Last throw of the dice for WiMAX

Like it or not, this is the year that will prove whether there is a business case for mobile WiMAX. If it doesn’t take off in a substantial way in 2008, I think you can safely proclaim it another broadband wireless niche platform that has come and gone, similar to the likes of LMDS, MMDS and some of the proprietary stuff that came before it. It will live on for providing fixed “DSL-equivalent” broadband in remote areas and emerging markets, but it will have missed its chance of becoming a ubiquitous broadband technology for the roaming masses.

If it hasn’t solidified its base by the end of the year, then it will be because carriers have chosen to stick with HSPA and wait for LTE, which will by then be just around the corner. And that will mean that WiMAX has been pushed down to become yet another footnote in wireless broadband history at the expense of the GSM juggernaut. (And the same goes for the other proposed 4G standard, Qualcomm’s UBM, by the way.)

Of course, it could be that WiMAX really does prove itself in 2008 and there are already some encouraging signs. In Japan late last year the government awarded two licences in the 2.5GHz band to consortia headed by KDDI and another to Willcom, with equipment vendors already lining up to provide gear. One thing to bear in mind, however, is that in the case of KDDI, trials are only expected to kick off in February 2009.

Similarly, 2009 is expected to be the year that another potential WiMAX market, Taiwan, really gets underway. Taiwan also sees itself as a major supplier of WiMAX equipment to the world, and it is interesting that there are already grumblings over there about the cost of WiMAX compliance testing. According to Digitimes sources, it will cost about US$25,000-31,250 for the makers to complete the certification testing of a single fixed WiMAX item. In addition, the WiMAX Forum is charging US$10,000 per mobile WiMAX product to use the WiMAX Forum certified mark compared to US$5,500 per fixed WiMAX model. The news report also noted that a fee of up to US$200,000 is being estimated for the testing of some items.

The WiMAX camp also got a generally favourable report from Juniper Research last week suggesting that the mobile WiMAX 802.16e market will grow to $23 billion by 2013, with half of that total coming from Asia. However, that will still only represent “a single digit proportion of the Asian mobile broadband base by 2013,” according to the report.

The Juniper report also warns that both the availability of suitable devices and the awarding of licences will be important factors in determining the success of Mobile WiMAX 802.16e, both in Asia and globally. Interestingly, it also tips licences in India and Thailand as being crucial to the WiMAX camp. Warning bells should ring right there, given the two countries’ notoriously slow licensing regimes. In the case of Thailand, you can almost guarantee that it won’t be issuing licences for WiMAX this year, given the political environment and the need to create a new regulatory body.

When it comes to devices, one of the WiMAX camp’s trump cards is the backing of Intel, which will see it become standard in every new notebook computer, much the same as Wi-Fi is today. The only problem with this is that if there is no network to connect to, it doesn’t really matter if the notebook is WiMAX-enabled or not.

In contrast, if the push to include HSPA in new devices takes off, the HUGE advantage they have is that the networks and service are widespread already. And the momentum to include HSPA chips in notebooks is likely to happen this year. Throw in all the HSPA-capable mobile phones, and the economies of scale certainly don’t favour WiMAX and won’t any time soon.

Despite some vendor claims to the contrary, WiMAX needs the Sprint rollout in the US to succeed, and it will need to succeed wildly in 2008 if it is to give any vote of confidence to carriers in the rest of the world wanting to roll it out. If it doesn’t, then the GSM/HSPA/LTE camp will have won the battle for mobile wireless broadband supremacy for the foreseeable future. – Geoff Long

The Great Mobile Internet Myth

I’d hate to think how many times I’ve seen presentations at trade shows and vendor events where they trot out figures of how many computers there are in the developing world compared to mobile phones and then without missing a beat proclaim that the mobile will be the access device for these markets to get on the Net. Sure, there are more mobile phones in use than PCs in “emerging” markets, but that doesn’t necessarily mean everyone will be jumping online with them. It’s only now that I’m using the mobile Internet that I’ve realised this.

Don’t get me wrong, I’m not having another dig at the mobile Internet. In fact, I’m currently enjoying my experience of finding out what it’s capable of (and not capable of). As a tech journo and reasonably early adopter, it’s my role to check out these things – and having access to the latest phones for testing purposes certainly helps. Your average Chinese, Indian or Thai taxi driver, labourer or office worker is not likely to be in the same situation.

For a start, the majority of phones sold in emerging markets are low-end devices that are not even capable of getting on the Internet. Even in the developed world, the number of people toting so-called smartphones is still slim, perhaps 10 percent of the market, tops. If they did want one of the new-fangled smartphones, they’re likely going to be handing over the equivalent of a few months wages to get it. Here in Bangkok, for example, the average smartphone goes for around 20-25,000 baht (upwards of US$650). Yet a decent desktop PC can be had for half that amount.

Then there’s the mobile data fees themselves. Thailand again is fairly reasonable in comparison to some countries, with an unlimited plan going for around US$30. But for half that you can have a fixed broadband connection that is way faster. It’s also a lot more reliable – let’s face it if everyone suddenly jumps online, a typical mobile cell (3G or 2.5G) is going to be close to unusable.

But the cost of the devices, the cost of mobile data service and issues such as speed and reliability are not the only things stopping the mobile from being the dominant access means in the developing world (although together they represent a pretty decent stumbling block). The other thing that I’ve come to realise is that most of the good Internet services for the mobile nearly all require you to be a regular Internet user in the first place.

Let’s take the services I’ve been using as an example. One of the most useful has been Gmail on the mobile. Google has created a small app that you can download to the mobile and it works great – but of course you have to have an existing Gmail account first (you could, theoretically, sign up on the mobile, but it would be painful). Another one I’ve noticed a lot of people using is Facebook for the mobile. Again, it complements your regular, desktop Facebook account rather than being purely for the mobile. There are plenty of similar examples, such as my Fantasy Premier League team, which I can manage via the mobile but which we won’t go into given that I’m losing. The point is you only use it on the mobile when you’re signed up on the desktop first.

Even some of the services designed specifically for the mobile, such as Nokia’s Widsets (widgets for the mobile) and Mosh (content sharing) require you to sign up via computer and are best configured and managed from the desktop. Sure, they both have some great mobile-only apps, but the people using it are still going to be heavy users of the desktop Internet. And I think this holds for most things to do with the mobile Internet – the way I see it, it will complement the fixed Internet rather than people using it exclusively.

So the next time someone tells you that mobile devices outnumber PCs in the developing world, don’t let them hoodwink you into thinking they’ll be using them to get on the Internet. At least not until they’re already using the fixed Internet first. – Geoff Long

The mobile Internet buzz

It would be easy to dismiss the whole mobile Internet buzz as nothing more than, well, buzz. After all, we've been through it all before with WAP and other hype cycles. But it would also be a mistake.

Mobile infrastructure looks finally ready to be a prime access mode for getting onto the Internet and some of the indicators indeed look promising. Certainly there's a ton of investment dollars being funneled into it. While this column has been negative about the iPhone since its introduction, it did serve to show the potential of the mobile Internet. And its introduction has also focussed attention on the capabilities of some of the other device makers and at the same time injected a healthy dose of new competition into the mix.

Recently, for example, I was shown a new Nokia device that could send photos to the Flickr image sharing service with just one-click. And the fact that the device's software pointed the user to the feature automatically, perhaps guiding them to a service that they didn't know existed, was also encouraging.

Video is also another rising capability, with CNN using the latest Nokia N series phones to do coverage that was later broadcast to its regular TV viewers earlier this year. And in Africa, a continent normally seen as on the wrong side of the digital divide, they are also doing reportage via mobile devices.

The Voices of Africa project has three mobile reporters in different countries filing stories for the Africa News web site (www.africanews.com). Since May this year they have been testing and getting experience in uploading texts, photos and videos - all via GPRS networks. Imagine what they could do on 3G.

Here in Asia, we're lucky that mobile networks are being upgraded to provide faster uploads and downloads. StarHub in Singapore, for example, will be offering one of the region's first HSPA (high-speed packet access) networks, with touted download and upload speeds of 7.2Mbps and 1.9Mbps respectively (even though we all know in reality that users won't be actually getting anywhere near those speeds).

And think what you will about the relative merits of WiMax versus 3G, the fact that both standards are competing and pushing each other can only be good for consumers and content providers alike.

Behind the scenes things are also moving along as well. For example at this year's JavaOne event in May, Sun released a new open mobile development platform called JavaFX Mobile, which it expects to lead to more innovative and sophisticated (and open) services on mobile devices. (The technology was actually developed by SavaJe Technologies and acquired by Sun this year.)

Some of the types of services that might be envisaged by Sun and others have already arrived. While most of the major social networking sites and the likes of YouTube are planning on porting their capabilities to the mobile world, other lesser-known names have already made progress in this direction.

In Japan, for example, social networking sites for the mobile are probably well ahead of anywhere else in the world. Take the example of mobagetown, a mobile social networking site that had over 6 million users as of June this year. And the icing on the cake: it's apparently turning a nice profit.

As a result, similar services are popping up regularly, with Media Groove planning the launch of "Chipuya Town" next month, according to Infinita. It reported that it will be a mobile Flash-based 2D version of real-world Tokyo youth hotspot Shibuya and include things such microblogs, communities, friends and chat as well as its own virtual currency.

There are a legion of other examples out there, but I'm sure you get the picture. While there will no doubt be a lot more hype to come, not to mention a decent spreading of both the instantly filthy-rich and some belly-up companies, this time the mobile Internet looks like the real thing.

How WiMAX can disrupt the cellco cartel

I'm now working on our Broadband Communities newsletter, which has lots of stuff on WiMax and muni wi-fi this week. Go to www.commsday.com if you're not a subscriber (it's free).
In the meantime, I thought I'd resurrect this column on how WiMax can make its mark.

How WiMAX can disrupt the cellco cartel
The time to prove the demand for WiMAX among users is at hand. While the hype machine has been active for some years, it’s only now in 2007 that we’re really going to see any activity in terms of commercial networks, particularly of the mobile WiMAX variety.

And they’ve got a lot of catching up to do with HSDPA, which has enjoyed a steady stream of rollouts around the world. The question is, how many users of a HSDPA network, or a handset that’s capable of using it, are actually making use of mobile Internet capabilities? I suspect not too many.

In fact, in a presentation at the WiMAX Strategies Asia forum recently, Motorola head of technology for South and East Asia, Dr Ray Owen, noted that last year worldwide ARPU for mobile cellular data actually dropped, and is tipped to rise only slightly this year. That would suggest that other than SMS messages and ringtones – the bread and butter of data ARPUs – subscribers aren’t buying this mobile Internet thing.

And with good reason: it’s overpriced and often hobbled.

Everyone has known for years that roaming fees for mobile voice are excessive. Roaming fees for mobile data are nothing short of extortion. Even among business people who travel regularly, many are forgoing the mobile data features of their phones because of high data roaming charges. For independents (ie, those of us who pay our own bills), the shock of the bill on your return is not worth the pain.

And the latest news is that operators such as Vodafone and Orange in the UK have been disabling the Skype and other built-in VoIP capabilities in the new Nokia N95 phones. That way they can lock users into their higher prices when making international calls or when roaming abroad.

Skype has also made a submission to the US Federal Communications Commission (FCC) on the same issue. In its “wireless net neutrality” proposal it called for users to be able to use Internet communications software and attach their own devices to any wireless network. Many commentators have pointed out similarities to the 1968 “Carterphone” decision, where AT&T was forced to allow users to connect third-party devices to their fixed line. (The decision was named after Tom Carter, who had a device for patching phone calls into two-way radio gear)

The mobile phone operators also want to lock you into their own walled garden of content as well. Last year Google hit out at such practices, accusing them of blocking access to Internet content and services including Google. “They’re inserting themselves in between you and an application that you want. I think that has scary, scary implications,” Chris Sacca, a Google senior exec, was quoted as saying.

So how does all of this help the WiMAX camp? It allows them to pitch their services as a “pure IP” play from day one. No walled gardens of content, no hobbled applications or disabled features, just pure and unadulterated access to “the” Internet. Wanna make voice calls, either international or local – go ahead, it’s just another application available on the Internet. Given that there’s already a WiMAX roaming forum being set up, it could seriously eat into cellco roaming fees the way Wi-Fi already is today.

One WiMAX operator at the WiMAX Strategies Asia forum is doing just that, even while offering its own VoIP services. “I don’t have a problem if my subscribers don’t use my voice but use Skype,” said Peter Ziegelwanger, managing director of Austria’s WiMAX Telecom. “What I can do is promise quality with my VoIP service,” he added.

Of course the mobile operators could also hit back with similar deals themselves. In a small way, this has already started to happen. Hutchison has launched its “X-series” of services that includes mobile Skype and other popular Internet services for its 3 mobile brand around the world, including in Hong Kong and more recently Australia. And users also get a flat monthly fee for mobile Internet as well.

Speaking to BroadBand Communities’ sister publication Communications Day, Hutchison Whampoa Group finance director Frank Sixt claimed that 3 was the first mobile operator in the world to tear down the walled garden. “Up until now network operators have treated network capacity as their most expensive asset. Historically it was and they rationed it and sold it at the highest possible price,” he said. “3 is the first mobile operator in the world to change the mobile media business model.”

To date, the rest of the mobile operator community has not followed suit. Which leaves a clear opening for WiMAX operators to offer – and more importantly market – what could be an important differentiator. That is, a “pure IP” service that is not hobbled or outrageously expensive, either at home or when on the road. – Geoff Long

Imitate Skype or die

Earlier this year I was informed that I could make free calls to China, mobile or fixed, over the Chinese New Year. Aside from the fact that most Chinese were too busy eating to pick up the phone, it was quite an offer. In fact, I’m getting so many of these freebies of late that I could do the bulk of my communications for almost no cost. Of course it’s not quite that simple, but the message is appealing nonetheless.

I’d had a similar offer of free calls from AsiaXPAT if I signed up for its web site. Turns out that both offers were via the same company, a VoIP provider with the obligatory odd-ball name, in this case ZoIPPE. Zoippe, a subsidiary of Hong Kong’s e-Kong Group, was only launched at ITU Telecom World in December last year, so no doubt the flurry of activity is to boost its membership base in a very crowded market.

Skype wasn’t the first free VoIP provider on the scene, but somehow it had the right ingredients to catch the public’s eye (or ear, in this case) and succeed. Ever since then its imitators have come thick and fast. Zoippe also has a “Zoippe Out” category in homage to Skype Out, where users pay VoIP rates rather than get free calls. It’s not the only one to flatter Skype with the imitation either, with Italy’s Skypho also fairly blatant about where its influences came from.

Another provider that has cropped up on my radar is the Gizmo Project, although in this case it was being recommended by other users who wanted to communicate with me – always a good indication that it’s catching on. Like Skype, Gizmo is being praised because of its better-than-average voice quality. And both are also moving into the mobile world, with Gizmo partnering with Nokia on its N80 devices.

These are just some of the new offerings that seemingly sprout up every other week in the alternative telecom patch. Another I’ve mentioned here in the past is Fon, which is backed by the likes of Skype and Google and is rolling out what it calls the world’s largest wireless network through a concept dubbed “user-generated infrastructure.” Users buy a Fon wireless router, then agree to share their home broadband connection with other users. In this way, Fon users have free access anywhere they go in the world, or at least anywhere there is an open Fon router.

The latest news on the Fon front is that it might be teaming up with BT in the UK. According to one report, BT users would be able to use Wi-Fi phones at any Fon hotspot. Whether that happens or not, Fon already has a new challenger in the form of Meraki Networks. It’s using a similar “user-generated” concept but it’s based on wireless mesh routers. Another similarity with Fon is that it got backing from investment firm Sequoia, announced last week, and yet another is that they both could as well fail.

Wireless and VoIP are both sectors with fairly high attrition rates. In the case of VoIP, I stumbled across an interesting list dubbed the VoIP Graveyard recently. With almost 100 deceased VoIP providers, it’s a fairly obvious warning to others that Skype is the exception rather than the rule.

Perhaps one way that providers could tap into new markets is to attract user communities – the way Zoippe is doing with the AsiaXPAT portal. Also in the case of Gizmo, it’s derived from the SIPphone platform, which was developed so that groups such as communities, universities and telcos could offer VoIP themselves. Today, partnering and peering is still one of the main aims of the Gizmo Project.

And then look at Skype, which has recently found its own user community thanks to new parent company eBay. So maybe providing branded services to different user constituencies is the way forward. We’ll keep an ear on Zoippe to find out, but in the meantime let’s hope it doesn’t end up in the VoIP Graveyard.

The iPhone's early legacy

One thing that Apple has managed to do with the iPhone, apart from giving marketing departments the world over an inferiority complex, is to focus attention on the closed nature of wireless networks. One of the biggest complaints is that the iPhone is locked to the AT&T network in the US and can’t be used on other mobile networks, while at the same time the phone has to be activated by AT&T to use many of its features. It also doesn’t allow you to download and use third-party applications.

In other words, it’s a classic “walled garden”. And the idea of locking the phone itself to the network is nothing new either, although it seems to be more prevalent over in the US than it is in Asia now. It used to be more prevalent in parts of Asia too. For example, Thailand used to be notorious for using IMEI locks, giving the boys down at one well-known retail outlet a regular source of revenue by unlocking the codes so that they could be used on any network.

Thankfully, that seems to be a thing of the past now and in Asia you can generally buy any phone (iPhones excepted) from any shop and use it on any network. As it should be. In fact, it looked for a while there that wireless operators were moving away from the closed network trend, with carriers like Hutchison earlier this year announcing that it was “tearing down the walled garden”. That followed its “X-series” of services that includes mobile Skype and other popular Internet services for its 3 mobile brand around the world, including in Hong Kong and Australia.

The US is well behind the rest of the world in this regard, however, with most consumers buying subsidised handsets that lock them into an exclusive contract. Now the iPhone seems to have taken the “open” cause back a few steps further, although I doubt the trend will take off in this part of the world.

One influential voice pushing for open networks is Bob Frankston, who is probably best known for co-developing the first spreadsheet, VisiCalc. Now among other things he is a popular commentator and advocate for the user’s right to access any service they want, with the network limited to providing the channel to get to such services.

As he writes in a post on his web site (www.frankston.com/public/?name=OurInternet) , the current telecom model gives control to the carrier at the expense of our own communications need (ie, the ability to use the applications and services of our own choosing). “We must not tolerate being forced to buy services from providers that have a stranglehold on our wires – whether they are physical wires or radios. Today our ability to communicate is limited by the unenlightened business needs of the carriers. This is intolerable and inexcusable,” he writes.

According to Frankston, the biggest impetus for change will come from investors who realise they have far more to gain if the carriers were not in the position to limit opportunity. The other argument is that applications like Skype that run on top of the service provider’s network are fine, but who pays for the investment in future infrastructure? It was brought up in an interview I had last week with Keith White, Alcatel-Lucent APAC security services director, who suggested that such services were threatening the business model of the carriers, which then wouldn’t be able to fund network expansion.

It’s probably the most pressing argument in the telecom world today and runs into the whole network neutrality debate (whether carriers should be able to favour certain applications or services over others). And of course there are no easy answers. Telecom providers are seeing their revenues eroded by new services such as VoIP, but many are adapting and there are no shortages of new entrants willing to give the user what they want. New business models will appear and some players may well go out of business.

In the end, it all boils down to competition. Apple has plenty of competition among device vendors, which is why I don’t think it will be able to keep it’s closed model of doing business with the iPhone, particularly when it comes to Asia. It would be great if we had the same level of competition among networks, particularly if the newcomers decided to embrace an open model. Perhaps then we’d have no need of net neutrality legislation.