Deloitte Global Mobile Consumer Survey 2012 shows that 58% of smartphone users and 93% of tablet users connect to the internet over wi-fi rather than over the mobile network. It's faster more reliable and more responsive.
Interesting, smartphone users in other countries (US, Germany, France and Japan) prefer to connect via the mobile network.
Other stats:
30% would prefer to pay for a fixed amount of data and then pay addition usage charges once they have reached the limit.
Half the smartphone owners subscribe to less than 1Gb of data and only a fifth of respondents subscribe to unlimited data package.
Mobile Operators are missing a simple trick - but one that massively demonstrates their value: a simple counter that is constantly displayed on their home page which shows their usage since last billing date / top-up date vs their contract ceiling. It should display call minutes, text minutes and data limits.
What I find irritating about mobile operators is that they wish to charge users a different additional tariff for tethering another device (for me, a laptop or a netbook) to their mobile phone. I tether these device infrequently to my phone, but when I do, it is very useful, but my usage isn't predictable enough to justify the expense - particularly when swinging off someone's wi-fi usually works.
Naturally, mobile operators don't want to offer unlimited data - this resources isn't infinite. Such a policy is madness, as I have blogged a long time ago:
However, I would like to use what has been contracted without any gotcha clauses!
David Halstead, technology, media and telecommunications partner at Deloitte in Cambridge recommends:
Mobile operatios should offer their customers a seamless connectivity experience including Wi-fi hotspots that their customers can use when they are out and about.
Hmm, this concept is known as fixed mobile convergence and has been around for ages!
I picked up this statistic: A 2009 World Bank study found that raising mobile-phone penetration in a developing country by ten percentage points increased GDP growth by 0.8% a year.
But what really got my attention was this statement:
Venko, a local phone maker, now offers a handset that holds four SIM cards, automatically choosing the cheapest for each call.
By 2015, Juniper analysis predicts that 63% of data will be delivered to smartphones by wi-fi and femtocells versus over the mobile networks (here's Silicon.com's Cheat Sheet on femtocells).
The quantity of data required will be 14,000 Petabytes (1 Petabyte = 1 million Gigabytes). This is an eye boggling amount of data - equivalent to 18 billion film downloads or 3 trillion music tracks. This is 'chunky' - Apple recently purchased 12 Petabytes of data from Isilon Systems, rumoured for video storage for iTunes.
There are two opposing effects here in mobile data:
users using wi-fi for browsing / increased wi-fi penetration
fixed to mobile substitution - ie people pitching their fixed line data connection for all mobile data connection
So the net effect is pretty big data chomping, but not as bad as mobile world feared some time ago.
This sounds impressive but Mike Bryant, an analyst with market research company Future Horizons points out in this article from EE Times that LTE cells can support MUCH fewer users than 3G cells.
Whereas a 3G basestation cell could support 4,000 users, an LTE cell is smaller and can only support 600 users, so seven times as many basestations are needed to support the same number of users, Bryant said. That means additional sites have to be found and, in addition, placing LTE equipment on the roofs of tall buildings doesn't always provide street-level coverage as it normally did for 3G basestations.
Bryant further concludes that:
The result is likely to be an inability to service the demand created by sales of smartphones. Already monthly flat rate data usage plans are being dropped by many operators in favor of per-Gbyte charging schemes to increase profits and throttle demand.
I have been a firm believer in the view that all-you-can-eat data schemes are disastrous for operators and that per-Gbyte must surely make better sense, even if it is a marketing proposition.
Also, this interesting article (from July 2010) also declares that WiMax is dead as operators are deploying the spectrum to other technologies
3 and T-Mobile intend to share their 3G cell towers. They expect to save GBP2 billion (USD4 billion) over ten years, by decommissioning over 5000 duplicate base stations.
Analysys, in this insightful report, applauds the decision. (Note: for some time after 3G licenses were sold in the UK, sharing of infrastructure was illegal. This requirement has since been relaxed.)
Voice remains the mainstay of ARPU with SMS being the primary source of non-voice ARPU. The demand for heavy data hasn't been apparent enough. AND that requirement is threatened by substitutes such as Wi-fi and Wi-Max, which means that operators need to invest in alternative technologies (examples below), which reduces the investment that they can make in their traditional cellular infrastructure.
fixed broadband ie triple plays and quadruple plays
Mobile TV
Femtocell - indoor base stations
Analysys also sees this as indicative of how operators will make future investments (such HSPA+ & LTE) - a strategy that led to the dominance of GSM.
Analysys calls this a 'major shift by mobile network operators' - and I agree.
Nokia has announced 100 Mbps data transfer speeds using LTE. Story from MobileMonday.
LTE (or its official name 3GPP LTE (Long Term Evolution) - definition at wikipeidia).
From the same article:
Verizon Wireless and Vodafone Group plc shocked some in the industry when the companies announced they were considering LTE as the 4G evolution path for their respective networks. However, neither company has yet fully committed to the technology.
Many still expect Vodafone partner company and CDMA operator Verizon Wireless to eventually select Ultra Mobile Broadband (UMB) technology, which stands on the CDMA evolution path, and is often touted as an alternative to LTE technology, which is the WCDMA evolution path.
Excellent summary of the state of the WiMAX implementations from Analysys.
Sprint Nextel revealed on Friday that it would not be following through with the previously announced plans to build a mobile WiMAX network with Clearwire; at least not within the timescales previously mentioned.
Both WiMAX and LTE (Long Term Evolution) are aiming to meet the ITU’s 4G requirement of 100Mbit/s data rates in a mobile environment.
Here's another summary of WiMAX's prospects (also from Analysys) from March '07. It poo-poos the opportunity in developing world, citing high Cap-Ex and the greater value placed on voice (rather than data) services.
In developed markets, head-to-head competition with DSL could be disastrous for WiMAX.
Here are Analysys' success criteria:
a WiMAX operator with a large existing customer base, strong brand and substantial marketing budget, to expedite the growth in customer numbers
strong demand for mobility, to enable a significant price premium over fixed broadband services
free spectrum available
low frequency of operation (2.5GHz), to minimise the number of WiMAX base stations required
strong leverage over terminal vendors, to drive substantial price declines
existing base station and transmission infrastructure, to minimise capital investment.
Google make a huge foray into the mobile arena, by providing a phone operating system for free 'Android'. It has launched Open Handset Alliance as the vehicle to facilitate its penetration into the mobile market.
See Sergry Brin introduce it:
Four handset manufacturers are on board: Samsung, HTC, Motorola and LG. Operators?? Sprint, Nextel, T-Mobile, China Mobile, Telefonica and Telecom Italia will sport the Google-powered phones - the first of them will be available late 2008.
This announcement is more than a poke in the eye with significant mobile OS providers such as Microsoft, Research in Motion, Palm and Symbian.
Clearly, everyone is feeling everyone else out with this new offering - 'of course, I'll participate, but I'm not going to jettison any of my existing partnerships that I have nurtured for years'.
I think this strategy is too early for Google - mobile internet isn't what 99% of users require out of a phone at the moment. Another desktop player, MS, took years to gain traction in the mobile sector. Admittedly, this strategy isn't home grown, it came from the acquisition of Android in 2005 - so it will have a better chance than MS, but still...
Google's behemoth is advertising - the mobile industry is a lot more sophisticated and VERY different to the internet. 'Free' isn't word that is trips off the tongue of mobile executives.
I reserve judgment. As I've said before, when people with lots of ammunition are wandering around the battlefield, be careful, they don't have to know too much about what they are doing to be very dangerous.
UPDATE: Here's a biting critique of Google's announcement from a report from Analysys:
As a strategy to bring fundamental change to the mobile industry, Android is way off target. In reality, a free OS will not be sufficient incentive for major players to write off investments in established software platforms and adopt a platform that offers nothing new from a development perspective. Manufacturers have a financial liability for their devices, and cannot contemplate the prospect of an open-source OS that could release a virus or trojan into the market. The required investment in OS security and stability would be high, as it has been for Android’s predecessors. They (members of the Open Handset Alliance) can exploit the publicity if the initiative is successful, and minimise their exposure (as one of several players participating in numerous initiatives) if it fails. In cash terms, partners will invest little in R&D to support this programme. Ultimately, Google’s primary strategic and revenue objective is to encourage the use of its search engine. If, by backing an OS alliance, Google can expand the scope of its search box placement by cementing relationships with established partners and developing deals with new partners, arguably Android will have done its job.
After years of being in the mobile business, then finally Orange UK looks to have discovered a common sense pricing model for consumers to use the mobile internet.
Bear in mind that 96% mobile revenues comes from plain ol' voice and text, so growing the 'proper' data component is pretty important. To date, pricing has been on a per MB or an 'all you can eat' basis.
I have blogged previously on why 3's gargantuan X-series package was indicative of amateur marketing. Looks like Orange have found a customer-centric solution.... wow, what a concept!
So here's why Orange's announcement will make total sense to users and I would anticipate the other operators will follow suit:
Pay-as-you-go: Internet snacks – 40p for 15 mins with daily cap of £2 (or a daily £1 bundle).
Contract: Internet “snacks” – 30p for 15mins with daily cap of £1.50 (or a “bundle” priced at £1 per day or £5 monthly for evening/ weekends or £8 monthly “anytime”)
Just as Rupert Murdoch's News Corp purchased MySpace last year for $580m, then Emap purchases YoSpace at a steal for £8.7m. Here's the press release.
Emap is a print and digital publishing house. YoSpace provides a platform for mobile user generated content - best known for 3’s (ie the mobile operator) SeeMeTV which allows mobile users to share and get paid for mobile video clips. Customers receive 1p for every clip watched - 3 has paid out £100,000 up to March last year.
YoSpace also provided the platform for O2’s Look AT Me TV service. And topped the 'UK 50 to Watch in Mobile 2007’ (sponsored by O2) published earlier this month.
Vodafone allows users to update their YouTube site - more here.
The internet social software services have, frankly, struggled with the whole mobile scene. I am skeptical that today's successful internet SoSos are going to able to migrate to mobile successfully - I think a new generation of social software will appear that is equally at home on the desktop / laptop AND the mobile.
The great and good (50K of them!) gather in Barcelona this week for 3GSM. Here's an interesting preview from John Strand, a telco consultant that got his head screwed on and from Informa.
Hot topics for this year:
mobile-TV (so last year)
IMS
mobile VoIP
user generated content (so last year and the year before that)
mobile advertising (worth US$11.3 billion by 2011 according to Informa)
Location based services (another any-day-now service, but this time GPS-based, rather than cell-based)
There is no doubt that the industry is facing large changes, but who will be the future heroes: "the big old boys" or "the small new kids on the block"?
I think this year will be the last year that we can state with confidence 'the big old boys'.
Next year's conference will raise the question: 'Lots of new technology - SO WHAT? - show me the end-consumer benefit!'. Read this excellence article on Pricing and User Experience in Industry Remembers Customers from 160 Characters.
Would you have guessed them?
Deloitte Global Mobile Consumer Survey 2012 shows that 58% of smartphone users and 93% of tablet users connect to the internet over wi-fi rather than over the mobile network. It's faster more reliable and more responsive.
