• 3UK figures are not released yet and these are more important to the UK market than Virgin Mobile
• Voda have stopped recording the inactive numbers, so have a different way of counting the base than the rest
• Voda and O2 exclude their MVNO operations from the subscriber count
• I have assumed all the Virgin Mobile base, both prepaid and contract, are counted within the T-Mobi prepaid numbers. The T-Mobi numbers will also include figures from their smaller MVNOs such as Fresh.
• O2 and T-Mobi only state their revenue figures in Äís and therefore I have converted them using the average exchange rate used by Orange during the quarter.

5:27:45 AM    comment   

Is the post-voice mobile era upon us? Stats out of the UK show a significant drop in the number of voice calls both pre- and postpaid users are making each week. Last year, prepay users made an average of 14 calls per week; this year, it’s down to 10. Postpaid users similarly fell, from 35 to 27. Prepay users’ texting levels held steady, but postpaid users are now sending almost 50% more texts each week.

What’s interesting is this is happening as voice prices are falling, too — resulting in significantly lower spending, according to the survey. It says prepaid spending is down from ¬£19.29 per month to ¬£12.35 per month, while postpaid is off 20 percent. I’m not sure just how much I buy into the spending figures, though, as looking over the ARPU stats for Vodafone and T-Mobile for the last couple of years don’t show a similar level of disruption (and their subscriber growth doesn’t make me think people are flocking to cut-rate providers).

Anyhow, it’s worth noting the apparent drop in call volume. People are talking less, texting more — and, hopefully, using more data services in spite of the tariffs. To our readers in the UK: are you talking less, or have you noticed any change in people’s behavior? Perhaps we’re running out of things to say, or are even more fully embracing the brevity and non-verbal communication offered by SMS, email or IM. Maybe people are figuring out that they want to talk less on their mobiles, and do more with them.

1:23:40 PM    comment   

Last week, Nokia announced several new handsets for emerging markets. At first glance, they look like what you’d expect: basic devices without the flashy features of the company’s high-end handsets. However, a couple of the most basic-looking, the 1200 and the 1208, have some cool features of their own that should give them a boost in emerging markets.

First, they support multiple phonebooks — a nod to the fact that in many developing nations, a single handset is shared among several family members or friends. The handsets allow for up to five separate phonebooks that can be managed individually, letting users have their own list of contacts, if not their own phone. Second, they have a call-tracking feature, which lets users set the maximum cost of a call before dialing. This lets users control their spending, but it also helps empower the entrepreneurs in these markets that buy a phone and airtime credit, then resell calls. Two small and superfluous features to those of us in developed markets, but two simple innovations that highlight how creative thinking can triumph even in the most basic of mobile environments.

Neither of these devices are going to have the likes of gadget-site writers writhing in the throes of lust, but these sorts of small innovations will make a big difference in their intended markets, and show the continuous improvement that’s possible on the most basic level of this industry.

1:19:43 PM    comment   

ìSo we have to encourage consumers to pay more ñì

1:03:40 PM    comment   

One of our Telco 2.0 event speakers, Tomi Ahonen, has written a passionate eulogy on the end user joys of SMS. We’re soon publishing our Consumer Voice & Messaging 2.0 report, and have been looking at the evolution of arbitrage and toll bypass schemes. Will the future be as rosy for operators as it is for their customers? Could SMS revenues be under threat despite growing volumes and adoption?

At the event we ran some survey questions on the first day with the full plenary audience. Given that SMS is a super-high margin product delivering between a third and half of most mobile operators’ profits, we asked if this service could be Skyped? These alternative services let you connect to a third party SMS gateway over the Internet (using GPRS, 3G, or Wi-Fi) and send SMS messages at well below standard operator prices. It’s much more plausible than VoIP displacing mobile voice, since there are few quality of service issues sending a one-off message.

The question we asked was:

What proportion of SMS messages will be originated from non-operator third-party services in 5 years time?

The results were quite interesting:

There seemed to be little consensus among the participants of whether the threat was real, and if so whether it was small or large. Each respondent was also asked for a reason why they chose their answer.

Those predicting a smaller haemorrage of customers to rival services cited several common factors:

• users are too lazy or indifferent to the cost of SMS to try lowering their expenditure
• there will be a general move towards IM, which will regulate costs and provide a richer alternative
• spam and privacy concerns will keep people away from non-operator services
• operators will just drop prices given any competitive threat

Those citing a larger threat suggested that messaging will be embedded in 3rd party applications, notably social networking services, and that operators will lose control of the context from which messages are initiated — as well as the revenue.

A common theme on both sides was the user experience. Those predicting a low rate of defection cited poor experience, whereas those forecasting some of the telepocalyptic scenarios felt it would come right over time.

We’ve been using a couple of such services recently. Given it costs 40p (about €0.59 or US$0.80) to send an SMS when roaming, we’ve had plenty of incentive. I’ve run out of credit on Vyke having used it a lot, and Jajah only lets me initiate voice calls, so we’ve screen captured all the stages of sending a message from smsBug instead. They all have a fairly similar user experience.

I’ve not included any of the sign-up and installation stages, as we’re assuming users will put up with considerable one-off inconvenience to switch (usually by handing a bank note and phone to a nearby youthful technophilic relative). You set up a pre-paid balance on each of these services, and download a Java client onto your handset. It’s not difficult.

We’ve laboriously documented all the steps, as there are more than for the standard texting experience.

We start from the home screen on my smartphone. I’ve set up smsBug as the (pretty horrible) second icon in the quick access row — the pair of bug eyes. I could have assigned this to the standard messaging hotkey — but we’re relying here on users knowing how to do quite advanced customisation to their phone UI. This isn’t part of the “out of the box” install (and probably never could be on the current generation of phones and Java.)

For some reason the message editor starts with the last message you sent, so you have to do a bit of selection and deletion to get rid of it.

Enter a new message — all standard text entry using native UI features like predictive text.

Then we select the options hotkey which gives us this menu. Somewhat strangely the next step is “send”, even though we haven’t entered any recipient details. And we now discover a “clear text” option, which isn’t visible or obvious to the user on first using the application. (You could fix this with a “select ‘clear text’ option from menu to create new message” down the bottom of the screen when the application is first used.)

A blank screen to type in a number.

We select the option to add a contact from the address book.

Pick the user using the native UI.

Pick the number. Note the boilerplate text glitch in that the UI assumes the purpose of an address book is to support calls, not messaging. (I really must delete that old Kansas City office number — I never look at my own address entry in Outlook!)

Now we’ve got our destination number. Unlike the native SMS user interface, you can only enter a single recipient.

Now send the message. This time “send” means “send”.

Ah, so as we’re going to use the 3G interface, we have to give this Java application permission. Every time.

And also select which access point to use. This is really the fault of the Symbian UI in not giving me more configuration control here. (“If in UK, always use T-Mobile”.)

Now a wait… This has taken up to 25 seconds before now.

A message briefly flashes by with my remaining balance and we’re dropped back into the message editor — unlike the native UI, it’s another keystroke to exit to the idle screen.

The service works — one new message.

And here it is:

None of this is integrated with the rest of the messaging UI of the phone. Your message won’t be stored in the outgoing messages folder. (The story for email is just the same — I have a 3rd party email application installed, but if I select “send via email” for an image I’ve snapped, the only choice is the native email UI, which isn’t configured in my case to send to anyone.)

Overall, I’d say that it’s worth jumping all these hoops to save yourself the best part of a dollar for sending a single SMS. Even when roaming, the combined cost of the bypass service and packet data charges are only a tiny fraction of the roaming messaging charge. I’ve found the services to be as reliable as those of the operators: even when sending “native” SMS when roaming, I’ve had messages fail to be delivered.

The real threat to operators was identified earlier. The owners of social networking applications will replicate these small arbitrage businesses and integrate them into a much slicker user experience. As SMS is hybridised with instant messaging they will also arbitrage termination charges when messages can be delivered over IP to a phone or PC.

Alternatively, as Truphone has done for VoIP telephony from mobiles, it gets integrated with the native UI and the user sees no difference except the price.

In the meantime, services such as these will put pricing pressure on the high-margin users (roaming, prepaid), and encourage the adoption of large or unlimited buckets of messages.

In either case, the SMS party may not be over, but the DJ has finished playing upbeat house music and is starting to rifle through his blues collection.

12:46:48 PM    comment   

One of the topics which came up in the ‘Digital Worker’ stream at the recent Telco 2.0 event was the role of the mobile operator and their SIM card. We asked Colin Mallett, our ‘analyst-in-residence’ for that session, and who spent many years working in R&D for BT, to share his thoughts with us:

“10 years ago BT started looking at a new kind of player called the ‘SoftTelco’. Later, with a multi-million pound R&D budget, we tried to implement some of the ideas, eventually ending up in the Brightstar incubator. This included looking at MVNOs and how to by-pass the Mobile Operator’s SIM.

The GSM SIM card uses tamperproof silicon to provide the client for the mobile operator’s Home Subscriber Subsystem (HSS). It provides a strong authentication token which can be managed securely over the cellular channel. This is a powerful platform which binds the user subscription, handset and network together.

Unfortunately, as readers of this blog know all too well, this sort of tight commercial and technical integration is being ripped apart by IP. It’s happened in fixed telephony with VoIP and it’s soon going to come to mobile - by around 2010 or 2011 according to a recent Telco 2.0 survey - even if, in the short term, operators ban VoIP from their ‘unlimited’ data packages.

So, are SIMs really appropriate for supporting converged services, especially on laptops or on the new classes of Mobile Internet Devices?

SIM Is Good…

The beauty of SIM authentication is that you switch on and a few seconds later you have a connection - more or less anywhere in the world. The whole process is hidden from the end user and everyone takes it for granted. Only traffic over the cellular interface is encrypted, but that is optional for the local mobile operator. So, for end-to-end IP data traffic to remain fully secure, familiar techniques such as the Transport Layer Security protocol (TLS) are still needed. While automatic and secure WiFi authentication is more complicated, it can be achieved if an application is linked to a SIM card (and TLS or IPSec protocols are employed).

…But is Under Attack…

So if the SIM card is so effective, why is it threatened? Mobile operators don’t want to give up the tight control that SIM’s give them, especially in the face of a growing number of MVNOs in increasingly saturated markets. For the majority of operators, in voice and messaging in particular, their reaction to the developing Telco 2.0 trends is to defend against convergence rather than embracing it, which giving open access to WiFi via 3G and HSDPA implies.

…It Hasn’t Evolved…

Over the last 5 years, compared with on-line transactions, SIM based mobile-commerce has failed to take off, partly because the mobile operators and payment card issuers have not been able to agree on appropriate business models and partly because the payment companies have not been able to accept that their logo should not appear on the physical card.

As a result, multi-application SIM cards have never appeared and the SIM has been seen as a blocker to progress, stimulating multiple research projects to bypass it.

..But Other Technology Has…

For many years, handset manufacturers opposed the dual-slot phone - one for the SIM and one for the credit card. However, the battle is now lost. In the diagram above, the mobile handset looks remarkably like a computer with added Cellular and WiFi modules. A second slot was originally needed for removable media to store photographs or music. Now it can take a ‘secure’ MultiMedia Card (SMC) consisting of a flash memory device combined with Java Cardâ[greater equal]¢ smart card silicon.

This, of course, could include banking credentials with the SMC even bearing the financial card issuer’s logo. Although the SIM card is still required for access to mobile networks, the SMC can run all the added-value applications and the processor can run secure automatic WiFi authentication processes and banking applications using SSL.

So, in this scenario, the poor little SIM card supports its original function, but is surrounded by modules and connections that bypass it for everything except connection to a mobile network. The cellular data connection is merely one channel through which servers can be reached securely.

SIM cards are fighting back by adding large amounts of flash memory (512 Mbytes), a high-speed USB interface and a Web server. In all these scenarios, the card manufacturers will grow their businesses.

Gorillas Entering the Fray

Compounding the issues, Intel is working on an Identity-Capable Platform (ICP). The ICP will be a secure hardware area in a processor which supports future converged mobile wireless security and high-value, trusted services including secure access to any device, network or service.

For mobile handsets and possibly other devices such as home gateways, ARM has an equivalent technology called TrustZone. This provides a secure hardware execution zone and memory partitioning. Many silicon vendors are licencing TrustZone. These innovations make possible the advent of downloadable SIM-style applications that could replace the need for a physical SIM card.

What Does the Future Hold?âo¢

- The SIM: will co-exist with its cousin the ‘softSIM’. New items will appear, like the ‘secure’ MultiMedia Card (SMC).

- The SIM vendors should do well: They will broaden out and embrace convergence. They have huge experience in securely issuing and managing trusted silicon devices. There is no reason why they should not turn their attention to provisioning and OTA (Over-The-Air) management of secure solutions, such as credentials on ‘soft SIMs’ or trusted platforms like the Intel Identity-capable Platform.

- The SIM card: will continue to be made and used, but will become a low value commodity item, always competing against managed secure intelligence in the mobile device.

- The mobile operator: will no longer be ‘in control’. They must embrace convergence fast.

The SIM is a wonderful platform, why restrict it to mobile operators!”

12:43:06 PM    comment   

MIH India has launched another payment module called ibQash for users of their social media portal ibibo. Users will be classified in six âo[ogonek]leaguesâo? based on the level of activity on ibibo, which determines the quantum of payment to users. The other payment module âo?Great Indian Blogger Huntâo? had issues of some people copy-pasting content from elsewhere, and ibibo has asked users to report abuse. Still, I remain skeptical about the whole concept of paying users to blog - money doesnâo[dot accent]t buy loyalty. And how feasible is it, since this is not an advertising revenue share - itâo[dot accent]s an out-and-out payment for usage...anyone remember the defunct Mailmetoday.com from the India Today group?

Ibibo has also launched polls - both online and mobile - and a classifieds search for cities, jobs, restaurants and (surprisingly) matrimony, called âo[dot accent]dwaarâo[breve]. Gaming sites chotafish and motafish are now ibibo kids and ibibo games respectively.

The more interesting initiative is a social networking site called Cafe ibibo, that requires users to disclose and verify their mobile number, and is hence positioned as being âo[breve]saferâo[dot accent] than other social nets. There are some usability issues and bugs, though - I couldnâo[dot accent]t figure out how to upload my photo directly to my ibibo cafe profile. Someone sent me a friend request, and when I checked the profile, it still displayed my name with his profile.  There are no groups yet at Cafe ibibo. I also noticed two more sites via the footer at bixee.com (which MIH acquired) - classifieds listing Apnamarket.com and questionbank.net.

11:37:22 AM    comment   

I have no idea what the traffic will be for this new venture if they create a single destination site. I have no idea what the traffic will be for video hosted by the distribution partners they signed up, Yahoo, MSN, AOL and Fox and NBC/Universal sites themselves. Individually they certainly will trail Youtube in traffic. In aggregate, it has a chance to surpass Youtube, but we won't know this for a long , long time.

Here is what I do know.

1. Because Gootube has chosen to hide behind the DMCA, it can only sell advertising around videos it has a license for. That means their inventory is limited, which in turn limits its ability to try new things and to make big sales. If the core competency of Google is to sell advertising and the foundation for the Youtube acquisition was to invent and deploy new and exciting forms of video advertising, that goal just took a huge hit.

This new venture, if it can launch in the next few months, will hit the ground with more and better content, and more monetization options than Google. Its a unique opportunity to set the rules of how video advertising is sold. Something Google thought they had wrapped up when they bought Youtube.

Whether Newco can live up to Google in terms of performance and innovation is another question, but they are going to have every opportunity to do so. Hiring some folks away at Google for stupid money would seem to make a lot of sense at this point.

2. Youtube's 10 minute limitation will put it at a disadvantage. Newco's distributors will have access to full episodes in addition to clips and user generated content beyond 10 minutes. This will give viewers much greater choice and could steal users from Youtube for this reason alone. It may force Google to combine Google Video and Youtube. It also will provide more options and flexibility for advertisers.

3. What may turn out to be the biggest problem created by Newco is the new competition for content from major content owners. Rather than Google walking into meetings as the only kid on the block, Newco can offer an alternative from the mindset of a content provider. It will certainly impact the terms and cost of content for Google. The good news for Google is that it may accelerate their ability to get deals done with people who dont want to partner with Newco for whatever reason

4. If the future of the net is video, where does this put Google Search ? Google Video Search right now plays in a walled garden of indexing and returning results only for Google Video and Youtube. How long will users give them a pass for this ? The distributors of content from Newco all have some level of internet video search, I would expect that they will start making an issue of this in advertising and promotional campaigns..."There are X million number of websites with video on them, Google Video searchs 2 of them..."

This new venture is about so much more than who can get more traffic. It was a very smart strategic move to put significant roadblocks in Google's path, while paving a way for those involved with Newco to give users and advertisers what they want from Online Video.

But as always, concept is one thing, execution is the bottom line

11:09:36 PM    comment   

With a few notable exceptions, the blogosphere is, predictably, dumping on the NBC-News Corp. announcement of a new video distribution service. Don't be so quick to write it off.

There are two ways to build an audience: aggregation and syndication.

Aggregation means bringing everyone to you. It's what the broadcast networks do on television, and what YouTube does on the Web. It's a two-step process: build scale, then monetize. I think most people get this model, although doing it effectively (especially the second part) is harder than it seems.

There's also syndication, which means distributing the content (or applications, or transaction opportunities) to where people already are. TV content producers do that too -- in fact, they largely invented syndication as a business model. And YouTube syndicates as well. I rarely go to the YouTube.com website, but I watch lots of YouTube videos embedded on blogs and other sites I visit. However, YouTube's revenues primarily come from leveraging viewership into visits to the central site, which creates and advertising and transaction opportunities.

The new NBC-News Corp. venture is all about syndication. They are getting beaten up for not having a name for the website, but as they made clear at the announcement, the central site is almost an afterthought. The core of the effort is syndicated distribution through a network of partners, like Yahoo! and MySpace. This is smart. Putting only some popular content into the syndication pipe isn't smart, but I predict that if the effort takes off, that limitation will go away soon. Notice that lots of midsize media companies are already syndicating through third parties, like Voxant and Brightcove. An effective monetization ecosystem for content needs three things: platforms, standards, and tracking data. That's what the current efforts are working towards.

Put aside the copyright rhetoric, which I agree is still overblown. This debate has never really been about "piracy" -- it's about business models and strategy: How big is the pie, and who gets which pieces. Don't underestimate the significance of big traditional media players acknowledging they need to follow their users to the Web.

11:05:13 PM    comment   

I'm quoted in John Markoff's New York Times article today about the 700 MHz spectrum auctions. The column grew out of a spectrum policy discussion I led a workshop last week, which John also attended.

My quote compresses a longer point I made, which hopefully comes through. It's that the direct transactional price of acquiring a spectrum license may not accurately reflect the economic and social value of certain spectrum uses. This was a key point of my Supercommons law review article. The 2.4 GHz spectrum where WiFi operates was considered worthless "junk" spectrum due to interference, but opened for unlicensed use, it is the foundation for massive investment and economic activity.

11:02:15 PM    comment   

Internet OS sector seems to be getting increasingly crowded. Start-ups such as YouOS, EyeOS are vying for mindshare with Internet giants like Google. The seriousness of market is reflected by the fact that earlier this month, Microsoft set up an all-star group to tackle the Cloud OS opportunities.

A dark horse in this race is Xcerion, a Swedish start-up that came out of stealth earlier this month, and announced its XIOS, its XML-based Internet OS, and got subtle tip of the hat from some of the most respected technology pundits.

Xcerion, now about five years old has started out as a company developing a friendly user interface for enterprise resource management systems, has developed a back-end software infrastructure was offering a two megabyte download that looked and mimicked any regular desktop OS. They claimed it took less than five seconds to boot up, and was able to offer applications that did most things we expect from apps on a desktop.

Too good to be true? That was my initial reaction, though my skepticism was allayed by the that Xcerion counted Lou Perazzoli, a former Microsoft distinguished engineer and one of key architect of Windows NT, and John Connors, former Microsoft chief financial officer was an investor. These two, clearly are two people who know operating systems.

It also helped that a Swedish venture capital group, Northzone was investing $10 million in the company (PDF), and the much-respected Mary Jo Foley, who despite similar trepidations about the company, had given it subtle thumbs up.

Xcerion’s technology falls in the category of “seeing is believing” products. (See the gallery of exclusive screenshots at the end of this article.) Daniel Arthursson, CEO of the company demoed the product, and it was a jaw dropping moment, when skepticism gave way to tempered enthusiasm.

The little OS worked as promised over the pokey Starbucks wireless connection, and for a few seconds I did forget that this was coming off the Internet and windows running locally.

He showed me an Outlook-type email/day planner app, a RSS reader, a word processing application, an Excel style spreadsheet application and a bunch of other small applications. “You can continue to keep working in our XIOS when offline and the information is synced when you connect the next time,” says Arthursson.

The entire application can be customized [base ']Äì developers can create skins that resemble MacOS, BeOS or even bring back some of the old OSes that are now long forgotten. (OS/2 anyone?) XIOS comes with a visual application development environment which can be used by anyone to create small applications [base ']Äì lets call them widgets [base ']Äì which can be completely bespoke or sold to others.

“XML was the only way for us to keep the download small enough and also be able to reuse the code when creating new applications,” says Arthurson. Xcerion is going to launch in the third quarter of 2007, and has developed the backend technology, that runs on servers using Ubuntu Linux. The company is putting scalable data centers in place to be able to handle all the heavy lifting.

Imagine this application married to say Nokia N800 tablet? It could be a full-fledged computer in your pocket [base ']Äì all you need is a decent Internet connection. Or XIOS embedded on a cheap $100 laptop that can be used by schools or kids in the emerging economies? There are many possible scenarios, but lets wait for the XIOS to be released: we all want to see it to believe it!

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3:29:43 PM    comment   

• a tiny 40GB Hard Disk - Iíll have that in my non-Apple phone in a couple of years;
• a limited set of supported Video Formatsñ H.264 with not-so-Fairplay DRM and MPEG-4 Simple Profile;
• a limited set of outputs ñ HMDI + Component Video ñ what no European SCART?
• No modem ñ just WiFi and Ethernet connectivity;
• No TV record capability; and
• No DVD play capabilities

• GooTube featuring the 100% in-house built Google Distributed SupaComputer and Advertising MegaNetwork with User provided access;
• Apple featuring the Akamai provided Content Distribution Network and the in-house built i-Tunes store with User provided access; or
• BT featuring the in-house owned IP-content network and the Microsoft IPTV platform with User provided access bought from BT.

3:28:37 PM    comment   

Scot Finnie, who recently made a public conversion to Macs over the course of three months, has an interesting, if disagreeable, piece on how Apple is competing with Microsoft more smartly than it ever has before. His key points:

• Mac is finally able to move fluidly into and out of the world of Microsoft Windows and its applications.

• Mac users are more productive than Windows users because Macs experience fewer problems. There's nothing mystical about it either. There are some obvious reasons why this is the case: The Mac is a closed hardware/software system.

• Apple is innovating not just with the software and hardware it creates, but with the value proposition it is building in the marketplace. While Macs still aren't cheap, you get a lot more bang for the buck than you once did.

But he also thinks:

Apple should create economy-oriented, business-class desktop and notebook hardware. Since Apple offers very few SKUs, it's almost impossible for enterprise buyers to save money by specifying this or that lesser feature in order to reduce cost.

In NY, it seems like Mac users are the majority, though I realize it's not the case everywhere. What's it like in your neck of the woods? Are you considering "the switch"? – Matt Buchanan

Why Microsoft Should Fear Apple [Computerworld]

3:19:39 PM    comment   

In this final instalment on our Telco 2.0 Business Model Map we[base ']ll look into some of the consequences for network operators. You[base ']ll want to read our introduction, explanation and map timeline before reading this article. We[base ']re going to stick with the ten-year-out map just for sake of typographical clarity, but the points apply to the industry evolution at any stage on the way.

The opportunity isn[base ']t where you think it is

The received wisdom in telcoland is that bundling a triple/quad/n-play is the route to a profitable future. We[base ']re less convinced. A few media owners control the blockbuster content (and the rest is on YouTube); telephony [~] even with feature add-ons [~] is coming under margin pressure on both fixed and mobile; and the broadband offering just sucks up capital without giving a good return (unless you[base ']ve got a weak regulator and great lawyers).

We think the biggest opportunity lies in a different quadrant, where the apps are less tied into the network ([base "]idiot savant pipe[per thou], rather than [base "]dumb pipe[per thou]) [~] but the billing and value-based pricing remain in place.

What operators need to do is to break up the broadband business model, horizontally and vertically:

• Horizontally break it into tiers: free (ad-funded), subload (e.g. backups), standard best-effort, priority and full [base "]QoS assured[per thou].
• Vertically slice it so it can be packaged with devices or services as [base "]postage and packing included[per thou].

This service-funded connectivity is crucial. Today[base ']s broadband model is a user experience disaster for customers, particularly wireless ones. Users have no idea what speeds they need, how much it[base ']s costing them in metered usage, and suffer bill shock when they sometimes find out. They need a single price, all-inclusive. This is not going to displace Internet access, but complement it.

The line passes through the IMS/QoS bubble; we[base ']d see IMS being used here as a capacity reservation system of otherwise dump-pipe point-to-point links, but not as a session routing and management service (as with telephone calls).

Keep some of the pie rather than lose all the pie

This space maps directly onto our [base "]customer intimacy[per thou] and [base "]market control[per thou] axes from our Telco 2.0 Market Report strategies. (You can read a bit more in a previous blog post).

The various additional strategies in the bottom right help stretch the options for a [base "]pipe++[per thou] play that takes the basic broadband offering and packages it in different ways. The [base "]platform[per thou] strategy opens up the closed voice, messaging and entertainment platforms to outside innovation. [base "]Protection[per thou] is about cost elimination and optimising the segmentation and pricing of the low-innovation legacy products.

What do you know about your customers?

The ability to perpetuate value-based pricing is going to keep telcos in the loop. Being able to slice up the offering and precision-price and package it will be crucial to bringing all kinds of internal and external innovation to market.

Telcos with a 360° view of the customer and their full spectrum of behaviour are going to be in a strong position.

Left-field is on the left

Finally, some of the more creative business models lie to the left.

BT are already busy getting attachment rights on government buildings in the UK in return for promising to build pubic-service networks. Wireless spectrum auctions in the US are seeing similar trends with hybrid public safety and private use networks. Community-centric networking is coming of age.

The absence of cell towers, call detail records and obvious billing points is likely to scare many operators off from the Personal Area Networking ([OE]PAN[base ']) space. The lockdown of Bluetooth and Wi-Fi [~] mostly by US wireless operators [~] suggests a deep lack of ideas on how to approach this space. Most human interaction is face-to-face, not on the phone. Billions of new interactive, smart devices are going to be deployed in homes, cars and offices, and not every radio needs to be connected to the Internet. Until our personal devices can interact more fully over personal scales, we[base ']ll be stuck with autistic technology. Someone[base ']s going to get really rich here, and it probably isn[base ']t you or me.

Finally we end with [OE]Bottom-Up[base '] networking initiatives. FON and Iliad are the current poster-children for this, but you can bet there will be more entrants [~] such as BT. New models will emerge that don[base ']t require fresh hardware, but open up what[base ']s already installed. Femtocells will be deployed with new business models that reward those who create the network and have paying users roam onto your privately supplied connectivity. It[base ']s an inevitable trend of de-centralisation of management control and network planning [~] one long-ago started with affiliate partners for build-out of US networks and growing with every Wi-Fi enabled home and office.

Over to you[sigma]

We[base ']ve had a lot of fun putting together the Telco 2.0 Business Model Map. We[base ']d love to hear your feedback: does it make sense, has it changed your outlook, what do you like and dislike, where are the gaps, and how can we improve it? And if you[base ']re feeling really lost without a map, you can always get in touch.

Editors Note: We will be presenting these concepts and discussing them in detail at the Telco 2.0 Industry Brainstorm, 27-29 March, London. Details here.

6:07:02 PM    comment   

We[base ']ll be closing our Voice & Messaging survey early next week, so if you want a freebie copy of the summary results, you need to get going and complete it now. If you just do the mandatory questions it takes about 15 minutes.

We[base ']ve had a few surprises. Either the Prozac[base ']s been on special offer this month, or things are looking up. You[base ']re overall quite positive about revenue growth in mature markets [~] but opinions are divided. We[base ']ll be doing some [base "]slide and dice[per thou] to find out who and why.

There[base ']s a lot more appetite than we expected for operators to engage in product and feature innovation. We asked:

[base "]In competing with Internet voice and messaging services with rich functionality (e.g. IM vs. SMS, Skype vs fixed line), rank each of the following tactics.[per thou]

We gave the following options:

• FIGHT: Rapidly improve service capabilities to include presence and multimedia features, offer a softphone/IM service, expand interoperability efforts with other carriers, lower prices and/or offer large/unlimited tariffs.
• EVADE: Build service around unique assets like home hubs and fixed-mobile converged products. Avoid high-priced flat-rate Internet access and sell value-based bundles of services with inclusive connectivity charges.
• CO-OPETITION: Offer a limited partnership, and co-operate only where capabilities and services don[base ']t overlap (e.g. access to pre-paid payments for premium Internet services). In-source selected products like mobile photo sharing to fill service portfolio holes. Revenue share search and advertising.
• CO-OPERATION: Partner in sales and marketing, leave the advanced messaging, media and search/advertising services to the Internet partner, and focus on legacy voice/messaging services, billing and customer service.
• RETREAT: Move to a pure pipe model of selling service. Use Internet brands as primary retail channel partners ([base "]Google phone[per thou] etc.), and focus on underlying infrastructure and service delivery.

To which you[base ']ve so far responded as follows:

Just under 50% of respondents so far selected [base "]fight[per thou] as the best or 2nd best option. Given the overall lack of confidence you[base ']ve expressed in the industry[base ']s future based on current trends, maybe this is a message to CEOs and boards to switch from playing defence to offence? Perhaps the Apple/Cingular iPhone is a first stage of a new features and user experience war brewing in core voice and messaging services?

We then asked about where the revenue opportunities lie, giving among other options:

• OPEN APIs: By opening up the voice, voicemail and messaging platform with APIs to enable 3rd party services and extensions, operators can generate enough new revenues from partners to significantly offset price competition in core voice and messaging services.
• CALLING FEATURES: A large number of users are willing to pay for new advanced calling features (e.g. intelligent call routing based on time of day, calendar, recent activity with caller).
• PRIVACY FEATURES: A large number of users are willing to pay for privacy features, such as multiple or disposable numbers or temporary identities.
• REAL-TIME SERVICES: At least one new real-time service offered by operators (other than mobile IM) will significantly increase industry revenues by achieving mass-market consumer adoption (e.g. push-to-talk, push-to-view, voice messaging).

By far the strongest positive response was to opening up the voice platform and enabling integrati