Mike - One of the dangers of being invested in wireless, is that one has to be researching wireless, thinking about wireless, and discussing wireless with other investors, all the time.
One starts thinking that all this broadband mobility stuff is just around the corner...not!
This is where I lose the thread...
"The company is emphasizing its capability in emerging mobile technologies such as enhanced data for GSM evolution (EDGE), which Maloney expects will provide wireless data services at 384 kilobits per second by 2001. He believes EDGE will eventually serve 80% of the world's digital mobile subscribers. By integrating access to EDGE into its core network, Motorola is positioning itself as a turnkey supplier to operators with both wireline and wireless capability."
Well, okay...but what about CDMA? How does that fit into this scenario? My understanding is that CDMA is sub-optimal as a high-capacity mobile carrier. What about HDR? If the quotation above is true, what does that say about the future?
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Fixed Attitudes
By Julian Bright
Delegates at last month's CTIA Wireless 2000 show in New Orleans revealed a degree of scepticism about the mobile Internet. Is the world's most advanced Internet nation resisting the mobile hype, or was this just a case of wounded U.S. pride at having to follow where others lead?
When NTT DoCoMo's president, Keiji Tachikawa, explained his company's latest wireless data service to delegates at the CTIA Wireless 2000 show in New Orleans, a ripple of amusement revealed the audience's scepticism.
Was this the best the eagerly awaited mobile Internet revolution could offer?
But Tachikawa wasn't finished. Customers in Japan are queuing up for the new service that delivers a different cartoon character to their data-enabled mobile phones each day, at a cost of just $1 per month. In fact it is the most popular offering on DoCoMo's hugely successful mobile Internet service, i-mode.
And when Tachikawa announced that DoCoMo had attracted 4.5 million subscribers with the range of entertainment, news, information, database and transaction services offered by i-mode, scepticism turned to interest - and more so when he explained the economics. Each i-mode subscriber pays a $3 monthly subscription fee, and spends an average of $10 per month accessing the service. Around $12 additional voice revenue is generated each month for every i-mode user, and NTT DoCoMo receives a further 9% commission from the $1 subscription paid to the service's 5,000 or more content providers.
The message behind the message, however, was clearly a difficult one for this U.S. audience to swallow. The fact is that North America trails much of the world in the development of mobile Internet, a stark fact that Vodafone Airtouch plc (Newbury, England) chief executive, Chris Gent, who followed Mr Tachikawa onto the platform, was more than ready to push home. For the country which has so often lead the way in telecoms innovation, the tables were comprehensively turned.
But despite Tachikawa's conviction that there is money to be made in mobile data services, many, both within and outside the United States, remain unconvinced. Even a service such as i-mode cannot, as yet, replicate the richness of the fixed Internet experience. Tachikawa is already anticipating the time when i-mode will carry full-motion video; but although ISDN speeds over mobile networks may be less than a year away, a great number of questions remain to be answered.
Mobile Internet is in its infancy, and concerns about which applications will translate successfully into a mobile environment, and what business models will deliver the anticipated revenues, are still unresolved.
At CTIA, upbeat U.S. mobile operators recognized that a lot of ground must be made up. Incoming chairman and chief executive of AT&T Wireless Group, John D. Zeglis, admitted that the U.S. mobile market was only just entering the steep growth curve that would bring subscriber figures up to European levels. Despite mobile penetration at below 30%, Zeglis still believes that the U.S. will close the gap, and introduce mobile data services within a similar timeframe to Europe.
The explanation for the U.S. market's mobile sluggishness lies at least in part with the success of wireline. Low fixed network tariffs combined with flat-rate charging have allowed the U.S. Internet culture to flourish.
Real competition in the access network has ensured a choice of service options, from basic PSTN through various flavors of ISDN and DSL to suit user bandwidth requirements.
Typical offerings, such as BellSouth's (Atlanta, Georgia) DSL package, which includes free connection and modem, and a flat rate per-month fee of $55, is some 40% cheaper than, for example, U.K. rates. Subscribers of Bell Atlantic Corp. (New York) can even benefit from data rates 12 times faster than a 56k modem, using a $229 plug-in attachment and a home connection kit from 3Com Corp. (Santa Clara, California).
But this competitive fixed network culture has not been replicated in the mobile sector. As well as the obvious lack of a single, national digital standard, until recently pricing structures that have required the called party to share airtime costs have undoubtedly held back services. More competitive rates are available through the use of bucket plans, but leading wireless operators like Bell Atlantic are only now introducing calling party pays across their U.S. wireless properties.
Affordable mobile service packages and tariffs such as single-rate price plans, national roaming, and pre-paid services are also being rolled out.
Yet services and tariffs will need to compete with attractive and affordable fixed Internet offerings before the majority of consumers will begin to think seriously about mobile Web access.
Meanwhile, even in Europe's early deregulated markets such as the United Kingdom, fixed services have progressed more slowly. U.K. users have seen inflexible pricing structures and delayed service rollout stifling Internet use. BT's proposed flat fee ADSL service is still to get off the ground, and only in recent weeks have the first initiatives been announced to replace metered access with flat rate charging.
Until now, U.K. users have had to watch their phone costs ratcheting up with each minute spent online. Now, ironically, the removal of a pricing regime that helped subsidize a host of free ISPs through a share of call charges, may tip the balance back the other way. U.S. Internet providers such as America Online Inc. (Dulles, Virginia) could benefit as the free ISPs have to rethink their business models and seek revenues from other sources such as advertising.
On the other hand, Europe has been far more successful than the United States in applying innovative pricing and marketing to the less regulated mobile sector, which, thanks to pre-paid, has become a service for the mass market.
But there is one European exception that proves the fixed versus mobile rule. Europe's leading fixed online service, Deutsche Telekom's T-Online, operates in one of the continent's less well-developed mobile markets.
Mobile penetration in Germany is relatively low at just under 26%, in a market that has yet to experience the pre-paid boom of its European neighbors. T-Online's strength may yet work to the advantage of Telekom's mobile arm, T-Mobil, which plans to leverage the online service's market dominance to develop mobile Internet services for business and private customers.
So which of these contrasting approaches - competitive and affordable fixed network access or universal and popular mobile services - will prove to be the correct one?
The answer may be both, because you don't have to dig too deeply beneath the surface of most mobile rhetoric to find evidence that the industry in general is still investing its time and resources in a future that embraces both fixed and mobile services. Most analysts appear to support the view that the two will co-exist, and strategies that encompass both the fixed and mobile environments are evident among most leading infrastructure vendors.
Among the CTIA exhibitors developing core network capabilities independent of access type was Motorola Inc. (Schaumburg, Illinois). Its 'All-IP' platform supports multiservice environments including cable, wireless and the public voice network.
Mike Maloney, general manager, global distribution and operations, for Motorola's network solutions sector believes that suppliers which don't go for an integrated core solution will have "disadvantages in economies of scale and ease of service". The company is emphasizing its capability in emerging mobile technologies such as enhanced data for GSM evolution (EDGE), which Maloney expects will provide wireless data services at 384 kilobits per second by 2001. He believes EDGE will eventually serve 80% of the world's digital mobile subscribers. By integrating access to EDGE into its core network, Motorola is positioning itself as a turnkey supplier to operators with both wireline and wireless capability.
Another seasoned mobile provider, LM Ericsson AB (Stockholm), has recently announced it is gearing its IP migration proposition towards an integrated fixed-mobile core network solution. Ericsson says mobility can now be viewed as a general feature of all services, with the concept of user mobility being applied within wireline network environments.
At a recent presentation of the company's 'Engine' next-generation ATM/IP voice, data and Internet backbone solution, its revised forecasts for mobile Internet anticipated that the market would be bigger than fixed Internet by 2005. Incumbents including BT, Spain's Telefonica and KPN of the Netherlands are among early investors in the Engine solution.
The real winners, says Ericsson's Einar Lindquist, president of wireline systems, will be the companies that can converge voice, data, IP and wireless technology into their products and services. One advantage of these integrated platforms will be the ability to offer a unified service such as voicemail across the network, and to integrate intelligence and functions to provide service across both the fixed and mobile worlds.
Motorola's Maloney says the integration of e-commerce services such as flight bookings would be simpler, with the individual's personalized information - such as flight preferences, destinations, booking and confirmation details - held in the core network, but with the capability to access information, or provide updates and alerts, when the user is on the move.
The promised advances in the data carrying capacity of mobile networks over the next few years, first to the ISDN-type speeds offered by general packet radio services (GPRS), then to EDGE and/or full 3G, hold out the possibility of a range of new applications such as real-time interactive video. However, bandwidth available over mobile networks will continue to lag behind that available for fixed, and the levels of investment required in next-generation mobile networks will ensure that mobile data services continue to attract the price premiums of mobile voice services today.
For the time being business IT strategies are likely to be based on a fixed network core, supported by a range of new, higher bandwidth mobile applications. Consumers, meanwhile, will benefit from location-based and mobile e-commerce services that will deliver the mobile Internet to their pockets. In short, fixed-mobile co-existence rather than mobile-fixed substitution.
totaltele.com |
