Is the post-voice mobile era upon us? Stats out of the UK show a significant drop in the number of voice calls both pre- and postpaid users are making each week. Last year, prepay users made an average of 14 calls per week; this year, it’s down to 10. Postpaid users similarly fell, from 35 to 27. Prepay users’ texting levels held steady, but postpaid users are now sending almost 50% more texts each week.

What’s interesting is this is happening as voice prices are falling, too — resulting in significantly lower spending, according to the survey. It says prepaid spending is down from ¬£19.29 per month to ¬£12.35 per month, while postpaid is off 20 percent. I’m not sure just how much I buy into the spending figures, though, as looking over the ARPU stats for Vodafone and T-Mobile for the last couple of years don’t show a similar level of disruption (and their subscriber growth doesn’t make me think people are flocking to cut-rate providers).

Anyhow, it’s worth noting the apparent drop in call volume. People are talking less, texting more — and, hopefully, using more data services in spite of the tariffs. To our readers in the UK: are you talking less, or have you noticed any change in people’s behavior? Perhaps we’re running out of things to say, or are even more fully embracing the brevity and non-verbal communication offered by SMS, email or IM. Maybe people are figuring out that they want to talk less on their mobiles, and do more with them.

1:23:40 PM    comment   

Last week, Nokia announced several new handsets for emerging markets. At first glance, they look like what you’d expect: basic devices without the flashy features of the company’s high-end handsets. However, a couple of the most basic-looking, the 1200 and the 1208, have some cool features of their own that should give them a boost in emerging markets.

First, they support multiple phonebooks — a nod to the fact that in many developing nations, a single handset is shared among several family members or friends. The handsets allow for up to five separate phonebooks that can be managed individually, letting users have their own list of contacts, if not their own phone. Second, they have a call-tracking feature, which lets users set the maximum cost of a call before dialing. This lets users control their spending, but it also helps empower the entrepreneurs in these markets that buy a phone and airtime credit, then resell calls. Two small and superfluous features to those of us in developed markets, but two simple innovations that highlight how creative thinking can triumph even in the most basic of mobile environments.

Neither of these devices are going to have the likes of gadget-site writers writhing in the throes of lust, but these sorts of small innovations will make a big difference in their intended markets, and show the continuous improvement that’s possible on the most basic level of this industry.

1:19:43 PM    comment   

ìSo we have to encourage consumers to pay more ñì

1:03:40 PM    comment   

One of our Telco 2.0 event speakers, Tomi Ahonen, has written a passionate eulogy on the end user joys of SMS. We’re soon publishing our Consumer Voice & Messaging 2.0 report, and have been looking at the evolution of arbitrage and toll bypass schemes. Will the future be as rosy for operators as it is for their customers? Could SMS revenues be under threat despite growing volumes and adoption?

At the event we ran some survey questions on the first day with the full plenary audience. Given that SMS is a super-high margin product delivering between a third and half of most mobile operators’ profits, we asked if this service could be Skyped? These alternative services let you connect to a third party SMS gateway over the Internet (using GPRS, 3G, or Wi-Fi) and send SMS messages at well below standard operator prices. It’s much more plausible than VoIP displacing mobile voice, since there are few quality of service issues sending a one-off message.

The question we asked was:

What proportion of SMS messages will be originated from non-operator third-party services in 5 years time?

The results were quite interesting:

There seemed to be little consensus among the participants of whether the threat was real, and if so whether it was small or large. Each respondent was also asked for a reason why they chose their answer.

Those predicting a smaller haemorrage of customers to rival services cited several common factors:

• users are too lazy or indifferent to the cost of SMS to try lowering their expenditure
• there will be a general move towards IM, which will regulate costs and provide a richer alternative
• spam and privacy concerns will keep people away from non-operator services
• operators will just drop prices given any competitive threat

Those citing a larger threat suggested that messaging will be embedded in 3rd party applications, notably social networking services, and that operators will lose control of the context from which messages are initiated — as well as the revenue.

A common theme on both sides was the user experience. Those predicting a low rate of defection cited poor experience, whereas those forecasting some of the telepocalyptic scenarios felt it would come right over time.

We’ve been using a couple of such services recently. Given it costs 40p (about €0.59 or US$0.80) to send an SMS when roaming, we’ve had plenty of incentive. I’ve run out of credit on Vyke having used it a lot, and Jajah only lets me initiate voice calls, so we’ve screen captured all the stages of sending a message from smsBug instead. They all have a fairly similar user experience.

I’ve not included any of the sign-up and installation stages, as we’re assuming users will put up with considerable one-off inconvenience to switch (usually by handing a bank note and phone to a nearby youthful technophilic relative). You set up a pre-paid balance on each of these services, and download a Java client onto your handset. It’s not difficult.

We’ve laboriously documented all the steps, as there are more than for the standard texting experience.

We start from the home screen on my smartphone. I’ve set up smsBug as the (pretty horrible) second icon in the quick access row — the pair of bug eyes. I could have assigned this to the standard messaging hotkey — but we’re relying here on users knowing how to do quite advanced customisation to their phone UI. This isn’t part of the “out of the box” install (and probably never could be on the current generation of phones and Java.)

For some reason the message editor starts with the last message you sent, so you have to do a bit of selection and deletion to get rid of it.

Enter a new message — all standard text entry using native UI features like predictive text.

Then we select the options hotkey which gives us this menu. Somewhat strangely the next step is “send”, even though we haven’t entered any recipient details. And we now discover a “clear text” option, which isn’t visible or obvious to the user on first using the application. (You could fix this with a “select ‘clear text’ option from menu to create new message” down the bottom of the screen when the application is first used.)

A blank screen to type in a number.

We select the option to add a contact from the address book.

Pick the user using the native UI.

Pick the number. Note the boilerplate text glitch in that the UI assumes the purpose of an address book is to support calls, not messaging. (I really must delete that old Kansas City office number — I never look at my own address entry in Outlook!)

Now we’ve got our destination number. Unlike the native SMS user interface, you can only enter a single recipient.

Now send the message. This time “send” means “send”.

Ah, so as we’re going to use the 3G interface, we have to give this Java application permission. Every time.

And also select which access point to use. This is really the fault of the Symbian UI in not giving me more configuration control here. (“If in UK, always use T-Mobile”.)

Now a wait… This has taken up to 25 seconds before now.

A message briefly flashes by with my remaining balance and we’re dropped back into the message editor — unlike the native UI, it’s another keystroke to exit to the idle screen.

The service works — one new message.

And here it is:

None of this is integrated with the rest of the messaging UI of the phone. Your message won’t be stored in the outgoing messages folder. (The story for email is just the same — I have a 3rd party email application installed, but if I select “send via email” for an image I’ve snapped, the only choice is the native email UI, which isn’t configured in my case to send to anyone.)

Overall, I’d say that it’s worth jumping all these hoops to save yourself the best part of a dollar for sending a single SMS. Even when roaming, the combined cost of the bypass service and packet data charges are only a tiny fraction of the roaming messaging charge. I’ve found the services to be as reliable as those of the operators: even when sending “native” SMS when roaming, I’ve had messages fail to be delivered.

The real threat to operators was identified earlier. The owners of social networking applications will replicate these small arbitrage businesses and integrate them into a much slicker user experience. As SMS is hybridised with instant messaging they will also arbitrage termination charges when messages can be delivered over IP to a phone or PC.

Alternatively, as Truphone has done for VoIP telephony from mobiles, it gets integrated with the native UI and the user sees no difference except the price.

In the meantime, services such as these will put pricing pressure on the high-margin users (roaming, prepaid), and encourage the adoption of large or unlimited buckets of messages.

In either case, the SMS party may not be over, but the DJ has finished playing upbeat house music and is starting to rifle through his blues collection.

12:46:48 PM    comment   

One of the topics which came up in the ‘Digital Worker’ stream at the recent Telco 2.0 event was the role of the mobile operator and their SIM card. We asked Colin Mallett, our ‘analyst-in-residence’ for that session, and who spent many years working in R&D for BT, to share his thoughts with us:

“10 years ago BT started looking at a new kind of player called the ‘SoftTelco’. Later, with a multi-million pound R&D budget, we tried to implement some of the ideas, eventually ending up in the Brightstar incubator. This included looking at MVNOs and how to by-pass the Mobile Operator’s SIM.

The GSM SIM card uses tamperproof silicon to provide the client for the mobile operator’s Home Subscriber Subsystem (HSS). It provides a strong authentication token which can be managed securely over the cellular channel. This is a powerful platform which binds the user subscription, handset and network together.

Unfortunately, as readers of this blog know all too well, this sort of tight commercial and technical integration is being ripped apart by IP. It’s happened in fixed telephony with VoIP and it’s soon going to come to mobile - by around 2010 or 2011 according to a recent Telco 2.0 survey - even if, in the short term, operators ban VoIP from their ‘unlimited’ data packages.

So, are SIMs really appropriate for supporting converged services, especially on laptops or on the new classes of Mobile Internet Devices?

SIM Is Good…

The beauty of SIM authentication is that you switch on and a few seconds later you have a connection - more or less anywhere in the world. The whole process is hidden from the end user and everyone takes it for granted. Only traffic over the cellular interface is encrypted, but that is optional for the local mobile operator. So, for end-to-end IP data traffic to remain fully secure, familiar techniques such as the Transport Layer Security protocol (TLS) are still needed. While automatic and secure WiFi authentication is more complicated, it can be achieved if an application is linked to a SIM card (and TLS or IPSec protocols are employed).

…But is Under Attack…

So if the SIM card is so effective, why is it threatened? Mobile operators don’t want to give up the tight control that SIM’s give them, especially in the face of a growing number of MVNOs in increasingly saturated markets. For the majority of operators, in voice and messaging in particular, their reaction to the developing Telco 2.0 trends is to defend against convergence rather than embracing it, which giving open access to WiFi via 3G and HSDPA implies.

…It Hasn’t Evolved…

Over the last 5 years, compared with on-line transactions, SIM based mobile-commerce has failed to take off, partly because the mobile operators and payment card issuers have not been able to agree on appropriate business models and partly because the payment companies have not been able to accept that their logo should not appear on the physical card.

As a result, multi-application SIM cards have never appeared and the SIM has been seen as a blocker to progress, stimulating multiple research projects to bypass it.

..But Other Technology Has…

For many years, handset manufacturers opposed the dual-slot phone - one for the SIM and one for the credit card. However, the battle is now lost. In the diagram above, the mobile handset looks remarkably like a computer with added Cellular and WiFi modules. A second slot was originally needed for removable media to store photographs or music. Now it can take a ‘secure’ MultiMedia Card (SMC) consisting of a flash memory device combined with Java Cardâ[greater equal]¢ smart card silicon.

This, of course, could include banking credentials with the SMC even bearing the financial card issuer’s logo. Although the SIM card is still required for access to mobile networks, the SMC can run all the added-value applications and the processor can run secure automatic WiFi authentication processes and banking applications using SSL.

So, in this scenario, the poor little SIM card supports its original function, but is surrounded by modules and connections that bypass it for everything except connection to a mobile network. The cellular data connection is merely one channel through which servers can be reached securely.

SIM cards are fighting back by adding large amounts of flash memory (512 Mbytes), a high-speed USB interface and a Web server. In all these scenarios, the card manufacturers will grow their businesses.

Gorillas Entering the Fray

Compounding the issues, Intel is working on an Identity-Capable Platform (ICP). The ICP will be a secure hardware area in a processor which supports future converged mobile wireless security and high-value, trusted services including secure access to any device, network or service.

For mobile handsets and possibly other devices such as home gateways, ARM has an equivalent technology called TrustZone. This provides a secure hardware execution zone and memory partitioning. Many silicon vendors are licencing TrustZone. These innovations make possible the advent of downloadable SIM-style applications that could replace the need for a physical SIM card.

What Does the Future Hold?âo¢

- The SIM: will co-exist with its cousin the ‘softSIM’. New items will appear, like the ‘secure’ MultiMedia Card (SMC).

- The SIM vendors should do well: They will broaden out and embrace convergence. They have huge experience in securely issuing and managing trusted silicon devices. There is no reason why they should not turn their attention to provisioning and OTA (Over-The-Air) management of secure solutions, such as credentials on ‘soft SIMs’ or trusted platforms like the Intel Identity-capable Platform.

- The SIM card: will continue to be made and used, but will become a low value commodity item, always competing against managed secure intelligence in the mobile device.

- The mobile operator: will no longer be ‘in control’. They must embrace convergence fast.

The SIM is a wonderful platform, why restrict it to mobile operators!”

12:43:06 PM    comment   

MIH India has launched another payment module called ibQash for users of their social media portal ibibo. Users will be classified in six âo[ogonek]leaguesâo? based on the level of activity on ibibo, which determines the quantum of payment to users. The other payment module âo?Great Indian Blogger Huntâo? had issues of some people copy-pasting content from elsewhere, and ibibo has asked users to report abuse. Still, I remain skeptical about the whole concept of paying users to blog - money doesnâo[dot accent]t buy loyalty. And how feasible is it, since this is not an advertising revenue share - itâo[dot accent]s an out-and-out payment for usage...anyone remember the defunct Mailmetoday.com from the India Today group?

Ibibo has also launched polls - both online and mobile - and a classifieds search for cities, jobs, restaurants and (surprisingly) matrimony, called âo[dot accent]dwaarâo[breve]. Gaming sites chotafish and motafish are now ibibo kids and ibibo games respectively.

The more interesting initiative is a social networking site called Cafe ibibo, that requires users to disclose and verify their mobile number, and is hence positioned as being âo[breve]saferâo[dot accent] than other social nets. There are some usability issues and bugs, though - I couldnâo[dot accent]t figure out how to upload my photo directly to my ibibo cafe profile. Someone sent me a friend request, and when I checked the profile, it still displayed my name with his profile.  There are no groups yet at Cafe ibibo. I also noticed two more sites via the footer at bixee.com (which MIH acquired) - classifieds listing Apnamarket.com and questionbank.net.

11:37:22 AM    comment