re: Issues with GPRS (EMC) Part 1 - long but comprehensive
>> Many Obstacles Lie Ahead As Operators Aim For GPRS Roll-Out, Conference Hears
Dennis Andrews
EMC Cellular
11-Jun-2001
e-searchwireless.com
At a time when the initial GPRS services are taking to the air, IBC held its well-attended GPRS Congress in Rome during mid-May 2001, and coupled it with a single-day seminar entitled 'Is GPRS the Saviour for WAP'. This EMC report centres on the presentations delivered at these two events but also takes in other related research that will provide a comprehensive analysis of the position of GPRS as a 2.5G technology, and its place in the path towards third generation systems.
Opening the conference, Jonas Twingler - Senior Partner at Northstream, reviewed the current market position of GPRS - a delayed start, shortage of choice in handsets, major uncertainties in the market, and fast changing perceived value chains. He highlighted what he saw as the fundamentals for GPRS success:
* Services that the market is prepared to pay for
* Pricing plans that make both sense and money
* Non-voice services that are simple and intuitive in use
* Roaming that is simple and workable
* An understanding of the relationship between GPRS, possible addition of EDGE, and the route to 3G
* Maintaining a grip on related dependencies and enablers - silicon devices, overall technology, business issues
Above all, the industry keeping a focus on what it can do best, and not what seems to be good.
There was a general view that GPRS, with its potential for new customer behaviour, new reasons for usage, and new types of services, will provide the potential for a 'revolution', with 3G/UMTS representing an 'evolution' - more bandwidth and additional complexity of service.
Adam Daum from the Gartner Group, reviewed findings from recent research into the potential for mobile data markets. This had highlighted critical differences between delivery of services in the fixed internet world and that of mobile data service.
Characteristics Fixed Internet Mobile service
Willingness to pay for content Almost zero Context-dependent
Registration/Opt-in Rare Essential
Accountability for content ISP is just a pipe Operator 'responsible'
Advertising Indiscriminate Opt-in only
Primary role in B2C e-commerce Information research Decision support
Source : Gartner
The research had also looked into the potential popularity of various types of mobile data services taking Italy as a representative market.
<snip chart >
Along with other presentations at the conference, this emphasised the acceptability of messaging and leisure services and the relatively small interest in 'business' applications. The same research provided some interesting information on the attitude of current WAP users, again in Italy, to paying for various types of mobile data service. This market view would support the ongoing introduction of multimedia messaging which is already appearing in the latest handsets.
GPRS Business Models And Value Chains
A number of presentations dealt with the complexity of the business models and value chains that will be associated with the provision of wireless data services.
Janne Pesu, from Sonera, said that despite technical and delivery problems, the GSM industry has generally beaten forecasts all through its short history and it should have the ability to do the same through GPRS and 3G. SMS became a new way to communicate and its low and fixed transaction cost proved to be a winner. By the use of market power, operators have a considerable ability to fulfil their own forecasts, although possibly at some cost.
Although some speakers discussed business models and value chains in terms of applications appealing to mature business users and value-added applications, there was something of an overall consensus that, certainly in the short term, a large proportion of any new revenue would come from the 15-24 year-old group who, as current SMS users, would be attracted by the enhanced message applications and games, and thence to other services. No speaker was able really to address the growing conundrum that many operators' business plans revolve around continuing ownership of the user and generation of revenue from the associated applications, but that the only financially successful wireless services to date have been built on the principle of the provision of a transparent 'data-pipe' with the bulk of revenue coming from airtime provision (i-mode and CDPD).
Tomas Wedl, from Telering Austria, provided a fairly simple example that highlighted the difficulty of aiming at application based revenue. Telering had attempted to establish a SMS-based service that provided the user with the ability to interrogate a radio station on the identity of music, and then provide the opportunity of ordering a CD online. However, no agreement could be reached with the various entities involved in the proposed service and it could never be launched. He said that for any complex value chain, the successful establishment of cohesive partnerships would be essential; but he had no message on how this might be achieved in practice.
Later in the conference Cindy Dahm, Business Development Manager with Openwave, defined the practices that might be required in constructing a Service Level Agreement with application partners.
* Usability - testing will be key; applications must be based on a Style Guide; every application must be compliance tested; every device and browser must be tested
* Performance and Reliability must be assured
* Information refresh intervals must be agreed
* Dynamic application changes must be controlled
* Copyright issues must be covered
* Privacy issues must be addressed and responsibilities agreed
* Split of revenue from advertising, referral fees and sponsorships must be covered
* Joint Marketing of services must be covered.
Applying The i-mode Experience to the GSM world
A number of speakers discussed the factors that had provided the success of i-mode in Japan. However, there seemed to be few accepted conclusions on how the resulting lessons might be applied to the GSM wireless data market. Some key factors could be distilled from the various presentations.
* The issue of the 'mobile internet' is unlikely to go away and will always present a difficulty of matching user expectations against deliverable functionality
* There is a fast expanding level of attention being devoted to CRM, its relationship to revenue growth and to reduction of churn
* The industry is, at long last, recognising that investment in a new cellular related product or service is, increasingly, an emotional purchasing decision rather than the traditional approach based on a technical and rational basis
Marco Buttazzoni, from Logica Consulting, whose company has been closely involved with the operation of NTT DoCoMo's i-mode network, provided some views on the system development and the factors associated with the rapid growth of its customer base.
He began by challenging a number of the suppositions that have been voiced over supposed 'special factors' in the Japanese market that do not apply elsewhere.
* 'Internet penetration in Japan is low' - not significantly different to most other countries
* 'The Japanese like gadgets' - no more that most other markets
* 'Japanese commuters have lots of time to kill' - no different to other countries
* 'Japanese prefer to write rather than speak' - no significant difference
* 'Japanese consumers are accepting of the principle of paying for data content' - most i-mode data is free.
Buttazzoni pointed out that NTT DoCoMo had originally launched packet mode over their PDC system during 1997; but it was not until February 1999, after a relaunch with a new marketing direction, that the explosive growth in usage began. With standing monthly charges of $3 for basic service additional $7 for data service, i-mode is generating around $18/month/user revenue for DoCoMo. Usage splits as 42% e-mail, 34% voice, and 24% web surfing.
He said that NTT DoCoMo had established a well-founded claim to be the first operator that has generated significant revenue from mobile internet applications in spite of a service that is based on a narrow bandwidth technology; much of this stemmed from the i-mode business model being structured as a 'delivery pipe' and billing engine. User expectations had been successfully contained by presenting i-mode as a new mobile service and not as the mobile internet. Other success factors included a high focus on the consumer, marketing the i-mode handset as a 'fashion item', the use of cHTML and high definition colour displays, and close control of application partners to ensure consistency across all accessed services.
Although the presentation was partly aimed at promoting NTT DoCoMo's efforts to market i-mode outside Japan, the message was that its success came from innovative marketing and not from the underlying technology.
Data Applications for GPRS Users
Some global concepts emerged from discussions on application provision.
* In the short term, at least, WAP will be the principal vehicle for the supply of data services
* Evidence suggests that leisure related applications will still be more popular than business applications
* In design of applications, the 'three click concept' is of great importance. This says that a user will accept up to three keystrokes in order to access required information. Every keystroke beyond three diminishes acceptability by a cumulative factor of 50%
* Some applications, such as MS Outlook, take a lot of time to establish due to handshaking requirements and will only operate satisfactorily with the addition of application accelerators.
Opening the one-day seminar on WAP, Jan Ten Sythoff, from Frost & Sullivan, listed the shortcomings that had undermined the technology in the early days and which should be successfully addressed in a GPRS environment.
* Bad user interface - small screen size, lack of colour and graphics, unwieldy input capability
* Poor device availability and capability
* Connection slow and expensive
* Poor interoperability
* Lack of compelling or easy to access applications and content
* Many operators over-stretched and trying to do too much
* Difficulties in bringing together all the elements of the value chain and making them work together.
Cindy Dahm, with Openwave, defined the issues involved in migration from GSM/WAP to GRPS/WAP
Requirements:
* Portable, IP-based portal framework that will operate simultaneously on both GSM and GPRS
* Performance test lab to ensure application compatibility
* Handset and browser specification and certification process
* Home page segmentation capability.
Migration Process:
* Test end-to-end WAP over GPRS for performance and reliability
* Isolate individual network performance issues
* Work through issues by vendor - ie router, handset, browser.
Max Kopjin, from AtoBe, explored the technical complexities involved in providing application access in both home and roaming environments. He identified three different classes of application services and the associated platform requirements.
Mobile Portal Services
* defined as a starting point for the provision of information, entertainment and transaction services
- Scalable dial-in capacity in various European countries for access from different mobile networks (GSM, GPRS and UMTS
- Scalable WAP- and SMS-gateway capacity
- Scalable mobile portal application hosting capacity
- Over-the-air configuration and ringing-tone functions for different handsets
- Personalisation and search functions
- Location-based functions
- Billing and security functions
- Aggregated usage and profiling reporting functions
- Advertising Functions
- '24x7' availability of all the above platform elements.
Mobile Workforce Services
* defined as those allowing employees to access corporate databases
- Requirements as for mobile portal services with some additions
- More advanced security functions
- A broad range of software packages to mobile enable existing corporate application.
Mobile Applications Services
* defined as the actual provision of a range of information, entertainment and transaction services
- Connection to portals from mobile operators and independent brands in various countries
- User access via a broad range of network bearers (SMS, GSM, GPRS and UMTS)
- Scalable mobile application hosting capacity
- Simple and uniform access to an increasing range of common mobile application features such as user identification, user profiling, handset specification, portal specification, user location specification, security options and billing options.
Kopjin went on to discuss the options for physical connection between networks and an independent mobile application portal. There are two options:
1. The platform connects directly to the GGSNs of the operators
2. The platform connects to the SGSNs of the operators via a GRX.
In the first case, the portal operator must establish connections to each operator through which the service is to be accessed - either through a lease line or IP-VPN connection. The second case is more attractive to portals as is would be more flexible in securing bandwidth, provide instant connection to new operators, and the GRX provider would guarantee 99.9% network availability. However, the operators are unlikely to agree to the required bilateral roaming agreements with an independent mobile portal to enable these GRX connections although some external data providers, such as banks, would see this path as providing the required level of access and firewall control for applications with high security requirements.
Many surveys have pointed to messaging applications as providing significant attraction to potential users of wireless data services. The present email services will be enhanced, in a relatively short timescale, with the addition of multimedia capabilities. In the USA the Blackberry PDA, although not strictly a cellular device, has built a significant market share. This product range will appear in GSM/GPRS markets and Rick Constanzo, Director of European Sales for Research in Motion provided a study of their experiences in the messaging environment.
* Currently 283 million corporate mailboxes worldwide - 70 million of these are in Europe
* The number of corporate mailboxes worldwide grew 510% between 1997 and 2000
Average number of messages received by end users is expected to jump 81% to 34 per day by 1Q2001
* The average corporate email user spends over two hours a day processing e-mail messages
* 90% of senior corporate email users would like to send and receive e-mail by wireless. <<
See next post for part 2 of this article.
- Eric - |
