the future of wireless ISSUE 153 SEPTEMBER 2008

featuring
Mobile advertising: Operators
are looking to define their role in
a complex value chain.

David Wood: Symbian's head of

research talks to MCI about the
move to open source.

Home delivery
CARRIERS ARE BANKING ON FEMTOCELLS TO
HELP WIN THE INDOOR BATTLE
ADVERTISEMENT FEATURE

While traditional media outlets such as terrestrial TV and

newspapers are facing rapidly declining advertising revenues,
there is one medium set for meteoric marketing growth, and that’s
mobile. Leading analyst firm Gartner puts the 2008 spend on
mobile advertising at an already healthy $2.7 billion worldwide
– but this could more than quadruple to $12.8 billion by 2011.
Truly innovative advertising campaigns have now been run that
target mobile consumers, such as those by sports firm Adidas.
Mainstream advertising agencies are including mobile in their
media plans, while a range of new mobile media specialists are
springing up to exploit the exciting potential of mobile as a medium.

The excitement stems from the ubiquity As Chris Murphy, director of digital at As research by Nokia Siemens Networks
of mobile handsets, their use by the Adidas, told a recent Mobile Marketing indicates, the greatest barrier to mobile
key demographic of younger users, Forum in New York: “We view mobile advertising is indeed consumer resistance
and technologies such as mobile as a potent way to move beyond the – at best, some users may perceive it as
broadband and multimedia messaging. engagement model we have with online irrelevant, and at worst they could find it
It means advertisers can reach millions into one that focuses on participation, intrusive and an invasion of their privacy.
of subscribers while also offering a and to do it in a way that activates all According to Laura Marriott, president of
personalised and interactive experience. of our marketing channels.” the Mobile Marketing Association, there
The Adidas ‘Basketball is Brotherhood’ are clear lessons to achieving results.
campaign, for example, encouraged A critical point that Adidas took on board They include:
basketball fans to interact with the is that overt advertising on mobiles • Simple, short engagement
company to receive messages from is likely to be a big turn off for some • Relevance – ie that added value
top players – and then directed them users. The term ‘mobile marketing’ more • Recognising mobile behaviours where
to a website where they could create accurately describes the range of activity users want spontaneity
personalised ringtones and voicemail most appropriate for this medium. Direct • Tailoring for key demographic groups.
messages, kicking off a ‘viral marketing’ advertising – by SMS or on web screen –
style campaign. Adverts with mobile is effective in some markets and for some As Marriott adds: “The anonymous
shortcodes appeared in print and TV, and users, such as in developing countries interaction that a consumer had with their
there were banner ads on AdMob’s mobile where mobiles are more novel. But brand through other media channels
advertising network. engaging other people, particular groups is disappearing and is being replaced
such as young men in Europe and the with mobile, authentic interaction where
During a five week campaign, the US, requires skillful use of fun, interactive demographics, purchase behaviour and
company succeeded in its goal to reach activities that above all add value to their personal preferences each help to create
a high volume of young males who would mobile experience – but still play a major a more tailored and engaging conversation
have been harder to engage otherwise. role in brand building. between brand and consumer.”
 ADVERTISEMENT FEATURE

“The anonymous interaction that a

consumer had with their brand through
other media channels is disappearing
and is being replaced with mobile.”
Laura Marriott,
President of the Mobile Marketing Association

In turn, this raises the challenge of just

how to plan and construct these new
mobile campaigns – and what role
and opportunities there are for service
providers. Julie Ask, research director at
Jupiter Research, comments that mobile
advertising calls for new creative thinking,
moving on from basic messaging to
taking advantage of the capabilities of
smartphones, such as the use of video.
She thinks that the level of creativity must
be excellent, with visuals that work well on
small screens and don’t take too long to
load on slower networks.

Clearly, the creativity also extends to

how mobile can integrate with websites,
conventional TV, billboards and other
promotional avenues, and as Ask notes,
the timing and frequency of when mobile who set what time they want to receive Becoming a trusted provider of information
content appears on screen can have many messages (which are anyway subject to a – and not just plugging product – is a Holy
aspects – say when users switch between daily limit). Grail of relationship building, and the early
applications, when they turn the phone on, success stories from the fledgling mobile
triggered by location, and so on. Blyk’s model is revolutionary and already marketing world show that those who get
looks to be working – by this spring it had it right are also realising substantial return
While the front-end creativity is in signed up 100,000 UK members since on investment.
the hands of brand owners and their its launch at the end of September 2007.
marketing agencies, there is ample But there is clearly a spectrum of services For more information please visit:
opportunity for mobile service providers that operators can offer brand owners, www.nokiasiemensnetworks.com/
and operators to become key partners in including access to specific demographic mobileadvertising
delivering campaigns and value. Indeed, segments of a subscriber base, and
one service provider, Blyk, has pioneered platforms to construct and manage
an advertising-based service in the UK, campaigns, such as technology offered by
hosted by Nokia Siemens Networks and Nokia Siemens Networks and also Nokia.
running on Orange’s network, targeting There are many new ways to promote
younger users with free usage up to and monetise products and services via
a certain point in return for receiving mobiles, using tools such as vouchers and
interactive advertisements from big brands location-based technology. Vitally, service
such as Xbox and Adidas. It reports providers can offer advertisers a way to
response rates to ads are excellent – up build trusted relationships with consumers
to 15 times better than other channels – via the operator’s own trusted brand
and obtrusiveness is moderated by users, and platform.
 FRONT

Editorial 04
CONTENTS SEPTEMBER08
News 06
A round-up of industry news and announcements
from the last month, produced in conjunction with
34 | FEMTOCELLS Telecoms.com.
For mobile operator and consumer alike, the potential attractions of femtocells
include improvements to both coverage and capacity, especially indoors. There may Handset news 16
also be opportunities for new services and reduced cost. We’ve heard something The latest developments from the mobile
like this before of course; the question remains, are femtocells a fixed mobile handset sector.
convergence dream come true or a recurring technology nightmare?
News analysis 18
SIM-only tariffs are growing in popularity
with operators looking to manage customer
acquisition costs. But handsets subsidies are
here to stay. Meanwhile, a hacker seems to be
trying to twist Nokia’s arm over security risks.
And finally, analysts are warning that operators
will require significant shifts in strategy in order
to survive as the industry evolves.

INTERVIEW

David Wood, Symbian’s executive vice president for 24

research and a founding director of the group, talks
to MCI about its acquisition by Nokia and the move
to make the platform open source.

MARKET ANALYSIS

Italy 26
The fiercely competitive Italian market is
42 | MOBILE ADVERTISING characterised by multiple SIM-owning, predominantly
Mobile advertising is a work in progress and it seems clear that the emphasis pre-paying, fashion hungry 3G customers.
must be on collaboration if the sector is to yield benefits for every member of
the value chain. COMPANY PROFILE

3 31
The Hutchison Whampoa-owened carrier 3 has
a firm toehold in a number of markets and it is a
disruptive influence throughout.

FEATURES

Femtocells 34

Mobile advertising 42

THE INFORMER

The Olympics was a resounding success for the 48

Chinese, particularly the home grown talent. Sadly,
the same cannot be said for the country’s TD-SCDMA
standard. 3G is stll in its infancy in China and it could
be set to stay that way if the government continues
to ignore the established global standards.

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Opinion, breaking news, debate, Tel: +44 20 8606 7539
careers, events & research. Fax: +44 20 8606 7301
Visit www.telecoms.com www.mobilecomms.com

Mobile Communications International | First for news, best for business 02

 EDITORIALSEPTEMBER08

mike.hibberd@informa.com
Scramble for Africa

M
odafone’s successful acquisition of interested simply in strategic investment. The EDITORIAL
Editorial Director
70 per cent of Ghana Telecom, which Kuwaiti firm has made public its desire to
Mike Hibberd
swiftly followed the repainting of use the Middle East and Africa as a spring- Deputy Editor
Sean Jackson
pan-African carrier Celltel in the corporate board for a global push that will take it into
Contributing Editor
colours of its parent company Zain, trained the top ten operators worldwide. Vodafone’s & Newsdesk
James Middleton
the spotlight on Africa as the key territorial move into Western Africa could well be seen
Associate Editor
battleground for international operators. as a response. Ken Wieland
Correspondents
China and India may well steal the head- Zain has introduced a pan-continental
The Informer
lines in terms of market size, but China is service offering that is no doubt the envy of
Editorial enquiries:
nigh on impregnable and India only acces- EC Commissioner Viviane Reding. There are
Mobile Communications International Editorial
sible by spending tens of billions of dollars. no international roaming charges for users on Mortimer House, 37-41 Mortimer Street London W1T 3JH, UK
Tel: +44 20 7017 5495
Vodafone is among the carriers able to cover Zain networks in other countries and this is a
Email: sean.jackson@informa.com
such an entrance fee, of course, but no doubt package that other pan-African carriers will
WORLDWIDE MEDIA SOLUTIONS
far prefers the $900m it paid for its stake in have no choice but to attempt to replicate. It
Account Managers
Ghana Telecom. probably can’t be done through partnership Michael Butcher
Egypt aside, Vodafone’s presence in Africa so we can expect to see big names picking up Suki Bains

comes through its 50 per cent stake in South properties market by market in an attempt Japan:
African headquartered Vodacom. But the to play Zain at its own game. Media Communications Inc.
Tokyo Real Takaracho Bldg., 4-2-1 Hatchobori,
fact that it moved into Ghana without the And Zain, let’s not forget, is forever run- Chuo-ku, Tokyo 104 0032, Japan
assistance of its regional partner suggests ning dummy acquisition manoeuvres on its Tel: +81 (0)3 3523 2600 Email: timmis@mcijapan.com

an eagerness to establish its own brand regional competitors. Consolidation remains All advertising enquiries to:
more firmly on the continent. Vodafone has to be done. Whether or not an outsider like MCI Media Solutions,
37-41 Mortimer Street London W1T 3JH, UK
repeatedly voiced a desire to assume control Vodafone can build scale in the region in Tel: +44 20 7017 5218 Fax: +44 20 7017 5647
of Vodacom, although attempts to broker a time to check the momentum of established email: tim.banham@informa.com

deal have proved fruitless. players, however, remains to be seen. PRODUCTION

Could the Ghanaian acquisition signal an Design & Production Manager
acceptance on the part of the UK-based car- Joanne Lowe
Production Controller
rier that this will never happen? Or might it Nikki McEllin
represent a flag-planting prelude to renewed
HEAD OF MARKETING
advances? Either way, it seems increasingly
Sophie Burdajewicz
clear that Africa will become dominated by Email: sophie.burdajewicz@informa.com
a handful of large players.
PUBLISHER
Zain is at the head of this group and its
Tim Banham
rebranding of Celltel is evidence that it’s not

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04 Mobile Communications International | First for news, best for business

NEWS SEPTEMBER2008

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NEWS SEPTEMBER2008

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8
Strategy & Marketing Operations Technology

Next Generation
Mobile Networks
The way to 4G

With our integrated consulting experience in the areas of strategy, technology, planning/implementation, and
associated business models Detecon is able to provide holistic solutions for the migration to next generation air
interface technologies, network architectures and associated services.

Leveraging on our long experience and supported by a powerful tool environment our service portfolio is able to
cover the entire value chain of mobile operators confronted with a wide spectrum of conflicting market messages.
Particular aspects of our service offering comprise:
L Technology strategy consulting and technology benchmarking with a particular emphasis on true KPIs under
real world operating conditions
L End-to-end network optimization including air interfaces, physical layers, control layers, service layers and
NG OSS aspects
L Network cost modelling and business case investigation as well as end-to-end traffic engineering and
optimization

Our particular strengths are a deep understanding of the physical foundation of existing and emerging technolo-
gies, many years of experience implementation projects and the ability to integrate technological and economic
aspects. Using our unique combination of management and technical expertise we can provide you with solu-
tions for tomorrow’s business today. DESIGNING FUTURE BUSINESS.

Consulting
www.detecon.com
info@detecon.com DETECON
NEWS SEPTEMBER2008

Search our archive at: www.telecoms.com

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10
 It’s the antenna that makes it wireless...

What do the top mobile phone, notebook and wireless device

vendors have in common?... They have Antenova inside.
Through it’s customers and licensee partners, Antenova’s high performance High Dielectric Antenna
(HDA®), multi-band mobile broadband and gigaNOVA standard antennas, along with it’s industry
leading RADIONOVA® RF Antenna modules, enable some of the most advanced wireless devices,
smartphones, feature phones and wireless notebook computers around the world.

And adding to these successes, Antenova’s GPS RADIONOVA RF Antenna Modules are enabling the
new generation of GPS enabled mobile devices.

You’re already connected...

www.antenova.com
NEWS SEPTEMBER2008

Search our archive at: www.telecoms.com

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12
COVER STORY HANDSETS

CBOSS Supports Re-branding

in Orange Moldova
For Orange Moldova, 2007 was the year of re-branding and of total explosion of traffic, market
share, penetration and multimedia. SA Voxtel’s re-branding to Orange Moldova as well as this
tremendous change of magnitude of business involved significant changes and was supported
by CBOSS Corporation.

T
he success of the total change of the com- continents as of March 31, 2008, of which two
pany benefited from the joint efforts of the thirds are Orange customers. The Group had
operator and CBOSS Corporation. CBOSS consolidated sales of 52.9 billion euros in 2007
is Orange’s preferred partner in Moldova, (13 billion euros at March 31, 2008). As of
providing billing of prepaid clients (83% of the March 31, 2008, the Group had 111.9 million
total customer base) and most of the core service mobile customers and 12 million broadband
platforms. During the initial stage, the re- internet (ADSL) customers.
branding project was developed and thoroughly In 2006, Orange became the Group’s sin-
planned. Two major goals of CBOSS were to gle brand for Internet, television and mobile
ensure full compliance of Voxtel technologies services in the majority of countries where the
with the Orange requirements and to arrange company operates, and Orange Business Serv-
marketing campaigns to boost customer acquisi- ices the banner for services offered to businesses
tion, loyalty and generate new revenue streams. worldwide. France Telecom is the number three
CBOSS Corporation completed the modification mobile operator and the number one provider
of existent technologies to ensure maximum of broadband internet services in Europe and
compliance with the Orange standards, im- one of the world leaders in providing telecom-
plemented new product features and provided munication services to multinational companies.
support for all marketing campaigns. France Telecom (NYSE:FTE) is listed on Euron-
The rebranding launch as well as all further ext Paris and on the New York Stock Exchange.
launches were all successful and on time thanks CBOSS Corporation is a world leader in the
to the reactivity and the involvement of CBOSS development of innovative convergent IT solu-
teams in Orange projects. Mr. Veaceslav Roman, IT Director at SA Orange Moldova tions for end-to-end automation of telecommu-
For Moldovans, this transformative project nications enterprises, delivering a competitive
meant wider availability and easier usage of “The successful completion of the re-branding edge to telecoms on all inhabited continents.
customary and innovative mobile services. project, carried out by CBOSS Corpora- CBOSS Corporation offers the full range of
After just one year, 45% more clients joined tion, allowed Orange Moldova to increase its equipment, system and application software
Orange and their voice ARPU doubled while subscriber base and consolidate its market and professional services, including consulting,
the traffic of all multimedia services was mul- leadership,” says Veaceslav Roman, IT Director turnkey implementation, technical support, staff
tiplied by 2 to 4 times. It is estimated that Or- at SA Orange Moldova. “We are sure that our training and IT outsourcing, providing telcos
ange captured 80% of the market that allowed upcoming mutual projects will be carried out with guaranteed operations quality while mini-
the Moldovan market to move from less than at the same professional level and will enable mizing operational and capital expenditures.
40 to more than 58% penetration in one year. us to achieve our goals. This will help Orange CBOSS can supply operators, service provid-
Olaf Swantee, CEO of Orange Group qualified Moldova satisfy the ever changing customer ers and MVNOs with all components of IT
the Moldovan rebranding as the best one in demand and offer a rich portfolio of cutting- infrastructure and/or services, as well as with
the France Telecom group. edge offerings to meet the highest global quality full-scale outsourcing options, providing a reli-
From November 2006 till the end of 2007, standards of the Orange brand.” able single point of responsibility.
CBOSS Corporation was implementing and Orange Moldova (www.orange.md) is a
supporting all further project stages. CBOSS Moldovan company of the Orange Group. In
experts have contributed to have the Orange April 2008, it had 1.3 million clients. After 10
group’s mobile TV offer to be launched in years operation, the company’s marketshare is
record time. evaluated at 70% of the mobile operator value in
Given the creativity, energy and highest quality a market counting 3 other mobile operators.
standards of Orange in Moldova, the adaptability, Orange (www.orange.com) is the key brand
professionalism and qualification of CBOSS of France Telecom, one of the world’s leading
experts will surely be a competitive advantage for telecommunications operators. France Telecom
offering 3G and, later, NGN services. serves more than 172 million customers in five For more information, visit www.cbossgroup.com
A Greener Tomorrow

Recently, several telecom vendors have proposed green base stations In the industry, it is common to integrate promotions, add external com-
and efficient methods of utilising energy sources. However, each vendor biners, or reduce battery facilities to simplify site acquisitions. The number
might have a different definition of “green”, since to date there is no of feeder and antenna systems will be restricted due to low base station
defined standard in the industry. integration and site limitations brought by tower, space, cost etc. In order for
multiple carriers to share the same feeder and antenna system, an expensive
If we analyze the one-time capital expenditure (CAPEX), we can conclude that external combiner needs to be added.
equipments only occupy a minority of total cost, from 30 per cent in develop-
ing nations to 15 per cent in Europe and other developed countries. In fact, The green base station will be able to provide 4 to 6 carriers with one com-
BTS cell sites constitute around 60 per cent of Total Cost of Ownership (TCO). mon port. For a S3/3/3 site, only 1 to 2 battery cabinets are required, occupy-
ing about 0.5sq.m. This makes site acquisition more convenient, and saves
An analysis of OPEX shows that around 93 per cent of power is consumed CAPEX, thus shortening the network planning and rollout period.
by BTS and Air conditioning units. Also, we can conclude that around 80 per
cent of total network power is incurred by BTS cell sites. Cutting power consumption by 50%
Huawei’s unrivalled Green BTS and Green shelter offer customers significant
With such high figures, there is huge potential to decrease the CAPEX and advantages of low power consumption and temperature control strategies.
OPEX by reducing the power consumption and reusing the site related auxil- The Green BTS can function normally even at temperatures higher than
iary facilities. This requires high integration, high output power, convergence, conventional BTS. Huawei’s green base station adopts enhanced Doherty
and multimode solution. technology, the latest power amplifier chip set, and brand new hardware
design for energy conservation and environmental protection.
Being customer-oriented, Huawei provides voluntary solutions to greatly
decrease CO2 emission. By considering factors such as environmental protec- Doherty technology and high efficiency scheduling algorithm can effectively
tion, current industry trends and challenges, Huawei continues to support reduce more than 60 per cent of static power, substantially avoiding the un-
operators with a cost effective, power effective, and environmentally friendly necessary waste of energy.
“Green Site Solution.”
In 2006, the industry-wide power amplifier efficiency was less than 33 per
This solution allows mobile operators to enjoy benefits in the following four cent, but with the latest Digital Pre-Distortion (DPD) and enhanced Doherty
important areas: auxiliary facilities, network deployment, environmental technologies, the amplifier efficiency of CDMA has risen from 33 per cent
protection and resources utilization. to 35 per cent. It is safe to predict that the power amplifier efficiency will be
improved to 40 per cent by 2008. Consequently, power consumption, coal
Huawei’s green BTS is able to incorporate environmental protection into
consumption, and emission of carbon dioxide can be decreased. By using
product design. Moreover, it significantly lowers the TCO by cutting energy
high-efficiency power amplifier technologies and Doherty technology, the
costs. The TCO can be reduced even further by employing environmentally
internal heat generated by the base station component is lowered consider-
friendly cooling mechanisms, professional tower and shelter solutions, and
ably. Traditional heat dissipation methods such as air-conditioning and heat-
green energy sources.
exchange can be replaced by convection cooling and natural heat dissipation
Saving site related auxiliary facilities in order to eliminate noise and save energy at the same time.
The Green BTS is a unique, low power consumption solution that sup-
Last but not least, according to a number of consulting firms in the
ports multimode, convergence, high transmission of power, and high
industry, 730 watts is the power supply separatrix of choosing be-
integration all at the same time. Therefore, operators can have a fewer
tween green energy and fuel engine and the investment balance can be
number of sites and maximize the utilization of site resources. Moreover,
reached within three years. For a site with low capacity demand such as
Huawei’s innovative shelters, full portfolio tower solution and intelligent
one sector with less than 2 transceivers, the power consumption is far
generator solution help customers further lower the TCO by reducing
less than 730 watts; therefore, clean energy such as solar, wind etc. can
real estate, civil works, and fuel consumption.
be used to power the site. In conclusion, not only does it save on invest-
ment, but also takes full advantage of using natural energy to eliminate
environmental pollution.

Moreover, the unique shelter designs embedded with direct cooling further
lower power consumption. Huawei’s Green solution is also able to reduce
noise, electromagnetic radiation, and environmental impact. Realizing all
the challenges that a customer can face, Huawei provides another unique
mini AC solution, decreasing the temperature of batteries up to 10oC
lower than the normal room temperature. This enables BTS cell sites to
operate at a higher room temperature without causing any harm to the
batteries, meeting the demands of customers around the globe.

A typical CDMA S2/2/2 site with a conventional macro BTS consumes

2,200 watts. With the same configuration, Huawei’s Green BTS only con-
sumes 680 W, reducing power consumption by as much as 13,315 kWh
per site annually. For 800 BTSs network, cumulative power savings is 10
million kWh per year. Moreover, it reduces 8,500 tons of CO2 emissions. It
is equivalent to 10,000 thousand cars travelling a distance of 4,300 km in
one year.

Easier installation The modular design is an innovative new type of base station, which sim-
Since a traditional base station is composed of many modules including plifies wiring between different modules and enables the base station to be
baseband, radio, combiner, transmission, management and O&M etc., the stacked or assembled in various ways. Construction and expansion is made
wiring and installation process is very complicated. This also makes site easier while the costs of civil works can be dramatically reduced. Operators
construction and expansion extremely difficult. will benefit from convenient installation and simple site acquisition, reduc-
ing on site investment and shortening network deployment time.
To avoid those problems, Huawei’s distributed base station adopts an open
CPRI Interface, and is physically divided into a baseband module and radio The green site solution is an effective method of ensuring profitability
module interconnected through optical fibre. This greatly enhances the and assisting operators to rapidly lower TCO in an increasingly competi-
flexibility of site acquisition and installation. A baseband module is 2U in tive environment. As a leading telecom equipment provider, Huawei is
height, which enables it to be installed on existing site equipment such as constantly innovating new solutions based on customer demands. It will
Automatic Power Management (APM) cabinets, transmission equipment bridge the standards gap towards multi-standard integration and help
cabinets or remote equipment rooms. Due to its light weight, the radio operators lower TCO. More importantly, Huawei’s solutions will help
module can be installed on towers, poles, or against walls etc. In com- build a greener future. ®¹
parison, traditional distributed base stations are only suitable for indoor
coverage because of its limited capacity.

Huawei’s full range of fourth generation Green BTS is highly modularised

and all base stations are unified to baseband and radio modules. With
multi-carrier and broadband radio technology, the capacity of a baseband
unit is greatly improved by 5 times, and its height is further reduced to
only 2U. In terms of radio module, one single module supports 4-8 CDMA
carriers.
SEPTEMBER2008

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18 Mobile Communications International | First for news, best for business

Exterminate SPAM
& Grow Revenues
Get SMS SPAM Protection for free, paid for by the incremental revenue
from mobile advertising or the cost savings from SMS offload.
Grow your Revenue with SMS Mobile Advertising
Optimize your SMS Architecture
Secure your SMS Network and Business

Tekelec delivers all of these benefits

in a single, modular solution
Found at the heart of most global networks, Tekelec’s market-leading,
carrier-grade network solutions enable the secure and instant delivery
of calls and text messages for more than one billion mobile and
fixed-line subscribers.
www.tekelec.com/OptimizeSMS

© 2008 Tekelec, All Rights Reserved. 5200 Paramount Parkway, Morrisville, NC 27560 USA
 NEWS ANALYSIS james.middleton@informa.com

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20 Mobile Communications International | First for news, best for business

| |

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 NEWS ANALYSIS james.middleton@informa.com

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22 Mobile Communications International | First for news, best for business

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MCI INTERVIEW

MCI INTERVIEW

From the Source

David Wood, Symbian’s executive vice president for research and a founding director o
talks to MCI about Symbian’s acquisition by Nokia and the move to make the platform

@
n 1998 David Wood, a senior soft- arrival. “Th
ware engineer at Psion, became device,” Wo
a founding director of Symbian, it’s only go
the grouping of handset vendors Some peop
that came together to establish a of device b
common operating system for mobile keyboard.
phones. Ten years on and—regulato- complaint
ry approval permitting—Symbian people wan
is about to be absorbed by Nokia, to enter lot
it’s principal shareholder, and its tally, that’s
core products taken open source. a significa
Symbian has new competition as iPhone use
well, in the form of Google’s Android rate messa
and the LiMo foundation’s plans as a Black
for a Linux platform. Microsoft and smartphon
Research In Motion are keeping the Wood ar
pressure on, too. riety of dev
Ten years ago there were plenty the Symbia
of PDAs around, but not that many will stand
smartphones. The Nokia 9000 Com- and that th
municator, which debuted at CeBIT nature of th
in 1996, was probably all there was Apple produ
to give a hint at what might be to David Wood to prove.
come. Today, while smartphones are Microsoft
by no means ubiquitous, they enjoy ple contender in th
far higher penetration, says Wood. are spurring traditional handset and Wood argues
“They’re not mass market yet,” he vendors onto greater achievement. figures tell the sto
says, “But the biggest thing that’s “The likes of Apple and Android have pretty good d
happened over the last decade is the have a very pleasant side effect sive releases of Wi
far wider distribution of this technol- from my point of view,” says Wood. they don’t have any
ogy. Worldwide only ten per cent of “Because they raise awareness of a market share as
phones are smartphones. But in some smartphones generally. People can preferring to focu
parts of the world the penetration is see one another using them and they rather than compe
much higher. In Japan, something like decide they want something more Microsoft applic
25 per cent of all phones sold last year than just voice.” are running on to
were Symbian phones. And in Italy the A boon to the sector they may operating system
number is significantly higher than be, but Wood betrays no concerns that there is room
ten per cent as well,” he adds. that these new players could pose success. “We have
These handsets have become more a threat to Symbian’s position. “We ware from RIM r
affordable, he says, partly through continue to set the standard. Each of on Symbian device
Moore’s Law, and partly through the other operating systems brings RIM is a competi
increased competition and efficiency some features that will encourage with Google. They
in the handset manufacturing sector. the industry as a whole—including which is a comp
The growing popularity of flat rate us—to raise its game. But if I look but they’re actual
data tariffs in the operator community across the broad range of features, of applications tha
has also helped boost the penetration I’m convinced that the Symbian OS Symbian phones.”
of a device segment that was once has the richest and strongest set of And he’s no mo
the exclusive realm of high-spending solutions and the best flexibility and ments from the Lin
early adopters. scalability,” he says. Android is a memb
The arrival of players and products But no phone from the Symbian have proven them
from other sectors—Google’s Android stable has ever generated the kind of ket yet, with the e
and the Apple iPhone—meanwhile, furore that engulfed the iPhone on its of the phones tha

24 Mobile Communications International | First for

 MCI INTERVIEW

Japan and some of the Motorola novation. We’ve been very innovative
devices in China,” he says. “It’s one career history in the last ten years, as the devices
thing to be able to create a phone and solutions testify. But I think that
and it’s another to be able to meet we can now go even faster.”
» David Wood joined Psion as a software engineer in
the demands of the network opera- He concedes that plans for the
June 1988, and gradually moved into roles involving
tors and the approval authorities. current Symbian Partner Network
software architecture and system integration. He was
People have the vision of a Linux have yet to be finalised. “It’s too
an early adopter of object-oriented technology within
operating system for phones. Then early to say what will become of
Psion in the late 1980s and saw this come to fruition
they came up against the reality that it when the Foundation goes live.
in popular handheld devices such as the Series 3 and
there’s an awful lot of devil in the I imagine there will continue to be
Series 3a.
detail. There’s ten per cent core Linux some value to be had by companies
and 90 per cent devil in the detail. retaining additional membership to
» From 1994 to 1997 he oversaw the development of
That has cost some companies huge the partnership but frankly it still
the upper layers of the software system that
amounts of money.” needs to be worked out. We’ve got
eventually became known as Symbian OS. He was a
And yet Symbian is taking a leaf the big vision as to how this will
founding director of Symbian on its formation in 1998.
from the Linux book and taking its all work, in terms of the Symbian
operating system open source as Foundation but we have some parts
» From 1998 to 2002 he headed Symbian’s Technical
part of Nokia’s acquisition. This of that worked out in a whole lot
Consulting department, building and directing teams
will see the creation of the Sym- more detail than others. In terms
that worked with Symbian's customers to create the
bian Foundation; essentially the of the Symbian partner network,
world’s first smartphones.
previous shareholders and major all I can say is that it’s going to
licensees which will continue to make sense for companies to work
» From 2002 to 2004 he was EVP of Partnering at
use the platform in their handsets very closely with Symbian for the
Symbian, creating partner programmes to foster
augmented by other firms which foreseeable future,” he says.
sustained commercial success for companies in the
have hitherto been unable to become In the immediate part of that
Symbian ecosystem.
licensees because the costs have future, Wood says, devices based
been prohibitive. » As EVP of Research, Wood is now responsible for
on the Symbian 9.4 release should
“There will be a licence fee,” Wood understanding and guiding Symbian's response to
hit the market later this year. “We’re
says, “because, to be clear, open disruptive trends in technology, business, and society.
also close to releasing 9.5, as well,”
source doesn’t mean no licence. he says. This latest iteration could
There are still rules and important » Wood has an MA in Mathematics from Cambridge be seen to contain Symbian’s rebuff
reasons why there are rules. People University and an honorary doctorate in science from to Apple’s famously successful user
can’t modify the source code and still the University of Westminster. interface. “9.5 has the first versions
say it’s a Symbian device. There are of Screenplay, which is our new
also rules to do with patents. When graphics architecture, and Freeway,
people get the source code, they will which is our new IP networking
also get royalty free licences for any architecture. And these will deliver
patents that are in the code. So if munity, which Wood says will keep what the end user will see as slicker,
people started suing the foundation the Foundation platform unified and richer experiences. So there will be
because they say the Foundation prevent fragmentation. richer animation and 3D graphics,
invalidates their patents, then their On control being ceded to Nokia, for example, and the equivalent of
patent licence granted by the Foun- Wood argues that greater efficiencies home broadband in your pocket,”
dation will be withdrawn. So it’s will be born out of the closer align- he says.
all about encouraging community ment of Symbian’s technical team The evolution of Symbian to an
spirit, with people pooling their in- with Nokia’s S60 team, responsible open source platform is clearly a
novation rather than trying to score for the UI and application layers. response to increased competition
points of each other. Or indeed lots “I would expect future versions of from newcomers. With operators
of money.” Symbian OS and S60 to come out calling for consolidation within
Crucially, he says, the licence be- even faster than we’ve seen in recent the handset OS space, drawing a
stowed on Foundation members will history,” he says. wider development community to its
require them to make their modifica- “The first result we expect from this breast, Symbian hopes, will keep it at
tions available to the whole com- open source move is much greater in- the forefront of the sector. Ê®

Mobile Communications International | First for news, best for business 25

 MARKET ANALYSIS

Forza mobile
The fiercely competitive Italian market is characterised by multiple
SIM-owning, predominantly pre-paying, fashion hungry 3G customers

=
our mobile carriers—Vodafone,
Telecom Italia, 3 and Wind—cur-
rently operate in Italy, although
a number of specialist MVNOs have
established themselves on the scene
within the last year. It is the second
largest cellular market in Europe
behind Germany.
According to Informa Telecoms &
Media’s World Cellular Information
Service the 100 per cent penetration
barrier was passed long ago, during the
summer of 2004. At the time of going
to press, teledensity in Italy stands at
nearly 150 per cent.
Year-on-year, mobile subscriptions in
Italy grew just under eight per cent in
Q108, to 86.4 million, up from 80.1 mil-
lion in Q107. However, net additions for
the quarter amounted to only 280,680,
representing a quarterly growth rate
of 0.33 per cent. In terms of net adds, now has a powerful bundling option launched services with immediate
Vodafone had the best quarter, followed for mobile and fixed services. Once success. In April 2008, the three
by Wind and 3.Telecom Italia, however, implemented, churn rates may well fall largest Italian MVNOs—UnoMobile
lost subscriptions in Q108. in the longer term. (Carrefour Italia Group), CoopVoce
Vodafone successfully offset the first Italy is currently the largest 3G and PosteMobile—reported a total of
quarter seasonal dip through a series market in Western Europe and all 500,000 customers since launch, up
of targeted promotions that stabilised four MNOs run sizable 3G networks. A from about 260,000 in Q407.
subscription growth and increased mes- fourth 3G licence was granted to IPSE PosteMobile launched its service in
saging volume. The latter was up 31.8 2000—a consortium led by Spain’s Tel- November 2007 and concentrates on
per cent year-on-year. Recent regulatory efonica and Finland’s Sonera. However, mobile micro payments.Astelit (branded
decisions on termination rates have it was revoked in 2006 in light of the Life J) and Daily Telecom Mobile will
made a large dent in Vodafone Group’s firm’s failure to deploy in accordance target ethnic communities (Ukrainians
voice revenue in all EU countries. In to licence obligations. and people who make calls to Hong
Italy, the firm’s Q108 voice revenue fell Subscriptions to 3G services stand at Kong, Macao or Taiwan, respectively).
7.9 per cent. But strong demand for over 25 million—up by more than eight But there are also those MVNOs that
mobile data connectivity and devices million since 2006. Italian 3G subscrib- owe their existence to the increasing
came to the rescue, and data revenue ers account for roughly one quarter pressure for fixed mobile convergence.
increased 17.2 per cent year-on-year. of the total WCDMA subscriptions Vodafone’s purchase of Tele2 is a step
With about one in four prepaid in Western Europe, though as more in this direction. Moving towards the
customers and one in five contract countries grow their 3G subscriber same point from the other direction,
subscribers switching their mobile bases, that market share will inevi- fixed network operators FastWeb and
service provider, Vodafone has deliv- tably come down. Tiscali have both signed contracts for
ered an impressive feat by increasing More than 87 per cent of mobile their MVNO operations in the first
its subscription base. But what it has subscriptions in Italy are prepaid, which half of 2008.
not achieved is sufficient customer might paint Italy as the ideal environ- Using existing technology and in-
contentment. The lack of “stickiness” ment for service providers intent on frastructure is one route to market,
is a problem. For fixed-line providers, marketing solely prepaid offerings. deploying a WiMAX network is another.
bundled service offerings provide an Italy’s mobile network operators In February 2008, 22 bidders were still
excellent way of increasing customer long resisted the pressure to open actively looking to acquire WiMAX
retention.With the acquisition of Tele2’s their networks to MVNOs. But in late licences in Italy. Telecom Italia and
Italian operation in late 2007,Vodafone 2007 and early 2008, several MVNOs broadcaster Mediaset placed bids; »

26 Mobile Communications International | First for news, best for business

 13TH ANNUAL

13-16 OCTOBER 2008 BANGKOK CONVENTION CENTRE AT CENTRALWORLD

WHERE MOBILE, MEDIA AND BROADBAND CONVERGE

Join leaders in the telecoms industry in Bangkok for the latest on

deploying and monetizing next generation mobile networks

Highlights of the 2008 Mobility World Congress

✓ Operators championing LTE, WiMAX, and CDMA evolutions brought together on one stage - helping
you compare, contrast and pick the winning technology for your business
✓ Real business models for making money from next generation mobile data services and applications
- Mobile commerce, entertainment, internet, user generated content
✓ Live consumer panel, providing an invaluable insight into what the customer wants
✓ Updates and insights into opportunities in the world’s key emerging markets

The programme includes operator case studies from: Plus expert insights into the latest trends in mobility from:
UÊ BT UÊ Packet One UÊ Thuraya UÊ 3GPP UÊ Lehman Brothers UÊ Cellectivity
UÊ DTAC UÊ PT Indosat Satellite UÊ Arthur D. Little UÊ Squire, Sanders & UÊ GroupM Interaction
UÊ Hits Telecom UÊ PT Telkom UÊ T-Mobile UÊ Analysys Mason Dempsey UÊ Google
Group UÊ PT Sampoerna International UÊ Andrew Seybold Inc UÊ TD-SCDMA Forum UÊ MTV Philippines -
UÊ KDDI Telekomunikasi UÊ Trivon UÊ CDMA Development UÊ Telemates All Youth Channels
UÊ KTF UÊ SK Telecom UÊ True Group UÊ TeleResources UÊ TU Media Corp
UÊ Globe UÊ Sprint Nextel Corporation UÊ Global mobile Engineering UÊ WPP
UÊ MobileOne UÊ Telefonica O2 UÊ Vodafone Suppliers Association UÊ TEMA
UÊ Mobilink Europe UÊ Huawei Technologies UÊ Trusted Computing
UÊ NTT DoCoMo UÊ Telenor R&I UÊ ICT168 Capital Group

KEY PARTNERS ORGANIZED BY SENIOR SPONSORS

To register phone: +852 2219 0111, fax: +852 2210 0112, email: info@BeaconEvents.com or visit
www.MobilityWorldCongress.com
 MARKET ANALYSIS

Wind and FastWeb withdrew from the

race. AFT-Linkem acquired licences at FACTFILE Data provided by WCIS | For related regional data: www.wcisdata.com email: telecoms.enquiries.com

the auction for 34m ($53.7m) and is likely HISTORICAL SUBSCRIBER FIGURES FOR ALL ITALIAN OPERATORS
to be the first Italian WiMAX network Operator Jun 07 Sep 07 Dec 07 Mar 08 Jun 08
to launch, in Q308, together with a local H3G 7,420,000 7,831,300 8,100,000 8,200,000 8,431,500
cable-TV operator,Telebari. Its target is Telecom Italia 34,312,000 35,310,000 36,331,000 35,930,000 35,796,000
to cover the city of Bari, at an estimated Vodafone Italia 24,904,340 25,641,300 26,093,760 26,411,440 26,733,440
cost of ö50m, and to expand the network Wind 15,216,000 15,321,000 15,636,000 15,900,000 16,114,900
into other regions in 2009. Total 81,852,340 84,103,600 86,160,760 86,441,440 87,075,840
With revenues from non-voice serv-
ices starting to replace declining voice
revenues, service innovation is crucial Source: World Cellular Information Service

for protecting future revenue streams.

One potentially lucrative service is
mobile instant messaging (mobile IM). Both operators subsequently an- Telecom Italia responded only by
According to industry statistician M- nounced tariffs designed to attract announcing that it was including an
Metrics, Italy leads the way in this area, people onto 24-month contracts, offering extra gigabyte of data in its plans for
accounting for 31 per cent of all mobile the unlocked device for a minimum price an additional ö10 a month, but did not
IM subscribers in the five largest Euro- of ö499 ($790) for the 8GB model. This lower the basic cost of its plans.
pean markets at end-February 2008. price is not much less than the ö525 for 3 is Italy’s largest 3G operator and
In June 2008,Telecom Italia estimated which Belgian operator Mobistar has could lose market share if sales of
that well over 500,000 mobile custom- exclusive rights to sell the unlocked the iPhone 3G at Telecom Italia and
ers of all four mobile operators in Italy device in Belgium. Vodafone draw 3G subscriptions
accessed IM via their mobile phones. Vodafone is offering a subsidy on away from its network. Some com-
Telecom Italia then had 250,000 active the iPhone handset fee to people who mentators have noted that heavy
users of Alice Messenger, its own-brand sign a 24-month contract and pay 9 a data users might do best to buy an
IM service. 3 is also experiencing fast month for the device in addition to a unlocked iPhone from Telecom Italia
growth in mobile IM customers. To ö199 upfront fee. This brings the total or Vodafone and use a data tariff
retain momentum, mobile IM needs to cost for the 8GB model down to ö415 such as 3’s Tre.Dati, which costs ö19
break out of the “walled gardens” and for the duration of the tariff. a month for up to 5GB of data. But
enable interconnectivity between dif- However, the operator’s three main 3 will be looking to sell the iPhone
ferent IM services. contracts that bundle in data transfer, together with dedicated tariffs via
As with many new social-networking voice minutes and SMS boost the overall its own sales channels.
services, business models are beginning cost of the iPhone significantly, making It is common for mobile customers
to take shape. For mobile IM in Italy, them more expensive than Telecom Ita- in Italy to have several SIM cards.
revenue generation currently rests on lia’s offer.The cheapest of these tariffs is Subscribers tend to switch SIMs at
direct-service micro fees of between priced at ö59 a month, which includes different times of the day to exploit
0.50 and ö1 a day. Associated revenue 600MB of data, 400 voice minutes and advantageous tariff plans. Encouraged
from advertising is also an option. 400 SMS a month. The total cost of the by a lack of SIM lock, unsubsidised
In May this year, Italy was revealed iPhone on this tariff is ö1,615, including handsets and a strong consumer pref-
as the first market where Apple would the handset fee. erence for the latest handset model,
abandon its iPhone sales model based Telecom Italia initially announced the Italian market is stereotypically
on exclusive rights for a single operator, five 24-month contract-tariffs for volatile. Subscriber growth may well
and Telecom Italia and Vodafone both the iPhone 3G, with a monthly fee be slowing but Italy remains one of the
announced that they would sell the ranging from ö30 to ö200. Factoring most interesting, innovative, saturated
iPhone 3G from July 11. in the upfront fee for the handset, markets in the world. ®
However, initial sales figures for Italy this takes the minimum cost for new
appear to be far lower than for the UK, customers to ö919 for the duration of
with Telecom Italia announcing 16,000 the contract, for which 1GB of data a
device sales on the day of launch. month is included.
The news that two Italian opera- The high prices and emphasis on
tors would sell the iPhone 3G fuelled long-term contracts by both operators Intelligence Centres are powerful
expectations that the device would sparked reaction from commentators information services designed to
be offered at a mass-market price and web forums in Italy. According provide you with up-to-the minute
and that it would be accessible to the to a press report, one web petition market comment, intelligence, data
nearly 90 per cent of subscriptions demanding that Telecom Italia and and analyst access, via a single, con-
via prepaid tariffs. However, the dual Vodafone offer lower prices or risk a venient online platform.
operator launch has failed to create consumer boycott of the iPhone 3G Find out more at: www.intelligence-
significant price advantages for Italian had already attracted 4,000 signatures centre.net Email: telecoms.enquiries@
customers. before the device was launched. informa.com

Mobile Communications International | First for news, best for business 28

 20 Di
% sc
Op ou
er nt
at
or
Exploiting the Opportunities for Broadband Market
Entry and Expansion in Russia & the CIS
21-22 October 2008 • World Trade Centre, Moscow, Russia

Uniting the local ecosystem: Oleg Taynov, Bob Fonow,

13 Operator speakers Chief Commercial
Officer, Enforta
Vice President,
Trivon/Virgin Connect
Vitaly Slizen, General Director, Synterra (Russia)
Fred Ledbetter, Chief Marketing Officer, Golden Telecom
(Russia) Vitaly Slizen, Valery Tikhvinskiy,
Alexander Gorbunov, VP Strategy and Development, General Director, Executive Director,
Comstar (Russia) Synterra Prestige Group
Valery Tikhvinskiy, Executive Director, Prestige Group
(Russia)
Alexander Gorbunov,
Bob Fonow, VP, Trivon/Virgin Connect (Russia) Vice president for strategy Fred Ledbetter,
Oleg Taynov, Chief Commercial Officer, Enforta (Russia) and development, Chief Marketing Officer,
Comstar Golden Telecom
Valery Gupal, CEO, Ukranian High Technologies (Ukraine)
Sergei Zhurakovsky, Acting Director, Farlep/MMDS (Ukraine)
Boris Demirkhanyan, CEO, Cornet (Armenia) Reasons for you to register for WiMAX Russia & CIS:
Denis Sverdlov, CEO, Scartel (Russia)
Igor Sergeev, Commercial director, Novie 1. The only local event officially supported by the WiMAX Forum
Telecommunicacii NEX3 (Russia) 2. Eliminate confusion from your deployment plans! Hear
Alexander Tyunin, CEO MediaSeti/Unitline (Russia) deployment realities and learn from the most advanced
Peter Ziegelwanger, CTO, WiMAX Telecom (Austria) operators in the region
Dmitry Laryushin, Technical Policy Director,
Intel Russia/CIS (Russia) 3. Meet and network with real decision makers
4. Develop fully-informed strategies for success in the wireless
Lead Sponsors broadband market
5. Engage with the investment community and finance your
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6. Influence the ecosystem and make your voice heard!
Conference Sponsors
20th October 2008: Pre-Conference Workshop
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Creating A Winning Business Case for WiMAX in Russia!

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For further information and to register visit www.wimax-vision.com

Produced by: Official community partner: Media Partners:
 Announcing the first event to identify the role of the

Te

Sp d Op
40akerng 18rato
In om
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telecoms industry in a greener future

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11th – 12th November 2008
The Westin Grand Hotel, Berlin, Germany
Why Going Green Makes Good Business Sense
Pre-Conference Workshop (afternoon) The Global Speaker List Features 40 Industry
10th November 2008 Experts Including:
Communicating your Green Message JeanPaul Jeanrenaud, Head of Business and Industry, WWF International
Chris Gabriel, CEO, Celtel International, Zain Group
Key Strategies for the Telecoms Industry
Paul Excell, Chief Customer Operations Officer, BT Group CTO, UK
Led by Futerra Sustainability Communications Luis Neves, Chairman of GeSI and Head, Sustainability and Environment,
Deutsche Telekom, Germany
Lorenzo Radice, Head of Sustainability Reporting,
Post-Conference Workshop (morning) Telecom Italia Group, Italy
13th November 2008 Albertus Aochamub, GM - Corporate Affairs, MTC Namibia
Rose Read, Manager Recycling, Australia Mobile
Building Business Cases and Deploying Telecommunications Association
Off-Grid Renewable Energy Solutions Matt Bauer, President and Co-Founder, BetterWorld Telecom, USA
Led by PowerOasis Ludwig C Graff, Director of Corporate Network and Technology,
Verizon, USA
Juha-Erkki Mantyniemi, Head of Environmental Affairs,
Nokia Siemens Networks, Finland
Co-located with: Sponsored by:
Kathrin Ankele, Senior Corporate Responsibility Manager,
Vodafone Germany
Chloe Munro, Executive Director Innovation Projects for the Digital Future,
Telstra Corporation, Australia
Yesim Hanci, Network Programme Management, Vodafone Turkey
Peter Anthony Dindial, CTO, Telenor Pakistan
Mats Pellback-Scharp, Head of Corporate Sustainability Office,
Don't forget to quote your VIP CODE: CU1155/MCI SonyEricsson, Sweden

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Produced by: Official Media Partners: Endorsing Associations: Official Online Partner:

®
 sean.jackson@informa.com COMPANY PROFILE

3’s a crowd
The Hutchison Whampoa-owned carrier 3 has a firm toehold in a number
of markets and it is a disruptive influence throughout.

G
erhaps oddly for a carrier with signed up in droves. The carrier had
a reputation for launching in- attracted over ten million subscribers
novative and disruptive new worldwide 18 months after launch—
services, 3’s genealogy is steeped and this in markets that were at or
in tradition. The parent company, approaching saturation.
Hutchison Whampoa, was formed Unfortunately for 3, the people
in the nineteenth century. The firm lured into churning on the promise
takes its name from an early found- of cheap voice turned out to be peo-
ing father, John Duflon Hutchison, ple unwilling to pay for expensive
and the site of one of the original data services. Still, building a sub-
business lines at shipping docks and licence. It has yet to start operations, scriber base was the intention and
repair yards in Whampoa. although the carrier is obliged to pro- it worked.
These days, Hutchison Whampoa vide 30 per cent population coverage It would be fair to say, though,
is a Fortune 500, Hong Kong-based, by September 2009. that 3’s early services met with pre-
multi-national corporation with five Hutch 3’s global positioning is a far dictable teething problems. Early
core businesses; ports, property, re- cry from ‘the one world, one carrier’ marketing campaigns were as eye-
tail, energy and telecoms. It turned image that some operators like to catching as they were misleading.
over $39.5bn in 2007 and according portray. The convoluted ownership Video calling was to be the next big
to Forbes magazine the firm’s current set up, complex history and sporadic thing. Except it wasn’t.
chairman Li Ka-shing is the 11th rich- footprint—not forgetting its new en- The first handsets, supplied by
est man on the planet. trant, new technology status—made NEC, were cumbersome and tended
Hutchison Telecommunications presenting a unified strategy all the to suffer from early chronic break-
International Limited was formed more challenging. down. Coverage, even in cities, was
in 1985 and provides mobile and As a new entrant coming into well patchy in comparison to rivals’ 2G
landline services in Hong Kong and established 2G markets, 3 needed to services. Industry lore has it that
Macau, Indonesia, Israel, Sri Lanka, offer some keen price incentives to at- in a bid to persuade the top brass of
Thailand and Vietnam. tract subscribers. The generous early the firm’s footprint, the travel itiner-
Hutchison Telecom launched the tariffs worked their magic and people ary of Hutchison Telecom chairman
Orange brand in the UK in 1994 and Canning Fok was handed over to
in 1997 it made an investment in Voic- engineers who deployed kit to ensure
eStream (now T-Mobile USA). In 1999 3 company history that he had perfect coverage every-
and 2000, Hutchison Telecom sold its where he went.
2000: Wins 3G licences in the UK, Italy, Austria and Sweden.
Orange and VoiceStream interests and Things improved over time. The
re-invested the greater part of the pro- choice of handsets grew and the
2001: Andala in Italy renamed H3G after the acquisition by
ceeds to develop its 3G business. coverage became more reliable. But
Hutchison and Partners. Forms a strategic alliance with Telecom
Hutch spent billions of dollars ac- 3’s initial burst of growth slowed.
Corporation of New Zealand to operate a 3G business in Australia.
quiring 3G licences—a good portion Wins 3G licences in Denmark and Hong Kong.
The carrier was undergoing an im-
of which went to the UK treasury, age overhaul. Describing itself as
where the carrier ended up pay- 2002: Wins 3G licences in Israel and Ireland. Announces global a mobile media company, it spent
ing £4.385bn. Globally, Hutchison brand name “3”. its time signing content deals with
Whampoa has 3G operations in Aus- music and gaming firms.
tralia, Austria, Denmark, Hong Kong, 2003: Rolls out its 3G mobile video and multimedia services in In June 2001, for example, the car-
Ireland, Israel, Italy, Macau, Sweden the UK. Hutchison 3G Australia launches. Hi3G Access rolls out in rier signed an agreement with Eng-
and the UK. The carrier markets its Sweden. Hi3G Access Norway is awarded a licence. land’s FA Premier League to secure
services under the global brand 3 the rights to provide top-flight football
with the exception of its Israeli opera- 2004: 3G Australia signs a network sharing agreement with Telstra. content to mobile phones and handsets
tion, which—confusingly—is branded in the UK. This sort of exclusive deal
Orange and owned by Hutchison 2006: Hutchison Telecom Macau is awarded a 3G licence. had been the making of the broad-
Telecom International. caster Sky, but when the mobile carrier
The firm also has the right to op- 2007: Hutchison Telecommunications launches its Indonesian launched in 2003 watching football on
mobile operation. Hutchison Telephone Macau launches 3G services. mobiles was not that well received.
erate 3G services in Norway, having
paid $8.23m in 2003 for a 12-year Similar deals were inked in Australia »

Mobile Communications International | First for news, best for business 31

 COMPANY PROFILE

through the 3 portal and installed

3 subscriber projections worldwide
software clients on 3G handsets. In
Q2 2008 2013 Market share % June it announced an agreement with
GSM WCDMA GSM WCDMA 2008 2013 Yahoo to integrate the internet firm’s
Australia - 1815100 - 2946000 8.68 11.31 search, web and messaging service
Austria - 565400 - 786600 5.69 6.98 into its mobile offering.
Denmark - 289600 - 418200 4.68 5.66 Then in November 3 announced the
Hong Kong 1021800 1215300 195300 2486000 26.23 26.41 global launch of the X-Series range
Macau 340300 19100 33900 362000 40.8 39.84 of handsets. 3 Group, in partnership
Indonesia 2488800 316200 2670000 5372000 2.64 3.98 with Skype, Sling Media, Yahoo, Nokia,
Ireland - 254000 - 511000 5.41 8.12 Google, eBay, Microsoft, Orb and Sony
Israel 2022000 834000 363000 2972000 31.09 30.37 Ericsson promised to deliver a coher-
Italy - 8431500 - 10812000 9.91 10.9 ent mobile internet vision. Vitally,
Sweden - 709600 - 871000 6.47 7.26 the X-Series also came with flat fee
UK - 4310700 - 5734000 5.94 6.7 data tariffs.
Continuing the global operator vision
in January 2007 3 Group announced
the introduction of 3 Like Home. A new
pricing policy that permits 3 customers
(cricket) and Sweden (ice hockey). In 2005 3 Italia jointly announced to travel abroad and use other 3 Group
Exclusive content deals would not with Rai the launch of the first TV networks for a price similar to that on
prove to be particularly attractive to channel in Italy created exclusively their home network. Then in October
potential new subscribers. for 3G phones, then later acquired 2007 3 and Skype launched a new
Admiring glances were being cast Channel 7 to become the first mobile handset 3 Skypephone that provides
in NTT DoCoMo’s direction as carri- media company in Europe to own a free Skype to Skype calls and enables
ers everywhere tried, and failed, to national digital TV licence. And also free Skype instant messages to other
emulate the Japanese number one in that same year 3UK launched See Skype users. The firm has sold over
operator’s success with i-mode. Me TV offering subscribers a chance 100,000 Skypephones in the UK since
In 2003 the 3 Group announced to earn cash in exchange for video launch and generates over one million
an agreement with DoCoMo to co- contributed by customers. Skype minutes every day.
operate in the development and However, video jukeboxes (or simi- Data finally overtook voice in terms
promotion of 3G services on an lar) and dual downloads would soon of volume in December 2007 and it has
international basis. This agreement be launched by 3’s rivals, who—it kept on climbing. The carrier says it is
initially united the research and seems—while slow with 3G were not now eight to ten times the volume of
marketing capabilities of the two quite standing still. Shortly after See the capacity used by voice. And in the
companies. At the time the Japanese Me TV went live came Look At Me on UK 3 is planning for a 60-fold increase
carrier held a 20 per cent stake in the O2 network. The two offerings in backhaul this year. The growth is
Hutchison 3G UK. Though in 2004 both used the same Yo Space platform, being driven primarily by USB dongles.
DoCoMo exchanged its stake in 3UK which would later be merged and of- In order to cope with the growth and
for a stake in Hutchison Telecom- fered up to both sets of subscribers improve in-building coverage the car-
muncations International. In 2005, 3 under the name EyeVibe. rier has entered into a network sharing
Hong Kong announced the launch of The carriers’ walled garden portals agreement with T-Mobile. Boosting the
the first bilateral International Mul- were generating comparatively small number of cell sites from 7,500 to over
timedia Messaging Service (IMMS) trickles of income, and thanks in part 13,000 at no extra cost.
with NTT DoCoMo, enabling 3’s 3G to unappealing revenue splits between The overall drive for the business
and 2G customers to exchange multi- content producers and the MNOs, the these days is the continued mobilisa-
media messages with NTT DoCoMo’s level of innovation was lacklustre. Like tion of the internet. There have been
i-mode customers. its rivals 3 would come to realise that number of changes in direction for
3UK continued to innovate and in it is, first and foremost, a communica- the carrier over the last five years as
July 2004 teamed up with the record tions company, not a media player. a range of different factors influenced
company BMG to launch the first ever The firm would now embark on a the industry.
mobile video jukebox enabling custom- series of group-wide communications The billions paid for 3G licences at the
ers to stream music videos direct to initiatives. In February 2006 3 Group turn of the century still seem steep but 3
their mobiles. The carrier would also and Skype, at the time the fastest is well positioned as a disruptive influ-
be one of the first to come to market growing internet communications ence. Using Gartner’s famed hype cycle
with ‘dual download’ for music so company, announced an agreement model, if the 3G auctions represented
that every audio track its customers to enable the latter’s voice over IP the peak of inflated expectations, fol-
download to mobile handsets would communications on 3G. In March it lowed by the trough of disillusionment
also be available to them online for no announced plans to deliver access to , 3 now finds itself heading steadily up
extra charge. Microsoft’s Messenger and Hotmail the slope of enlightenment. Ê®

32 Mobile Communications International | First for news, best for business

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FEATURE FEMTOCELL

34 Mobile Communications International | First for news, best for business

 FEMTOCELL FEATURE

Home delivery
The potential attractions of femtocells include improvements
to both coverage and capacity. We’ve heard something like this
before, are femtocells an FMC dream come true or a recurring
technology nightmare?

By Sean Jackson

@
n August, US CDMA carrier Sprint became the first “The unlimited calling plans can be added only in
carrier in the world to roll out a nationwide femtocell addition to a mobile plan,” says Steven Hartley, senior
offering. Under the banner Airave, Sprint subscribers analyst, Ovum. “Users pay Sprint once to subscribe to
can get hold of their very own home access 1XRTT base Sprint’s mobile service, again to improve indoor cover-
station for an initial investment of $99.99 plus $4.99 per age and a third time to benefit from Sprint’s backhaul
month for device rental. For an additional $10 or $20 cost savings. This is far from compelling and suggests
per month (depending on the number of lines required) to customers that Sprint’s indoor coverage must be very
subscribers can get unlimited calling plans. weak if it expects customers to pay extra.”
As world firsts go it is somewhat uninspiring. To To all intents and purposes Sprint’s offering resembles
recap, Sprint customers are being given the opportunity T-Mobile’s @Home service launched one month earlier.
to pay, in addition to their existing plan, just shy of Sprint is using a femtocell, while T-Mobile uses wifi. “To
$160 in the first year for improved voice only coverage, a consumer they are essentially the same,” says Hartley.
while at home. You could argue, fairly reasonably, that “Both divert fixed line minutes to the mobile operator by
Sprint should already be providing decent coverage routing calls via a box.”
for its customers. In fairness to the future potential success of ‘femtos’,
You’d be well placed to call into question the wisdom the Sprint case study does not paint the full picture. It
of Sprint customers that sign up for this service rather raises some important issues though, not least of which
than opting to churn to a supplier with better cover- is consumer buy-in.
age. You might like to ponder why, exactly, our loyal yet Not for the first time the vendor pitch suggests a world
inadequately served, theoretical Sprint customer will be in which everyone wins. Consumers will leap at the chance
persuaded that the femtocell on offer is anything more of improved data coverage, reduced calling charges and
than a repeater in disguise. If you know femtocells, you’ll some potentially compelling new data services. For opera-
know the technologies are far removed, but consumers tors, say the suppliers, femtos offer a twin cost saving; on
have never heard of femtocells. They’re familiar with the one hand they place part of the network rollout burden
repeaters though, and they’re not well liked. on its subscribers to subsidise a network roll out and on
“Coverage is a problem, but it is a hard one to really the other they shift the expected tidal wave of backhaul
promote a femtocell for,” says Allen Nogee, principal onto residential DSL. Not only that, subscribers are much
analyst for Wireless Technology & Infrastructure at more likely to opt for family packages which will help
In-Stat. “In the US with Verizon and AT&T, the two improve stickiness, say the vendors.
largest operators, every TV commercial you see is Thanks to an increased number of flat rate data tariffs
telling us how great their network is and how great and the boom in mobile broadband, mobile data usage
their coverage is, and how now here is a device that is is on the sort of upward trajectory that might well give
meant to improve coverage. So how do you advertise operators some serious coverage and backhaul head-
that? Coverage is great, but you may still need one aches. “We’re now seeing the flat rate tariffs stimulating
of these?” traffic growth to such an extent that the network will »

Mobile Communications International | First for news, best for business 35

FEATURE FEMTOCELL

eventually and finally be operating at some- “The principal reason why a licensed tech-
thing like a sensible capacity,” suggests Tim nology will win out over wifi is that there is
Lunn, managing consultant, PA Consulting. “So a very strong business model behind cellular
you’re going to have smaller and smaller cells services in terms of your tariff and your bun-
and more and more base stations to support dle that you just don’t have with wifi,” says
the traffic, which will be a cell planning and Johnson, adding. “There is a strong counter
deployment issue in its own right.” argument that says if you are subsidising the
According to Lunn, femtocells provide the handset then they don’t really want to make it
operator with a cost effective way of managing easy to use wifi because you lose the revenue
the increased demand being placed on their that goes with making calls in the home.”
networks. “There are a number of reasons, from Peter Jarich, wireless research director,
the operators’ point of view, why femtos are at- Current Analysis agrees: “Wifi will address
tractive and that will incentivise them to provide things like data, but until you get wifi in every
good deals for customers and so the customers phone it is not going to address the access
will be incentivised to accept the femtocell and to your phone, it is not going to address the
better data rates, coverage and services as part voice access and ultimately it won’t address
of what they expect,” he says. those advanced applications that operators
From the consumer perspective, however, are looking to develop to make femtocells
there is nothing particularly new about the more compelling.”
headline benefits of femtocells. Offering im- Going back to mobile broadband’s chief
proved prices in the home sounds like a win- competitor, the wifi-enabled laptop, Jarich
ner. Try conducting a straw poll of your own, There is a good chance that suggests the carriers could use femtocells to
asking: ‘would you like cheaper calls when muscle in on the space: “Part of the reason we
you’re at home?’ You’ll get a resounding yes offering your subscribers have wifi in laptops is because a) Intel put it
from almost everyone you ask. Which is almost
certainly something BT found prior to the
cheaper mobile calls at there and b) we haven’t had good indoor 3G
coverage. I think ultimately operators wouldn’t
launch of its UMA (Unlicenced Mobile Access) home will translate into mind seeing laptops running over 3G, especially
BT Fusion flop, which was taken off the market if you had a femtocell in the house. Ultimately,
after attracting about 45,000 customers. mobile voice revenue operators would like to see—although no one
Orange’s Unik, launched November 2006, is will say it out loud—3G take on wifi.”
widely regarded as one of the best examples of
cannibalisation According to Informa Telecoms & Media, in
a successful UMA FMC offering. Recent subs 2008 the home environment will be responsi-
numbers are hard to come by, but according cent fixed internet connectivity, so why would ble for 35 per cent of total mobile data traffic
to In-Stat’s Nogee, the firm has about one they be keen on paying an additional charge but this traffic is expected to predominate
million Unik subscribers, which sounds fairly to install a femtocell in order to connect to the within five years, with an overwhelming 60
impressive until you realise the carrier has internet via a mobile device that suffers from per cent in 2013.
176 million subscribers in total. Consumers some non-trivial user interface hurdles, when “This growth will be driven by the fact
might like the idea of cheaper calls at home, they’re more than likely to have a perfectly that users will increasingly initiate longer
but they’re not always motivated enough to serviceable PC or wifi-enabled laptop? and richer data sessions, in the relaxed en-
do anything about it. “It is curious, I had the same thought I must vironment of their home, through browsing
Returning to Sprint, Nogee raises further admit,” says Dr Nick Johnson, CTO at femto internet, watching longer and richer video
questions about the business case: “Minutes provider ip.access. “But the truth is people like clips, downloading music video applications,
in the US are so inexpensive that one of the having internet connectivity on their phone. It’s exchanging pictures, or using VoIP chatting
big benefits of the femtocell, the unlimited in their pocket, they don’t have to go to a desk online,” says Malik Saadi, principal analyst,
minutes that you could offer or the low cost, and turn the laptop on. The studies and the Informa Telecoms & Media. “This does not
really doesn’t come into play all that much. headlines about people who are interested in mean that mobile broadband services will
People don’t need these extra minutes.” And, data services are interested in doing that from fully substitute fixed broadband, but users
incidentally, there is a good chance that offer- the device in their pocket,” he continues. would prefer to keep some applications in
ing your subscribers cheaper mobile calls at But, say the cynics, if they’re interested the vicinity of the private and intimate zone
home will translate into mobile voice revenue in connecting wirelessly via a phone then of their mobile devices.”
cannibalisation rather than mobile for fixed they already can, it’s called wifi. The number Sprint’s 2008 debut femto roll out came later
substitution. of wifi-enabled handsets is on the rise. As than many analysts had predicted. AT&T,Voda-
There are also some interesting issues with more and more wifi-enabled phones come fone,Taiwan’s ChunghwaTelecom andTelefonica
regard to the demand for improvements to to market, it will surely dampen demand for O2 are all trialling femtocells at the moment,
coverage. Mobile users are well used to experi- improvements in 3G mobile coverage in the and there is consensus that we’ll see some more
encing lacklustre indoor 3G coverage and those home. Why buy a femtocell when you can get launches in 2009, but we might have to wait until
same mobile users will have experienced de- a wireless router? 2010 for anything like common adoption. »

36 Mobile Communications International | First for news, best for business

 HSL. Delivering the Opportunity.

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FEATURE FEMTOCELL

“Some operators will have a wait and see

attitude, the second mouse eats the cheese,”
Persuading consumers to There is one final issue that operators will
need to overcome, and it is an issue that has
says Rupert Baines VP of marketing for the put a base station in their dogged the positioning of traditional cell
Femto Forum. “The others are fast moving towers for years: Health. So much research
and their attitude is that the market share living room might stretch has been done to disprove the supposed link
among carriers changes very rarely, and a between cell phones and sites and cancer
few times you get a significant shift is when even the most silver- that the operators are well versed in tackling
you launch a brand new service.”
Baines suggests that the last example of
tongued of public policy what could be a challenging piece of PR.
But persuading consumers to put a base
a comparably disruptive service in Europe professionals station in their living room might stretch
was pay as you go, where the operators that even the most silver-tongued of public policy
launched first did very well. “One opera- professionals.
tor I’ve been talking to thinks femtocells A traditional network might include thou- “This is a matter of perception, and very
will be similarly disruptive,” says Baines. sands of base stations, each of which must difficult to predict,” says Peter Thornycroft,
“Their logic is that subscriptions at the be monitored and maintained centrally by product manager, Aruba Networks. “Given
moment are sold to individuals whereas the carrier, a femto network could extend the widespread market for wifi access
a femtocell will be sold to a household. to the millions. Again, operators must be points, one might expect it will not be an
So selling one service will snag additional able to drill down to each and every point issue. But femtocell devices might be seen
subscribers.” on their network. Again the vendors say this as different from wifi and it might only
Informa Telecoms & Media expects the will all be possible, but it could take a huge take one or two newspaper articles or TV
number of femtocells deployed by the end leap of faith before we find out how these programmes to set off a backlash.”
of 2013 exceed the 40 million mark. “This networks are managed in practice. Tim Lunn of PA Consulting says: “The ar-
installation base could help operators to “It will be different from wifi to the extent gument that wifi routers don’t cause cancer
offload up to eight per cent of total mobile that you need to deploy it as the end user is not a good argument, even raising it as
traffic to fixed networks via the end-user and it is part of the operator’s network, an issue would be unwise. I don’t know how
subscriber line. Obviously this could im- so the operator has to have a view into that argument is going to be addressed, it
ply mobile operators will make significant that thing, they have to be able to shut it may be raised by some groups.”
savings by reducing the need to create ad- down and do the diagnostic,” says Current Indeed, Lunn (and others) suggest there
ditional macrocell capacity to cope with Analysis’s Jarich. is a potential health upside to femtocell
this traffic,” says Saadi. There are management solutions, but the deployment: “Having a femto base station
A number of technical challenges exist, fact that no one has seen them up and run- means that your handset is transmitting
however, before we’ll see a mass-market ning is one of the key reasons they haven’t at a lower power. This is being used for
rollout. Interference and handoff are the taken off yet. “Operators want to see stuff the argument that it will save your battery,
two headline issues. Both of which the work. I can tell you that I have a really cool which is a nice feature but I don’t think it
femto vendors claim to have solved, but no solution, but operators will want to make will make the consumer decide one way or
one has rolled out a full femto network, so sure it works first,” says Jarich. another. And likewise, I don’t think people
in practice they may still cause significant “As part of the Femto Forum I co-chair one will be pushing the health reasons as a
problems. of the working groups which is specifically reason to buy a femto, though in reality it
Sprint’s femto solution has sidestepped interested in the radio physical layer,” says is a benefit.”
some of the handoff challenges: “If a user does ip.access’s Johnson. “One of the activities that It will be interesting to see how operators
take a supplementary Airave calling plan, we have been conducting over the last quarter build business models around femtocells.
calls initiated on the femtocell are charged at or so is an interference management study And how the tier one network infrastructure
the discounted rate even if the user roams » looking at various scenarios where you have vendors integrate the wide range of smaller,
on to the macro network,” says Ovum’s a femto sitting on a table in direct line of site as yet un-standardised, solutions into the
Hartley. “Sprint told us that it saw little of a macrocell with a nearby femto user and a core network. It’s likely that we’ll see some
revenue leakage during trials and wanted nearby macro user.” The results, according to bold first moves being made by disruptive
to prevent bill shock. This is reasonable; Johnson, are overwhelmingly positive. carriers—like Sprint.
however, potential for abuse remains.” Rupert Baines, also of the Femto Forum, Buy-in from the market leaders might be
Slightly less reasonable though is the plays down the interference issue: “Femto- slower to come. Like a good number of bright
fact that there is also no handover to the cells are smart devices. Putting a repeater in new technologies, femtocells could end up
femtocell for a call initiated on the macro is just like putting a loud speaker into your being something that gets rolled out because
network. “This is unhelpful to a user if back garden, it is great if you want to listen your rivals have rolled it out. Femtocells might
they paid extra for an Airave calling plan, to your music, but your neighbours gets to eventually enable FMC, and they will surely
or bought the femtocell for improved in- listen to your music whether, they would improve the uptake of mobile broadband. But
door coverage. The call must be completed like to or not. A femtocell is more like a pair they are not proven to be a consumer’s mobile
outside and restarted on the femtocell to of headphones, it will only send information dream come true even though they might be a
benefit,” says Hartley. to the people who want it.” solution for carriers’ coverage worries. ®

38 Mobile Communications International | First for news, best for business

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VENDOR VIEW
SPONSORED AND WRITTEN BY

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L]ZgZ^hi]ZGZVaBdcZn4
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\gdlViVWa^hiZg^c\eVXZÄVhbjX]Vh*%eZgXZciÄdkZgi]ZcZmihZkZgVanZVgh#I]ZWVY
cZlh49Zhe^iZi]ZYZbVcY[dgHBH!deZgVidgbVg\^ch[dgi]ZhZgk^XZVgZcdi`ZZe^c\eVXZ#

I
he combination of increasing com- text messages. From the operator’s traditional media. With billions of SMS
petition and subscriber expectation perspective, text advertising is an ideal messages sent every day, the potential
for bundled messaging plans is vehicle because it does not require any audience overwhelms that of the largest
driving a decline in revenue per SMS. The Web browsers on the phone and lever- Web sites, radio stations and TV shows.
operator’s dilemma in this highly charged ages the existing SMS network. Nearly And, the characteristics that make SMS a
market is how to reduce customer churn every phone today can accept text ads, great tool for personal communication –
and increase profitability with new rev- so the possibilities seem endless. In pervasiveness, immediacy and relevance
enue streams. fact, eMarketer forecasts that mobile – also make it a great tool for advertisers
Many operators are looking to mobile message advertising will make up more and revenue source for operators.
advertising such as in-message SMS as than 85% of mobile advertising rev- Audience size is just one of the many
the solution. Predictions on the overall enues through 2010. advantages of text messaging. Mobile
market opportunity vary among research With in-message marketing, opera- operators own a very unique asset – ac-
agencies, but there is consensus on con- tors use a “text insertion engine (TIE)” to cess to real-time demographic and be-
tinued, accelerated growth. eMarketer insert any text feed - commercial text for havioral data. That information, coupled
has sized the global mobile ad market at sponsored SMS, voicemail enrichment, with presence and location awareness,
$19B by 2012. news flashes or even ads for enhanced enables them to offer the distinctively
And while some have expressed con- services like SMS forwarding and copy - personalized and relevant communica-
cern regarding subscriber acceptance, into person-to-person
according to Yankee Group research, (P2P) SMS messages.
“About 42 percent of mobile customers The content can be
are open to mobile advertising, if it is added before (prologue)
relevant, if they asked for it or if they get and after (epilogue)
coupons for free services.” the existing message.
Mobile operators have a unique op- While the 160-char-
portunity to generate substantial new acter limit on SMS
revenue and increase customer loyalty. messages may seem
With mobile devices outnumbering an obstacle, most mes-
televisions and personal computers, sages fall far short of
they have access to a lucrative advertis- that number. In fact,
ing channel. However, until 3G networks the average message
are more widely available, operators will length is closer to
not be able to fully harness multimedia 80 characters. That
advertising dollars. In the near term, they unused character space
will need to narrow their focus to pro- can generate significant
grams like in-message SMS advertising new revenue dollars
that can be rolled out quickly - without for mobile operators.
overhauling the networks. Leveraging the ubiqui-
Next to voice, SMS is the most com- tous SMS market gives
monly used mobile technology; virtu- providers a reach that is Predictions on the overall market opportunity for mobile advertising vary,
ally all phones can send and receive difficult to match with but there is consensus on continued, accelerated growth.”
 VENDOR VIEW

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idYZa^kZgVbZhhV\ZegZX^hZanidi]Z^ciZcYZY 6aVcEVhXdZ
Sr. Manager, Product Marketing
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tion valued by advertisers and viewed and speaks to subscribers in

by subscribers as a value-added service. their own terms. It is a perfect
By allowing SMS recipients to control vehicle for local and national
the content they receive through user retailers to promote products,
profiles, operators can maintain sub- services and provide incentives
scriber privacy and ensure the value of like coupons or discounts. SMS
in-message content. is one of the most efficient chan-
SMS marketing is attracting the at- nels to create brand awareness
tention of advertisers around the globe. and loyalty. And, advertisers
With the ability to deliver a message are finding that in-message ads
precisely to the intended audience, it is are a valuable tool to leverage
emerging as one of the direct mar- other marketing efforts such
keter’s most powerful tools. Consumer- as print ads, television and
product companies, big retailers and radio. In-message advertising is
entertainment companies all realize particularly suited to ad-funded
the value of knowing that their message SMS business models where
will be read and, in some cases, even subscribers opt-in to receive
when it will be read. advertisements in exchange
Advertisers recognize the fact that for reduced rates. The secret to Tekelec’s mobile advertising solution enables operators
to insert relevant and targeted advertising before and
mobile phones and devices offer the most successful SMS advertising is its after the existing or incoming SMS content
personal and immediate means with ability to provide real value for
which to interact with consumers and mobile subscribers in the form of person- a ubiquitous communications chan-
the greatest choice and convenience for alized, relevant content or by providing nel with the ability to deliver relevant,
media consumption. .Advertisers can free or discounted messaging. personalized advertising unmatched by
create highly targeted, direct message traditional media. It has the potential to
marketing campaigns that can be rolled Conclusion be the largest advertising opportunity
out quickly and less expensively than Operators worldwide are watching their in the mobile world – one that operators
traditional vehicles like direct mail. revenue per SMS erode with increas- can tap today using their existing SMS
They can engage consumers and create a ing competition and customer demand networks - to generate new revenue and
dialog by offering sponsored content that for bundled messaging plans. They are deliver attractively priced services that
fits with their consumers’ brand identity. looking for new revenue vehicles to create subscriber loyalty.
By leveraging initial responses, advertis- bolster their bottom line and prevent Tekelec enables the secure and instant
ers can further connect with consumers customer churn. delivery of calls and text messages
with follow-up text, multi-media mes- With a substantial subscriber base for more than one billion subscribers
sages, email, mobile web and voice. SMS’s and the unique ability to track those across diverse devices, technologies and
ability to deliver cross-media interaction subscribers’ demographic data and protocols over existing and evolving
allows marketers to pick the mode that personal preferences, providers have networks. Please visit www.tekelec.com/
best fits their business goals. the opportunity to tap into the grow- OptimizeSMS for additional informa-
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FEATURE MOBILE ADVERTISING

Selling space
Mobile advertising is a work in progress and it seems clear that the emphasis must be
on collaboration if the sector is to yield benefits for every member of the value chain.

By Mike Hibberd

@
t is refreshing, in an industry so often sent represent just $1.72bn; some way less than global mobile revenues and accounts for
giddy with hype, that the mobile advertising a third of the annual advertising budget of 0.41 per cent of global advertising spend.
sector appears broadly to have settled into Proctor & Gamble which, with an estimated By 2013, when Informa predicts the mobile
a groove of realism and toil. spend of $6bn this year, says Informa, is the advertising market to be worth $12.09bn, it
Perhaps it is simply that the hard numbers world’s most prolific advertiser. will match up to 1.29 per cent of the overall
make for an impasse that not even the most In relation to the size of the mobile and mobile market and 2.2 per cent of advertis-
optimistic of outlooks can surmount. Informa advertising sectors globally, the intersec- ing revenue across the globe.
Telecoms & Media calculates that the total tion they create is small potatoes. In 2008, Still, these projections show rapid
mobile advertising market for 2008 will that $1.72bn equates to 0.23 per cent of growth—admittedly easier to achieve from

42 Mobile Communications International | First for news, best for business

 MOBILE ADVERTISING FEATURE

a lower starting point—which should give “The vast majority of our traffic tends to
some cause for positivism. come from off-portal,” says Buckley. “We’re not
And it can certainly be said that the mobile missing out on huge volumes by not working
community is looking to lead by example. with the operators. Certainly our combined
Informa estimates that some 75 per cent of traffic in any of our top five markets would
mobile advertising spend this year—$1.29bn— easily beat any single operator, so it’s not
will come from mobile content companies. really going to move the needle for us if we
“The earliest organisations going into this suddenly start working for them.”
market are the ones that are mobile applica- In monetising their own inventory, some
tion based,” says Jeff Herrmann, vice president carriers are employing in-house sales teams,
for mobile media at specialist media measure- while others are assigning partners, as Vo-
ment house Nielsen Mobile.” dafone has done with Yahoo. But if even in
As Informa points out in its report Mo- the mobile space third party sales organisa-
bile advertising: Cutting through the hype: tions are making the most of their sales to
“Despite the excitement surrounding the big third party publishers and content owners,
brands’ entrance into the mobile advertising question marks begin to appear over the role
arena, they are likely to contribute only around played by operators in this space and the
$430m in 2008. If the big brands do not ramp security and revenue potential of that role.
up their spend in mobile advertising, market In part this will be addressed as the range
growth will be severely hampered over the of formats routinely used for mobile advertis-
next five years.” ing increases. The majority of mobile adverts
While some big name brands are moving today take the form of banners and text links
into the space, collectively they clearly remain on mobile web pages but there are opportu-
to be convinced. Going back to Proctor & nities for in-message adverts, served in text
Gamble by way of an example, the firm has set or multimedia messages, which are entirely
aside $10m for mobile advertising, according controlled by the operators.
to Informa; less than two hundredths of one But the carrier community risks damaging the
per cent of its overall budget. sector as a whole if it seeks to maintain control
This illustrates a key point for the mo- over the value chain, with some experts suggest-
bile advertising sector, which is that big, ing that they should face up to the fact that such
non-mobile brands, will not be allocating control cannot be maintained and that their
incremental budget for mobile campaigns. interests would be best served by embracing
Rather, the sector has to convince them to the collaborative nature of the sector.
shift budget already reserved for familiar “I think the dominance of the carriers
media—TV, print, billboard and online—to will probably be strong for another couple
the less proven territory of mobile. of years,” says Harald Neidhardt, chief
Evidence suggests that the majority of marketing officer of California-headquar-
mobile inventory being sold at the moment tered Smaato, a firm that specialises in »
(inventory is a term that de-
scribes available advertising
Global mobile advertising spend, 2007-2013
space, be it on television or
in a text message) is outside
of operator portals, reflecting 14
the erosion of walled gardens 12.09
12
that has been a key facilita-
tor in the growth of mobile 10
internet usage. Admob runs 8.71
(US$ billion)

one of the leading mobile 8

advertising networks, serving 6.11

6
3.5bn text and banner adverts
4.08
on mobile media each month. 4
Russell Buckley, as well as 2.63
1.72
2
chairing the Mobile Market- 1.08
ing Association, is European 0
managing director for the
firm, which doesn’t serve ad- Source: Informa Telecoms & Media

verts on carrier inventory.

Mobile Communications International | First for news, best for business 43

FEATURE MOBILE ADVERTISING

in-application mobile advertising. “But I So if operators are unable to maximise some form of consistent, transparent meas-
think what will happen is what happened in their own inventory because mobile adver- urement is at the top of that list. We think
the fixed internet with companies like AOL. tising is predominantly off-portal, how can this is the key enabler that the operators can
The carriers have to be smart and be more they maintain their stake in the game? One deliver working together, an enabler for the
like media companies. Carriers have to evolve option is for them to act as enablers. “For me whole ecosystem.”
in this direction, then there’s a strong place their best position is as a facilitator of brand In February of this year, the GSMA an-
for them,” he says. contact, for compelling cross platform activi- nounced an initiative in the UK market that
For large, non-mobile sector advertis- ties,” says Herrmann. sees all five carriers—Vodafone, Telefonica O2,
ers, reach is key. And even if carriers can “When you consider the consumer rela- T-Mobile, FT-Orange and Hutchison’s 3—col-
boast millions of subscribers in any given tionships they have, they will always be in laborating to define common metrics and
market, they won’t be supplying service the process. They have the cross platform measurement processes for mobile advertising.
to every member of a given demographic. perspective to offer integrated campaigns The aim of the programme is to outline “a range
“The agencies are really anxious and eager like SMS tied to a mobile WAP site, a video or of metrics that will describe the mobile audi-
to spend money on mobile advertising,” even location based services,” he says. “This ence and measure the effectiveness of mobile
says Jeff Herrmann at Nielsen. “But they hasn’t been fully developed yet but that’s how advertising,” the GSMA said at the time.
can’t get the scale that they need. They’re they’ll maintain their position of prominence Speaking in August, Jenkins clarified the
used to a volume metric, page impression in the mobile advertising market.” goal: “Long term, the sort of ambition that
buy. They buy reach and are really focused Another answer, it appears, lies in the field we should be looking at for mobile is that
on reach estimates. And because of the of profiling and measurement. Henry Jenkins there’s an opportunity to say we understand
way the mobile ecosystem is structured manages the mobile advertising activities of a unique user and we can actually identify
today, which is very operator centric, the carrier lobby group the GSM Association. “On that user across multiple channels.”
agencies—from a reach standpoint—are the long list of things that the advertising This is not a simple task, but the GSMA
left with experimentation or discretionary industry would like operators to do,” says believes that if big brand advertisers from
campaigns.” Jenkins, “pretty much everybody agrees that outside the mobile sphere could be given
consistent, reliable, independently audited
figures like this, they would be far more com-
Global mobile advertising revenues remain negligable
fortable allocating more of their advertising
budget to mobile. The Association is taking
it upon itself, simply, to prove that mobile
advertising can work.
“The burden of proof lies with the opera-
tors,” says Jenkins. “We need to demonstrate
that operators can work together and we need
to demonstrate that they can do that in a way
that adds value to the broader industry. If
we achieve that, we’re building credibility; a
trusted role for operators.”
Jenkins says that responses from all
stakeholders in the UK has been favourable.
The advertisers are interested, the agencies
that plan and manage their spend, and the
operators themselves all see real value in
the project. But still, it is a slow process. The
technical challenges involved in working with
all of the operators, processing huge amounts
of data from multiple sources are significant
Total ad spend
to say the least, he says. “It’s a bit more time
0.41% consuming than we’d like,” he offers, by way
of an understatement.
A further problem is that this initiative is
patently not a money making exercise.The point
Mobile advertising
99.59% of the exercise is not to maximise the value of
the metrics themselves, the GSMA says, but to
grow the mobile advertising industry. And when
operators are prioritising their activities, they
tend to put the ones that generate revenue at the
top, and the ones that don’t at the bottom. »

44 Mobile Communications International | First for news, best for business

FEATURE MOBILE ADVERTISING

“It’s one thing to go into an operator

and say to the IT department, ‘I need this
The uniquely personal 30 per cent said they would install it just
because it was fun. They didn’t even want
resource to change this facility’ in a system nature of the mobile the free minutes.”
if that change brings a five per cent uplift It makes for a warming anecdote, perhaps,
in revenue. It’s very different when you’re phone—which is exactly but the reality is that consumers’ feelings
saying ‘here’s a strategic initiative that we about mobile advertising will only really
believe is incredibly important. There isn’t what excites potential become clear when mobile advertising takes
an immediate revenue uptake, we’re doing
this because it’s important for the broader
advertisers—is also one of off. So it is the large consumer brands whose
view of the whole sector is most crucially
industry, we’ll see benefit in other ways fur- the biggest obstacles they important in the immediate term. If they can
ther down the line’. It is changing the way in be convinced by collaborative initiatives like
which a lot of them work,” he says. must overcome that being run by the GSMA, then perhaps
The GSMA’s deadline is fast looming; the sector will hit the blue sky figures that
the group pledged to complete its proof of some of its more upbeat proponents are wont
concept by the end of 2008. It is still mulling Jeff Herrmann suggests that the greatest in- to proclaim. ®
over the timelines in terms of commercial novation in the mobile advertising supply-side
launch. And even commercial launch does not sector is being done in the area of customer
signal a conclusion. Just as well as advertis- profiling. And for all the hard graft around
Adverts and the iPhone
ers want to reach consumers irrespective of measurement and consumer identification that Apple’s iPhone has had a tremendous impact
their choice of carrier, so too do they want is being undertaken, it must be remembered on the mobile industry, in terms of hype alone.
to contact end users in multiple countries. that mobile advertising as a concept is itself But speak to those involved daily in the mobile
A reliable system of metrics is no good if it’s a tricky sell where end users are concerned. advertising space and you’ll hear that—in this
restricted to just one market. Which is why The uniquely personal nature of the mobile sector at least—the iconic handset is much more
than just talk.
the UK—home to the biggest international phone—which is exactly what excites potential
“The iPhone shows us that the future has
players of the West—was chosen as the advertisers—is also one of the biggest obsta-
arrived,” says Admob’s Russell Buckley. “For the
guinea pig market. cles they must overcome. One man’s advert, first time we’re seeing clear, blue water between
If the GSMA is working on similar projects after all, is another man’s spam. what the PC world does with advertising and what
in other markets, then it’s keeping tight- So is there a concern that operators might the mobile does. It enables us to play to the great
lipped on the subject. “Meaningful conversa- be persuaded into offering up information strengths of the mobile itself, particularly on the
tions” are ongoing, but that’s as far as Henry to advertisers that would make end users usability side of things.”
Jenkins is willing to go. “Regional would be uncomfortable? Henry Jenkins doesn’t think The iPhone enjoys a particularly high penetra-
an achievement,” he says. “Global would be so. “Operators’ core business is to provide tion among staff at advertising agencies, Buckley
says, enabling the people that make decisions
even better. We could characterise our am- communications services to their customers
about where large firms advertise to gain first
bition by saying we need to create a global and they’re not going to do anything that
hand experience of the kind of interface that could
level of consistency in terms of methodology, provides a threat to that customer relation- be key to the success of mobile advertising going
what we measure, what are the definitions ship,” he says. forward. “It’s put the mobile right at the centre of
and how we do it.” You only need to stop He even goes so far as to predict that opera- people’s attention,” he says, “so in terms of influ-
and think about that for a minute before tors will provide services to end users around ence, it’s hugely disproportionate.”
you realise just how significant a challenge managing their privacy. “I do believe that you Smaato’s Harald Neidhardt describes the hand-
it represents. will increasingly see operators developing set as a “catalyst”. He says: “Because the iPhone
For Russell Buckley, wearing both his capabilities around managing permission. was from Apple, all of the creative directors and
Admob and MMA hats, the measurement Creating that as a service, so they become the agency folks are running around with it right now.
There is a wake up call that you can do something
initiative is a winner. “Any more clarification trusted guardian of the end user’s personal
with it; people are more open to it now.”
we can give in terms of measuring people or information, enabling them to manage their
And if you want to see just the sort of thing that’s
unique users, is great. One of the issues that preferences.” exciting people about the iPhone and its potential
we have as a company like Admob is that very In any case, Smaato’s Harald Neidhardt role in the world of advertising, go to You Tube and
often our advertisers want to target unique offers up some optimism as regards users’ search Carling iPhone. It’s pretty clever stuff.
users. Very often we don’t have that data, and willingness to engage with mobile advertis-
that’s held by the operator.” ing. Smaato did a trial with Swisscom that
The collaboration between operators on placed audio adverts before and after voice
measurement raises an interesting question calls. He explains: “We asked consumers if
of whether they should unite to sell their own they would install the mobile advertising
inventory; after all advertisers don’t measure application on their handset if they were
their target markets by carrier selection. In given 100 free minutes in return.” According
all likelihood this remains some way off, but to Neidhardt, more than half, 52 per cent,
it may turn out to be necessary for operators said they would take the application for
to maximise their own revenues. 100 minutes. But, he says, “astonishingly,

46 Mobile Communications International | First for news, best for business

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Chasing the dream

Could TD-SCDMA become the champion of China?

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48 Mobile Communications International | First for news, best for business

 By the time you finished walking Rover $224,663
will have been spent on WiMAX products.
By 2012 that figure will have risen to $1,215,720.
Isn’t it time you took the lead?

ROAMING
CHARGES

The first global WiMAX magazine launches October 2007 www.wimax-vision.com

For subscription enquiries contact Sophie Burdajewicz: Head of Marketing: sophie.burdajewicz@informa.com
For advertising enquiries contact Ed Tranter: Group Publisher: T: +44 (0)207 017 5688: E: ed.tranter@informa.com
More Media. More Mobile. More You.
The MediaFLO system is real-time mobile media done right. A robust and open global standard that is purpose-built from the
™

ground up to deliver live TV and other compelling media to mobile devices. All with super-smooth video and CD-quality sound
on eye-friendly displays. It ’s mobile media without mobile compromise.

www.mediaflo.com
©2008 QUALCOMM Incorporated. All rights reserved.
MediaFLO is a trademark of QUALCOMM Incorporated.