Follow Up from 3GSM

I am at present stuck up a mountain with the family watching them ski and thinking about last week in Barcelona.

The Voice thing is getting to me! All of the noise has been on te whole about mobile data solutions, these require the networks to focus on something they are not very good at, educating users.

Whilst here I am looking at people using the phone as just that; a few are sending texts none are surfing or watching TV! All of them are paying a lot of money to make phone calls and the providers are happy.

So why don't the networks focus on the fact that 80% of the income is from the simple function of Voice?

Rather than develop HSDPA why cannot they give me the Stereo functionality my handset has to play MP3s? Or how about they develop noise surpression techniques so that whilst on the call the quality is lifted, just as they have for the workers in call centres?

I am going to go an sit in the sun and think a little longer and then make a few calls and see if I might just be able to convince a few people that rather than Convergence they need to diverge or people will just substitute the mobile for the fixed line and so we face financial suiside. This is something I cannot afford at the Girls have told me they love skiing and for the next ten years I am going to be the one having to pay for them to keep doing it!

Please remember that it is first and foremost a phone

Catching up on my RSS feed and Andreas latest post strikes loud with me after my week in Barcelona.

On Tuesday I took part in a roundtable discussion on Fixed Mobile Conversion. The point I was hoping to make in my presentation was that it is not the network on which you make the call that is converging, it is the place in which you make it that is. Most of us use our mobile phones along a defined route, at home, on the way to work, at work, in our local pub/club etc. over 90% of the calls we make are in a place that we know rather than somewhere new. So whilst most people call the mobile first it is not because they do not know where we are.

That being so how can an Operator maximise there take on the defined spend on Mobile? I argue that it is the quality of the voice call rather than the content of a call that limits its duration. How many times do we still say "I will have to call you back because the line is bad"?

Before we get caried away with Data on our phone here are a few facts that should mean that the focus is on Voice:

1/ Mobile voice

- worth over $1 trillion globally today

- volume equal (roughly) to fixed voice

- by 2015, mobile voice will likely be 2x greater than fixed voice

- 8-9 trillion mobile voice minutes per annum (2015)

- VoIP a small percentage (10-15%) of total volume, and probably less than 5% of total value

- massive growth potential - but not focused on by operators

- not a single EVP for Voice anywhere in European industry

- value being lost due to lack of strategic focus and minimal investment

- also value erosion through over-use of bundles

- termination cuts have had an impact (operators could be more proactive and take the surprise out of term rate cuts)

- LRIAC termination rate is a known quantity - and all operators can plan tariffs around it

- Elasticity exists - but operators own actions damping its potential

- tele.ring strategy versus T-Mobile Austria

2/ Mobile data

- at least 95% of mobile data revenues come from SMS

- interestingly, global SMS business is worth 3x the total, global music industry (including CD sales, DVDs, licensing, publishing, etc)

- yet operators think music downloads will transform their businesses!

- getting the basics right is still a valid objective - email, instant messaging, photo messaging, internet access/browsing, presence, location-sensitive search)

- not a single operator has managed to address these areas successfully yet (though cite Vodafone Spain with Real Mail as example of progress)

- Instead, most are focused on contrived nonsense - mobile TV being the best example

- simple, sequential service development

- use all of the real-estate on the device - 10 number keys equal ten shortcuts to ten simple data services

- the devices themselves remain a problem to data uptake - they are phones, with incidental data capabilities

- screen size stretches the resolving capacity of the human eye to its limits!

- new experience, and devices required

- what parts of the internet need to be available on mobile? - not all of it - and not in its current form

- intelligence, context-sensitivity, location-sensitivity, voice-driven etc .... very different look and feel, and functionalilty

3/ Convergence

- is, when it boils down to it, something of a myth

- convergence is a term dreamt up by consultants

- it is lazy short hand for collection of trends

- customers have exactly zero interest in convergence as a concept

- it is therefore a distraction

- it is just one of a number of potential means by which companies can choose to address customers

- it may be right for some customers in some circumstances - but that doesn't make it into the magic bullet that many in the industry believe it to be

- divergence has had a far more impressive track record thus far, in terms of value creation (iTunes, iPod etc are divergent; digital TV's many standards are divergent; digital radio standards are divergent etc)

- convergence has become a dangerous obsession for many players

- FT, DT, BT etc all have a "Convergence Strategy"

- Triple and quad plays are the most common manifestations

- Forrester reckons that on average, a European triple play customer will represent a cumulative loss of €3000-€4000 by 2010

- Their latest work calls triple play "financial suicide"

- IPTV is certainly a weak, immature technology competing against very efficient, well established technologies and highly effective and slick media companies

- Today, there are only 285 million broadband connections ON THE PLANET

- Of them, only 20 million or so are capable of 2mbps or faster ... and this is the total addressable market for IPTV

- In many respects, convergence therefore is another disaster waiting to happen

- strategic herding and lack of imagination threatens the long term prospects of a number of players

I am working on more detailed analysis of the above points and might publish it here on my blog as well as somewhere else. If you have any questions leave a comment and I will attempt to reply!

A Busy week in Barcelona

Back from the 3GSM event and still trying to process most of what I saw and heard.

This year's black is once again Content, this time MobileTV. At least that is what it's all about if you are to believe a number of CMO within the Network Operators!

The Equipment manufacturers are looking at how they can get the network into Buildings and across wider areas with the use of Femtocells and WiMAX!

As for the Handset makers it's a size issue, with lots of slimline models on which you can play music, take pictures and surf. These machines will be capable of using the resource light LINUX or resource heavy Windows Mobile 6.

What might be possible in the next few months in Dynamic Pricing as technology allows the Network to finally know the customer. Deep Packet Inspection can be run on a network and analysise just what someone is doing on a handset, then it can offer personalised deals in an effort to get them to change behaviour. This is something that a few ISPs are doing with Broadband customers and the software companies are now saying that they can do it with mobile phones.

The Elephant in the room is bundles. With Voice providing 80% of a Networks income what logic is there in testing Price Elasticity and the Mobility Premium? None of those that I talked to were speaking of services that improved the quality of voice as a product. For example, why is my phone stereo when it plays MP3 and Mono when I am making a call, its the same speaker system!

With my head buzzing from all the conversations over the last four days I am still trying to figure out why Vodafone thinks that India is the growth market that will allow it to still be the Worlds number one/two network when some of its advisors told them that it was a high risk. Will try and post something before I go off for a weeks holiday with the kids.

Windows 6 could this be what we are looking for?

Jason Langridge has done a great preview of Microsoft's upgrade of Windows Mobile. He has looked at the 1000+ upgrades to Windows Mobile 5 and as a a Senior Manager within the UK he has been using it for the last year.


Have Microsoft finally managed to develop an OS that gives mobile users something more than voice and texts? Rather than the X series from 3 this might be a platform the gives form to the hopes of the Mobile Web 2.0 fanboys.


On the screenshots it looks like the PIM functions are exceptional and the other office and surfing elements might mean that finally a single device is all that is needed. I guess the proof will be that they have removed the reset button seen on the iPAQ.


Guess the Microsoft briefing might be worth seeing next week in Barcelona.

I saw your sign in the window and I want one please!

Yasterday I decided that I had better test the current offering from 3 as it had a been sometime since I had last done so and a number of people have asked me for an opinion when we meet next week.

As luck would have it, I was close to the shop on Kensigton High Street and seeing a working handset on offer at £19.95 including £10 airtime on pay as you go I thought how can I go wrong.

On requesting such a deal for myself I was told that they don't have any of the £19.95 handsets in stock. No problems what other handsets can I have on Pay As You Go?

None, we have not been selling phones on Pay As You Go since November in this store I am told. I could trythe store on Oxford Street they might have a handset or I can try Superdrug across the road.

So I try Superdrug. On entering the store I find the stand with a number of handsets and accessories but no one to serve me. I ask someone stacking shelves if they can help. She says yes, what do I want. A 3 handset on Pay As You Go please. Sorry mate, we don't do Pay As You Go its contract only, I don't think your credit that bad that you can't have one. Look I only need a phone for a short time and so I don't want a contract. Well we can't help you then.

So I stop off at Oxford Street on my way home and guess what, same story all over again. No mate we only do contract handsets and SIMs.

Now I wonder, are the management trying to massage subscriber numbers? Is it that the actions of T-Mobile have disrupted them so much that the Pay As You Go market has no future for the guys at 3 and they are working on a new business model based on contract customers staying for 2 years plus? Or is it that they just no longer have a clue and the Boss back in China no long wishs to keep losing money faster than a injured footballer in a casino?