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Just back from Stockholm. Thanks everyone for the nice time there back again. As talked about in the previous post, here is my Master of Science Thesis report on Strategic Outlooks for European High Definition and IP TV. Enjoy!
Low blogging those past two days, mainly because of the crammed schedule during Armada, the job fair at KTH. Among the many interesting things out there, the grand come-back of Ericsson was probably the most noticeable. More than just a big booth (with nice flashy give-away telephone collars), the company also hosted several events to better understand what's inside the mobile telecommunication giant.
One of those events was a panel discussion on R&D and future technology trends, and it reminded us all, if needed at all, that the telecommunication industry is probably one of the most complex: as underlined by Ulf Wahlberg, Vice President Research, making your shiny new 3G mobile phone able to seamlessly call a 60 year-old phone sitting in a dusty corner in the outskirts of Mexico is no easy task indeed. A perfect (yet of such an ironic coincidence) example of the complexity to handle is the major network failure Bouygues Telecom suffered yesterday, effectively preventing most of its 6 millions customers to make or receive calls during the whole day.
Yet the future looks bright and open: 3.5G is already showing up its potential in the labs, with the new HSDPA (High Speed Digital Packet Access). In Kista (the "Wireless Valley", where Ericsson's HQ are located), Ericsson is experimenting this future generation of mobile access through prototype base stations in vans that drive around in the neighborhood, effectively allowing up to 5Mbit/s. Concerning services, the convergence towards an all-IP, Internet based platform opens up the way for integrated multimedia services (think Triple Play - broadband, Voice over IP and Video on Demand, directly on your mobile phone). In that sense, the development of IMS (IP Multimedia Subsystem) should hopefully make it easier for terminal manufacturers, operators and service providers to roll-out their contents and services in an always shortening Time-To-Market.
The key challenge might well be beyond the technological development: in order to avoid the self-created and sustained hype around 3G the whole industry suffered from, it is important to always put those innovations back in a user-driven and customer-centered perspective: such said customer might not always be rational, but at the end of the day, he's the one who sets the pace for the sector.
Forget about dual or triple-band phones: DoCoMo is (once again) leading the way in Japan with its new mobile phone, the N900iL, which sports both 3G access (FOMA - Freedom of Mobile Access) and Wireless LAN connectivity (the same 802.11b standard used in offices as well as private and public hotspots).
Named PASSAGE DUPLE, this dual access opens up the way for a better integration of mobile phones in the professional sector: whenever Wi-Fi is available, VoIP calls can be made, as well as "presence" services (like Instant Messaging, chat, file transfer). When out of the office, the device can switch back to the (almost omnipresent in Japan) 3G coverage and be used as a traditional phone.
I can't help but relate this to last Friday's seminar at Wireless@KTH, when Magnus Melander of Brainheat Capital talked to us about the opportunity Wi-Fi has of being a neutral ground between the telecom world and the datacom world - a broadly applicable technology on which new, less-vertically integrated business models can be established on both sides. In that sense, DoCoMo's strategy makes a lot of sense: in 1999, it brought i-mode, the first usable Internet services to a Japanese population that was at the time quite behind in its adoption of web surfing and computer-based internet. 42 million customers after that, it focuses this time on the corporate sector and aims at leveraging on the growing wireless adoption there.
A move to follow closely for sure; now, what I really want to see is Skype for DoCoMo phones!
This Wednesday marks a significant milestone for Third Generation (3G) mobile infrastructure and services: Vodafone, the world's largest mobile operator after China Mobile, is vastly expanding its 3G offerings: after Sweden and Japan, it will expand its Vodafone Live! 3G package in most part of Western Europe (Austria, France, Germany, Greece, Ireland, Italy, The Netherlands, Portugal, Spain, Sweden, Switzerland and the UK).
As reported by Bloomberg, Vodafone "plans to lure more
than 10 million customers to the company's high-speed mobile-
phone services by March 2006", a number that stresses again, if needed, the dire needs of operators to recoup the large investments they made for acquiring 3G spectrum licenses in the late 90's (Vodafone alone forked out nearly $28 billion world-wide). More than the new shiny phones and video calls (which 3 has already understood as being insufficient for attracting customers to switch to 3G), it will be user-centered services and innovative applications that make the operators' gambits less risky.
In that sense, Vodafone seems to take an interesting first-step by providing a "mobile iTunes" equivalent in Sweden. With 3000 songs already available, and the promise of 100000 by the end 2005, it's not the choice of or the technology (CD-quality) that is problematic, but rather the underlying business model: the songs cannot be transferred to a fixed computer nor a digital music player, and traffic costs are added when using the service from abroad. Still some way to go for the operators for providing true mobile media...
Earlier this year in January, Skype was being called as “toy” by AT&T Labs: as one could then read on Fortune, “[Skype] can't scale it, they don't have a brand like the AT&T brand, and they don't have the local footprint, which we have”, prophesizing that “[it]'s going to be very hard to compete with someone like AT&T".
Fast forward 10 months later: what we are witnessing is the proof that Skype can actually scale their solution: prominently displayed on their homepage is the recent announcement that the software has reached the 1 million simultaneous users mark. Adding that to the fact that Skype's own infrastructure is reduced to a strict minimum thanks to P2P technology (and people still wonder why they turned down industry-standard SIP...), the growth is mostly organic and almost immediately beneficial for Skype. While the marginal cost for Vonage and other VoIP operators is several hundred dollars for each new subscriber, for Skype it is barely a few tenths of a cent.
If we refer to Christensen's Innovator's Dilemma, we can say that Skype has been, and is still to some extent, a "toy" in the VoIP market. AT&T's quote is actually far from being naive, as Skype alone would have a hard time creating brand and customer confidence: especially in the corporate world, telephony is a "mission-critical" element that is not procured or outsourced lightly. Hence their quasi "wall-garden" and conservative moves towards VoIP.
The recent deals stroke by Skype clearly underlines the company's attempts at gaining a global credibility and brand image through partnerships that extend beyond the mere hardware/headset co-branding:
- IM and VoIP platform with TOM Online in China (October 24th).
- Co-branded telephony service through Livedoor portal in Japan (October 25th).
-Bundling of Skype into Guillemot / Hercules products and computer accessories (October 28th).
Another likely step forward fot Skype is to launch a service for getting a regular phone number that redirects calls to Skype users, a “SkypeIn” complement to SkypeOut. Will Skype succeed at becoming an operator without its associated infrastructure and support cost?
As I read on Vnunet, Skype is looking "to expand its range of free and low-cost voice over internet services with the launch of a video calling offering in the new year". Once again, perfect (and not so coincidental?) timing following Microsoft's announcement yesterday.
Of course it is PR, but the article has a point in underlining that Skype's way of going with an in-house, proprietary protocol (instead of adopting the standardized Session Initiation Protocol (SIP)) was motivated not only because of SIP's technical hurdles (which were actually substantial when Skype started in 2003 - and are still there to some extent) but also a consequence of the low consumer-demand for it. If Skype chooses to become more involved in providing B2B digital telephony, it will certainly have to find a solution to leverage on legacy and other incompatible infrastructure in the corporate world, but this (much-debated) decision of not adopting the de facto technology nevertheless stresses on the importance of consumer-focused and user-driven innovation in the ICT world.
Just back from the Mobile Style seminar at Tekniska Museet. As the full program suggests, it was about the similarities and differences of the mobile environments, technical and business-wise, in Sweden and Japan. More than yet-another comparison between i-mode/FOMA (Japanese 2.5G and 3G) and GPRS/UMTS (Europe's 2.5G and 3G), it was refreshing to look at the how the services have overcome the inherent limitations of the devices and the network(s) they're on. As noted by Johan Hjelm, being able to design, package, brand and sell services despite the limited bandwidth, the small screen, the awkward input methods and the relatively expensive usage accounts for a lot for the success and failure in the mobile world.
In other words, i-mode succeeded where WAP miserably failed because it didn't try to bring the whole Internet on your phone from the start. It much more humhbly started by providing no-nonsense access to specific and sanctionned information. Being able to download ringtones and get trains timetables may sound a bit simplistic by today's standards, but NTT DoCoMo (a spin-off of the former state-owned telco and the initiator of mobile web services through i-mode) did this brillantly, by carefully juggling with tight control and openness (standard technical protocols, three-tier revenue sharing, as explained in further details in my report on i-mode). Which accustomed mobile subscribers to become active users of mobile services, and in turn naturally paved the way for riskier and more advanced services (Java applications, location-based services, and the brand new contactless IC card FeliCa, to name but a few).
As Giles Richter from Mobile Content Forum pointed out, the uniqueness of the Japanese mobile "ecosystem" is that that it has evolved from inexistance to full acceptance and diffusion in an extremely short period of time. It has thus set the ground for hardware manufacturers, operators and service providers to smoothly make the transition to 3G, as opposed to most parts of Europe, where it remains uncoordinated, expensive, and limited, if not completely hypothetical.
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