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ABI Research Blog (121)

The future of 4G rests in the handset, not the network

Jun 10, 2010 12:00:00 AM / by Admin

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If there is one lesson to be learnt from the growth in 3G and 3.5G services, it is that widespread service adoption is contingent on the availability of attractive ‘blockbuster’, ‘must have’, handsets. This was true of 3G services, which only really gained the massive data-hungry popularity they now enjoy thanks to the remarkable success of the iPhone and its clones. What this did, was provide services and applications that gave compelling reasons for users to adopt 3G data plans. For network operators looking to sell their 4G services to the public, they must look to selling the ‘experience’, not the speed.

In that context, Mobile WiMAX’s quest to be the 4G service of choice received a fillip this week with the introduction of the HTC EVO 4G. The handset’s weekend sales will, according to estimates, range from 150,000-200,000 units; and will in the short matter of three days eclipse sales of all other WiMAX capable handsets this year.

The popularity of the handset does not stem solely from the availability of 4G data services. Clearwire’s WiMAX network does not yet cover much of the United States-yet the handset is reportedly sold out both online and in many stores countrywide. Customers are attracted to the power and usefulness of what is one of the top-end android handsets-with or without WiMAX. Its large screen and included video recording and editing make it an ideal device for portable content consumption.

The lesson is that, if WiMAX or LTE wish to gain quick market acceptance, it will be essential that the major handset manufacturers be prepared to offer compelling smart phones that include 4G. At the end of the day, consumers are interested in the user-experience, not the included technology.
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Russia's State RF Commision Might Push for LTE RAN Sharing

Jun 8, 2010 12:00:00 AM / by Admin

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In Russia, Rostelecom is planning on deploying LTE in Sochi, where the 2014 Winter Olympic Games will be held. Launching cutting edge mobile networks in cities where Olympic Games will be held is becoming commonplace, as seen with Beijing and Vancouver. MegaFon also intends to put an LTE network up in Sochi. The State RF Commission was supposed to make a decision about the licenses on June 2, 2010, but this has been delayed since the Russian military made it known that it intends to build its own 4G network in Russia using 2.3 GHz and 2.5 GHz spectrum.



In addition, Russia's regulatory body seems to be pushing the idea that Rostelecom and MegaFon should implement RAN sharing because it is unreasonable to have two LTE networks in Sochi. Perhaps this has more to do with ensuring that the Russian military has enough spectrum for its own network.



Yota, which has existing coverage in Sochi (among other cities) with its WiMAX network, is currently in disupute with the Russian regulator over whether or not it is allowed to deploy LTE. It is unclear if Yota is looking to deploy TD-LTE in its existing TDD spectrum it had intended to use to expand its WiMAX network to other cities or FD-LTE in separate FDD spectrum. It is possible that the real reason behind denying Yota the right to build an LTE network has to do with the Russian military's LTE goals as well.


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Signaling Crunch? Femtos to the rescue

Jun 2, 2010 12:00:00 AM / by Admin

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The femtocell chipset vendor picoChip announced today that it has been able to provide an additional capability in its PC3x3 chipset series called smartSignaling. This includes the PC313 and PC323 chipsets which supports Rx Diversity. With this functionality picoChip claims to be able support 2x-3x more users at the same power level.



With smartSignaling enabled in their Rx Diversity chipsets, through a firmware upgrade they can support up to 400 ‘always on’ devices on a femtocell.These devices mainly include smart phones, which have their push email and other notification applications on constantly resulting in a signaling deluge. ABI Research’s latest smartphone estimates show that the 2009 saw a 25% growth in smartphone penetration compared to 2008 with penetration levels in 2010 expected to reach 18% by end 2010.



I queried them on the 400 user estimate which looks to be a statistical estimate and is not a hard and fast rule. It might be higher but could also be lower, but am not sure how low.



In an office environment while you could have upto 40-60 users actively making calls or data sessions on a femtocell, the rest of the idle users also would need to be accounted for especially when smart phones are involved. Typically if 15% of the office staff is using up active data capacity, the rest 85% need to be accounted for their idle mode signaling. Therefore doing the math, with 60 active user sessions you need around 340 idle mode sessions. This seems like a good benchmark to work with. picoChip says that this capability can be supported on closed, open or hybrid mode and doesn’t matter. However in closed mode they would need all the 400 users to be on the whitelist.



This level of signaling offload looks like a unique feature set to picoChip (at least for the moment) and strengthens the case for femtocells as not just a capacity offload solution but as a signaling offload solution as well. Compared to WiFi offload this gives femtocells an edge for sure, as WiFi is primarily meant to offload capacity and not signaling traffic. With collapsed RNCs femtos are able to take most of the signaling traffic off the operator core network. There seems to be a general revival in interest towards enterprise femtocells and the main reason is the data explosion from smartphones many of which are found in offices. Having spoken to many of the large operators, this seems to be a problem that needs urgent fixing, and WiFi doesn’t seem to be a long-term solution for them.



If femtocells can offload a significant amount of signaling traffic apart from data traffic for operators, it could become a much more cost effective solution than they had initially imagined, taking some strain off their core and RAN capex budgets, while bringing in additional enterprise user revenues.
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Mobile Impact of MasterCard API Move: Covering The Bases

May 28, 2010 12:00:00 AM / by Admin

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This week, MasterCard announced they will open APIs to third party software developers around the world to “create a new wave of e-commerce and mobile payment applications.”


Setting aside the broadest impact of the announcement and focusing strictly on the mobile perspective, the announcement caused some speculation as to what specifically MasterCard had in mind.Is there some area within mobile Mastercard is keen on?Some possibilities:


Direct relationships with mobile app developers. Perhaps to enable speedy in app purchases, upgrades, subscriptions, etc.

Pay by mobile online. Merchants or others seeking payment options online develop option for consumers to enter only their mobile number after initial registration to trigger a purchase linked to a MasterCard.Potential convenience to consumer and very solid way to provide multi-authentication and limit fraud.


Publicly, they are saying the API initiative is not driven by specific mobile opportunities.After speaking with Josh Peirez, the Chief Innovation Officer MasterCard Worldwide, it appears Mastercard is primarily looking at the API initiative as a preemptive move to support creativity, and it’s less about any specific mobile initiative.Peirez sees an increasing melding of the physical and digital marketplace.He says he isn’t sure what the best or biggest usage of the Mastercard APIs will be, but he does know MasterCard doesn’t want to miss the opportunity to tap a growing digital payment play.


Peirez went on to say that the compelling proposition for MasterCard around mobile is that opposed to a plastic card, mobile really opens the door to a broad range of multiple services, because a plastic card is dumb and in relative terms a mobile is smart.

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AT&T Experimenting with Wi-Fi Hotzone in Times Square

May 27, 2010 12:00:00 AM / by Admin

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AT&T is experimenting with Wi-Fi hotzones - a group of access points that together provide one large coverage area. It is starting with Times Square in Manhattan, just North of where 7th Avenue and Broadway intersect between 45th and 47th Streets. This is a great approach to solving its network issues. AT&T is deploying faster HSPA/HSPA+ speeds now, will launch their LTE network in late 2011 and 2012, and are looking into expanding their use of Wi-Fi. AT&T already has a lot of Wi-Fi hotspots on which many AT&T devices can automatically connect to, but these are primarily indoors. This hotzone is outdoors in an area with heavy pedestrian traffic. If implemented correctly, this will alleviate a lot of data traffic from the cellular network, as well as a lot of the extra signaling that goes with it. If this test is successful, AT&T will expand this to other areas as well. This is definitely a good move - leveraging the best network possible at any given time or location makes the most sense. As traffic increases, mobile operators will want to push cellular data traffic over to other types of networks that can better handle the capacity. With Wi-Fi attach rates rapidly increasing in smartphones, Wi-Fi hotspots and hotzones are a great way to offload traffic and provide better speeds to end users.
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Nokia Money: The Model for Mobile P2P Growth?

May 26, 2010 12:00:00 AM / by Admin

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With the GSM Association’s Mobile Money Summit wrapping up today in Rio, there has been plenty of media attention focused on developing world mobile P2P initiatives by Zain, Vodafone (MPESA) and MTN http://www.mobilemoneysummit.com/press/show_daily.shtml , and on the challenge of striking working arrangements between MNOs and banks.


Leaving the bank/MNO feud aside for a moment, what most people have not understood about mobile money transfer initiatives to date is that by and large, none of the current services offer a significant degree of interoperability.For example, Zain, Vodafone and MTN programs only work when both the money sender and recipient are customers of the service – MTN customer to MTN customer, Zain to Zain, etc. A large part of MPESA’s success in Kenya is due to the fact that Vodafone/Safaricom has over 80% of the mobile subscribers there.By contrast, Vodafone has not been as successful in Tanzania.While that could be due to several factors, it is important to note that Vodafone has a much smaller market share in Tanzania than they do in Kenya.


Banks seeking to launch these services face similar challenges and it will be rare to see a bank-led mobile P2P service that embraces interoperability and consequently, exponential growth of mobile P2P.


So how can mobile P2P services be widely distributed?While there is the potential for MNOs to work through interoperability for P2P services (they do so today for text messaging, international roaming), none have done so today.


That’s why Nokia Money’s model is intriguing.Nokia Money is bank and MNO agnostic, leveraging merchants that currently sell Nokia phones as Nokia Money agents.In talking with Nokia Money officials last week, ABI Research found that the Nokia merchant network is more than 500,000 retailers worldwide.Nokia is also by far the most dominant device supplier in developing markets, providing very low end mobile phones throughout Africa and Southeast Asia, including India.


While it is true that Nokia’s potential agent network won’t penetrate as deeply into the extreme rural areas that MNO agents do, Nokia is seeking to extend their agent network by potentially working with the post in selected countries.Traditionally, the post has offered money transfer services, but not mobile.Nokia would embrace a rival and use it to their benefit – something the MNO or bank led initiatives have not done to date.
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Google Wins Approval to Acquire AdMob - Bigger Battle with Apple Looms

May 21, 2010 12:00:00 AM / by Admin

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Google can now move ahead in its bid to strengthen its foothold inmobile advertising.It just won FTC approval to acquire leading mobile ad network AdMob.



This is a big deal, and it gives further validation ofthe emerging importance of mobile marketing. It also meanswe will seemore intense competition between Google andApple as the latter rolls outits forthcoming iAd platform.



In its 5-0 decision, the FTC commissioners said the Google-AdMob deal did raise some serious antitrust issues, but that Apple's purchase of Quattro Wireless earlier this year and other competitors in the space wereenough to give Googlethe green light.



Look for more on this topic in the next few days in an upcoming ABI Insight.
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WiMAX Ecosystem Will Lose Yota as a Service Provider in Russia

May 21, 2010 12:00:00 AM / by Admin

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Having been one of the key service providers pushing WiMAX early since 2008, Scartel's Yota was steadily growing its subscriber base of WiMAX customers. In a very short time, they ramped up to what they last reported was 375,000 subscribers. The company had mentioned that they were expecting to get to 500,000 subscribers fairly quickly. This article is citing 500,000 subscribers. They reached 25 million people in Moscow and St. Petersburg, giving Yota about a 2 percent penetration rate against people covered by its network. Yota had also quickly turned profitable.



The 15 cities it had planned to expand its WiMAX network into will instead be built with LTE. Moscow and St. Petersburg and the three other cities where WiMAX now operates are to be converted to LTE by the end of 2011 - in about a year and a half from now. Yota used to be the WiMAX service provider with the most subscribers, until it was surpassed by Clearwire in the US last quarter.



One question that remains open is whether or not Yota will plan on coverting its upcoming WiMAX networks in Belarus, Peru, and Nicaragua from WiMAX to LTE. In these countries, the considerations may be different depending on the regulatory situation.


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Cisco to Acquire Moto? No, not that Moto.

May 20, 2010 12:00:00 AM / by Admin

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My first thought when I saw the headline in my email was that Cisco was trying to pick up the STB business from Motorola.I was relieved when I saw that the Moto the article was referring to was Moto Development, the company that helped design the Flip video camera.In this case, I think acquiring Moto is a great move for Cisco in its continued strategy pursuing consumer devices.

The Flip video camera is a standout product, and having used one I believe the design and user experience is excellent.I have owned video cameras in the past, and my current cell phone also shoots video, but the Flip is my go-to device for capturing important moments.I have an eleven month old nephew, and the Flip has been there to see him crawl for the first time, and last night when he took his first steps.That is the kind of product that consumers embrace and make a part of their everyday life.

Cisco has been doing a much better job with consumer-targeted products after the acquisition of the Pure Digital (Flip) team.Of course, the original Flip product was released prior to the Cisco acquisition, but the company allowed that team to stay on track with the second generation device and brought them in to work on the new Valet line of routers.If you’ve seen my review of that product, you know that I think they have made tremendous steps in improving home networking.

Cisco’s first attempt at networked home audio didn’t go so well, and a lot of that had to do with the design and user experience.We’ve also already seen Cisco talking about consumer TelePresence, and that is going to take an exceptional user experience to separate Cisco’s product from competitors like Skype and now Google TV.By bringing in a talented and creative group of individuals from the Moto Development team, I believe Cisco will be well positioned to tackle additional consumer related devices and categories.
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Aepona: Interesting Investment for Blackberry Fund

May 19, 2010 12:00:00 AM / by Admin

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On May 6, Belfast-based Aepona announced they had received a new $10 million round of funding led by the Blackberry Partners Fund (BPF).BPF is “ is focused on investing in mobile applications… for the BlackBerry and other mobile platforms.”With the addition of Aepona, BPF are now actively invested in eight companies.A quick analysis of the portfolio, one can see how RIM could potentially benefit from the success of these companies, but there is something a little different about Aepona.


Aepona is the industry pioneer in “Network as a Service” (NaaS) platforms.Aepona’s product is called the Universal Service Platform (USP) and is designed to give operators the ability to offer key network APIs (billing, location, messaging) to third party app developers quickly and easily. The platform normalizes MNO specific APIs into web based APIs, which means app developers can in theory write to Aepona’s single set of APIs and reach Aepona’s multiple MNO customers.The company recently acquired multi-channel payments and settlement specialist Valista, and is the technology partner providing a standardized version of USP for the GSM Association’s OneAPI initiative.

From a purely speculative perspective, what is compelling about the Aepona investment by BPF is the potential use of the Universal Service Platform by RIM.


RIM seems keen to deepen and expand their ties with their MNO partners. One way they have done that is to work hard to incorporate carrier billing into AppWorld or even potentially help establish carrier-branded Blackberry App Stores.If RIM were to become a customer of Aepona’s USP, it would create a win/win for RIM and their MNO partners.For RIM, they would be able to offer not only device APIs to app developers, but network APIs as well.For MNOs, they would get to participate directly in app revenue share for Blackberry apps, and the value of those apps to consumers would in theory be much higher because of the deep device and network integration potential.


If that weren’t enough, consider this – Aepona’s platform is currently being marketed to enterprise customers as a way to easily extend and enhance Software as a Service (SaaS) offerings with NaaS.As RIM’s great strength is with the business user, enterprise-specific tools such as this would make the bond with enterprise users even stronger.
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