is no ‘line of demarcation” between “today” and “tomorrow.” There’s no switch or lever to pull to go from 3G to 4G. A better way to think of mobile technologies is…the English language:

We have the Queen’s English, and then there’s us Americans and how we butcher the language and slang to our liking and then there’s English as the spoken word among businesses around the world (with differences in annunciation, pronunciations and emphasis) and the language has evolved from what it was hundreds of years ago with influence from Germany, France, the Scandinavian countries and Asia-Pacific to become the lingua franca of the modern era.

3G to NGN is an evolution which will go on for next decade

Yes, you may have heard of Verizon, Telia Sonera and AT&T talking about LTE in 2010-11 but that’s not the endpoint for a Next Generation Network. Today’s 3G networks are evolving due to subscribers’ needs for new and faster applications, better devices and the opportunity for operators to deploy profitable services. Several operators have seen network traffic triple and in some cases data traffic has increased over 500% in just one year.

3G UK traffic data from February 2009 showed a tremendous traffic uptake:

316 million internet pages viewed
189 million instant messages
94 million Facebook page views
42 million Skype calling minutes

Today's mobile networks may have the speed of a LAN in 2000 with applications developed for 2010 (Several operators are launching HSPA+ in 2009 for 21 Mbps peak downlink speeds and above). Within the next couple of years, the gap will be much closer and by 2015 the network experience is tied to the device and subscriber plans you have – and not limited by the network infrastructure. Home, work or at play – your device is the network.

The (missing) indoor subscriber experience

Today 70% of 3G capacity is impacted by signal strength inside. According to T-Mobile's own research, 43% of customers would switch operators for better home coverage. That’s a tremendous opportunity to steal market share – if you have a solution in mind.

Many operators have plans in place to test and trial Femto and other systems. Indoor as a barrier for a good mobile experience will be removed within a few years. Lower cost systems deployed closer to where the data consumption takes place, self optimizing networks and interference mitigation techniques will be put in place to help operators go after large enterprise accounts (Campus) and dense metropolitan areas.

Capacity consumption is way up and operators need ways to reduce the cost of deploying networks, including site acquisition. To make this a reality, operators need to also solve the backhaul issues and they need more spectrum. Smaller, “built from the inside out” networks are the potential solution. What we may see are “islands” of LTE where people gather and spend time (and capacity) to augment the HSDPA/HSPA+ networks for mobility and travel.

Therefore, do not expect to see LTE deployed across the entire spectrum in a country (700MHz, 800MHz, 2.6GHz) but in hotspots where capacity and coverage requirements are the highest.

By now you are asking yourself (unless you’re an operator) “but why not WiFi 802.11n and UMA (unlicensed/universal mobile access) solutions, they certainly have capacity – right? Yes and NO. The big NO is from large operators who see WiFi as a “data only, fixed” system. Not a solution for mobility and seamless handoff between macro and inside radio systems to handle mobile communication. Telefonica O2 and BT reference “complexity” and “number of service calls” as reasons for not proceeding with UMA. In brief, mobility kills the business case – it just does not work (same reasons why WiFi + MESH did not take off for city-wide and metro networks in 2002 and beyond). WiFi is great for stationary data-only access (with QoS for VoIP).

As a side note, WiMAX was barely a mention by the large operators and vendors presenting at NGN. “(WiMAX) Time has come and has passed,” someone told me. On the bright side, Analysys-Mason believes 90% of all WiMAX deployments (primarily fixed) will be in developing countries (and continents such as Africa and South America). So where-to next?

Next generation networks are evolving from within today’s 3G networks.

We will have HSDPA/HSPA for many-many years and devices need to support 3G and LTE by 2012 (Over 93.5% of commercial WCDMA operators have commercially launched HSPA)
Some early deployments of LTE will take place in late 2010 (over 20 operators committed to LTE). An all-LTE network? Not any time before 2018.
LTE devices: less than a handful of devices by late 2010 and into 2011. Do not expect lots of device options (availability) until late 2012 with FDD and TDD support closer to 2014)
Over 93.5% of commercial WCDMA operators have commercially launched HSPA with over 1400 devices option to choose from.

NGN is the lingua franca of the modern era and just like we grew up to speak English and our neighbor from France had his kids learn English in school, the next generation of people will travel and communicate over a seamless and transparent network within the next decade where the device is the network and we all speak the same language.

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Managing our Future

2009-04-14T11:53:00.000-07:00

In 2006, several leading industry firms predicted that the market for managed services for mobile networks would become a $50 billion market.

Their predictions were spot on. This 'quiet' trend is changing the infrastructure landscape for vendors and operators alike. For vendors, the leading managed providers for mobile networks (Alcatel Lucent, Ericsson and Nokia-Siemens with Huawei slowly gaining traction) are increasingly becoming an important part of the selling cycle. Before, they were the vendors. Since 2006, they have emerged as a trusted "partner" (while keeping the hat on as 'vendor') for mobile operators whose vision is to become global communications providers of wireless and wire-line services. Most of the "big guns" (Vodafone, T-Mobile, AT&T) have been acquiring brands and networks for a period of five years and most (almost all) of these networks are indeed managed by NSN, Ericsson and Alcatel-Lucent.

Not counting the Nokia-Siemens merger, the top 5 players made over $20 B in acquisitions related managed network services during 2003-2008 (includes Alcatel-Lucent). Ericsson posted service revenues of $3.3B in 2005. Last year, 2008 professional services revenue accounted for 25% of all revenue for the company - roughly $6B (doubling in sales). Overall, do not be surprised to find that 'services' account for 30-40% of revenue for many of these companies (and 20-30% margin or more) within the next 2 years. In 2008, Ericsson managed networks that served more than 185 million subscribers worldwide.

It's just a matter of time before China Mobile (world's largest by # of subscribers) decides to make a brand entry into Europe or North America by acquiring networks and assets (brand). Most likely, these networks will be managed by the top three or the emergence of Huawei as a service partner - creating a "4 horse race."

So why this trends of outsourced managed networks for mobile operators?

We have seen the same trend since 1997 when it comes to managed enterprise networks (first finance and insurance, then the rest of the verticals). Very simply, the savings are tremendous and by outsourcing the communications networks, the company can focus on its core competencies (sell products and services it makes).

Customer savings range from 10-40% with outsourced managed services
Increase efficiencies for CAPEX and OPEX: Integrate new technologies and application without hiring specialists (multiple radios, network technologies, applications, etc). Simplify integration with networks, billing and outsourced application provider
Managed services is strategic to both operators and the managed network vendors: Vendor moves-up value chain from supplier to key partner (gains more control/influence). Vendors can sell hardware/software solutions for lesser margin and make it up with global service contracts
Consolidation in the industry secures scarce people resources to 3-5 key players (Operators are able to leverage vendors access to people, expertise and networks)

By outsourcing, operators will focus efforts on marketing the brand and differentiate with customer service in order to hold off price wars and customer churn.

This trend has created a new landscape. You could make the same argument NY Times did in their article last Monday when they raised this question:

"Which two European companies run the biggest wireless networks in the world, with a combined 355 million customers? If you are thinking of the top mobile operators — Vodafone, Telefónica, T-Mobile or Orange — you would be wrong. The right answer: Ericsson and Nokia Siemens Networks." See article

As NYT's Kevin J. O’Brien puts it

"...most subscribers are unaware that day-to-day management of their calls and text messages is being supervised not by local engineers but by managers in remote centers like New Delhi, Bucharest or São Paolo. In Britain alone, Ericsson manages significant parts, if not all, of the networks of 3, T-Mobile and O2. In March, Ericsson added Vodafone, its fourth mobile operator client in Britain. On the same day, Nokia Siemens said it had been hired by Orange, the mobile unit of France Télécom, to manage its British network."

This is a very powerful trend which impacts all the players in the infrastructure network. The day could come where operators and enterprise alike says to IT vendors... "Talk to my partner." The operator and the enterprise IT group just stipulate what they need in form of products and SLA (as in shopping) and for an agreed contracts, services are rendered without the customer touching the IT decision. Take this a step further. The operator can become the brand-facing Communications Provider for small, medium and large enterprise customers. The enterprise stipulate LAN-Wan and Wireless service needs and the operators then dictates to the "Managed Communications Partner" what they need to fulfill service contacts with hundreds or thousands of enterprise customers.

Managed Mobile Networks has changed the landscape for all communication, inside and outside.

The managed network space (not just for mobile networks) is worth hundreds of $ billions every year. IBM is already a big player in this market as are many System and Solutions Integrators. The gravy lies with mobile networks. It remains to be seen if Cisco decided to get into this space as well, creating a global services organization for wired and wireless network services. Even Dell got into the SMB space for smaller network services. Managed Network Services is a strong trend for all communication services, for enterprise, consumers and mobile network operators alike. By outsourcing, the brand can focus on its core products and services and allow the infrastructure to be handles by the experts.

My prediction is that managed services (wired & mobile) will exceed $1 trillion in revenue by 2015 where the top 4 players account for 80% of the revenue.

I'm glad to see the New York Times article by Levin J O'Brien. He's on to the big news. I hope the CEOs read and internalize the article and conceptualize the impact on their organization during the next 3 years.

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CTIA: "plus ça change, plus c'est la même chose"

2009-04-06T14:27:00.000-07:00

"The More Things Change, The More they Stay the Same." (Alphonse Karr, 1808-1890).

Last week's CTIA was more subdued and not as exciting as it was a year ago. As other insider have reflected, maybe change is needed? CTIA, just 4 weeks after Mobile World Congress in Barcelona and CES the month prior, leaves us with little news and progress to report from CTIA. The themes sated the same: we all want a more open Eco system, LTE will happen and early deployments will kick off in the CDMA and WCDMA camps as early as 2010. Of course, device options will lag behind but that's what happens when a network evolution is kicked into high gear because some operators really-really want to be first.

In this case, Verizon wants to lead the charge by evolving its CDMA EVDO Rev A network to include LTE capabilities. This means, devices need EVDO Rev A and LTE within for years to come. The multi-band, multi-technology chipsets will be in great demand for years from AT&T, Vodafone, T-Mobile, who will demand HDSPA, HSPA+ and LTE within to make sure they have backwards compatible devices on global networks. The big nothing at the show was "WiMAX." Even with an announcement that WiMAX development center would be set up and that WiMAX would (in essence) be free in Silicon Valley -- there was no interest. Funny enough, even a senior Nokia person (and a big backer of WiMAX) said what everyone was thinking. "WiMAX is Betamax". It's now clear that Mobile WiMAX has lost out to (not LTE) HSDPA and HSPA. It’s just the matter of weeks if not months before the Clearwire ship will turn and maybe even become part of Sprint again - since spectrum is an asset and WiMAX has become a liability. Some big funds, after they are done being audited by Uncle Sam, will look to industry insiders as Scapegoats for their WiMAX negative return of investment (NROI).

The big take-away after the first two big wireless shows of the year (CTIA+ MWC) is that HSDPA and HSPA+ deliver a multi-meg experience with full mobility now and that these networks will pull-through voice, video and other rich content such as TV over these networks and thus creating a capacity crunch in the coming years as the industry grows to 1 Billion subscribers.

Maybe Taylor Swift's new song in 2010 will be about her experience as a mobile subscriber watching TV on the go in her music bus -- "the day my lifeline died" (much in common with "the night when the lights went out in Georgia") which explains the blog title "The More Things Change, The More they Stay the Same." (i.e., network strain will kill the phone).

With evolution comes conflicts and with conflicts - we experience turmoil. Progress is great, but it comes at a cost. We do not know what the cause and effect is until we experience it. When email and attachment became a way of doing life within the LAN, we had to move from 1 to 10 to 100M and then Gigh Ethernet and so on. As we got smarter and broadened the pipe, the users just sent more and more files. At each step of the way, we experience bottle necks as we bring "broadband to the people." If you give a mouse a cookie, you know the rest.

HSDPA,HSPA and LTE will enable more apps and more broadband experience which will cause new bottlenecks in the network. In this case, the mobile network. I can only imagine what the network architect at my "operator" think of me now that I am addicted to Slingbox on my mobile. I'm sure, if I can convince 3 or more people in my vicinity to also watch NCAA tonight on their phone in the same sector, our joint broadband experience will tie up Gigs of capacity for hours. This is good news for Cisco who has (correctly) predicted that mobile network capacity will be strained as more mobile broadband subscribers discover "crack TV" on their phone and understand that their 3G phone is capable of sending and receiving video.

So, the more we change to a mobile broadband connected world, we will discover the problems of the past presented in a new form but with the same logical conclusion: build out more, in a smarter way, while reducing cost and complexities - because we need to.

Twitter/mobileinsider

Life on the Go-Go (CTIA)

2009-03-31T15:20:00.000-07:00

After a tumulteous day with after many chats, meetings, bumping into people, and driving around - I finally sat down with a cup of Starbuck's coffee and reflected upon the last 2 days. In earnest, it became a reflection of the life we live in the wireless 'Fast Lane.'

Yesterday, CTIA's very own Mark Desautels (56) passed away in Las Vegas of an apparent heart attack. I'm sure we all feel for the family and our thoughts and prayers go out to them during this difficult and challenging time. http://www.ctia.org/media/press/body.cfm/prid/1810

So why a reflection on "life"? We all scurry around from conferences to business meetings, around the USA and some time outside to meetings in Spain, UK or wherever else our businss takes us. If we are lucky, we get to spend some time with family and friends in-between. As I reflect on the sad news, I can't help but think that I am missing my wife and my children back home. I did bring my videocam and will use it to "video home" tonight to tell them how much I miss them while hearing about their day at home and at school.

Living a life on the go, we will make use of devices and applications which will connect us with family, friends and business. And, ins ome cases "hack around" until we find a working solution. Today, I use my laptop for video and Skype calls and look forward to making 3G Skype calls soon (not restricted to Wi-Fi hot spots). It will happen because people will demand it (why make a Skype call using iSkoot if the call counts against minutes when I'm using a VoIP session?). I have also tested TV over 3G handsets (Blackberry and iPhone) using Slingbox and other apps to connect to Comcast and DirecTV services. And it works! I saw my Duke team go down in flames to Villanova - tearing apart my dream to see Mike Krzyzewski win his 4th NCAA championship. And, I did so while at a family event (hiding behind the big tree in the park). Tomorrow's applications will just make my experience more interactive.

Life is about communication. We want to see when things happen and share our experiences in real time and talk to friends and family all at the same time. Texting becomes IM and IM become video IM and soon we will all be videocasting over mobile networks. Within the next 2-3 years, video-based communication will count for the majority of mobile and IP traffic (http://tinyurl.com/b9berc ). We'll be watching Duke beat Villanova in 2011 while "casting" our experience live to friends (yes, DRM lawyers will have to figure that dillema...these firms will do well for years to come).

So, with CTIA in mind. This week will be about how the industry is already building the infrastructure for years to come (HSDPA going to HSPA and then LTE). Sprinkle in some news about Femto and some new cool devices and 'open ecosystem' for applications and after-market chargers --- and what we have is" Barcelona in Las Vegas." I do not expect any big-big news this week. In the midst if a down-economy, we look to some bright lights where some existing OEMs announce operator wins with HSPA and LTE and some new startups secure small Femto trials for Femto. Motorola and Nokia will toss in some new devices to show how "life goes on" and at the end of the day, we will look back at CTIA with renewed hope that the mobile industry will weather the economic storm and prosper next year.

Life goes on.

Twitter/mobileinsider

Live TV - When I Want It - on My Phone

2009-03-20T10:47:00.000-07:00

On my way back to Silicon Valley, I spent some time reflecting some mobile trend data recently posted in blogs, twitter updates as well as in articles on popular web sites.

Cellular-news reported that “Mobile TV will reach 472 million by 2013” (source: Cantab Wireless). Until now, TV on mobile devices was strictly limited to video clips (downloads) or special devices embedded with tuners, etc. Sprint and Verizon were the early adopters using Qualcomm’s MediaFLO. To add complexity to the TV application, Qualcomm cleared the path for its customers by negotiating TV rights from ESPN and others while buying up spectrum in key markets in North America. This is a costly proposition and is most likely is why TV over Mobile did not take off as predicted in 2006 and 2007.

Recently, I’ve been talking to friends who live in the Bay Area, Boston, San Diego and New York, probing their TV over mobile experience. Most of them make use of 3G PC cards (USB) for wide area connectivity and subscribe to AT&T, Verizon and T-Mobile.

Here’s what I found out:

1) 25% subscribed to an operator’s TV/video service. Usage was minimal (less than 1 hour per week) because the service was “cumbersome” and limited to the channels and programming supported by the operator.
2) 50% did not make use of any TV over mobile. Why? “Not interested” or the service options “too expensive and too limited.”
3) 25% did not subscribe to any service, but was indeed watching live TV (FREE) using their 3G device or 3G USB/PC card (laptop). These people either had Comcast, DirecTV or Dish Network DVR service at home or were users of freeware or beta software from Sling for use with iPhone, Blackberry Storm, Blackberry Bold and/or Samsung Android phones.

Here’s the big surprise. Usage was 300% higher than the people who paid for TV over mobile service. Note, these people have unlimited data plans and sure made use of every bit. Usage examples cited.

· Watch news or sports while at airport (using WiFi or 3G)
· Listen/watch news while driving in car
· Keep the kids quiet in car while driving (let the kids watch kids shows)
· Watch news while waiting for: dentist/doctor/car service/etc.

Note: where Wi-Fi was available, the laptop users used free service or service roaming partners of AT&T or T-Mobile to avoid buffering issues.

So, the big lesson for mobile operators and application developers is: do not make people re-learn how to watch TV or video. Much like Nokia found out in the early nineties, it takes 6-7 years for people to re-learn a new format (handset design where # actions button placements is critical). Make it simple. By allowing access to home services (DVR, cable, satellite), more people will watch TV in more places – thus requiring more capacity and better network services. The big question is…why on earth would operators allow this? Because it will happen no matter what so they better prepare for it. I’m sure subscribers would not mind paying a small service fee to access home services or a higher fee if TV channels were provided by the operator’s own servers.

So, building upon my last blog, I’m now convinced that as more people start making use of TV/video services that we are faced with a barrage of data usage where TV, video and personal video casting (IM) will make use of every available bit and spectrum within a service area.

Some mobile data for consideration:

By 2013, 80 percent of global mobile traffic comes from 3G/4G mobile broadband handsets and laptop users (PC cards). “A single high-end phone like the iPhone/Blackberry generates more data traffic than 30 basic-feature cell phones. A laptop aircard generates more data traffic than 450 basic-feature cell phones.”
“Almost 64 percent of the world's mobile traffic will be video by 2013. Mobile video has the highest growth rate of any application category.”

Source: Cisco VNI Forecast January 29, 2009. http://tinyurl.com/b9berc

Video, TV and personal video-casting will happen no matter what we do. 3G and LTE will enable more subscribers accessing more services and using more bandwidth – because they can and will make use of every bit and spectrum available.

So what did I learn? I will use this weekend to download some freeware and start watching TV over my unlimited data plan and if all goes well, I will be watching Duke go to the final four during 'March Madness' – on my 3G phone.

Twitter/mobileinsider

The Tsunami is Coming: Mobile Operators, Brace Yourselves…

2009-03-17T11:29:00.000-07:00

Why the use of the word Tsunami? Normally, this is a very scare phenomenon at sea. On land, we are faced with Thunderstorms, hail, wind, rain and so on. So, why ‘Tsunami’ in context of mobile broadband?

The term 'Tsunami' comes from the Japanese, meaning "harbor" (tsu, 津) and "wave" (nami, 波). Source: Wikipedia. In the Tamil language, "Aazhi Peralai means “disastrous wave.”

What mobile operators are faced with, for the next 5 years, is a series of waves when it comes to the increasing number of 3G subscribers, 3G enabled devices and laptops, application use and the enablement of video casting and photo sharing within social networks.

The first wave has already hit. Let’s call it the “Bold iPhone” wave of 2009

Last year, 30% of US consumers who purchased Apple iPhone 3G in the summer of 2008 switched from other mobile carriers to join AT&T. People want broadband and will make use of every bit in the network. In August last year, there were over 100 million 3G subscriptions out of a total of mobile subscriptions of 910.8 million in Europe (Source: Informa). It’s safe to predict that 3G subscriptions will reach 175 million by end of 2009 (iPhones , Blackberry BOLD, Android and other 3G phones).

Personally, I think the EO 2009 number will be closer to 300 million. According to The NPD Group, consumer sales of smartphones to US consumers represented 23% of all handset sales in Q4 2008 compared to just 12% in Q4 2007. By 2013, there will be 4.1 Billion subscriptions globally (source ITU). Of which 67% are 3G/3G+ capable (source: ABI). That’s a staggering 2.7 million subscribers generating 80% of all global mobile traffic.

Why is this scary? “A single high-end phone like the iPhone/Blackberry generates more data traffic than 30 basic-feature cell phones. A laptop aircard generates more data traffic than 450 basic-feature cell phones.” Source: Cisco Visual Networking Index (VNI) Jan 29, 2009:

Last week, it was widely reported that AT&T had network capacity issues due to heavy 3G usage in a central metropolitan location. We are talking about a few hundred to thousand subscribers congregating (imagine 60,000 people at Football game all using 3G to communicate and share video, photos, etc). Om Malik (Gigaom) predicted the impact on networks over a year ago. His March 16 post covered the AT&T network issue (See http://tinyurl.com/cn9pt8 )

The second wave: “the social broadband wave of 2010”

By 2011, we will most likely have over 1B 3G subscribers actively using multimedia to send/receive/share. In addition, 30-40% of the subscribers will watch live TV throughout the day, using mobile and/or Wi-Fi connectivity based on their location. This is reality today for some. Cable and Satellite TV can accessed vis phones and laptops (via DVRs, Slingbox and other services)

The third wave: “the TV/video wave of 2012”

Now, what happens when we have 2.7 Billion subscribers generating 2 Exabytes of usage, per month, by 2013? We are talking about traffic doubling every year, a 66x increase per Cisco’s VNI where video accounts for 64% of all mobile traffic. http://tinyurl.com/b9berc

By 2013, the networks will crash unless something drastic happens. So what can be done?

Why can’t we just add more cell sites?
Why can’t we just add more spectrum?
Why cant’s we just limit the # of 3G subscribers?
Why’ can’t we just add Wi-Fi access points everywhere?
Why can’t we just add Femto access points everywhere?

The answer is ‘YES” to all of the above. But, there are restrictions.

Cell site costs can be as much as $500,000 in some cases. Even though AT&T is planning on spending $17 Billion on Capex this year, there are limits to how much an operator can afford to spend on network Capex, year after year. This is also why more and more operators are outsourcing management of their networks to Ericsson, Lucent, Nokia-Siemens, Huawei, etc – to reduce Capex. Of course, Opex increases but at least cost of equipment goes down. The net result is that the operators can demand better coverage and capacity from their service partners as demand for capacity increase from their subscriber base.
More spectrum is needed. Operators want more uniform global bands to improve roaming across continents and to help reduce device BOM and price in the store.. Likely candidates for uniform bands for 2012 and beyond include 700MHz, 900MHz, 2.5 and 2.6GHz. Members of 3GPP and ITU are lobbying for more Spectrum from US and European regulators. From the time spectrum is awarded or freed up, it takes anywhere from 2-5 years to deploy sites and enable devices to work across the band in question.
You cannot limit the number of 3G subscribers, so take that option off the table (consumers have options with regard to operators)
Wi-Fi with 802.11n will help offload usage at home and within businesses much like Femto access points deployed strategically in suburban areas and within the enterprise. Today’s Femto products are yet not ready. Femto access points need more intelligence, interference management and scalability to help offload capacity from the Macro network to improve overall subscriber experience as they roam across the land. By 2010-11, we should expect solutions to these challenges and Femto, WiFi and Macro co-deployments will help add capacity in “3G and 4G hot zones.”

So when will the Tsunami hit? Well, it already did with a small wave caused by iPhone and Bold subscribers. If predictions are only 50% correct, we will face significant mobile network issues as early as 2010. If Capex money is available, 2010-12 could be good years for infrastructure vendors and mobile managed services providers.

Twitter/mobileinsider

FEMTO Low-Price Market Penetration Strategy: a race to the bottom?

2009-03-12T09:25:00.000-07:00

This week was filled with more doom and gloom predictions in the networking industry. In the midst of the forest filled with bears, AT&T made the statement that Capex is not down but slightly up as compared to 2008. Also bucking the trend, we heard supporting (positive) statements from IBM, Cisco, Google and Juniper as well as Vodafone. These companies are investing in people, companies and the future. So, overall, there are good news among a flurry of negative earnings and the Madoff scandal.

Some (perceived) sad news for the Femto players when RadioFrame finally confirmed that they will not be a player in the Femto AP market (rumors started prior to MWC in Barcelona). They will focus on the ASIC side of the business. But, is this bad news or good news? Maybe RadioFrame decided that competing for business with basic access point BOM well above $200 and operator requirements for pricing at $200 going to $100 over the next 2 years -- was not a good idea. Can we fault that logic?

"We are trying to be prudent with our money in these tough economic times and we have pared back to a core set of businesses that will take advantage of our unique market position while maximizing our use of funds." - CEO Jeff Brown said in an email reply to Unstrung earlier this week.

I personally applaud them for making the tough choice. But, does that mean that the other players are running off a cliff? With enough funding and volume, a low-price, market penetration strategy can pay off (especially if your company name is Huawei and you have the entire China government supporting you). The dilemma facing Ubiquisys and ip.access (and now Airvana who is betting the future eon Femto) is that they are the first into a potentially enormous market that has enormous risks. Winning the future bid for $100 Access Points limits the intelligence and features you can place within -- before BOM hits $200+. By setting the price low, the perceived value is low. This year (2009) and 2010 will be challenging for the consumer Femto players. Their mission is to survive numerous trials and operators tinkering with the Femto business plan for consumers, while building strong relationships with major players who will ultimately be picked for the big roll-outs. Yes, that's how this market will roll.

Was it therefore a surprise when the same consumer players made a left turn and started to talk about Enterprise Femto? Of course not as these players need to find a profitable market segment where they can sell Femto APs at a higher price and therefore make up for the costly consumer business. However, the trap lies with the product strategy. The low-priced consumer APs cannot scale to the demands of the enterprise. You cannot simply name the consumer AP something else, paint it blue, and expect it to work within the enterprise. A new board design is needed and advanced management and interference features demand a better product with tight integration with the gateway/aggregation router on or off premises. "Just" being a Femto AP vendor limits the control you have with operators and the enterprise alike. And, it gives you few cards to play with major OEMs. What's needed for the enterprise is: scalability, security and management features, QoS, advanced routing functions, local switching support and tight integration with the supporting RNC. In essence, the consumer Femto players need to design a radio network inside rather than a Wi-Fi-like access point. The enterprise will demand that you include Wi-Fi.

This "left turn" requires a new approach and that requires more funding. The road to Femto success is very exciting but also riddled with "IAD"s (important access developments). It's great that the Femto market receives a lot of media attention. But, it takes more than hype to survive the economic situation of 2009-2010.

Today, ABI released its updated Femto vendor matrix (http://tinyurl.com/arsr2k). In light of RadioFrame's bold move to exit the AP business, the matrix could become an indicator of a race to the bottom.

Show me the money, then I will believe in the Femto consumer business case.

Twitter/mobileinsider

Can You Hear What I Hear, Can You See What I See?

2009-03-05T20:40:00.001-08:00

Fellow Mobile Insiders

This evening, after spending most of the day catching up with long-time friends who are industry and financial analysts in our industry (people who actually know what's going on inside the mobile industry), I went to my favorite web sites to catch up on news and developments.

Many of these sites reported (again) about Mobile WiMAX big plan for the future and that "next year" it will be everywhere (something we have heard since 2004). The latest, Clearwire will spend $1.5B to build out more cities in US next year. Really? We believe this?

To quote an article I read, "Clearwire brought in about US$20.5 million in revenue and lost $118 million"".... which means that another $1.5B will be spent to secure another 1M subs over the next two years while burning millions of more cash every quarter? When are investors going to start asking serious questions about the business plan or lack thereof?

I continue to be surprised by such big plans -- which are void of any plans for profitability.

As a nationwide network technology option, mobile WiMAX is paddling behind the big smoky steamship and coughing from lack of Oxygen behind the "MS HSPA-LTE."

Today, Nokia reinforced its support for LTE. Their support for WiMAX was over last October. Their strong support of HSPA and soon, LTE devices, means that Samsung will be next to debark the sinking (mobile) WiMAX ship. Please do not misunderstand the pragmatic criticism. I do not dislike Mobile WiMAX. The technology had its chance in 2004 and 2005 but failed to deliver.

On the bright side, Clearwire has spectrum which is a valuable asset to some operators. VZ, T-Mobile and AT&T will need more spectrum by 2011 in time for LTE build-outs. So, I question any serious intent to spend any Capex whatsoever. It's a bluff which is why they are slow-rolling any build-outs. So, if you can hear what I hear and see what I see, then do what Google and others have done, write-down (off) mobile WiMax and move on.

twitter/mobileinsider

2009-02-23T13:37:00.000-08:00

Mobile World Congress 2009 Viewpoint

With Mobile World Congress 2009 completed, my five net impressions of the show are as follows:

MWC 2009 was a solid event. There was much enthusiasm for the future. However, the sentiment is that next year’s show will be the testament of the industry’s economic viability and ability to weather a worldwide “financial Tsunami”

2. The industry wants an Open Eco System for collaboration among vendors, standards bodies, and operators. Open API to allow for apps to traverse networks just like SMS. Any device, any network + common charger for devices, the focus for 2010 and beyond. What’s next, a common platform for charging our handheld devices? Oh, yes, that’s coming too (2012 target).

LTE infrastructure deployments may start as early as late this year with commercial services taking off in 2011-2012. Femto products and indoor wireless systems will play an important role to fill coverage and capacity holes for HSDPA/HSPA and support LTE in 2012 (WiMAX for Backhaul?)
More Spectrum is needed but there will not likely be a uniform worldwide band for LTE by 2012 (400/700/900MHz, and 1.7 +2.6GHz the likely candidates? Time will tell)
No focus on Wi-Max…it’s now been relegated to backhaul and remote areas such as Africa. Today, MOTO also confirmed layoffs in its Wi-Max group which makes

Since Femto got some play at the conferenc, let me address the viability of this segment:

FEMTO and other indoor wireless solutions are indeed gaining momentum. This year will see 3 or maybe 4 major operators conduct controlled field trials (or labeled “commercial launch”) to test acceptance of these solutions to improve coverage and capacity for voice and broadband data and consumers and business’ willingness to pay. Unfortunately, the current startups will likely be pushed aside if the market takes off and hundreds of thousands of units are need. That’s when Cisco, Huawei, NSN, ZTE and Alcatel-Lucent step in.

Qualcomm is aiming to provide reference design in this space and given their 2H10 time-line, it may be well timed with market take off for this emerging segment of the industry.

Feedback from Telecom Italia was that consumers and business alike want an integrated ‘box’ for DSL/Wi-Fi/Femto. Netgear displayed an early demo box at the show. This “combo box” may be the home or SMB set-top box of the future (something Cisco will agree with)

This week, Brian Modoff of Deutsche Bank Securities sent out their Point of View on Femto.

“Most people we spoke with, including carriers, believe that the femto cell will not be a stand-alone box in the home. In many instances its features will be integrated into residential gateways or set-top boxes. This is particularly true of wireless operators who have wire-line assets.”

“We see this as toe-dipping by both carriers, seeking to fill some holes in their network coverage areas. The Samsung box can only handle voice and not data connections. It is also expensive, at an unsubsidized $250. Our understanding is that the box was built by Samsung’s handset unit, while femtocells under development by other vendors feature advanced network designs.”

“The biggest question around femtocells remains the operators’ interest. Femtocell deployments still carry some thorny issues. The largest of these is how the femto will integrate back into the carriers’ core network. Much of this work has now been finished, with the standardization of the Iu-h interface, but final details are still being ironed out. Other technical issues, particularly interference management, are still being resolved. If past roll-outs of new technologies are any good we would not be surprised if femtos get delayed by “unforeseen challenges” as we move through the year and into 2010.”

Overall, a good show in Barcelona. Next year, we hope to see less Thievery and no prostitutes on Las Rambla and more Police presence. More, cheaper, smarter mobile devices. A clear plan with regard to transitioning to a 20Mb mobile broadband experience around the world (and which bands to use).

I’m sure, next year will be the year when personal video-casting makes its entry into handheld devices (early trials) which makes 2011 the year the entire mobile network crashed J

Twitter/mobileinsider

It's a Plane, It's a Toaster...It's a...Femto?

2009-02-12T11:10:00.000-08:00

Michelle Donegan (Unstrung) is a brilliant journalist. She's insightful and she also is ON to the subtle shifts underway when it comes to vendors marketing gimmicks.

In her recent blog (http://tinyurl.com/ch3aoz ) she confesses that it is indeed confusing how the Femto and Pico Cell vendors are marketing and repositioning existing product lines -- or trying to create a differentiated product category. She brings up some simple and insightful questions as to what is what in Femto land.

Here's my crack at it (do not read too much into this)

1. Super femtocell: a beefed up picocell product repositioned to take advantage of Femto hype

2. Enterprise femtocell: anything a consumer vendor want it to be...at this point. Place an 'e' in front to existing Femto (Home Node B) and promise up to 8 users some time in the next 18 months and voila`, there's the enterprise femto (regardless of what the enterprise needs from a premise equipment).

3. Enterprise Femto becomes Picocell when a customer want a Pico cell solution and Femto when...you get the drift

4. When is Femto a small macro base stations?
A: It takes more than an AP, AP + Aggreagator to make an outside RAN. Some vendors will attempt to call a small Femto solution a Macro solution when LTE comes around. Scalability is key.

In the meantime, we have to witness Femto and Picocell vendors lobby for airtime and position products based on range, # of active users, time of day and time of month. It will only get worse before it gets better. Michelle - keep up the good reporting,

Twitter/mobileinsider

2009-02-10T08:01:00.000-08:00

The Coming Mobile Network Capacity Problem

Today’s mobile operators are faced with a network capacity dilemma which will only become more critical as more smart phones and 3G-enabled laptops and devices are sold throughout the world.

Attempts to provide the wireless coverage inside for voice and data has been cost prohibitive for mobile operators. Wi-Fi, while offering a relatively low-cost wireless data access solution indoors, suffers from interference, integration issues, poor voice quality and issues with macro to AP and AP-to-AP handover. DAS and Pico-cell solutions are costly and require site and network planning. Existing solutions can either handle voice well or fixed data access– but not robust mobile voice and broadband inside the enterprise. UMA has its own issues and AP to AP handoff is not easily done over Wi-Fi (if at all). Show me a good working solution.

It will be interesting to see if FEMTO solutions can scale to handle dense areas without creating too much macro cell interference. Just adding a Femto AP does not solve capacity problems or coverage issues. Careful network planning is needed, otherwise we will face "Rogue" Femtos inside the enterprise (just like we experience with WiFi in '97 - '99 and beyond) and in dense areas which will only have a negative impact on the overal mobile network. The Femto Forum is on to the intereference issues and so are consumer femto vendors. The question is, when can they truely deliver a high capacity solution which address cost, coverage and capacity requirements for hundreds and thousands of people in a 1km by 1km square area?

SV Mobile Insider (twitter/mobileinsider

2009-02-09T10:41:00.000-08:00

WiMAX Cloudy Future

In response to recent articles in Fortune (Feb 16 - Jon Fortt) and Forbes (Feb 6):

WiMAX: The Business Case Does Not Fly - anymore.

The promise of a $3B nationwide network is now more likely to cost $10B, something Clearwire does not have and Intel and Sprint would not underwrite (anymore). Current WiMAX users in the US should enjoy the spotty coverage where you have it, it's unlikely that we will see "NFL" city coverage any time soon.

In 2003-4, Nextel envisioned a network costing $2.5-$3B with a mobile network from Flarion, a company acquired by Qualcomm in 2006. With the Sprint-Nextel merger, Intel promised to underwrite the WiMax technology and thus "WiMax everywhere" was what everyone envisioned by beginning of 2007. Then, with the issues and delays of mobile WiMAX, the vision became 2008... and here we are in 2009 and there are just a few cities with coverage. Clearwire (now includes Sprint/nextel WiMAX mobile broadband group), now realize that the "cheap" WiMAX is indeed as expensive as CDMA Do Rev A (or 3x more than FLASH-OFDM from 2005).

It is unlikely, given the economic climate, that Clearwire can deploy more cities without some serious funding or re-vector towards LTE and get economic incentives from the 3G community of vendors. But, the spectrum is indeed valuable. Maybe some major global operator will buy the spectrum in 2009-2010?

Regardless, WiMAX nationwide footprint is now a "pipe dream" and with HSDPA getting foothold with AT&T and CDMA/WCDMA operators looking to LTE commercial services in 2011-2012, the business case for mobile WiMAX has indeed failed.

MobileInsider (Twitter)