The mobile information systems industry (lecture 1)

Written by: Jonathan Briggs

February 1, 2007 [4141 views]

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

What do we mean by mobile business?

Business (and leisure) activities carried out through the application of technologies that are delivered via portable and wireless devices

What sort of activities?

• Shopping (payment, commerce, auctions, ticketing etc)
• Communication (calls, email, alerts, messaging, chat, dating)
• Business process automation (health monitoring, vehicle tracking, identity)
• Information publishing (blogging, browsing, search)
• Entertainment (games, betting)
• Location based services (local information, mapping)
• Security (tracking, alerts)

More than phones

• Technologies that extend the power of phones such as streaming, music, personalization, video, real time messaging, internet access, positioning, identity
• Alternatives to mobile phone communication such as Bluetooth and WiFi
• Complementary technologies such as RFID, GPS

It is all about terminology:

• Technologies
• Spectrum
• Networks
• Operators
• Terminals
• Terminal functionality
• ARPU

Why is your mobile phone an interesting device?

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

Mobile telephony in the UK

• 2-3 technologies in the UK: GSM (2G), GPRS (2.5G for data), UMTS (3G)
• 5 network providers: Vodafone, MMO2 (Telefonica), T-Mobile (Deutsche Telecom), Orange (France Telecom), 3
• Mobile service providers: 3, Vodafone, O2, T-Mobile, Orange, Virgin Mobile, Fresh, Tesco, BT Mobile and more
• 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
• Complex industry structure created by UK government regulation to stimulate competition
• Handset (terminal) manufactures and retailers have subsidised costs of handsets
• Phones available on Pre-pay (card) or Pay-as-you-go (contract) basis
• Networks now trying to raise average revenue per user (ARPU) through data, content and personalisation services
• 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.
• Most networks have tried 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
• Number portability demanded by regulator (Ofcom)

Technologies overview

• Digital phone calls (circuit and packet switched)
• SMS messaging
• SMSC service gateways
• WAP/WML and comparisons with HTTP
• GPRS- packet switched ‘always on’ 9.6-64kb/s
• 3G/UMTS 9.6-384kb/s
• Java (J2ME)
• Alternatives/complementary technologies – Wi-Fi (802.11b/802.11g and soon n ), Bluetooth
• Smartphones and PDAs
• Operating systems (Symbian, PalmOs, Windows CE)
• Mobile Ajax, Flash

Cool things you can do with a mobile

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

Where is the money?

For the operators

• Call charges
• Message charges (including premium rate)
• Data charges (very high when compared with broadband)
• Unused components inside packaged tariffs
• Network interconnect charges

Device manufacturers

• Sale of devices (including subsidy from operators)
• Built in obsolescence (upgrades)

For content providers

• Fees from operators
• mCommerce revenues
• Advertising (Google)
• Subscriptions
• Premium SMS charges

For government

• License fees (for rental of the spectrum)

Some observations

1. Customers don’t always use the services offered (WAP, MMS, Video calling, ‘walled gardens’)
2. Customers will use services that they find useful (SMS, Find my nearest, Mobile web, ring tones, cameras)
3. Customers have worries (health, cost, privacy, viruses
4. Different technologies have worked well in different countries (SMS, Blackberry, iMode)
5. Regulation and powerful companies have helped create a vibrant market
6. Mobile access to the internet could be bigger than PC access
7. Different countries have encouraged mobile business in different ways (UK, India, Japan, US)
8. Some emerging economies have leapfrogged traditional phone and wired internet services
9. Revenue from mobile calls is falling (regulation and competition)
10. Mobile devices are merging (cameras, music players, TVs, GPS, credit cards/tickets?)

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