I enjoyed reading this one on Ryanair, the zero-frills European budget airline.

Money quotes:

The Scotsman, quoting Ryanair’s own figures, writes that the carrier handles 10,000 passengers per employee, compared to no-frills rivals EasyJet’s 6,300 and British Airways’ 760.

Note to sell-side telecom analysts: don’t forget to ask your telco friends how they plan to slash 90% of their labour costs. You mean, they haven’t told you already?

… On Lufthansa, [Ryanair CEO Mike O’Leary] has this to say about chief executive Jurgen Weber: “Weber says Germans don’t like low fares. How does he know? He’s never offered them any. The Germans will crawl bollock-naked over broken glass to get them.”

Note to buy-side telecom analysts: spotted anyone offering low, low prices recently? If they’ve also slashed 90% of their labour costs, they’re a buy.

11:11:04 PM    comment   

Whilst telcos rush towards bundling dodecatuple-plays as a defensive measure, budget airlines (i.e. the profitable ones) rush towards unbundling. From my inbox today:

easyJet has teamed up with Servisair/GlobeGround, one of the world’s leading providers of aviation services and Europe’s leading independent operator of airport lounges to launch easyJetLounges, giving you excellent opportunity to escape the hustle and bustle of busy airport terminals when travelling. You can relax in our comfortable Executive Lounges before your flight. Prices start from just £12.00 per passenger including VAT.

Somehow the standard bundling theory — smooth out differential willingness to pay by aggregating the uncertainty — isn’t playing out at the hyper-competitive bums-on-seats network business. Are information goods fundamentally different? What’s really going on here?

11:06:52 PM    comment   

Sometimes I feel a bit sheepish introducing myself as the author of a blog called “Telepocalypse” or the director of “Telepocalypse Ltd.” — it seems rather pretentious to have transformed what was just a joke between myself and my brother into its own micro-brand under such a provocative and un-corporate name. (I guess it also doesn’t exactly help the cause of selling consultancy to telcos wanting rescue advice, but it’s a happy living, nonetheless.) What if telecom soldiers on quite nicely thank-you, the weed-free walled gardens bloom and prosper, and I’m left with more egg than Sainsbury’s?

But then again, there are days when I read articles like this one on the Mobile Technology Weblog, and I have to grin wickedly with schaudenfreude.

Mobile Content Purchased Off-Portal Grows

… [Selling content via an operator’s mobile portal] required little risk (other than the cost of developing the content) but the operators took a massive cut of the revenues - around 50%. And since about 70% of content was sold this way, that was probably the best route, provided you could persuade the operators to co-operate. This wasn’t easy without an existing relationship and a track record and it was excruciatingly slow.

… But according to Vodafone and Orange in the UK, off-portal now accounts for some 70% of all content sold. This is an important trend.

As the CEO of Ryanair said, they’ll crawl across broken glass butt-naked to get low prices.

… Finally, it rather proves Gareth Jones, the COO of UK’s 3 network, wrong when he said last year:

“People don’t want open access, that’s not what our customers tell us they want. Anyone in their right mind who tries to do anything on the Internet with a screen that size has to be nuts.”

It looks like either all the other networks’ customers are different from 3’s, or 3’s walled garden approach may not last too much longer, if they’re wise.

Telepocalypse prediction: within the next 18 months at least one tier-one mobile operator will abandon its own portal offering and partner with MSN, AOL, Yahoo! or a locally-strong equivalent. (And this is assuming, in my ignorance, none already have.)

11:05:00 PM    comment   

I’ve long taken an interest in what is called, for want of a better term, “digital identity”. This little vignette by Scott Lemon triggered a thought:

I believe that one of the biggest hurdles that is impacting the successful creation and deployment of Identity Management Solutions is this complete misunderstanding of the origins of our identity. […] If my identity is given to me by some community, how I can I be the owner of it? I am the recipient of it … I have a community pointing their finger at me saying that it is true and accurate … I even have to refer anyone asking for verification back to that community to have it proven.

The Intelligent Network is also a complete misunderstanding of how value is created in communications. I’m wondering if there’s a link here.

The end-to-end principle works to maximise the option value of a network:

• Don’t do in the core what you can do at the edge.
• Don’t do at a lower layer what you can do at a higher layer.

Here’s the way we preserve option value for identities:

• Don’t manage an identity centrally that can be managed in a distributed manner.
• Don’t do in hardware what you can do in software.

Here in the UK the government is planning the mother of all IT disasters with a vast central identity federation system across all government systems, and a physical ID card that is (eventually) compulsory for all citizens.

This is stupid for many reasons I won’t recount here. It goes against both my principles above: it’s centralised, and it specifies the hardware.

But there’s a better way.

Why not invert the whole problem? What if instead of a central database, there were merely bits of data scattered around and “managed” by the users. (As Scott notes, “ownership” of identity is a fraught philosophical problem.) So when I get a passport I get sent a digitally signed set of assertions by the passport office:

• We saw this picture on date X.
• We issued a passport with number Y on date Z.
• The application was processed by agent A.

And so on. And I get to choose what instrument I store these assertions on. If I pay my utility bill, I get a digitally signed receipt in return. Eventually I accumulate my own personal store of digitally notarised assertions. I can control who gets to see these, and they control what inference they will make from it.

Now, if it turns out that Agent A at the passport office turns out to be a crook — and someone else notices that passports issued by Agent A are correlated with fraud — the distributed system can react to this data. A centralised government-owned database cannot, since it assumes the truth of all the data it stores.

Call it the firewall fantasy — that the world inside the firewall is good and safe, and that outside is evil and dangerous. We put identity data behind an institutional firewall, and only good and true changes can be made. But that just confuses the ownership and management of the data. We can manage data in a distributed manner whose truth is centrally controlled.

By decentralising and uncoupling from a specific hardware solution we cure a lot of problems at a stroke. We’ve eliminated most of the “big brother” privacy issues, security risk of a central data store, and billions of dollars of IT expense. We can still have smart cards that store our ID — but you and I get to choose what form of smart card we adopt. If I want to use my credit card, cell phone, or a USB key as the conveyor, that’s my choice. We get the benefits of a strong ID system, without the dangers of assuming that a government stamp on a piece of data makes it true.

For instance, my ID kit might include an assertion that a birth certificate was issued in the name of Martin Geddes on a certain date in the early 1970s. Just because I turn up with a card holding that piece of information doesn’t mean that the person is Martin Geddes. But that’s what a government ID card is asking you to do.

It isn’t hard to protect privacy when you share your “assertions”. We don’t need to reveal the actual data for some third party to be able to make trust inferences. They don’t need to know my name; just that I’ve got a UK-issued birth certificate. (Or that a particular notary of government office claims to have seen the tatty piece of paper I have.) They don’t need to know how much I paid for my electricity, or even to whom; just that someone called Martin Geddes has been interacting with society under that name for a considerable period. We just adjust the aperture to reveal the right amount of ID data.

The system becomes even stronger when these assertions are networked together. If I used my birth certificate key to open my utility account, that fact should be recorded. To lie about my birth certificate then requires me to abandon all derived identity data — I can’t use my utility bill assertion because I can no longer provide my birth certificate assertion.

I’m asking you to trust me because I’ve assembled a collection of data about myself that can be correlated by third parties who need not be present at the point of transaction. This system doesn’t eliminate identity fraud — you never can. It’s a diffent layer of the identity stack.

There’s a telecom angle to all this too. What communities do I engage with and pass through when carrying a cell phone? What identities should that device be a bearer for?

There are many examples of use of cellphone as identity token: mobile wallets, phone as authentication system (e.g. “tickets by SMS”), season tickets, or phone as affinity signal (football club face plates). More innovation is on its way. In fact, it’s one area where the industry has so far got it more-or-less right.

One of my favourite patents I co-authored at Sprint was identity-based. Interchangeable faceplates are old-hat; “smart” faceplates have also been done. Our innovation was to make your faceplate smart in a unique way. Plug an Dungbeetle University faceplate on your phone and a proportion of your spending goes to the affinity partner (as well as the UI adopting elements of the affinity partner’s branding). Just like an MBNA affinity credit card giving a 1% cut, but on your mobile.

You only have to ask yourself why we aren’t using our mobile phones for carrying our identity around more. Maybe there’s too much centralised control by telcos and lock-in into fixed hardware? Perhaps this requires a multi-generational cultural change?

The network is becoming a bottleneck to the exchange of value, because telcos can’t figure out how to charge for it. They’re addicted to rationing out scarcity. Proximity-based transactions seem like an obvious outlet for the creativity of the handset makers. Every one of them is going to have identity at its core.

And the telcos are possibly winners too: there’s no Paradox of the Best Network if there’s no network to worry about. They’re nicely positioned to help you manage the storage and presentation of this data. Can they execute? I’ll let you decide the truth of that — on your own, decentralised.

11:04:22 PM    comment   

I compiled the following data for a recent client report, and thought I’d share it with you all, my dear unidirectional content consumers. I was just trying to illustrate that every telco attempt at tolling at the service layer (as opposed to just connectivity) results in a complementary industry that deals with disintermediating and arbitraging those toll booths.

Service	Toll gate	Means of bypass	Examples
Circuit voice	International call interconnect	Calling cards	IDT
Circuit voice	Premium rates for cross-network calls (e.g. mobile to mobile)	Prefix dialing of landline numbers to preserve bucket for x-net calls	www.80550.co.uk
Circuit voice	Roaming charges + handset lock-down	Unlocked handsets and third-party prepaid SIM	Expansys (handsets); www.oneroam.co.uk (SIM cards)
Circuit voice	PSTN switch	VoIP + Wi-Fi	Skype for Pocket PC
Telex and telegram	Gateway/separate network	Fax machine	N/A
Fax	PSTN switch	Fax-email gateway	eFax
Fax	PSTN switch	Fax-IP gateway	Mediatrix
MMS for photos	MMS gateway	Email + IP network; File transfer in IM applications (e.g. MSN, Skype) + IP network; SMS for notification (“check your email”); Bluetooth file transfer; face-to-face viewing; sneakernet via flash memory cards	N/A
SMS	Mobile originated message charges	Java/Symbian application + IP Network	SMSSend [defunct], SMSBug, Agilemobile
Ringtones	Download vending machine	User-created ring tones; flash memory cards or Bluetooth	Xingtone
Push-to-talk	Gateway/proxy	Java application + IP Network	FastMobile

If you’ve got more ideas or examples, just stick’em in below as comments and I’ll assemble the better ones into an updated table. If this really gets big I’ll think about making a wiki page.

UPDATE: Maybe I should call this “Newton’s third law of telecom: for every mediation there is an equal and opposite disintermediation.” (The first two are “An incumbent telco will keep sucking its customers dry unless an external force is applied”, and “Profit = lobbyists x lawyers”).

11:02:22 PM    comment   

The iPod was a success for many reasons: sleek design, uniquely large capacity, brand, content availability, and so on.

But what fascinates me is the scroll wheel. It enables you to rapidly navigate a large menu space very quickly. But cellphones seem to have got stuck with “microswitch mania”. Just lots of binary on/off switches arranged in standard or crazy layouts. Ever wondered why the Blackberry is so popular when anybody can get e-mail dirt cheap on a normal smartphone? Look at that little analogue-feeling wheel. That’s the secret sauce.

Without the scroll-wheel, the iPod would have failed. And the competition is barely catching up.

Reading through Russell Beattie’s encyclopedia of Symbian Series 60 applications, you can’t but help be struck with the though, “My Grandma! What a lot of applications you’ve got!”. He does explain how he orders them, and bends the default folder structure to his needs. But that’s a lot of clicks for him to fire up an app and do a simple task.

Now the application paradigm is broken for mass-market mobility in many ways I’ll go into another day. But just imagine for a moment how much better a user interface we could make to explore these complex data structures. I don’t know what the answer is — it could be some combination of clicked, haptic, and orientation functions we’ve barely dreamed of. But I’m sure one key to unlocking the value of these devices is improved navigation of data structures — as well as a better information architecture of those data structures in the first place.

Interestingly, we have never seen intelligent user interface components develop even for today’s clickety-click user interfaces. Take an apparently simple thing like entering a US state into a phone. There are several naive approaches. Get someone to triple-tap the state abbreviation (hope you know your AR from your AS). Or have a drop-down list with all 48/50/59/65 of them (what, you didn’t know?) — lots of fun pressing the down key three dozen times. Even doing the simplest UI tasks across multiple devices and their form factors and software profiles is a nightmare.

What the developer needs is a UI component that will adapt itself to the device in question:

• On a touch-sensitive screen, you might show a map with the general regions (west, central, etc.); and then a second map where you select the individual state.
• On a device with a scrolly wheel, the drop-down list might be OK. On a device with a keyboard, offering the shortcut abbreviation with an option to to a look-up makes sense.
• On a simple 5-way joystick, you need something different. In that case it might be a smart algorithm that looks at the number of lines the screen has (say 8), and then divides the states into 8 buckets according to first-letter distribution frequencies: “What is the first letter of the state: A-C, D-H, I-L, M [lots begin with “M”], N, O-S, T-W.” — you can even use the keypad as a shortcut. The maximum subsequent length of the menu to select the state is ten, again fitting the keypad for a short-cut.

This kind of stuff isn’t obvious. We have an opportunity to improve the basic user experience, and it isn’t being seized.

I understand Microsoft have made quite a bit of headway in their development tools for hiding these device complexity issues. But their actual influence in the real world of mobile devices seems slim outside of the enterprise. At least they deserve a pat on the back for trying — even if the motivation is classic embrace and extend of everyone else’s platform by mediating with an abstraction layer.

Once you have such UI components, and they are embedded in the devices, the developer is freed from having to worry about it. Just include a tag in your application “Insert date here”. Even better, the handset maker is freed to explore new user interfaces without having to worry about annoying the developers with custom code to support it.

What I want to see come to life are standard UI components for five essential things:

• Specify a person or respondent. Classic address book selection.
• Specify a place. Harder — more degrees of freedom in this information architecture.
• Specify a time or period.
• Specify an action. Russel’s problem is finding an action — the right app to solve his problem.
• Specify a message or object. A more subtle one; a conversation needs you to be able to refer forwards and backwards among the messages you have exchanged across all media (e-mail, IM, voicemail, Skype, etc) or the objects you have (URLs, files). The Blackberry does this well, too.

The goal is to enable us to quickly navigate broader and deeper information architectures; and where there’s a switching point that requires richer user input to decide which branch to take, it should be as utterly seamless and device-aware as possible.

Once we’ve got these “back to basics” issues sorted, it should help invigorate the mobile handset as a communications device, and divert attention from trying to make it into a rich media device that it doesn’t want to become.

An impossible vision? I think not.

11:01:51 PM    comment   

Stowe Boyd has a wish list of social network features he’d like, as well as a lament for current public social network services.

My feature request? A telephony++ application that gives you the chance of calling someone’s boss, secretary or deputy. Just the first level of awareness of corporate social structure.

Or am I asking too much?

11:00:55 PM    comment   

These were the results of the Ministry's first official survey of broadband availability, and are based on data given by broadband service providers.

The survey indicated that broadband was not available in just 207 of Japan's 3,123 municipalities as of April 1, 2004. Nearly all of these communities are in remote regions with populations of less than 5,000.

Last year, the Ministry announced plans to extend broadband capability to all of Japan's households by 2010.

By way of contrast, a recent article in Business Week entitled "America -- the High Tech Laggard," reported that today as many as 20 percent of Americans are still unable to obtain broadband access. [Japan Media Review]
10:58:08 PM    comment   

On Wednesday, it announced that its net profits for the year that ended March 31 had slipped 8.6 percent from the previous year. Principally responsible was the sharp decline in licensing fees it takes in from viewers.

Every household in Japan that owns a television is required to pay these viewing fees, about 1,400 yen ($13) per month for a color TV, and in the past they have accounted for about 96.5 percent of NHK's total revenues. However, since last fall, a growing number of Japanese has refused to pay the fees, in protest over a number of embezzlement scandals and allegations that NHK censored its own programming due to political pressure. The scandals claimed the job of former Chairman Katsuji Ebisawa, who resigned in January.

As of March 31, NHK estimated that 747,000 households were withholding their licensing fees.

At the same time, NHK's 2004 results were bolstered by robust sales of DVDs and videos connected to the popular "Winter Sonata" melodrama, a South Korean import that has attracted huge audiences in Japan, particularly married women.

However, the gain from such merchandise sales was not enough to offset the large decline to unpaid viewer fees. NHK recognized a 31 billion yen ($290 million)expense for uncollected viewer fees. That's about 40 percent more than a similar expense booked in the previous year.

Last week, NHK revealed that the number of Japanese who have refused to pay their fees jumped to 970,000 at the end of May, up 30 percent since March. NHK President Genichi Hashimoto told reporters that more and more people were refusing to pay because their neighbors weren't paying. [Japan Media Review]
10:57:36 PM    comment