The mobile industry

Written by: Jonathan Briggs

February 3, 2006 [4665 views]

This session will survey some of the issues from the mobile phone market and try to highlight why it is an important sector of the information technology industry.

It is all about terminology:

1. Technologies
2. Networks
3. Operators
4. Terminals
5. Terminal functionality
6. ARPU

Why is your mobile phone an interesting device?

1. Hugely popular consumer device. Which other devices do we all carry around?
2. Highly personal device unlikely to be shared with unique user ID! What are the additional applications of this ID?
3. Communication orientated (phone, messaging)
4. Nokia handsets are the most popular in the UK although they are losing their market share
5. Pay per call/message. Telephone customer are used to paying for the services they receive. Compare this with Television or Internet usage.
6. Different technology starting points/standards across the world: GSM (Europe, Africa, Australasia), PDC (Japan), TDMA/CDMA (Americas)
7. Customer resistance after WAP oversold in the UK
8. £1B pa entertainment market (mainly ringtones and logos) in the UK
9. Average UK customer sending around 50 SMS messages per month

Mobile telephony in the UK

1. 2-3 technologies in the UK: GSM (2G), GPRS (2.5G for data), UMTS (3G)
2. 5 network providers: Vodafone, MMO2, T-Mobile (Deutsche Telecom), Orange (France Telecom), 3
3. Mobile service providers: 3, Vodafone, O2, T-Mobile, Orange, Virgin Mobile, Fresh, Tesco, BT Mobile and more
4. Billing and customer relationships are with an even wider range of retailers and billing companies who buy service from the service providers who buy wholesale airtime from the networks
5. Complex industry structure created by regulation to stimulate competition
6. Handset (terminal) manufactures and retailers have subsidised costs of handsets
7. Phones available on Pre-pay (card) or Pay-as-you-go (contract) basis
8. Networks now trying to raise average revenue per user (ARPU) through data, content and personalisation services
9. 3G (UMTS) licences were auctioned by the government in one of the most successful spectrum auction in the world. Successful 3G operators took on licence debt as well as the cost of building out the network. www.3gnewsroom.com
10. Most networks are trying to tie their users into their own content offering: Vodafone Live!, O2 Active, Orange World etc through management of the terminal interface and pre-configuration of terminals
11. Number portability demanded by regulator (Ofcom)
12. Digital radio (including text info) is likely to be launched over mobile networks in 2006

Services

Here are a few of the popular services that people are using now.

1. Messaging (SMS, MMS, email and video calling on 3G)
2. SMS Alerts (news, football, horoscopes, stock prices)
3. Anonymous chat/flirting
4. Ringtones and logos and celebrity voicemail
5. Shopping – special offers and hot deals
6. Java games
7. Find my nearest? (on 3G)
8. Voting
9. Auctions
10. Betting

Technologies overview

1. Digital phone calls (circuit and packet switched)
2. SMS messaging
3. SMSC service gateways
4. WAP/WML and comparisons with HTTP
5. GPRS- packet switched ‘always on’ 9.6-64kb/s
6. 3G/UMTS 9.6-384kb/s
7. Java (J2ME)
8. Alternatives/complementary technologies – Wi-Fi (802.11b/802.11g), Bluetooth
9. Smartphones and PDAs
10. Operating systems (Symbian, PalmOs, Windows CE)

Payment for/with mobiles

1. Bulk purchase of messages – operators share revenue for calls www.mobile365
2. Interactive Voice Response (IVR) payment over premium rate www.pipemedia.com
3. Premium rate mobile numbers – calls cost extra and revenue shared www.icstis.org.uk
4. Bill the recipient (reverse billing) – operators pay service provider a percentage www.smsrevenue.co.uk
5. Mobile as identification (Paybox) – mobile no linked to credit card no www.paybox.net wwww.insideid.com
6. Purchase costs added to mobile phone bill (possible but unpopular with operators)

Cool things you can do with a mobile

1. Find out where it is (Location) www.mapamobile.com
2. Change the ringtone and logo (Personalisation)
3. Integrate with instant messaging (Presence)
4. Push content (Always On)
5. Share photographs
6. Deliver small applications (Java/J2ME) and multimedia content (Flash)
7. Identify music www.shazam.com

Designing services

1. Simple SMS applications are still worth building
2. Its not the web!
3. Focus on communication and service
4. Conversations between the handset and the server cost money
5. Consider integration with other platforms such as TV and web

Barriers to successful services

1. Operators (and the revenue share they demand)
2. Customer resistance
3. Coverage in cities and rural areas – need scalable services that can cope with interruption
4. Multiple devices with different features

International Perspective

1. National technologies (US versus Europe versus Japan)
2. Economic conditions (compare India and Japan)
3. Technology cultures (compare Japan and India and Europe and the US)
4. Geography
5. Existing infrastructure

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