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Monday, August 5, 2013
Secret of Telco Success - A Perfect DNA Will Drive the Whole Mobile Ecosystem
In the early days of mobile Internet when GPRS and 3G was introduced, all mobile service providers was so excited to get their spectrum to be fully utilise. However, many operators didn't realise the extend of the after-effects when provide Internet access to the users. Initially, operators offered Unlimited Data or Pay-Per-Use Packages just to entice new users to have a feel of mobile Internet. Its either a very high-end user or just a low-end user. But as the traffic grows and the pipe becoming smaller, the operators started to introduce data quotas or throttling mechanisms to provide a fair usage policy.
However, the growth of mobile is so fast that the network is unable to cope with the demand of data-thristy users. GPRS speed is simply insufficient and thus operators have to introduce EDGE and later to 3G and beyond. Furthermore, many other operators are also introducing new and attractive packages. With the problems of customers churning, the operators need to find better ways to ensure the users stay longer or loyal to them. This includes subsidising handphones methods.
The tremendous surge of mobile traffic and subsidising handphones doesn't help in the long run. Its no longer a "big pipe" provider game. The operators need to find new ways and move to the next value chain by monetizing the traffic further.
However, many Internet players like Skype, Google and Facebook seems to be able to leverage on the Mobile Internet and monetize their services - much to their advantage. In addition, phone manufacturers are became stronger in their negotiation power compared to the network operators. For example, Apple with their iPhones is at the "strong" and winning side of the negotiation table dictating how and when they wanted to price and launch their services.
What really drives the whole mobile industry and the ecosystem in each country? previously, many countries try to emulate the success of NTT DoCoMo's i-Mode but failed. Somehow, the business model doesn't work simply because the who ecosystem is not ready. The formula for success is actually to find the right combination of DNA (Device, Network and Application).
- Devices - In the early days of GPRS and EDGE, there are many phone manufacturers attempted to find a better mobile Internet phone or so-called smartphones (that days we called feature phones) and PDAs (Personal Digital Assistants) but many failed in their attempts to topple the "king of mobile data" i.e. SMS and MMS. When Apple iPhone was introduced, it suddenly transformed the way we look at the phones - it actually make the owners smarter. The combined usage of PDA integrated to a smartphone coupled with the ease of use totally change the telecommunications and Internet world. And nowadays bigger devices (called Tablets) are introduced to the market with varying sizes. Imagine a single smartphone can carry 24 times the traffic of a normal phone. And a tablet can carry as high as 122 times the traffic of a phone. And we are expecting the worldwide traffic will grow 1000 times within the next 10 years!
- Networks - The lifetime of each mobile technology is about 10 years. First generation mobile is around 1985-1995, 2G is 1995-2005, 3G is 2005 - 2015 and 4G most probably 2015-2025? In my personal opinion a "true" 4G is when we launched 3GPP Release 10. The current so-called 4G LTE is actually considered as 3.9G (3GPP Release 8/9). But, in more advanced countries, the operators adopted and deployed the new generation mobile much earlier compared to the rest of the world. Whilst European countries have been at the forefront of 3G deployment, it seems US operators are more successful with the their latest LTE networks. Speed is the name of the game. Users will never go back to a lower speed Internet once they have already experience a high-speed Internet. A smartphone works best with 3G speed and never good in EDGE.
- Applications - What makes NTT DCoMo i-Mode ecosystem a success is because they have a very good applications ecosystem that not only covers the smartphone applications but also the whole developer and support chain. To make this successful, there must be tons of applications and thus good incentives and business model must be developed to entice innovative and creative application developers. Applications must be monetized, and thus payment system must be deployed together to ensure the smoothness of revenue sharing model between operators, developers, content providers. In today's example, we can see how Apple App Store managed to attract thousands of developers.
However, the adoption of the above DNA varies from one country to another. A right mix of regulatory framework, policies, incentives and culture will determine the DNA healthiness. The question remains - how is your DNA in your country?
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You can contact the author, Dr. Mazlan Abbas via the below Social Media links:
Friday, August 2, 2013
Thursday, August 1, 2013
Sunday, July 28, 2013
LTE - 4 Things That Can Increase Mobile Data Revenue
There is quite a significant gap between EU and US in the mobile wireless markets. Based on the report "Mobile Wireless Performance in the EU & the US", May 2013 by GSMA, US seems to perform far better than their EU counterpart. How about countries in Asia especially the newcomer Malaysia? Are we taking the right move to introduce LTE when only half of the mobile subscribers are still using 3G and only 30% of them own smartphones? Can LTE increase the data revenue? Maybe we can learn something from US. Some of the key aspects of the report are mentioned below with additional personal comments.
- Mobile Internet Culture - The need to inculcate the culture for seeking knowledge, consuming and downloading information, generating contents purchasing online. The same activity that we used on the fixed Internet at home/office computers is now moving to the next level - i.e. using a smaller screen of mobile devices to do the same tasks.
- Size Matters - With LTE speeds, smartphones with smaller screens does not matter very much but it does make a big difference on a bigger devices such as Tablets and Laptops. With the kind of speed, what previously being a stumbling block for wireless adoption, users are now receptive to the idea of having LTE dongles on their laptops or having Tablets for better browsing experience. There is no more lagging of watching Youtube or streaming videos or having to wait when downloading contents.
- Connection Quality - LTE promises the speed higher than 3G or even what TM Unifi currently offering i.e. beyond 10 Mb/s or even 20 Mb/s. Ask anyone on the street and they will always wish for higher speed and quality.
- Coverage - This is one the basic criteria of choosing a network operator. What's the use of having an LTE device with an attractive data plan but could never get online? In the US, the operators spend a significant amount of CAPEX to deploy and cover nearly 96% of Americans. Most of their users have data plans. That's why we see companies like Apple launch their LTE-enabled iPhone in US first before any other countries. Americans are already hunger for higher-speed mobile Internet.
Is the perception "build and they will come" will remain true? Let's look the example of WiMAX networks in Malaysia. Two WiMAX operators in Malaysia (namely P1 and YES) have different strategies in deploying their network. P1 started to market their 4G WiMAX in places even before they have base stations installed in those places with the intention to get users hyped up and aware of their branding first. On the other hand, YES deployed their networks first before they officially launch their service to ensure the customers expectations are met and no complaints about coverage.
P1 strategy works to some extend in getting their services roll-out well ahead of their competitor and thus successfully capture the early adopters. However, YES learned from the mistakes of the first entrant by providing a better and richer user experience to their users.
However, WiMAX lost the 2 year window frame "given to them" when they did not get enough traction from the device manufacturers. Nearly all WiMAX operators around the world are new players. Thus, they faced an uphill task to get their operations in full swing as compared to the incumbents who can quickly deploy LTE by utilising all the existing infrastructure that's already in place.
This post revisit Malaysia's future of mobile data in the LTE era.
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You can contact Dr. Mazlan Abbas via the below Social Media links:
4G LTE - A New Cash Cow for Telcos?
Maxis and Celcom launched their 4G LTE in the first half of the year 2013. Both of them offered at two frequency spectrums i.e. 1800 MHz and 2600 MHz. Earlier, when they offered at 2600 MHz, there is a big disappointment since there is lack of support on current smartphones. Even the iPhone 5 supports 1800 MHz.
When both operators managed to get approval from the Regulatory, MCMC, to operate at 1800 MHz, many applauded including the public because now more LTE-enabled smartphones will be available. Maxis made easier for their customers to use LTE - without changing their SIM Cards. Only an update of their Carrier software settings. However, Celcom need to get the new SIM cards and furthermore if some of the users have upgraded their iOS firmware to iOS 7 Beta, they somehow need to download some carrier tweaks to enable the Celcom LTE.
Malaysia’s 3G SIM card penetration is low at 52%, while nationwide smartphone penetration is only at about 30%. It took 3G more than 8 years to get to this stage (Celcom launched 3G service in May 2005), thus, what makes us think 4G LTE can do the same or better?
Personally, I am very positive with the growth of LTE in Malaysia. What we did things 5 years ago are not the same today. Let's take a look what's the difference:-
- Awareness - Users today hunger for speed and they are aware that 3G is able to satisfy their needs but they still want more. They are now well educated regarding the evolution of mobile standards from 1G to 2G to 3G and they are expecting a better experience with 4G.
- Social Media - The phenomenal growth of social media when Facebook was introduced. It became more personalised when smartphones introduced Facebook clients on their mobile. Since then, most mobile social media applications are such an easy to use. Popular apps like Twitter, Google+, Facebook, Instagram are now built-in to the mobile/portable devices OS such as Android, iOS and Mac OS X. Sharing has now become so simple - thus the era of user generated contents has finally arrived
- Generation Y - We considered Gen-X to be tech savvy and Gen-Y to be user savvy. The current Gen-Y grew up with the technology and coincidently at the right time when the wireless technology is matured enough to have a better experience. Gen-Y and the next upcoming Gen-Z will have higher expectations since these mobile applications and gadgets have become part of their daily life.
- Smartphones & Tablets - The phones has evolve into more than just a phone. The increased power of CPU, bigger memory, hi-res display (retina, Full HD), integrated functions such as music, games, video, GPS coupled with high speed network have transformed the way we traditionally look and carry the gadgets. Tablets gave a new browsing experience in browsing Internet with its instant boot-up time and mobility.
This upcoming post describes the success factor of LTE.
Source: Dr. Mazlan's Personal Thoughts
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You can contact Dr. Mazlan Abbas via the below Social Media links:
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