Dean Bubley's Disruptive Wireless

The death of communications "ubiquity" - and why the GSMA has got it wrong on RCS & VoLTE

2012-02-10T19:18:00.003Z

Overview

This is a long and important post about the future structure of the telephony, messaging and communications services business. It argues that "ubiquitous services" are a thing of the past, and that the telecoms industry needs to embrace fragmentation, not fight it, in the future.

It leans on the work I've been doing on my Telco-OTT report, my recent advisory work with operators and others, as well as the findings that I've learnt during my Future of Comms events & operator engagements with Martin Geddes. (Sign up for our newsletter here)

It covers:

The history of telecoms ubiquity
Why fragmentation is happening now
The user appeal of "silo" services
Why service standardisation can do more harm than good
Why RCS & VoLTE may hasten the demise of the traditional operator model
What can be done by operators about communications services

But first, let me set something straight.

I make a sizeable % of my revenues from mobile operators and "traditional" telecom vendors. I do not dislike them, nor do I want to see them go out of business. I'd like them to continue having the need and means to pay for my services, as well as the funds to build out faster and better networks.

But that doesn't mean I'm a cheerleader, especially when the telcos sometimes act collectively like a herd of ostriches. It is in my own long-term interests to see the telecoms industry maintain its health, and so I'm unafraid to make some hard calls in the short term when I see imminent strategic mistakes.

I also certainly recognise that large organisations harbour many different opinions and initiatives, and I meet as many clued-up and insightful operator employees who I respect and learn from, as I do relics of the telecom Jurassic period who make me shake my head in bewilderment.

The history of telecoms ubiquity

Perhaps the largest failing of many I encounter in the communications services industry is their belief that "ubiquity", "standards" and "interoperability" are always more desirable (and profitable) than "niche", "proprietary" and "silo" as service attrributes.

If anyone has any doubt about this, consider how a "niche" provider of "proprietary" mobile phones & computers now makes enough money to significantly alter the overall profitability of corporate US as a whole, while another "silo" provider has just filed for an IPO that would comfortably put it in the list of the Top 10 telcos by market cap.

Clearly for some organisations, ubiquity is far from essential. So why is it still taken for granted in telecoms?

This "standards first" mentality is most damaging in the area of personal communications - specifically around voice and messaging services. It is often taken for granted that "ubiquitous" services or applications are inherently better than more tailored or niche alternatives.

Now it is certainly true that we have a number of successful, useful and ubiquitous services today - telephony (fixed and mobile), SMS, and (for all intents and purposes) MMS and email. I am excluding "Internet access" as that is a connectivity service rather than an application.

Clearly, taken together (especially telephony and SMS) we have a huge precedent for ubiquity being "good". They generate getting on for a $trillion per year worldwide. We also get a warm and egalitarian feeling from their democratic nature - everyone can have them, whether they have a $20 phone or a $1000 super-device. Against that backdrop, it's easy to see why people hope to find the "next ubiquitous service".

It is also easy to see why organisations such as the GSMA are so emphatic about re-inventing and promoting "ubiquity" as a principle. It has had a hugely successful history, and they would like to perpetuate that trend - both in terms of democratisation of communications for users, and in terms of control and profitability for their members.

But the problem is that from now on, Ubiquity is Dead in telecoms. Unfortunately, the telecoms past is not a reliable indication of how the future will evolve. New services can never become ubiquitous again, while the existing ones will slowly, but steadily, die. (See Martin Geddes' fantastic article on "peak telecoms" for more).

That's not all. Not only is the age of ubiquity over, but attempts to "force" ubiquity may well backfire and make the fragmentation and cannibalisation worse and faster. Such attempts are inherently "brittle" and will lead to unsustainable tensions that will at some point break down catastrophically, rather than gracefully.

Why fragmentation is happening now

In a nutshell, fragmentation of communications services is happening "because it can".

The history of the telecoms industry has been about standardisation and ubiquity (at a service level) because of the costs and complexities involved in bringing new applications to market. They have needed to be hosted in the network, "hard-wired" into dedicated boxes, linked to complicated billing and OSS systems. The phones were essentially "dumb endpoints" with no ability to host much application logic themselves.

Also, historic regulatory structures have tended to drive national regimes for licencing, numbering and interconnection, fragmenting the providers of a few well-defined services to provide competition, rather than encourage competition between services. That is unsurprising, given the technological limitations of the past. In Disruptive Analysis' view, there needs to be some significant regulatory evolution to cope with the new landscape.

The old backdrop has now changed because of multiple trends and drivers:

Thegrowing base of open smartphones and appstores allows easy distribution and installation of 3^rd-partymobile communications applications
HomePC & broadband penetration catalysed the initial growth of popular new communications services, that have then reached across to the mobile domain (webmail, IM, social networks, PC VoIP etc).
Thegeneral trend towards “cloud” is catalysing the separation of application hosting andnetwork access.
Operatorsare starting to de-layer into NetCo and ServiceCo divisions anyway, eitherbecause of regulatory intervention, or by the direct entry of newwholesale-centric "UTF" (under-the-floor) operators that are forcing separation through competition.
All-IPnetworks – and especially LTE – are forcing a range of decisions to be made nowabout future operator-hosted applications and supporting infrastructures.
Thereis growing awareness that “telco grade” QoS is not always thepre-eminent driver of customer adoption, or arbiter of communicationsexcellence. Some customers will accept lower network quality in exchange for higher experience quality, for example through clever web-basedinteractions. Facebook and Skype exemplify this.
Software and development tools and techniques have improved massively, along with supporting capabilities such as Amazon cloud platforms to host scalable applications.
CFOsare aware that much of the value creation in the communications and Internetindustry has been driven by asset-light, rapid-growth services such as Googleor GroupOn. They want to capture some of this capital growth for shareholders,even if it does not fit traditional revenue/margin business models.
WiFi allows a variety of communications services to circumvent operator visibility and control, exploiting fast and low-latency IP connections.This then seeds the market with applications capable of using HSPA+ and LTE networks when they reach the necessary quality.
A few "non-Internet" OTT services have also emerged - notably BlackBerry Messenger (BBM) and various corporate VoIP/UC products.

Taken together, these mean that innovation - and fragmentation - of communications products has accelerated. Companies like Viber and WhatsApp have been able to emerge with tiny amounts of funding, creating improvements on legacy standardised alternatives, and benefiting from viral adoption and social media word-of-mouth. Even if a new standardised service is temporarily popular, it will need to "run just to stand still" as otherwise users will churn to newer, cooler alternatives.

The user appeal of "silo" services

Thegenerally-accepted assumption in the telecoms industry is that end users alwayswant ubiquity. Services need to work everywhere, on every platform, for everyuser. Isolated or proprietary “islands” are seen as impediments. Ideally,services are standardised and adopted by all operators. Stories abound of howSMS only “took off” after it become possible to send messages across networks, or how "everyone just wants to pick up the phone and call someone".

But this assumptionneeds closer scrutiny. Users do indeed want someservices that work over all accessnetworks but they also seem to be happy to tolerate access-neutral service islands – even where there are otherconstraints such as lock-in to specific device platforms.

Experience seems toprove that users are willing to tolerate (or embrace) fragmentation inmessaging in particular – many see it as a benefit, in compartmentalising theirgroups and slightly-different modes of engagement. Users seem entirely at easehaving multiple IM and email accounts, SMS/IMS, Twitter, Facebook, BBM and soforth. Disruptive Analysis believes that the same will happen with voicecapabilities – they will fragment and multiply, absorbed into multipleapplications and web services, rather than just being “phone calls”. Apple’sSiri is a good example of this.

The population is getting much better atmulti-tasking and segmenting its communications experience. Many users havemultiple IM addresses, logins, devices, numbers and other identifiers. Despitethe industry bodies crying wolf about the dangers of losing ubiquity (or trying to converge the various apps with aggregation layers), this isnot a "tragedy of the commons" scenario.

Fragmentation often addsvalue and consumer utility, rather than reduces it.

Customers seem highly ableto find the application(s) which precisely fit their needs and price/qualitypoints, even if they don’t have the same level of ubiquity and interoperabilityseen in the traditional telco world. In some cases (eg BlackBerry Messenger), alack of ubiquity has counter-intuitively been re-framed as desirable exclusivity for example.

In the past, 99% of human "distant" communications has used a few standardised models - telephone calls, SMS, email and so on.

Now, the picture is shifting. For maybe 80% of communications, there are now better or cheaper tools available - especially among closed groups such as friends or employees. "Ubiquitous" services are being downgraded to being just a fallback. If I want to invite 50 friends to a birthday party, I'll send 48 invitations via Facebook, and the other two by SMS to the recalcitrant non-users. Similarly, once in a while I'll make an old-school phone call for a pizza, as the restaurant isn't a "friend" on Facebook or a contact on Skype.

The problem is that for the telcos, the standardised services (old and new) are still expected to be primary channels, not just the secondary option, or lowest-common denominator.

In other words, new services need to be either

The best primary option for a given use-case (& to stay the best through regular updates)
The cheapest fallback as a compromise, when none of the preferred silos works

Why standardisation can do more harm than good

But even if we accept that services like iMessage and QQ will take a good share of the "optimised communications" market, surely it makes sense for the industry to at least try to create new ubiquitous services? Like, to name a couple of examples, RCSe or VoLTE?

On the face of it, that sounds like a smart solution. If it doesn't cost that much to try for a collaborative, standardised solution, then what's the harm in trying?

And that's where the problem lies.

In my view, failed attempts at creating ubiquity may in fact be worse-than-useless. There may be additional damage caused to operators' legacy revenue streams and customer loyalty, above and beyond that which will happen anyway.

For example:

Some new services will be integrated with existing telephony or messaging. If the new experience is poor, then usage of the older services may drop too, and the user may investigate alternatives more thoroughly. For example, mid-2000's phones which put 3G videocalling above telephony in menus caused significant user resentment.
Users may opt for devices that do not feature the new "forced ubiquity" services - for example unlocked $100 Android phones, or Apple devices. They may also "root" or jail-break operator-supplied devices with different software stacks
One or more operators may pull out of the GSMA/3GPP model unilaterally (for services, not underlying network access) leading to a crumbling of traditional models in an unpredictable fashion - perhaps through removing SIMs from the value chain and moving to alternatives (eg Soft-SIM)
Operators may be forced into infrastructure investments that are expensive or cumbersome (eg full IMS implementations). They may also delay investment in LTE or migration of users towards it, while they find alternative voice and messaging solutions.
The time and effort wasted on failed "ubiquity" projects may have impacts beyond the upfront costs. Delay may mean relinquishing other opportunities, a reduction in work to enhance "old" services, and also allow other companies to further overtake the telcos and dictate events and pricing.

The problem is that services designed to work in a ubiquitous fashion often work poorly in a non-ubiquitous context. They're perfect at 100% compliance, useful at 90%, OK at 80%....but then below that, they rapidly become a liability, especially if they get in the user's way in the device UI. At 70% "ubiquity", the chance of any two users having the capability is 49%.

Conversely, services designed as silos typically have mechanisms to cope with that fact. They have sophisticated "invitation" mechanisms, APIs for importing and exporting communications if needed (eg SkypeOut / SkypeIn), or are intended for specific niches and communities. Their makers expect them to exist in a convoluted world - and even Facebook and Google aren't arrogant enough to prohibit their apps from being deleted or uninstalled.

Why RCS & VoLTE may hasten the demise of the traditional operator model

In two weeks' time, MWC will launch a huge upsurge of talk about the GSMA's favoured RCSe and VoLTE programmes. We might even get the long-delayed launch of the Spanish RCSe service, rumoured to be called Joyn.

For the reasons above, I think that RCSe in particular is one of the most damaging and divisive services that the telcos and their vendors have proposed. It is a huge and unnecessary distraction at precisely the wrong time. It has numerous flaws in design and conception, and in any case will have (at best) patchy acceptance by vendors. It is too little, too late, and in the wrong direction anyway. The industry can't even decide if it's supposed to compete with Internet-OTT players or complement them.

Worse, theapproach by the GSMA is somewhere between strident and delusional, with a side-order of bullying.The mantra of "it's just there, it just works" has been trumpeted loud and long, but is entirely the wrong concept. There is a transparent attempt to pitch RCSe as a "fait accompli" in the hope that more operators will sign up, for fear of being left behind.

That approach can most charitably be described as "fake it 'till you make it"

Firstly, it isn't "just there" on all devices - the iPhone implementation will be app-based as Apple is unsurprisingly unwilling to implement it natively, as it would compete with its own communications products such as iMessage and FaceTime. It's unlikely to be in the native Android stack but implemented by OEMs on certain specific phones. Its relationship with RIM and Microsoft remains unclear (especially its fit with/against BBM and MSN/Skype), and it seems improbable that "vanilla" featurephones for the prepay market will integrate all the software, unless the manufacturers are convinced it will sell more devices. Even Samsung, a supporter, will have to position RCSe carefully against its own ChatON service.

In addition, the attempts to strong-arm manufacturers by getting handset certification rules changed at the GCF, or specifications adopted at OMA, look like a triumph of power over consumer demand and "ecosystem good practice". Such moves appear Machiavellian - they put the "cart before the horse". When/if RCSe has proven itself to be liked by users and successful, then it is the time to entrench and optimise it.

Worse, the effort to embed RCS capabilities low-down in the device "stack" will make it difficult to update (or bug-fix), and possibly unable to be deleted or removed by users if they decide they don't like it. Keeping a disliked and possibly invasive feature front-and-centre on a phone is a good way to breed user disloyalty.

VoLTE is a bit different and will probably emerge to the market in some usable form - but likely later than anticipated and only by some operators for some users. Also, the timelines are a bit different - it won't be deployed (in most cases) until LTE coverage is good enough, while the SR-VCC mechanism for handoff to circuit-calls has only just been lab-tested. By that time, it should be apparent to all that phones will have multiple voice services (not just telephony) and so hopefully it will be implemented to be a "good citizen" in the company of various other apps.

There is also much less rhetoric about VoLTE being "ubiquitous" - except in some vague, "middle of the 2020's utopia" sort of fashion. Apart from anything else, the telcos know that it will have to coexist with 2G and 3G circuit-only phones, as well as various flavours of VoIP. That said, if early implementations are problematic (eg poor voice quality or battery life) they will hand the battle to Microsoft/Skype or perhaps one of the new Telco-OTT alternatives. But that is a different issue to the "forced ubiquity" weaknesses of RCSe

What can be done by operators about communications services?

On a recent call with an operator strategist, a point was made to me that telcos increasingly need to be "portfolio managers" rather than being focused on traditional single-product metrics. This is absolutely the case for next-gen communications services around voice and messaging (and also video).

The winners in this space will be the ones which acknowledge that they are not the only game in town, and which aim to gain traction gradually, and alongside others, pulled along by users actually liking the service and its ongoing iterations. Designing and solidifying a platform technology, before getting real customer feedback on early service implementations is foolhardy.

Designing the mobile IMS architecture before services like RSCe and VoLTE get wide user acceptance is a 1970s-era view of telecom service development. RCSe should have been designed as an OTT-style service first and then when it met user demands (and was embraced enthusiastically), it could have been "platformised" later. Given that there are various RCSe-type OTT options (eg Metaswitch Thrutu) it is perhaps not too late.

The GSMA and the G5 operators urgently need to drop the claim to ubiquity for RCSe, ideally before Barcelona. Facebook's 400m+ mobile users make them look foolish - if reach is the critical indicator of success, they have already lost the battle. The claim in various RCS slide-decks that it's somehow difficult to to install 3rd-party services is even more risible: it's much easier than going to a shop to buy a new RCSe-capable phone, while the operators themselves will be depending on that much-derided model for iPhones and existing Androids.

Even "it's just there" is empty rhetoric, when even prepay SIM cards can work out-of-the-box with OTT services like BBM, while it clearly won't be "just there" on iPhones at least, and probably many other devices. And let's wait to see how RCSe actually operates in the user's hands before we claim "it just works....", when we know if the fourth word is "well" or "badly". If it's the latter, it will do the operators more harm than good.

My view is that proponents of RCSe should forget about "ubiquity" as a driver, and instead focus on specific niches or use-cases, and evolve the service over time based on user feedback. Because this may be country-specific, it should also move away from the multi-operator interoperability model, and towards a Telco-OTT basis. It may be that Vodafone does something clever with RCSe implementations that Orange does not. It could be that we each end up with three or four different RCSe-OTT apps on our devices if they're done well.

Operators should be thinking about specific use cases and service "look and feel". They should absolutely have a long-term aim to launch services that could reach a billion people or more eventually, but should not try and leap straight there on the first iteration. They need to adopt Google's approach and try services like Wave, Buzz and Google+ and be prepared to kill them and move on if they don't work.

Creating binary "unkillable" services that can only ever be ubiquitous or entirely absent is an existential mistake. Given what's going on in the industry, trying to create "forced ubiquity" will likely accelerate the movement towards "total absence".

Economists might want to think about an unfortunate parallel here, with attempts to force a certain "ubiquitous" currency on a diverse group of nations, leading to a possible "disorderly breakup" when one defaults on its debts, with "contagion" taking down the other dominos via "interoperable" holdings of debt by banks.

When the first major operator "defaults" on the 3GPP/GSMA world-view, the outcome will not be pretty either.

So for telecoms, ubiquity is dead from here onwards. Even if RCSe miraculously succeeds, its most optimistic destiny is to become the lowest-common denominator fallback when nothing else better is available. The sooner telcos, their vendors and the GSMA admit it, and embrace fragmentation and flexibility, the sooner they can hope to recreate their role as services providers of choice.

Whether operators partner with Internet companies or each other, acquire promising Internet startups (eg Viber, Tumblr, WhatsApp, Pinger, Path, Yammer etc), or build their own Telco-OTT services from the ground up, an acceptance of "communications diversity" is a non-negotiable starting point.

They need to find best-of-breed communications apps, because the value is going to shift permanently. "Ubiquity" = "lowest common denominator" = "minimal value".

(Disruptive Analysis has recently published a report on Telco-OTT Strategies. Click here for more details)

There will be a pushback against user profiling, big data & analytics

2012-02-08T08:37:00.000Z

When it comes to Internet or telecom companies and personal data and privacy, I think there are two classes of abusive behaviour that tend to annoy end-users:

Revealing specific data-points without permission
Over-analysis of user behaviour during longer periods of time

The first class is more "obvious" - we've seen outcries about abuses from companies such as Google (with its WiFi logging and Google Streetmap content), Telefonica O2 (revealing phone numbers to websites during mobile browsing) and Carrier IQ (logging all on-handset activity).

But the second type is more insidious, yet leaves many people with a sense of unease. Just how much does Facebook know about you? What can Vodafone or AT&T or Etisalat deduce from your mobile phone usage - and link to your billing/registration details? What exactly are the "dark sides" of Google new privacy policy as it integrates its various personal datasets

Of course, this worry isn't confined to telecom and Internet companies. Both Microsoft and Apple probably see more of our behaviour than we feel comfortable with. And, obviously, governmental scrutiny extends to both instantaneous activity (eg CCTV, passport checks) and longer-term analytical capabilities.

Many libertarians rightly dislike the idea of governments joining the dots & connecting various datasets about citizens. The state should fear the people, not the other way around.

The same is true of online and telecoms user data as well. It needs to be collected to *serve* end-users, not creepily over-analyse them for the purpose of selling advertising, or attempting to up-sell them. I always have a sense of unease when I speak to a OSS/BSS companies that try to predict when customers are about to churn through service usage analytics, for example. I don't want to have my intentions inferred, especially by companies I'm paying money to. It's slightly different for Facebook, where I am consciously aware that I am "the product", as it's a free service.

Now some companies seem to use analytics responsibly - they're open about it, and demonstrate how it offers value. Amazon's recommendations are pretty useful, for example - and moreover, they are not intrusive (this is critical). Conversely, many mobile operators know exactly where they have coverage gaps, from their RAN analytics, but do nothing to plug the holes (some get the same data from their social media analytics & ignore that too).

Either way, we are likely to see more abuses (and also more useful instances as well). Both telecom companies and Internet players are acquiring more and more personal data - and are aggressively expanding their analytics capabilities. I'd expect "big data" to be a big deal at MWC.

However, I sense a mounting push-back against privacy invasion and over-analysis. We already see regular outcries about Facebook's fluid and questionable privacy policy and website tactics. Disgruntled people use that very same service (as well as Twitter and others) to complain vociferously - and have succeeded in getting changes made rapidly by the company. CarrierIQ fell before the lynch-mob of social media too - and O2 shut down its phone-number exposure within hours after a concerted online campaign.

I expect we'll see more of that type of thing... but I also think we'll see a fightback about on the analytics front too. I'm expecting to see a steady rise of behaviours and software tools that deliberately set out to undermine oveer-analysis of customer data, especially where there is low transparency, or the value accrues disproportionately to the company rather than user.

We'll see software plug-ins that log you out of Google automatically unless you're specifically searching or using gmail.com. We'll see obfuscatory smartphone apps that send "spare" bundled SMS
to random (well, actually pre-agreed) numbers. We might get easier or automated ways to switch off the cellular radio to avoid location tracking. We'll get software layers that make it easier to manage multiple Facebook accounts. We may get ways to share or pool "identities" - if necessary with record-keeping to keep law enforcement happy. We'll get browsers that generate random traffic & go to random websites to minimise any profiling from the likes of Phorm.

You get the idea. There is a built-in negative feedback loop with customer data and analytics. If the "market" perceives that over-analysis of "big data" is a danger, then there will be a concerted effort to pollute those datasets, made ever easier by social media, HTML5 and smartphones apps. The interesting thing is that this trend will apply equally to telcos and Internet companies.

An update on @DApremium - the world's first paid Twitter channel. Now available with quarterly or annual subscriptions

2012-02-01T21:02:00.001Z

It's now been six weeks since I announced the launch of @DApremium, my second Twitter stream - one which is available only to paid subscribers. (The original announcement with the background of the disruptive and ground-breaking concept is here).

Since then, I've added 173 tweets to @DApremium, and signed up a couple of dozen followers; a mix of standalone paying Tweet-stream subscribers, and those who have obtained access bundled with purchasing the new Telco-OTT Strategy Report, or various consulting engagements.

Firstly, it has been pretty exciting to see an entirely new business model come to life. I had a number of people express doubt that anyone would pay for Twitter access - and given my normal cynicism about many social media "innovations" (and my historic Twitterphobic stance) I can't really blame them. Nevertheless, it's been very edifying to prove them wrong.

It's also been interesting that other people have been watching the progress closely - my Future of Communications associate Martin Geddes tweeted the other day that he may follow suit, and a couple of my analyst peers have also asked about progress, when I've bumped into them. A few watchers of general social media trends also appear to have taken an interest. I'd love others to follow my lead here, as it would further validate the concept and give encouragement to more people to subscribe as a mainstream alternative to newsletters or other premium analyst content formats.

I've now got a good feel for how the Premium-Tweet concept should work going forward, both in terms of content and sign-up process. I think I've got the balance right between my normal free-to-air @disruptivedean posts, and the paid-for content. The paid tweets include my real "ah-hah!" insights and epiphanies, as well as more company-specific commentary.

This is a selection of recent paid Tweets:

1. Virtualisation of core IP infrastructure may be the answer to wholesale LTE mobile networks - have various network nodes as multi-tenant

2. Cisco's Videoscape + soft client architecture is an enabler for #TelcoOTT video services (eg telco buys football rights, sells/streams OTT)

3. Bundling SMS plan with data plan may stem short-term SMS rev erosion. But "forced bundles" cause customer resentment if low perceived value

4. Many telcos reporting results soon. Will be embarassing if vendor slides at MWC still show "scissor diagram" if data rev growth > volumes

5. For #RCSe to be taken seriously as a developer platform, G5 operators need to show it working for own major IT systems eg customer support

6. Microsoft more likely to acquire RIM than Nokia IMO. Easier integration Seattle-Waterloo & US Gov will much prefer NAm buyer for RIM

7. Think about your personal spend on voice/telephony. What % would you ascribe to the utility of true "moving about" element of mobility?

8. If Net Neutrality laws modified to permit "premium" QoS for certain services, strong argument that must be available non-discriminatorily

9. There's a strong argument for 3GPP to be broken up into radio, core & application bodies. Integration was synergistic, now its a liability

10. Discussion on LinkedIn VoLTE group asserts it is an "open" standard. Open? But biz model is closed: subs, SIMs, IMS, roaming etc.

Going forward, I am going to be putting the majority of my "event" tweets on the premium channel - notably from MWC - although I'll be keeping the items that should drive open discussions & debate on @disruptivedean. It's still too early to know how the "community" aspect will evolve on the premium channel - given that there are unlikely to be other analysts or pundits on it, I suspect there won't be as much to-and-fro. But over time, it may shift from a broadcast / newsletter model to one which looks closer to the LinkedIn philosophy. (I might actually set up an LI group anyway).

I'm also closing down the introductory pricing structure, and moving to a new plan. There are now two options: quarterly ($100) or annual ($300) subscriptions. The quarterly option has been added as a way to get a "trial run" for those uncertain about a full year's commitment.

The terms and conditions otherwise remain the same as I'd previously published . One new point though - I'm getting a number of "speculative" follow requests without payment. I'll try to track these down & send a Twitter direct message from @disruptivedean about subscription options, but I will reject the requests after a week if I don't hear anything.

The sign-up process is simple:

1) Pay for 3-month or 12-month subscriptions via credit card or Paypal, below.
2) Access @DApremium on Twitter, and request to follow
3) Send an email to information AT disruptive-analysis.com with relevant VAT details if you opt for the EU VAT-exempt pricing. Also, drop me a note with any particular areas you'd like me to cover when possible.
4) I will authorise the follow-request ASAP, typically within 24 hours of payment, unless I'm travelling somewhere obscure

Many thanks to my original pioneering followers, many of whom have shown an enthusiastic interest in the business model as well as the content. I look forward to having valuable online and offline discussions with a larger community of participants in future. (I'm also interested in discussions about extending the general notion of paid/disruptive social and community models for analysis - get in touch if you've got a neat business idea I might find valuable).
If for some reason this doesn't work (sometimes PayPal can be a bit flaky), contact me via information AT disruptive-analysis DOT com and I can issue an invoice or payment email request.

You may want to send me an email anyway, or add me on LinkedIn so I can get to know my community a bit better. If you're an existing Disruptive Analysis client, please let me know and I can give you a complimentary subscription.

BYOD trend means BYOSP (bring your own service provider)... and will driveTelco-OTT services

2012-01-31T14:12:00.000Z

One of the largest trends in enterprise IT right now is “BYOD” – standing for “bring your own device”. This is just a snappy acronym for what’s been happening for a while – employees using their own mobile phones, tablets or other products for work as well as in their personal life. Previously, it was given the less-cool name of “consumerisation of the enterprise”, although pedantically that also implies the use of consumer-grade services (eg Skype) as well as hardware.

BYOD is important for a whole host of reasons relevant to enterprise CIOs and their suppliers – security, management, fit with IT applications and so on. In the past, IT departments would have typically had a proscriptive “Thou shalt use company-approved Device X if thou wisheth to receive support”. Or in other words “Use your BlackBerry or E71 for business email, not your iPhone or Galaxy S”. But over time, the pushback has become more solid – often starting with C-level executives or top staff ignoring those edicts and demanding that IT support their favoured products. It’s a brave IT manager that will tell the CEO or top salesperson that they can’t use their iPad when they’re with clients.

But this post is not about those practical issues – it’s about how this impacts telcos.

The first point is that this potentially doesn’t just mean BYOD – it also implies BYOSP (bring your own service provider). Employees’ own devices, if used for business, are likely to be connected via a broad array of mobile network operators, or if WiFi-only, perhaps no SP at all. This is a completely different model to the idea of a corporate “fleet” of mobile devices all provided by the same company, with a bundled device+SIM deal. Instead, BYOD means that employees will have various SIMs, and various operator-customised versions of phones, plus some that are “vanilla” bought through retail.

This is a major problem for operators that have been trying to develop and sell enterprise mobility applications such as mobile PBX clients, or dedicated middleware for connection to back-end corporate applications. If a company’s IT department now has a mix of users with iOS, Android, Windows and other devices, connecting via Vodafone, O2, Orange and WiFi, it makes it much less likely that they will want (say) Vodafone OneNet or an Orange VPN client .

Instead, they will want applications that can work on any device (and OS/firmware build), running on any network. In other words, OTT-style functions using generic data connectivity – probably via the public Internet, but perhaps also via a dedicated connection like BlackBerry’s BES.

If you’re a regular reader of the blog, you can probably see what’s coming next:

If mobile operators seriously want to offer advanced mobile enterprise services, they are going to need to run them over their competitors’ networks, at least part of the time. Maybe they will be better when integrated with their own optimised device and network, but to reach the BYOD community they will need to push towards an OTT model themselves.

MNO services + BYOD + WiFi-only devices = mandatory Telco-OTT

That, needless to say, is easy neither for operators to accept, nor execute upon. Yet it will be essential, unless operators want to confine their enterprise exposure to the dwindling group of corporate-provided homogenous fleets of users.

This is one of the themes covered in Disruptive Analysis’ new report on Telco-OTT Strategies. If you're interested, contact information AT disruptive-analysis DOT com

Telco-OTT Strategies report now published

2012-01-26T22:56:00.001Z

The report is now available.

135 pages
88 operator services mentioned
4 service categories

Content, video & portals
Communications, social & identity
Corporate & cloud
Connectivity

Comprehensive discussion of what "Telco-OTT" means, why it's inevitable, and key success factors for making it work. Covers everything from VoIP to femtocells to SaaS to IP-VPNs to portals to IPTV-anywhere.

For full details or to order via PO/invoice, please email:
information AT disruptive-analysis DOT com

Or to purchase immediately by credit card or Paypal, please select licence option (1-3 users, or corporate) and click the links below. The report will be emailed as a PDF, wherever posssible within 24 hours.

Peak Telephony - why voice has to be about more than phone calls

2012-01-24T22:57:00.001Z

This thread is from my Facebook page. The original poster is a 23yo friend, others range up to about 40-45yo. I thought it was worth a post as it highlights the reason why re-organising a trillion-dollar industry about something as near-obsolete as the 100-year old "phone call" is so dangerous.

[Note: I don't know "Samuel" who defends the phone call, but by an interesting coincidence there's someone on LinkedIn who's a "technology analyst" with the same age & academic background].

Ruth: Am I alone in really not liking talking on the phone? Or am I a bit weird? It's just that someone phoning you on a mobile is a bit like someone leaping into the middle of your room yelling "Talk to me! Drop everything you are doing and talk to me RIGHT NOW! Talk to me!"

Samuel: No different to a Facebook update

Scott: I like voicemail. My phone is for me to talk to people when i want to. Not for them to bug me at their leisure.

Ruth: Totally is, and to a text message. Those I can ignore and deal with at my leisure.

Matt: ‎*nods* Asynchronous communication FTW!

Samuel: You can ignore the phone call too. No-one is making you answer it, it's just that the alert is a little longer. You obtain and deal with the information at a later date, just like with a text, except that rather than opening, reading and replying to a text, you're calling, listening and replying to a contact. Or opening, listening to a voicemail, and then calling back.

Dan: I totally agree with your aversion to phone calls. I used to think it was all talking to someone and not being able to see their expression but now I realise it's the inherent guilt that I'm busy doing something else at the same time as talking. Somehow it's fine to chat to someone face to face but it's impossible to talk on the phone without needing something else to do. Which is why Skype is evil - they can see what you are doing!!

Ruth: Sam, on a day when I am clearly very irritable anyway, do you have to make everything an argument? I was clearly just asking for a little light moral support for my stance, not a serious debate.

Fleur: Totally agree. People should ask for permission by text or email before calling.

Alex: I HATE talking to people on the phone. I can't see their expressions, and my own voice sounds so droning, and my gesticulations are wasted, and I get distracted so easily and my eye wanders to a book or something and then I lose track of the conversation and get flustered, and the horrible nagging ring just breaks in on life demanding to be heard, usually when I'm busy. Aaargh. I can talk to close family (who I can read even without expressions) while walking at night when there's not a lot to see or in Camden where there's a lot I don't want to see, but beyond that, ugh. I usually leave my phone off, or 'forget' to charge it, or 'mislay' it. Currently, I'm not entirely sure where it is, and suspect that it may be out of charge.

Ruth: I wish I could do that with my phone but it's also my texting device and I'm a very happy and regular texter. Is there a way to just "accidentally" turn off the phone part of an iphone? But not leave it permanently unserviceable in case I need to phone utilities to yell at them or etcetera (which rules out just smashing the microphone unfortunately)

800+ providers of telephony services in a shrinking market? Consolidation to Telco-OTT, not federation, is the answer

2012-01-21T12:56:00.000Z

Every telco, fixed or mobile, operates its own telephony service. Some operate two or more - either with separate enterprise platforms, IMS (mostly fixed, but VoLTE for some in the future), or OTT-style VoIP.

This is ridiculous.

The conventional telephony market is peaking, and in various areas declining. Apart from emerging markets with new users, even mobile telephony is reducing in price and popularity, as people switch to messaging or in some cases Internet-based VoIP alternatives. Pricing regulation, and accounting changes, are also driving down the measured market size.

Yes, we see some consolidation in terms of networks for various reasons, but really, given that data use is growing and voice telephony is falling, it makes sense to decouple them. Telephony service consolidation is massively overdue, and has been hampered by legacy constraints about numbering, interconnect, roaming and so forth. Some of those constraints are regulatory, and some are about commercial inertia.

The advent of Skype and its peers is changing this. Skype is taking over a significant share of the most "open" part of the market, international direct-dial calls. That's a good and easy starting point, because pricing is egregiously-high, and most calls are from fixed locations, but there is much more to come.

The current "federation" model where each network owner runs its own voice service and they interconnect is a quirky legacy. The telecoms "establishment" would have you believe that on-net telephony will always be the highest quality. But the QoS argument is a red herring on at least two counts:

Customers pay the highest prices for the lowest QoS guarantee - when roaming, where your home operator has very little visibility or control over the quality of the visited network.
Continued insistence by operators and vendors that (if Net Neutrality laws were permitted) they could offer guaranteed QoS to third party providers such as Skype.

If you take the latter point to its logical conclusion, it suggests that, ironically, Net Neutrality is the only thing that allows operators' own telephony services to differentiate quality from third parties'. Today, the only voice service that most operators are allowed to optimise is their own.

If you stop to think about it, the economics are ridiculous. maybe 1000 global companies each offer the same simple service, locally, with expensive equipment, which could easily be centralised or redesigned with different architectures. That is 1000 providers of a flat or declining "electronic" service. They typically tie the "phone service" to other products like Internet access or TV. Ten years ago, there were probably 1000 global mid-size retail chains of booksellers.

Even in banking and finance (a traditional national-oriented industry), we see cross-border acquisitions and centralised functions. We have centralised currency trading hubs, rather than each country having its own marketplace.

I recently flew between Singapore and London on Qantas, the Australian airline, quite literally "over the top" of both places. There's no mandate that anyone walking into (accessing) Changi Airport only uses Singapore Airlines.

In future, it will be ridiculous to suggest that anyone using AT&T or Vodafone's network can only use their telephony services. Obviously in fixed networks, various models of unbundling have been possible for years, and that will make similar logical sense in mobile as well. Either QoS mechanisms will be good enough to allow "managed" third-party access, or VoIP software will be good enough not to need it.

Looking ahead, I expect to see massive consolidation in the provision of basic commodity telephony services. The GSMA/ITU view that each network operator should have its own telephony service is an anachronistic, obsolete picture. We may well see innovative "non-telephony" voice services tailored to particular demographics, geographies or customer bases, but basic "Person A calls Person B for 5 minutes" will surely see aggregation.

We will also see some telephony move away from being a "service" altogether - speech will be a feature of the web, with spoken forms of words essentially little different to italic or bold. HTML5 and WebRTC are already starting that next phase of development. Some telephony will just become a mere feature or function of browsers or apps, rather than a third-party administered "service".

I predict that maybe 3-5 global players will dominate in "telephony services" by 2020, plus perhaps some regional or country-specific companies, for example if regulations are limiting factors in market evolution. There will also be some low-end vertically-integrated operators that just run 2G or 3G networks, for which 3rd-party telephony service is a more complex proposition - but even there, much of their back-end infrastructure is likely to be provided wholesale, by a company with more scale.

The obvious contenders from today's perspective are Microsoft/Skype, Google and maybe Facebook or Apple. Maybe also an infrastructure UTF player such as Ericsson or Huawei, offering their own direct-to-consumer voice services, hollowing out operators or just using them as a wholesale channel. Other newcomers like Viber or Vox.io might also spring from nowhere, with innovative approaches garnering massive support almost overnight.

But telcos could still have a role to play, if (and only if) some of them break free from the shackles of linking access and telephony service, ignore new "one-deployment-per-network-operator" blind alleys like VoLTE, and emulate the new winners.

In my view, there is scope for a few telcos to become Tier-1 Global telephony players in 2020, after the market has consolidated massively. Those that win will be those that become proficient and successful at what I term "Telco-OTT" forms of voice service.

The current industry trajectory, of international operator groups sharing some core-network and application-layer infrastructure gives some scale benefits, but not enough. It lacks the "viral" nature of the best Internet-OTT players, which can capture users' minds, hearts and wallets, irrespective of their access providers.

The federation model can never win again - it is too slow-moving and bureaucratic, and cannot evolve services fast enough to keep up with the needs and whims of today's fickle communications users. The tired "ubiquity" argument is one which Facebook, with close to a billion users, and Google, with probably 2 billion+, have already won. There are close parallels between today's telephony and 2001's email market.

So, there will likely only be 1 or 2 telcos with major revenues from "vanilla" telephony in 2020.

And the real value will come from additional services, perhaps based around innovative voice and messaging concepts. Apple is showing the way here, with Siri. Microsoft may well do something clever with Skype and its other properties like Kinect or XBox. Google might do real-time translation in the cloud. Facebook might do some clever form of "social voice". None of those would work in "federated mode", based on the legacy telecom interconnect/standards worldview.

The Telco Telephony winners in 2020 will not only be those who can implement "Telco-OTT", but also those with a true vision of the "Future of Voice" that goes beyond just protecting the 100-year accident of linking phone service to network access.

Disruptive Analysis' new strategy report on Telco-OTT Services & Strategies is out next week.

For details, email information AT disruptive-analysis DOT com, or see my pre-announcement blog post here.

2012 Winners and Losers

2011-12-18T11:04:00.000Z

It's time for the annual merry-go-round of analyst predictions, and so I'll thrown my hat into the ring as usual. Some of these will come as "no surprise" to my regular readers & clients, others represent a bit of a change of stance.

I'm hideously busy before I head off for the holidays, so I'm afraid these are just bullet points. More detail & explanation will crop up here over time, or on my new subscription @DApremium Twitter channel.

Winners:

Telco OTT services & business models This won't surprise many regular readers as it's a theme I've talked about for many years. It's a complex and nuanced area though, and we'll see as many failures as successes, if not more. Nevertheless, trial & experimentation are essential "you have to be in it, to win it"
Loyalty business models for telcos - I think much of the future revenue growth opportunity for operators comes from clever pricing and marketing, assisted by network technology where needed. "Top up your account by $10+ by Wednesday and get a free 20MB of data and a discounted movie ticket".
Charging/billing related policy engines - the key enabler of loyalty schemes and other similar offers. The policy "intelligence" will primarily reside in the IT side of the operator, with enforcement on the network side. We'll also see on-device policy clients extending beyond today's simple dashboard / quota apps.
Enhanced telephony & SMS services or functions - Making existing 20-100 year old services better should be prioritised above creating new ones. So-called HD voice is a start, but it's shameful that the industry abdicated its responsibility and to let Apple create Visual Voicemail and Siri, or Palm and others developed threaded SMS. Unfortunately, the obsession with standards and interoperability seems to stop the telco industry itself from improving the user experience of basic functions.
Non-seamless operator wifi (offload, onload & other models). "Frictionless" will be a particular winner, not "seamless" (ie user will remain in control most or all of the time). A regular topic of mine: see various blog posts and this white paper I wrote on Carrier WiFi.
iPads & Kindle Fires as complementary devices - OK, I'll admit I was unduly pessimistic about the impact of the iPad when it first launched. However, I still see it largely as an *extra* device for people rather than a substitute. I still don't buy this "post PC era" rhetoric. Netbooks were extra devices too, sold to people wanting a cheap portable second computing device - and iPads fit in the same category, with added coolness and new use-cases. I see the Fire as doing something similar - it looks like something new and fun, but again is incremental not substitutive.
Microsoft & Nokia smartphones - I'll take a flyer on this and say that I expect MicroNokia to be a surprise success, although I think the buyout rumours are bunk. That said, it's critical we see continued developer traction - my main reason for not getting a Lumia at the moment is lack of support for some critical apps for me (BTFon for WiFi, Onavo for roaming data-saving, not sure if the Barclays London bike hire scheme has one yet)
Mobile broadband data plans based on speed, location, time, device & user - all of these criteria can be determined accurately and easily (unlike application type). Ever more sophisticated pricing plans will be developed around them, supported by realtime information about network congestion, and perhaps ways to offer "happy hours" or similar.
On-device network-intelligence for connectivity, policy & control (including both telco-driven innovations & more user-centric apps). Another theme of mine recently: trying to manage the network just from the core won't work - there needs to be intelligence out at the real edge to understand what's going on. Trying to guess about "video optimisation" when you don't even know if the user is watching a foreground player, or downloading in a hidden window makes no sense, for example. To know, you need footprint on the phone. Same deal with managing WiFi access and maybe policy in accordance with user wishes & expectations
Consent-based mobile video delivery eg based on Operator CDNs, adaptive bitrate streaming & close cooperation with video publishers. Where the operator works directly with a content company, they get "consent" to reformat or otherwise manage a video stream. That is going to be much more acceptable than trying to use boxes in the network to "optimise" it without permission or transparency. I wrote about the idea here (and comments) and I spoke about this at a conference recently - watch for an upcoming white paper.
Wholesale 3G / 4G networks - yes, LightSquared has problems with GPS. But the general model of wholesale-centric LTE networks is a very strong one. Depending on the market, some will see disruptor new entrants, some will see government intervention, and others may see existing tier-2/3 operators opt for structural separation.
Freemium Twitter / LinkedIn business models for analysts, consultants & other professional services companies. Sooner or later, someone clever is going to find a way to make money out of Twitter *coughs modestly*

Losers:

RCSe - It was dead. It's now still dead, but shambling around like a zombie. I'm hoping to publish a report shaped like a wooden stake during 2012.
NFC payments - classic case of a solution looking for a problem, with the added bonus of squabbling over who controls the wreckage. Massively overhpyed.
QR codes - They're everywhere it seems. But have you ever actually seen somebody use one in public? Just give me the URL: I'm not going to "engage" with your marketing until *I* decide to.
LTE in Europe - Spectrum, devices, voice, business case. Oh and flattening demand for data as well.
SMS revenues - they've been a sitting duck for years. 20 years ago, sending 160 characters of text was quite a feat. Now, not so much. I expect massive price erosion (even within bundles) as a response to the continued viral adoption of iMessage, BBM, WhatsApp & whatever 2012 brings us.

Cellular-enabled tablets - Poor fit of subscription "data plan" model with computing devices that tend to get used in unpredictable and ad-hoc fashion, often in places with WiFi anyway. And in the idea that you'd be happy to let an operator policy-manage your computing/Internet experience, and you've got a recipe for disaster. I told you so, 3 years ago.
Telco control of user identity - I think the idea of SIM=identity will break down irretrievably in the next 24 months. Operators *do* have a role to play in ID and authentication, but it needs to be much more nuanced and user-centric. Some of the stuff that my associates at Telco 2.0 are doing with the World Economic Forum is interesting, but the industry still has too much of an arrogant belief that it can "own" more customer knowledge than it will get in practice.
App-based policy control & charging - Another familiar theme of mine. The network doesn't see apps the way that users do. HTML5 makes the problem even worse - how do you charge for "Facebook" when there's 800m different versions, created on the fly in the server?
Eurozone-exposed telecom companies - I'm not an economist, but delving into the topic with Telco 2.0 for a recent paper made me realise some of the problems that next year might bring. Hopefully I won't be writing the 2013 predictions from a cave, looking at the smouldering ruins of civilisation. All things considered though, I'm quite glad to be living and working this side of the Channel, despite the Monty-Python inspired taunting from our friends in Paris.
ANDSF, IFOM, I-WLAN & seamless wifi offload - There's some good stuff in ANDSF (eg advising the user which WiFi access point is best), but it's a bit buried in the general belief that operators can control users' WiFi overall, forcing connectivity and enforcing policy. They can't, expect in a few corner-case instances. Attempting over-control will backfire: telcos can either control 30% of user WiFi, or zero. I suspect they'll aim for 100%, and the push-back will mean they'll get zero.
Operator API balance-of-payments vs. Internet companies - Telcos are still pushing "capability exposure" via initiatives like OneAPI and Telefonica's commendable BlueVia project. But they're still not doing the right APIs in many cases (eg "does the user have a suitable data plan?", or "does the user have good coverage & network speeds?"). Meanwhile, Google, Facebook and others are starting to charge for bulk access to *their* APIs: telcos are often major users. Result: the net API balance of payments won't be pretty.
Full mobile network outsourcing to "under the floor" players - another theme I've talked about for a while: in some cases, vendors' "UTF" managed services offers are larger strategic threats to telco business models than so-called "OTT" providers. Loss of control over the network might mean Opex savings, but it introduces massive opportunity costs from lower flexibility. Conference presentation here - and watch for an upcoming report I've written for Telco 2.0 on the subject.

Questionmarks

NFC non-payment applications - interactions, not transactions. More likelihood of success, as it could be driven by a million developers doing cool new things, rather than people wanting a slice of transaction values. But dependent on Apple actually launching NFC as a catalyst, mostly.
Mobile VoIP as a telephony replacement - we're getting closer, but we're still not *quite* there yet. Still issues with data network coverage, user interaction, numbering, ringing and so forth. Maybe we'll get the real viral trigger in 2012. Hear the issues in more depth at a Future of Voice workshop (and sign up for the newsletter!)
Operator reported "voice" revenues - driven more by price bundling & accounting than VoIP at this stage. Some of the recent discussions I've had suggest that operator execs think they're inevitably losing the voice revenue battle. Add in some dry-but-important accounting changes and they're probably right.
Development of simultaneous dual-radio LTE + GSM/UMTS phones - In my view, a sensible alternative to CSFB or VoLTE for LTE voice, but it might be a good idea too late (a bit like VoLGA). See this post & comment stream. One sneaking suspicion - the first such device might be a TD-LTE / GSM phone as I suspect that we're a long way behind implementing both CSFB and VoLTE on TDD networks.
Android tablets - can't see the point really, unless you get something much cheaper and more interesting like the Kindle Fire.
Blackberry resurgence/demise - 2011 as been an awful year for RIM. A big outage. Storm over encryption. The PlayBook is a cool device lacking an essential capability (email). It hasn't capitalised on its BBM franchise well enough either and is being "outcooled" in its core teenage market, while being sidelined by BYOD policies in its legacy enterprise customers. Can it survive 2012 as an independent? I'm a lot more pessimistic now than a year ago. Clearly some organisational issues to deal with, but at least it's actually still making some profit.
Possible network overcapacity as "data explosion" fizzles out - Let's watch the stats over the next 6 months. I've a feeling that the Cisco VNI numbers have created a self-denying prophesy - the industry has developed 20+ solutions to the "data explosion" problem, and it seems that at least 10 have worked - perhaps too well.
HTML5 impact on mobile networks if (& that's a big if) web apps take over from downloaded apps. Nobody seems to have thought about signalling, overall traffic load etc. I spoke about this at a recent Telco 2.0 event in Singapore, and I'm writing a research note for them for early 2012.

I hope you've found this interesting & thought-provoking. As always, I'd love to hear your opinions or disagreements on any of this.

I'd also like to suggest that you challenge your own company - I do numerous workshops and advisory projects for operators, investors and vendors on "Disruption". Some of this focuses on individual issues mentioned here (eg "What's the negative story around RCSe?"), while sometimes I'm asked for an across-the-board wake-up call to provoke thought and discussion. Please get in touch via information AT disruptive-analysis DOT com.

New! Disruptive Analysis Premium Twitter subscription stream @DApremium - sign up today at an introductory promotional rate

2011-12-14T18:59:00.001Z

What am I doing?

I am launching the first analyst paid channel for Twitter: a subscription for "premium" exclusive tweets of my analysis, opinion and market observations.

Why am I doing this?

I've been using Twitter for over a year and a half, posting as @disruptivedean. I was a hold-out for a long time before grudgingly signing up. Although I've got a fairly good "reach" from it, I've been vocal in criticising it. I'd much prefer to just use something more useful like LinkedIn or Quora for "status" updates and more detailed discussions instead.

But unfortunately, Twitter is like tax - as an analyst, you have to grit your teeth and do it, painful, time-consuming and distasteful as it is. I end up spending time on Twitter that could be more profitably spent writing posts on this blog, advising clients or taking briefings. It adds cost, but brings little in the way of value or revenue.

There's a temporary warm feeling of "being part of something", and some undeniable self-validation in counting followers. But that's emotion, not business (and I don't use Twitter for my personal life).

One of the problems is that the main beneficiaries of Twitter are the Fourth Estate - journalists, and their digital equivalents and entourage: bloggers [no, I'm not one], PRs, marketing folk and analyst relations people. It does a lot of their job for them. Unsurprisingly, this group of users then promotes it as being the best thing since sliced bread, since for them, it probably is. As a result, it's become table-stakes, and because I've had to do it, I've tried to do it well.

I spoke recently at an IIAR (Institute of Industry Analyst Relations) debate about social media, and described Twitter's realtime platform as "seductive but irrelevant" to the work of an analyst, with little or no real value.

So today, I'm hoping to change that. To use a telecoms metaphor, I'm "monetising the opinion pipe". I'm launching a premium Twitter channel, open only to paying subscribers or my existing clients. I'm keeping @disruptivedean but adding @DApremium

How will it work?

Ideally, Twitter (or, preferably, one of its better rivals) would have had a ready-made freemium + revshare platform, but at present I'm having to work it out with a mix of "protected" Tweets and offline payment through other channels. Looking about online, it looks like there were a couple of experiments doing paid Twitter streams around 2009, but I'm not aware of anything that currently does what I want.

This is experimental. It's genuinely disruptive. I'm not aware of anyone else doing this successfully. It's possible that Twitter may take a dim view and try & shut it down. Or it's possible that the model becomes more widely successful and I get bragging rights in a couple of years' time, albeit wishing I'd set it up as a software platform instead & sold it for a huge sum.

Clearly, most analyst firms offer various subscription models for their content and advice. This is not something that Disruptive Analysis has not done to date, preferring to use a mix of free content via this blog, as well as standalone published reports, papers and advisory services. A paid subscription Twitter stream, at a low price, fits into the trend towards providing analyst material in short, pithy, concise bursts.

I will maintain this blog at its current frequency, for longer & more analytical pieces. Depending on the response to @DApremium, I may add extra pay-walled material for subscribers in 2012. I'll also keep my free Twitter stream, especially for discussions and interactions, and as a marketing tool.

What's the deal?

So... what does @DApremium offer?

My best insights and discoveries, delivered immediately. My existing blog & Twitter readers will recognise the regular "I told you so" moments. Future epiphanies will be on @DApremium
1000+ exclusive tweets per year (not retweetable, no forwarding allowed)
A bias towards tweets which name & analyse specific vendors / organisations / operators
The bulk of any conference coverage on @DApremium
Answers to specific subscriber questions on @DApremium where feasible
Additional content & benefits for @DApremium subscribers
The ability to interact with a narrower group of high-level industry figures, with a much better "signal to noise" ratio to the open Twitter. In future, may set up a separate forum on LinkedIn or elsewhere for more full debate & longer-format discussions.

(Incidentally, I'm willing to be quoted about @DApremium, as an example of business model innovation in social media, and monetising supposedly free services)

What are some examples?

I only set up @DApremium on 13th December, and I am putting up this page a day later. The first 20 tweets have been (from first to last):

1. The premium Twitter stream of @disruptivedean, exclusively for subscribers & clients. Vendor analysis, event streams, unique insights etc

2. RT @disruptivedean BBC iPlayer 3G streaming approach points to death of non-consensual video optimisation model bbc.in/uufHaA

3. My dislike of Twitter is well known, but if DApremium enables monetisation of the "opinion pipe", I'll admit to seeing the value in it.

4. 2 telcos clearly embracing Telco-OTT concepts most strategically today: Telefonica & Telenor. Most others have smaller tactical activities

5. EverythingEverywhere had 326TB data traffic in last year bit.ly/uTPsFq but 3UK claims 137TB per DAY bit.ly/vcsBKn

6. I know that 3UK has lot of USB dongles & is still unlimited, but find it hard to believe 50x or 100x data traffic of EE. Miscalculation?

7. BBC using HLS adaptive bitrate streaming: self-optimising content. Will be more important than in-network optimisers see.sc/GHBBrI

8. Ah, seems EverythingEverywhere 326TB traffic just applies to the sharing/roaming deal T-Mo/Orange, not "native" data on each network

9. Still a disparity though: 3UK=137TB with 6m subs, EE=maybe 50TB/day with 27m subs. Big difference is down to market share of 3G USB modems

10. Telcos likely to be net losers on API balance-of-trade with Google, Facebook etc. eg GMaps charging coverage checkers see.sc/JtEH3b

11. Trying to work out whether there are actually any real-world implementations LIPA or SIPTO offload standards yet. Some vendor support.

12. Interesting presentation on RCS-e: suggests Spain launch now early 2012, not 2011 after all. Embarassing for GSMA see.sc/c97hGw

13. Congrats 3GPP for saying user WIFi prefs take priority over MNO steering. From OPIIS docs "Solution shall allow UE to override rules"

14. Thinking a lot about impact of HTML5 on networks. Totally kills app-based policy - there could be 200m different versions of Facebook Mobile

15. 2012 is likely to see dampening of NFC hype. Where it happens, it will be driven by non-financial interactions, not transactions or purchase

16. Wondering if the attempt by network depts & 3GPP to "own" online charging infrastr is the most damaging strategic mistake by mobile industry

17. Nokia Lumia devices seem well-received & even selling out in some places. But is that just because nobody had the confidence to order many?

18. Rogers in Canada extending its subs' numbers & voice services over the web via an OTT-style CounterPath platform t.co/igvIaiz

19. Ericsson's slow & grudging embrace of small cells seems to reflect fears over cannibalisation & commoditisation http://see.sc/sAsqoE

20. Uploaded my intro preso on LTE ("A contrarian's view") that I gave at last week's Layer123 LTE/EPC event in London www.scribd.com/doc/75687759

I can send across some more recent tweets via email if you get in contact with me

What does it cost?

Pricing for a new service like this is difficult. There are few benchmarks. Obviously, full analyst subscriptions can cost $10s of thousands per year, but with much more content. Disruptive Analysis' own research reports (such as January's forthcoming Telco-OTT report) vary from $hundreds to $thousands. At the other end of the spectrum, consumers getting a daily horoscope via SMS can cost $140 a year.

Now, I'd like to think that my insight is worth rather more than an astrologist's, even in volume terms - you can expect at least 3x the number of messages per year.

How can I sign up / pay?

Given the relatively small transaction size, I'm hoping that the bulk of subscribers will use credit cards or Paypal.

EDIT 1st Feb 2012: The introductory discount pricing period has now finished.
Please go to the new price-plan page here

If for some reason this doesn't work (sometimes PayPal can be a bit flaky), contact me via information AT disruptive-analysis DOT com and I can issue an invoice or payment email request.

You may want to send me an email anyway, or add me on LinkedIn so I can get to know my community a bit better. If you're an existing Disruptive Analysis client, please let me know and I can give you a complimentary subscription.

If you sign up - thanks for valuing my input, and recognising the value in a new form of analyst interaction & advisory delivery model. I'll share feedback as we go along, and I hope you find the service useful & thought-provoking.

The fine print

A full set of terms & conditions are available on request. Key terms include:

- @DApremium Tweets may not be retweeted, copied/pasted into other Twitter streams, forwarded via email or otherwise distributed.
- Subscriptions are per-user, with the expectation that a maximum of 3 people have access to any individual Twitter account. Corporations [eg company-wide accounts @XYZcorp] will need to contact Disruptive Analysis for access
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Telco-OTT Strategies & Case Studies: Pre-publication discount on forthcoming Disruptive Analysis report

2011-12-08T17:04:00.001Z

I've discussed for several years (via private advisory work and this blog) the prospect of operators running their own "access independent" services. This means mimicking the major Internet players' role by offering what I'm calling "Telco-OTT" services. In other words, decoupling the network from the application - something which is highly controversial, especially for telecom traditionalists.

Google, Facebook, Skype and others have shown the power and value of standalone applications and services. Finally, operators are exploiting the scale of the multi-billion user Internet, the flexibilty of PCs, and the ease and virality of the smartphone app paradigm, to go beyond the narrow confines of their own access customer base. In other words, they are embracing the doctrine of "If you can't beat 'em, join 'em". But while compelling, it is not easy - there will be failures as well as successes.

I'm now in the final stages of putting together a landmark Disruptive Analysis strategy report on Telco-OTT services. It will span both fixed and mobile operators, and a broad set of applications and case-studies. It will be published in January, but I'm giving advance notice here, a taster of some of the thinking in the report, and offering this blog's readers a promotional discount for pre-orders.

This will be the first analyst report to focus on, describe and identify the trend - and "give it a name".

There are two broad strategies I see emerging for operators' own inhouse OTT activities:

Add value to existing access subscribers, by adding service "accessibility" via 3rd-party networks and devices
Extend brand and service/content reach to non-access subscribers

A prime example in the first category is fixed-broadband IPTV or cable providers, which are increasingly offering their subscribers a mobile app to watch content while "on the go" - typically on smartphones or tablets connected via other operators' networks. In the communications arena, Telefonica is trialling its O2 Connect VoIP service (based on Jajah) with an initial focus on existing O2 subscribers connecting via WiFi. Even RCSe believers see value in a "broadband access" option for OTT linkage into a user's service, via a PC client and generic Internet connection.

The second class is a more "full" vision of OTT-style services by operators, reaching new users who do not have a "subscription" at all. Orange's ON Voicefeed (a third-party visual voicemail) is a good example, as is T-Mobile US Bobsled (a Facebook-based communications app). Many operators also have traditional web portal or video/audio businesses, selling or delivering content to the Internet at large.

The first strategy is generally lower-risk and easier to monetise; the second is much more difficult (essentially on a par with any other Internet startup) but ultimately could generate more value. The report considers both paths, as well as the different options for organic development and acquisition. It also looks at strategic pitfalls and mistakes for Telco-OTT services, such as the creation of custom hardware (eg Vodafone 360 handsets).

There are also various other offerings that fall into the Telco-OTT envelope - classical enterprise VPN remote access services, femtocells connected over another operator's broadband lines, even WiFi "onload" used as a way for one operator to gain a service "pipe" onto another operator's smartphone fleet. New markets as diverse as M2M and social networking also yield opportunities and examples.

The draft contents of the 60-page report are as follows (subject to minor edits and amendments):

Introduction: what is Telco-OTT?

Many operators are already buying into the OTT vision

“Give it a name”

The dumb pipe & “over the top” myth

Why OTT business models are seen as a threat

Hypocrisy, opportunity or expediency?

Fixed, mobile or converged?

Can operators actually monetise OTT services?

Segmenting the access-independent landscape

Segmentation by end-user service type

Segmentation by business model

Overview of key operators’ telco-OTT initiatives

Why is this happening now?

Service fragmentation – QoS isn’t everything

Addressing user behaviour: Ubiquity vs. fragmentation

It’s all about Freemium

The role of two-sided business models & upstream customers

Global reach

LTE and all-IP mobile networks

The impact of WiFi

Evolution of the web and application environments

Content, video & portals

Web portals

Download, appstore and gaming sites

IPTV and Internet video

IPTV

Internet video & social TV

Summary

Communications, social networking & identity

Introduction: the hold of the old, the lure of the new

Assumptions and legacies in the telecom industries

Is communications standardisation & ubiquity needed?

Smartphones + apps = communication fragmentation

Where does IMS fit? Could “OTT-IMS” work?

Exploiting telco assets to differentiate from other OTT players

Messaging, IM and presence services

Voice, VoIP, video-calling & telephony

Introduction

Background

OTT VoIP over “naked” home broadband

Lessons from history: UMA and VoLGA

Video-calling

The Future of Voice

The LTE transition: catalyst for telco-OTT services?

Enterprise VoIP: the old bastion of Telco-OTT

Niche use cases

Social networks & address books

Redefining “social”

Hidden and “over the top” RCS

Social network M&A?

Yellow pages & location services

Identity management

Personal data brokers & data intermediaries

Security, connectivity, cloud & enterprise

Infrastructure as a service, middle mile & CDNs

IP-VPNs & remote access

Femtocells

WiFi Offload/Onload

Case study: O2 OTT-based WiFi Onload

Cloud computing

M2M enablers

Practical & operational issues for Telco-OTT

Investment justification

Protection from legacy telco fiefdoms

Incentivisation of staff

Reclassifying access and services revenue: the ARPU myth

Build vs. partner vs. acquire software

Telco-OTT infrastructure & architecture considerations

Standards – inhibitors or accelerants of Telco-OTT?

Exploit all the tricks & tools open to software companies

Net Neutrality, OTT services and the Law

Pure OTT vs. on-net optimisation

Branded smartphone apps

The operator branded app as a “Trojan Horse”

Conclusions

The sound of inevitability

Video-first?

Leaders & laggards

Forecasts and scenarios

Recommendations

Recommendations for fixed operators

Recommendations for mobile operators

Recommendations for network, device & software vendors

Recommendations for Internet & media companies

Recommendations for investors & consultants

Recommendations for regulators & industry bodies

The report mentions a diverse array of operators (fixed, mobile, cable) from around the world, as well as providing case studies and examples.

I'll be talking about this in more detail nearer publication time. But if this taster is enough to stimulate interest, I'm offering a 10% discount on pricing for firm orders taken before January 23rd 2012. Please get in touch with me via email [ information AT disruptive-analysis DOT com ] for licensing terms and payment options.

This theme is also one I explore in custom consulting work, as well as Future of Voice events with Martin Geddes, and joint efforts with my associates at Telco 2.0.

What is the cost of VoLTE? Is it a huge strategic error for the mobile industry?

2011-12-07T11:12:00.001Z

I'm sitting at the Layer123 conference on EPC and LTE in London.

I've just heard a joint presentation on VoLTE from the GSMA and the MSF. The latter was about the recent interop trial, and the former was a general flag-waving / propaganda pitch. Apparently "everyone" is now agreed on VoLTE deployment. (I assume that comes from the same GSMA dictionary as "ubiquitous" used in discussions on RCS / RCSe). The subsequent presentation is from Germany consultancy Detecon, and the former one was from BT Wholesale.

Some outputs so far on LTE Voice:

- General agreement that CSFB still reduces QoE by increasing call setup time and dropping the LTE data connection
- "Pure" VoLTE should be available without handoff when the user moves out of LTE coverage in late 2012 / early 2013, after trials in early/mid 2012
- E911 support is a bit of a hassle for the US and a short-term cludge will be needed
- VoLTE with SRVCC (for handoff to 2G/3G at the edge of coverage) is late and complex
- Massmarket VoLTE with SRVCC "should" be available in 2014. I think that's both (a) delayed from initial discussions, and (b) very optimistic. I think 2016 is more likely when you take into account various other factors like devices

But the elephant in the room is the growing realisation in the industry that mobile voice telephony revenues are declining. A survey of strategists at the London Telco 2.0 event I attended a few weeks ago suggested 20-30% revenue erosion for operators on telephony in the next 3 years. The Asian equivalent in Singapore last week was even more bearish. Private conversations I've had with telco voice and strategy executives also demonstrate pessimism - sometime to the extent that they see telephony revenues evaporating almost entirely, under the onslaught from MVNOs, Google, Skype and the regulators.

So let me get this straight:

- Telephony revenues are declining because of external (and unstoppable) factors
- CSFB gives a worse user experience than circuit telephony
- VoLTE is only useful where there's actually LTE coverage
- Without SRVCC, VoLTE will drop calls (worse QoE than circuit)

Now in theory, VoIP means more calls can be squeezed into a Hz of frequency - so there are efficiencies on the radio and on backhaul capacity. But all the complexity of policy management, QoS, legacy interworking needs to be factored in.

Can anyone honestly say they believe that VoLTE will offer a lower "production cost" for telephony than GSM? Or are the costs per unit about to go up, just when the revenues are going down? And CSFB probably means higher costs AND lower quality than today's GSM.

That doesn't make economic sense - what operator will want to invest in more-expensive technology in order to provide a worse service in a declining market?

EDIT - a couple of people have pointed out that CS voice infrastructure isn't that cheap either, and neither are the legacy billing/OSS systems. True, but modern developing world 2G/3G networks show that CS can be really cheap if deployed today. I think a CS refresh (or full OTT-style service with a chance of Future of Voice type new revenue streams) may be a better bet than VoLTE.

Controlling telephony IN and supplementary features by app

2011-11-28T14:06:00.000Z

This is a very quick post, before I dash to the airport. I'll be in Singapore for the rest of this week at Telco 2.0's New Digital Economics event, speaking on both Mobile Broadband, and also on the telco-world implications of HTML5. More to follow on that topic another time.

I was out with a friend last night, and he bemoaned the fact that he can't easily adjust the number of rings his phone does before it diverts to voicemail. (He's using an Android handset on a major operator). He said he'd been able to do something via some obscure code like *7529# , but it had taken him ages to find it - and he's a serious geek as well.

It struck me that this is the sort of thing that should be done via an app, linked to the voicemail server. (I don't know if Apple's visual voicemail allows this, or 3rd-party consumer options like ON VoiceFeed, but this is just about the normal operator-provided vmail).

More broadly, there's a ton of supplementary services and other legacy IN stuff around in the telephony space that never really gets properly thought about, except how much of a pain it is in terms of ensuring backward-compatiblity. Why? Why isn't there a decent operator-provided app for voicemail, 3-way calling or whatever other features they've got? Who cares if it only works on some people's phones - and who cares if it emulates *# codes or hooks directly into the server?

It's this type of thing that Martin Geddes and I mean when we say that the basic telephony service hasn't evolved. You don't need to go to HD Voice or even application-embedded voice to make a difference - nobody seems to have sat back and thought "how can we make telephony 1.0 work better, given the tools we've got at our disposal?". Yes, I'm sure there are security issues - but sort them!

Anyone got an answer to why there's no easy "configure my voicemail" app? Or even a web interface through the operator self-care portal?

[or maybe there are examples, but I'm not aware of them. In which case, an alternative question is "why don't you tell anyone about this?"]

The top 10 assumptions the telecoms industry makes about communications services

2011-11-26T15:18:00.000Z

This is a slightly-edited repeat of a post I made last year. I think it is more relevant than ever, especially as the telecoms industry sleepwalks into another generation of mistakes, notably RCSe.

Disruptive Analysis' tagline is "don't assume". It is worth quickly stepping back to understand some of the basic premises and unspoken assumptions of the telecom industry “establishment” around personal communications. These are themes and concepts burnt into the mind of the "telecoms old guard", especially standards bodies, telecoms academics and traditional suppliers; they are seen as unwritten laws.

But are they really self-evident and unquestionable? Maybe not. It needs to be remembered that the telecom industry has grown up around the constraints and artificial boundaries of 100-year old technology (numbering, for example, or linking of length of a conversation with value). Many of those unnatural constraints no longer apply in an Internet or IP world - it is possible to more accurately replicate society's interactions - and extend them way beyond normal human modes of communication.

For any telecoms company wanting a continuing role for the next 100 years of the industry, it is worth going back to first principles. It is critical that everything previously taken for granted is reassessed in the light of real human behaviour - because we now have the tools to make communications systems work the way that people do, rather than forcing users to conform to technology's weird limitations.

For instance, we currently see the weird phenomenon of companies pushing so-called “HD” (high-definition) voice, as if it’s an amazing evolution. Actually, they mean “normal voice”, as it comes out of our mouths when we speak. We’ve only been using low-def voice because the older networks and applications weren’t capable of living up to our everyday real-life communications experience. Shockingly, this has taken decades to make a “big jump”, rather than evolving gradually and gracefully as technology improved.

So, in no particular order, these are the assumptions Disruptive Analysis believes are unwarranted.

A “subscription” is assumed to be the most natural way to engage with, or pay for, communications services.
The most basic quantum of human communication is assumed to be “a session”.
It is entirely rational to expect people to want a single presentation layer or interface, for all their various modes of communication (ie “unified” communications or messaging).
Communications capabilities are best offered as “services” rather than being owned outright, or as features of another product.
A phonebook is assumed to be the best metaphor for aggregating all of a person’s contacts and affiliations.
A phone call – (person A sets up a 2-way voice channel with person B for X minutes) is an accurate representation of human conversation & interaction, and not just a 100-year old best effort.
People always want to tell the truth (presence, name, context) to others that wish to communicate with them.
People are genuinely loyal to communications service providers, rather than merely grudgingly tolerant.
Ubiquity is always more important than exclusivity or specialisation.
The quality of a communications function or service is mostly determined by the technical characteristics of the network.

These are the types of issue discussed in much more depth my research reports, private advisory engagements, and in the Future of Voice workshops run by myself and Martin Geddes.

If you'd like more detailed explanation of these assumptions - and what they mean for next-generation communications business models, please get in touch. I'm at information AT disruptive-analysis DOT com

European Court of Justice ruling on ISP filtering of P2P has wider implications for DPI & policy

2011-11-26T11:17:00.000Z

There has already been quite a lot of online discussion of this week's ruling by the European Court of Justice (ECJ) on whether a Belgian ISP can be forced to filter out P2P traffic on its network. (A quick news article is here and more detailed analysis here or here)

From my point of view, the most interesting thing about this judgement seems to be that the court has taken a very dim view of the possibility of "false positives" from the DPI or whatever other system might be used to monitor the traffic. (It also has implications for the privacy aspects of data monitoring by telcos as well - it was that, rather than more general "neutrality" concerns, that led to the Dutch Net Neutrality law)

The term "false positive" comes (I think) from the healthcare and pharmaceutical industry, where a "false positive" is a wrong diagnosis, such as telling someone that tests show they've got a disease, when actually they don't. The opposite (false negative) is arguably even worse - that means telling them that the tests show they're clear of the disease, when actually they DO have it all along. False positives/negatives also crop up regularly in discussions of security technology (eg fingerprint recognition or lie-detectors).

In other words, DPI tends to work blindly testing for a specific "class" or other group of traffic flows, using "signatures" to help it detect what's happening. This works OK, up to a point, and we see various ISPs blocking or throttling P2P traffic. It can also distinguish between particular web or IP addresses and various other parameters. But the issue with the ECJ judgement is that this process can't distinguish between "bad" P2P (illegal content piracy) and "good" P2P (legitimate use for distributing free content or other purposes).

A DPI system should be able to spot BitTorrent traffic, but likely wouldn't know if the content being transported was an illicit copy of New Order's True Faith, or a recording of a really terrible karaoke version with a plinky-plonky backing track you'd done yourself and released into the public domain. (To be fair, if your singing is as bad as mine, blocking its transmission is probably a service to humanity, but that's not the point here).

If the network is actually congested, the operator can probably claim it is reasonable to block or slow down all P2P traffic. And there is possibly a legal argument about the ISP working to limit piracy, if costs are low enough for implementation (again, a separate discussion). But if the network is not congested, it's definitely not reasonable to slow down the "false-positive" legal P2P data.

The interesting thing for me is how this could apply to other P2P use cases - for example application-based prioritisation. What is the legal (and/or consumer protection) stance when the DPI or PCRF makes a mistake? Let's say for some reason, I use a video codec, player and streaming server to transmit non-video material - animation perhaps, or some form of machine-readable codes. If the DPI leaps to the conclusion that it's "video" and prioritises/degrades/"optimises"/charges extra for it, is that a false positive and therefore illegal?

According to Wikipedia "Video is the technology of electronically capturing, recording, processing, storing, transmitting, and reconstructing a sequence of still images representing scenes in motion". There are definitely applications of video-type technology for non-video content.

There are plenty of other false-positive and false-negative risks stemming from mashups, encryption, application obfuscation or simple poor definition or consumer understanding of what constitutes "Facebook". (This is especially true where a network DPI / optimisation box / TDF works *without* the direct collaboration of the third party).

Now, in my experience, DPI vendors have been very cagey about disclosing their rate of "false positives", simply saying that overall, the situation is improved for the operator. I've heard from some sources that an accuracy of 85-90% is considered typical, but I imagine it varies quite a bit based on definition (eg # of bits vs. # of flows). It's also unclear exactly how you'd measure it from a legal point of view.

But the ECJ judgement would seem to suggest that's not good enough.

I'm quite glad that most of the vendors' product and marketing people don't work in the pharmaceuticals industry. Wrongly diagnosing 15% of patients would probably not be acceptable.... Even in other technology areas (eg anti-spam software) it would be near-useless. As I've said before about video, I think there are some very interesting use-cases for consent-based policy with involvement of the user and upstream provider, but it seems that the network *acting on its own* cannot be trusted to detect applications with sufficient accuracy, at least under stricter legal supervision from bodies like the ECJ.

My thoughts on Ofcom's Net Neutrality statement

2011-11-24T16:12:00.001Z

Ofcom has finally put out its statement on how it views Net Neutrality today. I'm quite impressed - it seems like a sensible compromise between a ton of vested interests and ideologies. If I'm honest, I'm also quite pleased because it has a broadly similar tone to my own submission to the consultation last year and my proposed "code of conduct" on this blog.

Some highlights:

The distinction between vanilla best-efforts "Internet Access" and "Managed Services", which can be prioritised
"If a service does not provide full access to the Internet, we would not expect it to be marketed as Internet Access"
The stipulation that the Internet Access portion should remain neutral, unless absolutely necessary for traffic management - in other words, Internet Access as a product means "The Real Internet" (TM)
Sensible discussion of two-sided business models
Recognition of the value of the "open Internet"
General view that competition seems to work quite well in broadband access, as long as it remains easy enough to switch between providers
Ofcom has seemingly booting the idea of generalised two-sided "traffic tax" out of consideration. (Luckily, the ludicrous telco-sponsored ATKearney report on a "viable future model of the Internet" seems to have been laughed out of court - pure #telcowash that ATK should have been ashamed of)
Making the point that any traffic management applied to Internet Access should be non-discriminatory between similar services (eg throttle one source of video, throttle them all). This is similar to the situation the Israeli regulator on my panel at the BBTM conference last week was expounding (ie "fair" rather than "reasonable" traffic management).
That traffic management practices need to be made very clear at point of sales and ongoing
Reservation of capacity for managed services should not unnecessarily impede the QoS of best-efforts Internet Access. No hard-and-fast rules, but a clear "we're watching you" with an implicit threat of more specific regulation if operators misbehave.
Marketing should be based on average speeds rather than theoretical peaks
It seems that traffic management is deemed OK for dealing with congestion, but not for dealing with variable costs on uncongested networks ("traffic management may be necessary in order to manage congestion on networks"). That means that various of the video optimisation use cases I discussed in my post this morning would be forbidden.
Ofcom has washed its hands of dealing with "public service" content and how that should be dealt with. Basically, that's kicking the problem of the massively successful BBC iPlayer upstairs, for the politicians to decide about.

One thing to note here is that I expect all operators to have to sell "Internet Access" as part of their offers, if not by law then in practical terms. If I buy a phone contract from an 18yo trainee on a Saturday morning and ask "does it come with Internet access?" then I'll have grounds for complaints about mis-selling if it subsequently turns out that I've been sold "processed Internet-like substitute", or "I can't believe it's not Internet". Ofcom's left it a bit vague about selling Internet Access with caveats, which suggests that burying the detail in the fine print won't be acceptable either.

Overall, this strikes me as a good compromise. If operators' and vendors' QoS systems can genuinely improve on what today's best-effort Internet can do, without damaging the utility of that vanilla Internet Access for other customers, then it's entirely reasonable for them to monetise it. Making operators sell the vanilla service in terms of average speeds (ideally average latency as well) means that the minimum QoS floor is defined when the customer buys the service. If I buy an average 2Mbit/s connection, then I don't really care if someone else gets 5Mbit/s priority turbo-boosts or whatever.

That said, as always the Devil will be in the detail. An average 2Mbit/s is pretty useless if it's really spiky. But Ofcom has reserved the right to give harder targets for QoS in future, which will likely be punitive if operators transgress what's reasonable. It seems to suggest that enough capacity to watch Internet video - and therefore, implicitly, VoIP - is likely a reasonable compromise for best-effort access.

This fits with my general view that operators are not going to be able to "monetise" stuff that works perfectly well now, just by putting a tollgate in the way. They'll have to add value and make it better - implicitly meaning that network QoS has to fight its corner for content companies and developers, against other options like better software/codecs/UI. In other words, if operators want a revenue-share from Google or Facebook, they're going to have to help them earn MORE money than they're already doing, not try and take a share of their existing business.

I suspect that the disparaging term "OTT" might finally disappear when T-Mobile's account director sits down with his YouTube counterpart to agree a new affiliate deal....

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Mobile video optimisation - different perspectives

2011-11-24T08:46:00.001Z

I had a briefing call with one of the mobile video optimisation companies yesterday, discussing the role played by network boxes that can compress, rate-limit and otherwise change a downloaded video stream.

It's an area I've been critical of for a while - especially where the network 'transparently' alters video content, without the explicit consent of either video publisher or end-user. I recognise that's a useful short-term fix for congested networks as it can shave 20-30% off of data throughput, but I also think that it's not a viable model in the long term.

Basically, publishers don't like the idea that some device in the data path "messes with our content", and in many cases users and regulators won't like it either. Some of the vendors suggest that reducing video "stalling" by optimisation actually improves the quality of user experience (QoE), but there are also other approaches to that which are more "consensual".

It was interesting to read the other day that Verizon's Video arm (formerly V-Cast) is working with its network teams to pre-define properly "optimal" formats for video depending on network connection, device type (ie screen & processor) and even user dataplan. In my mind, that's totally acceptable, as the content publisher/aggregator is working hand-in-hand with the network team to create a balance between QoE, network integrity and "artistic integrity". Collectively, they've thought about the trade-offs for both network and user in terms of quality, cost and performance. Presumably they also looked at the role of CDNs, adaptive bitrate streaming, on-device caching and assorted other clever mobile-video tech. According to a related article, they can't use WiFi offload because their content rights agreement is for 3G/4G only - another good illustration of the complexities here. All in all, it sounds like a great example of "holistic" traffic management, working with the various constraints imposed. I assume they have a roadmap for further evolution as it all matures.

But there's a million miles between that philosophy, and the type of non-consensual optimisation that's increasingly common for normal Internet video traffic destined for mobile devices, where the network unilaterally decides to alter the content. We're seeing solutions getting a bit smarter here - for example, only acting if the cell is actually busy, but there are various other use cases where it's more directly about the operator's costs.

The vendor I spoke to yesterday mentioned scenarios like shared networks (where each operator pays a share of costs based on traffic volumes), or where the backhaul is obtained from a third-party fixed operator at variable-cost. Another scenario I've heard (usually more for caching / CDNs) is around international transit in parts of the world with expensive connectivity. But another use cases was where the network is uncongested but high-quality video was being downloaded at high speed. In that instance "we can take 20% of the data stream off the top, and they won't notice".

Here is where we differ. In my view, if I (as a customer) pay for Internet Access, then I expect that the bits and bytes that come out of the server are the same bits and bytes that arrive on my device. The server owner thinks the same. Yes, in certain circumstances I'll accept a trade-off if it improves my QoE, as long as I am told what's happening and opt in: imagine an icon appearing, indicating "optimiser on", or a switchable user-controlled optimiser like Onavo's for reducing roaming traffic. But I'm not prepared to accept a lower quality just because the operator has been stupid enough to agree contracts for a shared network, with terms that don't take account of the types of retail broadband service its selling to its customers.

"Oh, I'm sorry Mr Bubley, we know you paid £1000 for the flight, but we've downgraded you to economy class because it's a codeshare flight, and we have to pay our partner airline £500 extra per-seat for business class passengers". I'm sorry, but that's your problem and not mine.

And as for the notion that the Internet connection can arbitrarily decide that "I won't notice" if it chops up & reformats my data? Hello? How do you know that? Maybe I've encoded something into it steganographically in the background? Maybe I've PAID for content of a specific resolution, and I have a contract with the publisher? Maybe I'm willing to take the trade-off of throttled buffered' throughput, because it's going to a background app for viewing later? If I've paid for my 2GB per month, I'll use it the way I like, thank you very much. If the network's busy, fine - tell me (and/or the publisher) & I'll use WiFi or download it later or *I* will make the decision to drop the quality if I want instant gratification.

I've got a lot of sympathy for operators that have genuine peaks and troughs of demand, or that are constrained in terms of supply by spectrum shortages or difficulties obtaining cell sites. But I've got less sympathy for companies that sell a product ("2GB of mobile Internet access at up to 10Mbit/s") and then realise they can't deliver it, because it doesn't match up to their network's capabilities or cost structure.

But it struck me that the reason that telecom operators (especially mobile) think that this is OK, is that degrading quality is at the core of their business proposition. For the last 100 years or so, we've had to deal with the fact that our natural, wideband human speech has been squished into 3KHz pipes for transport across the network. It's "optimised" (ie downgraded) at the microphone on your handset. Of course, now we have service providers trying to monetise HD voice - and expecting you to pay a premium just for transporting what your vocal cords have been putting out all along.

I'd love to know if there's internal transfer-pricing going on at Verizon for the video service. Is VZW actually "monetising" its optimisation capabilities and charging the Video department for the privilege? Or is it being done for mutual benefit, without money changing hands? I suspect the latter, which is the model I see most (but maybe not all) consensual video optimisation working out.

Oh, and if I ever go for a drink with this particular optimisation company exec, I'm going to have a word with the barman. I'll tell him to pour 80% of his pint of beer as normal, but top up the other 20% with coloured water. I'm sure he won't notice.

Another reason why application-based charging for mobile data won't work

2011-11-22T09:36:00.003Z

I was at the Broadband Traffic Management conference in London last week, one of the largest events in the calendar for 3G data networks and policy/traffic management and charging solutions. I spoke to a wide range of vendors and operators, and moderated an afternoon stream about dealing with mobile video.

I came away from the event with a number of my beliefs about policy, WiFi offload, video optimisation and operator "politics" strengthened, and a number of new learnings and perpectives that I'll be sharing either on this blog, or in a report in early 2012. This particular post covers a couple of things about "service-based" or "application-based" charging and policy.

(As an aside: I'm going to be boycotting the BBTM event in 2012, for numerous reasons, not least of which was the ridiculous decision to host it in a place with no decent cellular coverage and £20 / day WiFi. I know from organising my own events that organisers have a lot of negotiating power with venues about the "delegate package". If the venue refuses because it has 3rd-party run WiFi with an inflexible contract [this venue used Swisscom] then go somewhere else. It's inexcusable).

I've said on numerous occasions (eg here, here and here) before that I don't believe that operators can (in general) successfully design mobile data or broadband services around application-specific policies and pricing. Despite continued hype from the industry and standards bodies, network cannot and never will be able to accurately detect and classify traffic, application or "services" on its own. With explicit cooperation from third-parties, or sophisticated on-device client software hooked into the policy engine, there's a bit more of a chance.

But I continue to hear rhetoric from the network-centric side of the policy domain about creating "a Facebook data plan", or "charging extra for video", or "zero-rating YouTube". I'm a serious skeptic of this model, believing instead that policy will be more about location, time, speed, user, device, congestion and other variables, but not an attempt to decode packets/streams etc. in an effort to guess what the user is doing. However, lots of DPI and PCRF vendors have spent a lot of money on custom silicon and software to crunch through "traffic" and have promoted standards like 3GPP's new "Traffic Detection Function", and are now determined to justify the hype.

Much of the story fits with the usual attitude of punishing (or "monetising") the so-called OTT providers of application and content, by enabling the network to act as a selective tollgate. On a road, it's easy to differentiate charges based on the number of wheels or axles a vehicle has, as you can count them. Not so true of mobile data - some of the reasons that I'm skeptical include mashups, encryption, obfuscation, offload, Web 2.0, M&A between service providers and so on. (And obviously, national or internationl laws on Net Neutrality, privacy, copyright, consumer protection and probably other bits of legislation).

But during the BBTM, I came to a neat way to encapsulate the problem: timing.

Applications change on a month-by-month or week-by-week basis. The Facebook app on my iPhone looks different to me (and the network) when it gets upgraded via the AppStore. I talked to a network acrhitect last night about the cat-and-mouse game he plays with Skype and its introduction of new protocols. Not only that, but different versions of the app, on different devices, on different OS's, all act differently. And according to someone I met at BBTM, different countries' versions of different phones might interact differently with the network too. And the OS might get updated every few months as well.

Operators can't work on timescales of weeks/months when it comes to policy and charging. The business processes can't flex enough, and neither can customer-facing T's and C's. How do you define "Facebook"? Does it include YouTube videos or web pages shared by friends viewed *inside the app*? What about plug-ins? Who knows what they're going to launch next week? What if they shift CDN providers so the source of data changes?

Unless you've got a really strong relationship with Facebook and hear about all upcoming changes under NDA, you'll only find out after it happens. And then how long will it take you to change your data plans, and/or change the terms of ones currently in force? What's the customer service impact when users realise they're charged extra for data they thought was zero-rated?

And if you think that's bad, what a year or two.

As we move towards HTML5 apps, I'd expect them to become more personalised. My Facebook app and your Facebook app might be completely different, just as my PC Facebook web page is. Maybe I've got encryption turned on, or maybe Mark Zuckerberg sets up the web server to put video ads on my wall, but not yours. Maybe I'm one of 5 million people out of 800 million who's testing a subtly different version of the app? Or that has a Netflix integration? Websites do that all the time - they can compare responsiveness or stickiness and test alternative designs on the real audience. And because it's all web-based, or widget-based, much of that configuration may be done on the server, on the fly.

How are you going to set up a dataplan & DPI that copes with the inherent differences between dean.m.facebook.com and personX.m.facebook.com? Especially when it changes on a day-by-day or session-by-session basis?

Yes, there will still be fairly static, "big chunks" of data that will remain understandable and predictable. If I download a 2GB movie, it's going to be fairly similar today and tomorrow. Although if I stream it with adaptive bitrate filtering, then maybe the network will find it harder to drive policy.

EDIT - another "gotcha" for application-based pricing is: How do you know that apps don't talk to each other? Maybe Facebook has a deal with Netflix to dump 8GB of movie files into my phone's memory (via the branded Facebook app & servers), which the Netflix app then accesses locally on the device? This is likely to evolve more in the future - think about your PC, and the way the applications can pass data to each other.

One last thing from the BBTM conference: we heard several speakers (and I heard several private comments) that the big pain is still signalling load of various types, not application data "tonnage". I've yet to hear a DPI vendor talk convincingly about charging per-app or per-service based on signalling, especially as much of the problem is "lower down" the network and outside of the visibility of boxes at the "back" of the network.

Yes, we'll continue to see experiments like the Belgian zero-rating one I mentioned recently. But I expect them to crumble under the realities of what applications - defined in the user's eyes, not the network's - really are, and how fast they are evolving.

UNSUBTLE SALES PITCH: if you want a deeper understanding of how application changes will impact network policy, or the fit of traffic management with WiFi offload, CDNs, optimisation, devices and user behaviour, get in touch to arrange a private workshop or in-depth advisory project with Dean Bubley of Disruptive Analysis . Email information AT disruptive-analysis DOT com

Operator fear & control over WiFi tethering is only one example of connection-sharing threat

2011-11-14T09:35:00.001Z

I've just read a really interesting piece by fellow analyst Ian Fogg which highlights how operator customisation & policy can be pushed down to smartphones, even where those devices are bought "unlocked" (or "vanilla") by the end-user.

In a nutshell, the mere act of inserting a SIM into a device like an iPhone can lead to some configuration options being locked-down to the end user - specifically, data connection APNs (the named "virtual" access points on 3G/4G networks such as iphone.operator.com) - or the ability to use tethering.

Tethering has been pretty controversial for several years now - the ability to turn a phone into a WiFi hotspot, to allow multiple devices to connect through one network access subscription. Some operators charge extra for such services, while others allow it for free on certain plans. It's becoming more widely used - I see quite a few Android and a few iPhone SSIDs when I'm in public locations.

There has been a significant push-back from users, who tend to view this as a right ("I've bought 1GB of data, why should someone else determine how I use it?"), but the leading device and OS vendors seem to have bowed to operator demands and helped block unauthorised use. Google has even limited the availability of "unofficial" tethering apps on Android. Various policy tools and DPI approaches to spotting tethering are also available - for example looking for tell-tale IE or Firefox PC browser traffic going through a connection that's otherwise obviously from a phone.

I also take the view that this is one battle that (for now) the handset vendors are fairly happy to allow the operators to win. The availability of tethering doesn't really make Apple much extra profit, but potentially limits the willingness of telcos to subsidise iPhones. Various Android device makers also sell 3G/4G USB modems or MiFi-style personal hotspots, so they'd also prefer you to buy a second device rather than use your phone as a tether. While desired by consumers, tethering is also a battery-drain, so OEMs see it as something they'd rather not encourage huge use of.

There are a couple of important related issues here though.

Firstly, operators would like to use the same control channels (which probably include things like OMA's Device Management standards) to apply to WiFi use more generally - in particular, which WiFi access points the user can log on to. This will fail though - both users and device vendors place "WiFi neutrality" much higher on the utility and importance scale than tethering, and I see attempts to lock-down or force WiFi choice as backfiring massively. This is why I have grave doubts about much of the current hype around Hotspot 2.0, ANDSF and assorted other standards aiming to give MNOs greater control over WiFi.

More generally, tethering is just one use case of a wider phenomenon I first identified a couple of years ago, called "connection sharing". This is the concept of smartphones working together to bond multiple users' data pipes, either to fill in coverage holes collaboratively, or to "multiplex" data connections together for faster connectivity.

Imagine sitting at a table with one person using an iPhone on Vodafone, another with an HTC Android on Orange, and a third with a Windows Nokia on 3UK. If they could discover each other and bolt together their connections, the three users would get much better service acting collectively. But.... the operators' data conections would be both cannibalised and commoditised. It would be impossible to enforce user-specific policy or use the SIM for alternative applications such as Identity Management services, as the networks wouldn't know which of the three people was generating which IP packets. Not only that, but this would essentially lead to an offloading of the weakest network's traffic onto the strongest.

We'd also possibly see secondary markets evolve in selling "unused inventory" of data connectivity - people with good dataplans could try to sell spare capacity to other people. You can imagine an app working out that the user still has 300MB left two days before the end of the quota/billing-cycle, and trying to resell it to nearby users "second-hand". More securely, I've previously suggested the notion of "social tethering", where perhaps you could allocate a certain volume of your data allowance to be shared with your known Facebook or LinkedIn contacts if you're in the same room.

Overall, connection-sharing has the ability to change (or even destroy) multiple operator business models and services. Various operator services tied to SIMs would be completely undermined - most of the IMS/RCS story depends on keeping the link between network/SIM and the application, as do some of the NFC implementations. In the long run, the break between SIM and identity is inevitable in my view (breaking the "Tyranny of the SIM card"), but the operators' attempts to clamp down on tethering may delay it a little longer.

That said, I can see other workarounds emerging - especially WiFi Direct, which is an official WiFi Alliance standard intended to make the old and little-used peer-to-peer WiFi mode work a lot better. Rumours tell me that the telcos are not big fans of this, so it will be interesting to see if it makes it onto smartphones, and how exactly it is implemented.

I've also got a couple of other disruptive next-gen tethering options in mind as well, but I'll keep those to myself for now, or just for those consulting clients that employ me to assist them (either as poacher or gamekeeper).

Overall, I expect the current initiatives to reduce the impact of user-driven tethering by a certain amount. But in the medium term, I expect those controls to crumble - but perhaps by the OEMs themselves. I continue to believe there's a good chance that Apple, Google or another player will suddenly push a really disruptive WiFi play of their own, and are happy to keep the "tethering powder" dry until that point.

The smoking gun - I think O2 UK has FALLING mobile data usage

2011-11-11T12:34:00.002Z

Following on from my earlier post about whether mobile data usage is flattening off, I've done a quick bit of forensic analysis and modelling about Telefonica O2 UK's mobile data traffic statistics:

From Q1 2011 report: "Data traffic from mobile broadband accesses however continued to grow with total volume increasing 45% year-on-year. Despite the removal of further heavy users to ensure the best network experience to all customers, both data usage per customer and mobile broadband penetration continued growing"

From Q2 2011 report: "Data traffic from mobile broadband accesses also continued to grow with total volume increasing 31% year-on-year in the first half."

From Q3 2011 report: "Data traffic also continued to grow with total volume increasing 22% year-on-year in the first nine months. Growth in the third quarter was lower at 7.9% year-on-year following the removal of heavy data users, with all consumer data contract base sequentially growing usage."

The model is slightly complex because we don't know exact QoQ growths for 2010, and we have to reverse them out of the 6/9 month YoY stats and make estimates.

But whichever way I set the spreadsheet up, it looks like O2 UK has recorded falling absolute levels of traffic in Q3 of 2011, and perhaps Q2 as well.

EDIT - one of the commenters has found a set of numbers that doesn't have a fall, but has 3 quarters essentially static at +/- 1% . Might be a one-off readjustment, but it's surprisingly "elegant" if that narrow possibility holds true

We know that Q1 2011 = 45% more than Q1 2010.

So let's put Q1 2010 = 100 and Q1 2011 = 145 . Interpolating, we could have Q1/2/3/4 of 2010 as perhaps 100/115/125/135 or maybe 100/120/130/140 or similar. But then we can determine Q2 and Q3 2011 from the other growth rates reported.

So for example, we get:

Q1 2010	100
Q2 2010	115
Q3 2010	125
Q4 2010	135
Q1 2011	145
Q2 2011	137
Q3 2011	135

Q1 2010	100
Q2 2010	120
Q3 2010	130
Q4 2010	140
Q1 2011	145
Q2 2011	143
Q3 2011	140

Unless you put really silly numbers into the model (eg Q2 2010 = 250, up 2.5x QoQ) I can't see how you get anything but an absolute decline in recent months.

Now this is just one operator in one country. And it's possible that O2 (the original iPhone exclusive operator in the UK) has seen a lot of churn to Vodafone, EE and 3UK (which still has full flatrate dataplans and has been reporting strong data growth). And O2 has repeatedly stated that it has "removed heavy data users" and has apparently also blocked adult content by default, as well as encouraging WiFi. So this could be an isolated example, or a one-time blip before growth resumes.

O2 Germany's stats reported in the same financial statements do not demonstrate an absolute fall, but also suggest a slowing rate of growth. I'm estimating that it's down to maybe 8-10% QoQ growth, based on statements such as "Mobile data traffic also increased significantly (+51% year-on-year in the first nine months; +47% in the third quarter)"

I'm going to be looking very closely for other data points, and more importantly trends over time in growth rates - any other contributions or comments most welcome.

ARE YOU A MOBILE OPERATOR OR VENDOR WONDERING WHAT IT MEANS IF YOUR MOBILE DATA USAGE FORECASTS ARE WRONG? WHAT IF THE "DATA TSUNAMI" IS OVER? BOOK A WORKSHOP OR ADVISORY PROJECT WITH DISRUPTIVE ANALYSIS - email information AT disruptive-analysis DOT com

Has mobile data growth flattened off? Are caps & tiers working too well?

2011-11-11T11:17:00.005Z

From Telefonica's Q3 report on O2UK:
"Data traffic also continued to grow with total volume increasing 22% year-on-year in the first nine months. Growth in the third quarter was lower at 7.9% year-on-year following the removal of heavy data users, with all consumer data contract base sequentially growing usage." [Hat-tip to @twhemeier for pointing me to this]

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From Cisco's February 2011 Mobile Data Forecast from its widely-used VNI (Visual Networking Index) research team - "Global mobile data traffic will increase 26-fold between 2010 and 2015. Mobile data traffic will grow at a compound annual growth rate (CAGR) of 92 percent from 2010 to 2015, reaching 6.3 exabytes per month by 2015."

From Ericsson's new report on mobile data traffic, press release headline "Ericsson predicts Mobile Data Traffic to grow 10-fold by 2016", on Page 12 "Data traffic grew by 100 percent between Q2
2010 and Q2 2011. The comparatively smaller quarterly growth of 8 percent between Q1 and Q2 2011 is likely to be related to seasonal variations in traffic levels"

Seasonal variations.Yes, obviously. Because personally, I always use my smartphone and 3G modem less in April than February.

I've already been saying this on Twitter for a few days, but with next week's Broadband Traffic Management conference coming up in London, I thought it was worth putting a stake in the ground via the blog as well.

I think mobile data growth is slowing - much faster than expected. The exponential has been tamed.

Now it's possible that the "tsunami" has just receded from the shore, and is going to come in again harder still with the next wave (eg tablet-driven video). But at the very least, the smooth curves drawn in millions of infamously-wrong "scissor diagrams" are wrong. Maybe we've got a 2-stage S-surve instead....

... or maybe we've got a fast, 1-stage S-curve and then steady growth, much as you get with most technology service adoptions. I think there's a good chance we've just gone past the inflection point.

I'll keep an eye on this in later posts, but a few more bits of food for thought upfront today.

Firstly, it seems that caps and tiers are working - perhaps too well. People DO change their behaviour, operators CAN limit data growth and drive more revenue. They have closed the scissors. Maybe we don't need fancy, app/content-based tariffs, and operators can offer "happy pipe" data services, and save on opex by firing their anti-Net Neutrality lobbyists and consultants?

Secondly, there has been a huge effort by network equipment vendors to lower the "production cost" of mobile data. The mythical "cost per bit" has been chased by LTE and HSPA+, but more importantly operators have shared their networks, optimised their cell-site locations, looked at distributed architectures for GGSNs, offloaded traffic, sorted out their backhaul opex, and got vendors focusing on small cells and better space/power-efficiency. And we've also recognised that traffic growth to date has (a) been filling up empty capacity, and (b) been filling it up mostly in a few cells only.

Now let's look forward. Most of the forecasts I've seen assume both increasing penetration of smartphones / tablets / mobile-enabled laptops AND a continued growth in use per month. That's not the way things work - usually the first users are early adopters, and get more enthusiastic quickly, for the first year or two. So usage grows quicker as there is both accelerating adoption and better understanding / exploitation of their capabilities (and also, better devices/networks). And then after that, you get the late majority and laggards, who are often more "casual" users - and who look for lower price-point devices and connectivity services. A $100 low-end Android user in Africa, on a $15 month plan (or $7 month prepay) is not going to be consuming the same amount of data as a $60/month user of an iPhone 4S in Stockholm or San Francisco.

Then we've got increasing use of WiFi, smarter and more tactical use of data allowances by end users. We've also got various content and application companies who've become smarter about their use of data in mobile - not universally no, but for sure Apple and YouTube and Facebook all recognise that they shoulder some responsibility for helping users keep down their bills. It doesn't help Apple sell more phones, if its customers have to spend more money on data overage charges, rather than upgradig to a new device. So we've had innovations like HLS Adaptive Bitrate Streaming, and Google working with operators like Orange to create more network-friendly apps and content.

Of course, this is all rather inconvenient for those network equipment vendors who are pitching complex policy-management and charging solutions, based around DPI boxes trying to work out traffic/app types and concoct complex, processing-intense approaches to billing for them. Never mind that such methods have severe deficiencies, because apps/content can evolve on the basis of days/weeks - much faster than telco processes can change billing business rules and implement them to fit.

Now we'll certainly see more data growth globally - clearly there are a lot of "un-smartphoned" users in India, China, Russia, and Africa and Latin America. There's a fair amount of growth left too in Europe and N America and developed Asia, especially with 2nd and 3rd smart devices (eg tablets), as well as M2M and so on.

And there's also a chance that we're seeing a one-time blip, as flatrate plans are ended, and the most egregious abusers of bandwidth are reigned in. Perhaps we'll be back to "business as usual" with natural organic growth in 6 months' time.

But I content that mobile data growth is *much* more manageable than we expected. The forecasts look too high to me, especially like-for-like in developed markets. Unfortunately, Cisco's VNI stats have scared the industry *so much* that companies have taken action to avoid them coming true. They've become a self-denying prophesy - something that, as a forecaster myself, I've got a lot of sympathy for. The problem with creating methodologically-rigorous predictions is that you can never factor in other peoples' response to those predictions. If they're independent (eg locked away in a vault and nobody sees them until afterwards), you can gloat about your accuracy retrospectively. With some of my own less-well-propagated research I can do just that.

Unfortunately Cisco VNI (and now, Ericsson) has done what every scientist knows from quantum mechanics - the act of measuring something can actually change it.

I'm not saying that mobile data growth has completely flattened off - clearly, there is still growth. But I think it's now *manageable growth* rather than an explosion, and so some of the knee-jerk approaches to it (such as non-consensual video optimisation, or forced non-neutral WiFi offload) are no longer needed.

Edit: a full analysis of the O2 traffic numbers is here

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ARE YOU A MOBILE OPERATOR OR VENDOR WONDERING WHAT IT MEANS IF YOUR MOBILE DATA USAGE FORECASTS ARE WRONG? WHAT IF THE "DATA TSUNAMI" IS OVER? IS THERE A RISK OF OVERCAPACITY? BOOK A WORKSHOP OR ADVISORY PROJECT WITH DISRUPTIVE ANALYSIS -
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Belgian MNO tries app-specific zero rating - bad idea in my view

2011-11-01T11:10:00.001Z

Mobistar in Belgium has started offering a plan which gives users zero-rated Facebook, Twitter and Netlog (a local social network), as well as free access to its own mobistar.be domain. (These sites are actually fair-use capped at 1GB data per month).

[Hat-tip for this to Samira Zafar who mentioned it on one of LinkedIn's discussion forums on Net Neutrality]

Details are at http://www.mobistar.be/fr/offre/mobile/cartes-rechargeables/tempotribe

I think that this will backfire spectacularly on the company. Their terms & conditions (run through Google Translate) says:

Unlimited surfing on Facebook, Twitter and Netlog is only valid in Belgium and corresponds to a volume of 1 GB maximum.

Surfing is for free surfing on mobile sites official Facebook, Netlog and Twitter for:

• Mobistar's mobile portal (m.mobistar.be)
• The official URL such as http://m.facebook.com , http://m.netlog.be , http://mobile.twitter.com
• applications of these official sites

The unofficial applications are not included in this option.

Links, pictures and content to external URLs has Facebook, Twitter and Netlog will be charged at the normal rate of a session Mobile Mail & Surf.

So in other words, if you use the Facebook app, and a friend links to a web-page or video which renders *inside the app* (ie with the blue banner still across the top), then you get charged extra. For me and I expect many other user's, that's part of the experience of using Facebook. Not only that, but in Facebook (certainly on the iPhone app) you don't always know if someone is sharing something on-site (eg a group page or note or picture) or off-site.

Furthermore, Facebook is now allowing its own-hosted videos to play inside the app - so where does that fit? And what happens when Facebook updates the app with new features (let's say, proxying bits of the web through itself)? Especially if it's only on some OS's, or some updated versions? Or if FB decides to route bits of its own content (pictures, lets say) through a new CDN with a different set of URLs? There are so many potential "gotchas" here it's amazing.

Then there's this official / unofficial app business. I seem to recall that Twitter has acquired half the "unofficial" apps like Tweetdeck, so presumably they are now official? Or not? Who knows? Then there's the chance that twitter.com gets fired up in the browser rather than an app (perhaps because there's a link in an email) and it defaults to the PC version rather than m.twitter .

I also have my doubts that the Belgian representatives of Facebook and Twitter (if they're actively being involved) are privy to new and upcoming features, or changes in the way the apps work - let's say, adding HTTPS encryption, for example. The list of hiccups and chances for both false-positives and false-negatives is huge.

Never mind Net Neutrality (which is a separate & legitimate concern here as well), this is an absolute minefield for confusion, poor customer service & complaints.

Could be an interesting case-study though - let's watch the outcome.

[Speaking of case-studies, this post is another one. I'm not linking it to Twitter, but only driving it via LinkedIn and native / email-subscribers of this blog. The main objective is to divert the flow of people away from Twitter followers to more direct engagement with me via email or LinkedIn. Ultimately, I want to delete my Twitter account, and this is part of the migration process].

Telcos will find that API payments are a two-way street

2011-10-28T09:24:00.000+01:00

Various telecom operators are rolling out paid-for API programmes, typically for charging against a phone bill, sending an SMS and so forth. There are some increasingly good individual operator strategies (eg Telefonica BlueVia) and the ongoing (but grindingly-slow evolution) of the industry-standard OneAPI from the GSMA.

However.... it's not easy. And not only that, but operators are increasingly going to find that payments for Internet APIs are two-way. They will (and indeed should) be paying for capabilities from Facebook, Google, Amazon and others, as well as (hopefully) making money from them elsewhere.

I first wrote about payments FROM telcos to Internet and so-called "OTT" players about 6 months ago. It's also something I suggested might happen in yesterday's post about OTTs potentially moving from being "dumb data centres" to charging differentially for priority access from some network operators.

I also asked people at this week's Rich Communications conference whether they expected to make more money from selling RCSe APIs than they'd likely have to pay out, for decent Facebook integration or other third-party services. I didn't get a satisfactory answer.

Today, another interesting development - a new charging structure for the Google Maps API. This one is interesting, as numerous operators use it for a variety of different purposes. Both the BTFon and Vodafone Wi-Fi Finder offload/connection clients use Google Maps to help me find the nearest hotspot, for example. T-Mobile's UK website uses it for helping customers find the nearest store. There are probably numerous other mashups as well.

While the operator may have its own location lookup from the network, or be able to extract it from a handset's integral GPS API, they often won't have a nice, familiar user-friendly map like Google's or Bing's. Especially where app development is being done by a small team decoupled from the main engineering units of the telco (eg a telco-OTT app skunk-works, or many WiFi add-ons), they will just tend to follow the usual paths taken by developers and use whichever APIs make sense.

But in a way, this is a good thing. Although the "balance of payments" for APIs may be negative in the short term (ie telcos paying more money to Internet companies than they get in return), that's not necessarily worrying.

Firstly, operators need to show that they "get" the whole API / web-services / mashup philosophy. By both buying and selling APIs, operators have a much better chance to show that they're serious members of the web ecosystem, rather than taking an arrogant stance that they are somehow entitled to "monetise their assets and capabilities" unilaterally, and have people flocking to their doors.

Secondly, operators should be using Web APIs for the same reason as everyone else - they help lower costs, improve time-to-market and add new and innovative features that improve the value of their own services. Similarly, they should be looking at tactically using hosted cloud services like Amazon's as well, not just trying to sell cloud services of their own.

Lastly, gaining greater experience with buying APIs should also yield a lot more insight into how to market, price, bill and support them, when they move into the API sales arena. That should yield better knowledge about good interfaces, speed and flexibility in evolving their API platforms, and the relative importance of "silo" APIs that just work, versus more complex federated or standardised ones.

There needs to be an Alternative Communications Providers Association (ACPA or OTTA) to counterbalance the GSMA

2011-10-26T23:06:00.002+01:00

One of the speakers said something really profound at last week's Sonus Connexions event in Miami:

"Skype is now the world's biggest telco". It has more users than China Mobile has subscribers.

And one of the notable outputs from the Rich Communications summit in Munich this week has been the push by mobile operators and the GSMA for RCS-e to be embedded "natively" in mobile phones, so that "It's just there". The operators hope to use their purchasing leverage with the handset OEMs to encourage and cajole them into building RCS-e into the basic handset software/firmware stack - implicitly putting broader IMS capability in with it.

That got me thinking.

The GSMA talks incessantly about its 5 billion+ "community". Never mind the fact that it's no more a community than the 5 billion with electricity - or shoes, for that matter - it's a large number, irrelevant as it is. (And yes, riddled with errors because of multiple SIMs per person). One of the speakers at the event said this mean that RCS-e had the "potential" to reach 5 billion people in future.

I commented at the time that Facebook has similar potential, as it uses not just downloadable smartphone apps, but also Java ME, Facebook Zero (WAP) and even USSD menus. That takes it to a potential 5 billion user reach today, not at some indeterminate point in the future.

But thinking further - if the mobile operators can start trying to mandate "native" capabilities in devices, why can't Facebook as well? Or, indeed, its peers.

Let's imagine for a moment what an Alternative Communications Provider Association might look like, made up of the various non-MNO voice/video/messaging providers. You could even call it OTTA if you wanted a nice logo of an aquatic mammal.

We've got (roughly and non-comprehensively):

Service               Users
Facebook            800m
QQ (China)         800m
Skype                  600m
MSN 500m
Sina Weibo         250m
Twitter                200m
Yahoo IM            200m
Renren                 200m
LinkedIn    150m

Orkut    60m
Nimbuzz 50m
RIM BBM 50m
Google+ 50m
Kakao 25m
Cyworld (Korea) 20m
Viber                     20m
WhatsApp             20m

And then there's Apple's Facetime and iMessage, Google Voice, Kik, enterprise VoIP from Cisco and Avaya, IBM SameTime and many others. So, give or take, about 4.5 billion users collectively. You could also add in various providers of webmail for another 3 billion or so as well. Potentially, you could add in the telco-OTT operations like ON, Comoyo, Bobsled and O2 Connect as well. And yes, there's a lot of overlap in terms of the user base - but then that's also true (albeit to a lesser degree) of SIMs.

So now let's consider what specifications and other activities that ACPA / OTTA could start doing, if it acted collectively like the GSMA. (Obviously with appropriate anti-trust safeguards).

- Define handset standards that give equal priority to 3rd party communications services as the "official" MNO ones
- Define mechanisms that ensure that users can easily install - AND delete - any handset communications apps, including SMS, RCS etc.
- Specify multiple identity and authentication methods for services (leaving the SIM for network registration though, for now).
- Develop an equivalent to the GSMA IPX for interchange / backbone services
- Define methods for VoIP / social network portability
- Act for collective lobbying vs. regulators and governments on issues like Net Neutrality, termination regimes and structural separation
- Examine business models for monetising MNOs that currently deliver their services to users "for free", exploiting their R&D and data centre assets. (Who wants to be a dumb data centre, working equally with all networks?). For example, rev-shares on data roaming fees, which aren't even based on the billing operator's network assets.
- Market the benefits of unlocked "vanilla" handsets without operators' software add-ons
- Develop a shared approach to emergency calls / lawful intercept
- Work with banks or credit organisations to provide alternative sources of handset subsidy/loan
- Defining ways for multiple comms apps to "peacefully coexist" on handsets without software conflicts
- Examine ways to minimise battery drain, for example by using shared notification systems
- Work with network equipment & IT infrastructure providers to develop optimised hardware for data centres, private overlay networks etc

In a way, it surprises me that no such grouping exists already. For all their competitive animosity, I can't believe that Microsoft, Apple, Google and Facebook (and maybe QQ as an outsider) can't work together as effectively as the squabbling telco world - and probably make decisions and take action an order of magnitude faster. Perhaps there have already been secret discussions I'm not aware of, and they concluded that it wasn't necessary given the companies are still ascendant.

But given that the legacy telcos have failed to change their ridiculous "them and us" stance versus their newer peers, it is perhaps now appropriate for these maturing organisations to work to their mutual benefit against a common front.

This is just a starting point - I've literally just thought of this in the last hour or so.

Needless to say, if any of the organisations mentioned would like some analytical insight into this concept, I'd be delighted to assist in any way possible. You can contact me via @disruptivedean or information AT disruptive-analysis DOT com

Implementing native RCSe in devices brings operational risks from emergent behaviour

2011-10-25T12:20:00.001+01:00

I'm at the Rich Communicatiosn conference in Munich today & tomorrow, listening to presentations on RCSe (asd asking critical questions).

I'll do a full summary another time (thus far: operators are more convincing - and more restrained - than vendors). But one point has struck me:

The big push from GSMA and the "Group of 5" lead operators is around natively embedding RCS capability into future mobile phones so that it "just works", and appears to the user in a similar way to today's SMS and voice diallers. On other devices, aftermarket apps for RCS may be available for download.

I can see the "elegance" here in native capabilities, but I think there is a huge risk which has not been identified. Downloaded apps can be updated "in the field" relatively easily. HTML5 apps can be updated even more simply as the functionality resides mostly in the cloud, or through browser plug-ins.

The risk is that of "emergent behaviour". Consumers and companies tend to find unexpected ways to use services - sometimes providing benefits and value, but sometimes creating problems. For the voice dialler, many people have started to use "missed calls" to notify friends of things, creating signalling load and congesting voice switches, but creating no revenues. SMS usage was essentially an "emergent" behaviour which drove huge revenues. SMS spam, however, has been a downside. Consumer use of BlackBerry Messenger has been largely emergent.

Nobody knows what the emergent properties of RCSe might be. They might be hugely addictive and valuable services, or they might cause huge problems. They are unpredictable and essentially untestable. There may be unexpected bugs or weird effects when users start behaving in a particular way.

One of the things we've seen in recent years is similar issues with Facebook and other online services, which have created risks such as privacy leaks, issues around personal safety / stalking and many other undesirable side-effects. When these occur however, they can be quite rapidly rectified, either by changing the web application, or perhaps by issuing an OS patch, or an amended or bug-fixed smartphone app.

It is far from clear how a "bug-fix" or emergency upgrade / alteration of RCSe clients could be achieved if the functionality is hard-coded into phones. Some might be updateable via FOTA (firmware-over-the-air) upgrades, but that is unlikely to be feasible across the board. Apple can update iOS via iTunes - but no similar mechanism will exist for RCSe.

The problem is that this risk is essentially unquantifiable - emergent behaviours are inherently surprising. I think that RCSe needs a clear and well-articulated strategy for "rapid response" if something untoward happens. This is not just the risk of creating network load either - there is the potential for reputational and legal risk as well. This needs to be considered and managed much more effectively than I've seen so far.

Next few months are do-or-die (or die again) for RCS and RCS-e

2011-10-20T16:28:00.000+01:00

A year ago, I published a report on why I thought RCS was dead , which also included some thoughts on how I thought it might be salvaged.

Since then, it has been reincarnated as RCS-e (e supposedly standing for "enhanced"), which takes out things like presence and focuses on IM and media-sharing. Less generously, I'd perhaps call it "reanimated" and RCS-z (z for zombie, as it's still shambling around despite being dead).

We're about to move into another season of marketing, hype and possibly propaganda for RCS-e, as the market has been promised launches from the European "group of five" major operators - Vodafone, T-Mobile, Orange, Telefonica and Telecom Italia Mobile, with interest from other telcos in Europe, Asia and Middle East (and, perhaps, the US).

Coming up are events such as next week's Rich Communications summit in Munich and Telco 2.0's New Digital Economics EMEA in early November, which has significant RCS-e presence from companies like Vodafone. I'll be at both events.

Although I've been negative about RCS / RCS-e since Day 1 - and various operators have commissioned me to explain my views and demonstrate the "bear case" - I'll try and attend with an open mind. I'm conscious that this time, my skepticism is actually mainstream - the market as a whole seems to agree with me. That worries me, as I don't think I'm influential enough to have convinced everyone, and normally I believe that the Tyranny of Consensus means that the majority is wrong.

So I'll listen to presentations, watch some demos - and grill some of the advocates. But there's a very high bar to make me change my mind, as I've identified at least a dozen reasons why RCS/e is a bad idea, and I suspect that many (most) haven't been addressed.

Some examples: lack of support from Apple, lack of business model, the slow pace of evolution, risks of security breaches or unwanted "emergent" behaviours, and the ridiculousness of trying to intermediate between a user & their Facebook experience.

So it's going to take quite a lot for me to be bitten by the RCS zombie and get infected by enthusiasm for it. Either way, it's not going to eat my brain - I'll be taking plenty of very sharp and pointy wooden stakes with me, ready to put RCS-z out of our collective misery if it's still dead.

Musings on my next personal phone & contract

2011-10-12T11:31:00.000+01:00

I'm coming up to the point of deciding on my next main personal mobile phone & contract.I thought it might be worth going through my thought processes on the blog, which may highlight some factors that reflect wider industry trends - or perhaps just reflect my outlier status as a user.

Although I've usually got a couple of spare devices around, and occasionally play with new ones to get a feel for things, I don't tend to chop & change, and I don't review handsets. Up until two years ago, I had separate voice/SMS/camera and email/data-centric devices, but I've switched to a single-device approach since then.

I'm currently using an iPhone 3GS on Vodafone, with an 18-month contract that's just expired - but with the "grandfathered" 1GB a month allowance. It's still in decent condition after 15 months (my first one fried its baseband & was replaced), despite not using a case. I'd like a better camera but it's actually sill pretty functional.

I'm tempted to just keep the current phone, either get it unlocked & port to another network, or stay on Vodafone, and switch to a rolling 30-day contract at half the price.

My criteria for choosing an operator / plan are:

Mandatory:

1GB+ per month (I use around 600-700MB typically). This could be done with 500MB + an extra 500MB package, or maybe just reasonable overage charges
Cheap data roaming. This is imperative. Vodafone (in Europe) is now good with its £2/day plan for 25MB
Cost - my base plan is £41 per month (which obviously included the initial subsidy repayment) & I have no desire to increase this.
No heavy-handed branded operator bloatware, or attempts to put an extra software layer between me & what I want to do.

Important considerations

Decent 3G coverage in central London (Vodafone is surprisingly poor)
Low network latency (difficult to tell network vs. phone, but I see 3G latency as *much* worse than WiFi - even when done via my 3UK MiFi)
Reasonable network policies (eg no VoIP blocking, no unnecessary data/video optimisations)
(up to a point) OK WiFi offload and a decent "my account" dashboard app

Basically, I want the best pipe I can get. On this basis I may have to grudgingly stick with VF, despite their iffy coverage (still no 3G in Primrose Hill, 7 months after this post) as the others don't stack up for roaming as well.

Choosing a phone is also complicated.

Let's get one thing out of the way first off - no Androids. I don't/won't use a Google login for my primary device account. For me, a Google account is purely for business, not personal, and I always try to avoid blending the two on any ecosystem (Facebook=personal, Twitter=business, iTunes=personal etc). I usually log out of Google when I'm not using Blogger (or if I'm forced to use Google Doc by a client). I've got a Gmail account but hardly use it, and have clicked the "stop spamming me with invites" link for G+. That's not changing. (Unless it's possible to fully log out of Google while using an Android phone? Let me know).

On "coolness" grounds I'd prefer not to have an iPhone, but something more individual & unusual. I see so many in London (and so many Macs), that having an Apple feels like driving something like a BMW: a boring, default, sheeplike choice. Well-engineered but a bit soulless & dehumanising.

On the other hand, it does "just work" (well, apart from my first one that committed suicide), the swipes and menus are pretty nice, and I can express my individuality in plenty of ways other than through the brand of telephone I'm carrying.

I've been tempted to switch to using a BlackBerry for a while, as so many of my younger friends have them for BBM but I'm sensing that that ship may have sailed (especially with WhatsApp and other similar messaging services on other platforms)... and the current (12/10) outage won't have helped.

Windows phones are appealing because they're different & I quite like UI. I'm interested in seeing what Nokia comes up with, but that may be too late for me anyway. Also, the tiles look a bit like another attempt at social network aggregation (no thanks) which I'd need to be able to switch off. I'll definitely check out one or two though... but... the kicker is application support.

Apps. Now I'll admit to being a Luddite here - I haven't *bought* an app for personal use since 2005. Apple doesn't have my credit card details on iTunes (one of my original criteria for getting an iPhone was the ability to sign up without adding any payment channel). But I do use some free apps quite a lot - almost exclusively for Social Networking, Travel/Transport and Connectivity.

Social networking: Facebook obviously, and recently LinkedIn, MeetUp and Quora. (I deleted the Twitter app, though)
Travel/transport: Barclays Bike Hire app (Boris Bikes in central London), Kayak, Tube Status, British Airways, Addison Lee taxi hire and MapsWithMe (offline Wikitravel)
Connectivity: BTFon (for WiFi access as I use BT broadband at home & this gives me a couple of million FON/Openzone spots) and Onavo (for data compression while roaming). I might add the O2 WiFi app at some point as well.

And unfortunately, most of these are iPhone / Android only at the moment (and some just iPhone, or different on Android). All of them also work fine on my 3GS - as yet I haven't really come across anything must-have that needs a 4 / 4S. The camera is tempting, though - but not worth the extra money vs. a small digicam I could carry if I wanted.

Actually, writing all this out has probably given me the answer - stick with the 3GS, batter Vodafone into giving me a new & much lower off-contract rolling 30-day price plan, and then wait until either something must-have drives me to a 4S (better camera maybe, or iOS 5-only apps), or until Windows Phones have enough app support & some cool devices. It's actually been an interesting exercise for me as well - forced me to think about what's important (eg which categories of apps I care about)

WiFi neutrality vs. the OMA

2011-10-10T14:14:00.000+01:00

I've written before about the critical importance of "WiFi Neutrality" - the ability for the end-user, device OS or applications to choose which WiFi connection to use, over-riding any operator-defined preferences if such exist.

The critical control point is the "connection manager" on a device - the bit of software that determines which accesses are available, and how/when to connect to them. For WiFi, this is usually done as a core role of the device OS - most people are used to seeing the Windows or Mac choices for WiFi APs, or a similar function on their smartphones. For cellular connections, it doesn't really exist as such on phones (beyond a primitive menu somewhere with auto/manual network-select). But on laptops, there's usually a customised client from the operator that gets auto-loaded when inserting a 3G USB dongle for the first time, or pre-loaded if it's got a built-in module.

I've long predicted that the CM would become a strategic battleground, especially for the WiFi aspects. Much to service providers' continued annoyance, most WiFi isn't a service at all (ie at a hotspot), but is just a wireless connection to a local LAN. The biggest use of WiFi is for connection to a fixed-broadband router or gateway, and then direct to the Internet. Various other LAN use-cases are important as well, notably enterprise network connections, or UPnP links to other devices in a user's home (TV, printer, server etc).

The mobile operator community would dearly love to have greater control and visibility over users' WiFi connections - ideally capturing data connections and putting them through the core network (for billing, charging, policy, QoS reasons etc). "Uncontrolled" (ie user-driven) WiFi connections are often seen as undesirable because they represent a second access path for data on or off the device. This both implicitly reduces the perceived value of the paid cellular/hotspot connections, and also allows easier access to applications that the operator may not want (eg competing VoIP).

The Open Mobile Alliance is currently working on a "solution" for the fact that CM's currently are not standardised. The Open Connection Manager programme and its associated APIs are being worked on by a group of its members (Intel, Orange, Huawei, HP & Deutsche Telekom) with various objectives.

"Up to now, there is no existing standard or de facto standard for Connection Managers. Operators and OEM/ODM have to develop and use different and dedicated solutions, thus increasing the effort and time to market.

For Mobile Broadband devices, this situation is critical and leading to a strong effort for service providers to develop connection manager applications as there are already several networks to support and any new mobile broadband device such as USB modem requires to redevelop existing connection managers to be implemented and supported by these applications.

For smartphones or tablets, the importance of management of Wi-Fi offloads for example and/or the need to expose information status on the connection to applications is requiring a solution through the connection manager application.

Furthermore, new fast growing businesses such as Connected Devices & M2M are facing the same hurtles and will need as well a solution to reduce the impacts and efforts to deal with the connection management aspects."

Now, for cellular data connections this is fair enough. There is a fair amount of work needed to reinvent the UI for each new device or module, so standardising some aspects certainly makes sense.

For WiFi, however, the situation is much murkier. There are already various efforts such as Hotspot 2.0, I-WLAN and ANDSF which are attempting to "steer" smartphones to use operator-provided WiFi. The dreaded term "seamless offload" still crops up regularly. While I've had some positive recent conversations with operators and vendors - who realise that control over WiFi ultimately should and will continue to reside with the user, I'm not so sure that OMA has got that particular memo.

"The OpenCMAPI enabler SHALL be configured to use the operator defined list of preferred SSID preconfigured in the device and/or the WSID (Wlan Specific Identifier) list in accordance with [3GPP TS 24.234] if present in the SIM/RUIM/NAA on UICC"

"The OpenCMAPI enabler SHALL be able to force the association on a SSID, visible or not"

"The OpenCMAPI enabler SHALL be able to modify or delete only WiFi profile that are not predefined by the operator"

Now to be fair, it also says this:

"The OpenCMAPI enabler SHALL allow the user or the application using the Open CMAPI to connect to Known network or Unknown network manually"

But it's entirely unclear how that will work if that conflicts with the previous requirement. So for example, could an enterprise user delete the operator's WiFi profile & stop offload, if they decide it is incompatible with their security policy?

The bottom line is that as far as I can see, the OMA Connection Manager API sits very uneasily with the concept of WiFi Neutrality - I really can't see many device vendors (especially Apple) relinquishing control of this pivotal part of the stack. In any case, the Open CM is unlikely to be seen as a useful basis for the expanding number of WiFi-only devices.

If implemented in this WiFi-unfriendly fashion, it is also going to be something that will further dissuade users from buying 3G-embedded laptops (which I've been negative about for years), if the operator also controls the WiFi connectivity settings. You don't let a service provider dictate how you use your USB ports or fixed-ethernet RJ45 socket on your PC, so why on earth would you accept controls on the wireless-ethernet?

I have a simple adage with anything to do with WiFi : If you don't understand fixed ethernet, then you have no business doing anything with the wireless version either. Quod erat demonstrandum....

My suspicions on iPhone delays - chipset integration complexity?

2011-10-05T13:00:00.002+01:00

EDIT 1am 6/10/11: RIP Steve Jobs

So.

Now we know that we're going to get an iPhone 4S, and not an iPhone 5 for now. I'm quite glad that I haven't been speculating about what might or might not be in an iPhone 5, as there are plenty of analysts and other commentators with egg on their faces today.

And so now there are lots of people who are disappointed in the outcome:

"Is that all? It's the same device with a better camera and that voice recognition thingy. Where's our big screen, our NFC, our LTE - what happened to all the leaked designs and mockups of cases for a new device? Why did it take them so long to do this, surely this isn't 16 months work, these changes are minor!"

I suspect that the answer lies under the hood. What Apple has actually been doing is working on a new hardware platform which will probably endure for several generations of its devices. That has likely taken a *huge* amount of work: chipset and hardware level integration is massively complex and needs lots of fine-tuning. It's quite possible to have to start again several times if the outcomes aren't perfect - something that Apple has the unique luxury of doing as it's not really that pressured cashflow-wise to get something out, even if it's compromised. It's worth remembering that the original iPhone only came out when Steve Jobs thought it was up to standard, and I'd imagine that Tim Cook will take the same stance on the '5. Then think of all the other promising devices over the years that have had issues like awful battery life, or which crash all the time - or even Apple putting out the iPhone 4 before getting the antenna properly tested and sorted.

It's worth looking at what's in an iPhone. Most critically, the baseband chipset which is the "modem" which connects to the cellular network. (There's a separate story with the apps processor as well, see below).

In most of the iPhones to date, the 2G/3G baseband has come from Infineon (now owned by Intel), with three generations of silicon. The CDMA-based version of the iPhone 4 was the first to have an alternative chip, from Qualcomm. In theory, this chip could have been used to give the "world-phone" UMTS/CDMA ability touted for the 4S - but it was never actually switched on and used in this way.

While the baseband for the 4S hasn't been announced, I strongly suspect it's also a Qualcomm product, as they pretty much monopolise everything CDMA-related, and so dual-mode GSM/CDMA devices are pretty much a done-deal for the Big Q.

Most critically, not only does Infineon/Intel not support CDMA (critical to keep Verizon and others on-board), it does not currently have an LTE chipset , although it is working on one for mid-2012 volume shipments. Crucially though, that still doesn't support CDMA, which will likely still be needed for a few years as Verizon and others will not have full LTE coverage and enough capacity until 2013-2014 at the earliest and possibly much later. And of course, regular readers will know that I don't expect VoLTE to be fully ready for prime-time for a long while either, so VZW iPhones will need at least CDMA 1x support for the foreseeable future.

And then there's the processor. The iPad has already been using the A5 chip, so it is natural that the company would like to migrate it down into the phone. The iPhone A4 was used in both the iPhone 4's, with previous phones thought to be using a Samsung chip. But a tablet has a big form-factor and battery, so there doesn't need to be such tight integration between the processor and modem - the baseband can be done as a "module" - which in fact works well, because the iPad has to come in WiFi-only versions anyway. But iPhones all need baseband and processor, fitted into much tighter constraints of space and battery size.

So Apple historically has had:

A4 + Infineon (iPhone 4 GSM)
A4 + Qualcomm (iPhone 4 CDMA)
A5 + optional Infineon (iPad & iPad 2)
Samsung + Infineon (iPhone 3GS)

But Apple won't want to support multiple hardware platforms unnecessarily if it can avoid it, as it wants to keep up its margins in the face of competition and will want scale benefits and performance optimisation. So there are probably four important hardware integration and evolution exercises that have been occuring at Apple:

Move the GSM/UMTS platform from Infineon to Qualcomm, with lots of integration with the radio and other bits of the hardware
Add UMTS capability to the CDMA versions of the device - lots of integration, again. [Note: it's more important to add UMTS to CDMA than vice-versa for outbound roaming, although I'm sure Vodafone likes the idea of being able to roam onto Verizon]
Shift the iPhone platform from A4 to A5 processor & future descendants AND integrate this with the new (presumably Qualcomm) baseband

(There's also a vague chance that it's migrating away from the Samsung apps processor in newer versions of the 3GS, I guess - especially given the current IPR war between the two companies)

But more importantly I'm expecting that it is also....

(I'm really hypothesising here) Developing a single LTE platform consisting of A5 (or A6 etc) processor and a CDMA/UMTS/LTE baseband, usable in iPhone, iPad and iImagineSomethingElse. This is probably a *huge* development project which probably faces a ton of horribleness in everything from power consumption to radio performance. I'd guess there's perhaps a fallback plan of going to separate UMTS/LTE and CDMA/LTE platforms if it faces insuperable problems, especially given the range of frequencies that will need to be supported. I suspect Apple would rather have two or three variants of the same core platform, rather than totally divergent solutions.

I'd guess that just doing the first three have involved a Herculean effort, which we now see the results of in the 4S. If that means that Apple has to disappoint some of its more ardent fans clamouring for new stuff... well, I reckon they took they realised that doing everything in one go was impossible, and decided to take the pain now.

It's also possible that Apple sticks with another iteration of the current 4S platform for another year, before adding in a "perfect" LTE option in 2013. My prediction from June 2010 was that Apple support LTE was most likely in 2012 or 2013 (I'm glad I dodged the bullet on the 5% 2011 chance). An October 2012 launch would make sense - and would also fit in with future timelines of both Qualcomm and Intel (and possibly others like nVidia).

Edit: there's also a chance Apple will do something truly disruptive with its LTE implementation, and move to a full dual-radio SVLTE approach, keeping telephony on circuit-based radio connections rather than relying on VoIP on LTE or the uber-clunky, worse-than-useless circuit-switched fallback option. Interestingly, Huawei has now started floating dual-radio as a possible option (ZTE has for some time). Hat-top to Zahid for spotting this, I'll follow up another time in depth - and it's also covered in the Future of Voice workshops' section on LTE.

To sum up - in my view, the iPhone 4S is all about the hardware platform shift. Stuff like Siri is window-dressing in comparison, to give the fans at least something visible. LTE support was completely unrealistic (as I've said before) given the other more important and urgent changes going on with the platform. It's also another reason why fripperies like NFC have been kicked further down the road - especially as I imagine Apple knows very well that it's being overhyped.

This might be disappointing for some, and could possibly give Microsoft and Nokia an opportunity to profit from a temporary lull in external iPhone evolution, but it's likely set the scene for continued growth and profitability from Apple's mobile devices for a few more years.