3GSM World Congress

Barcelona
February 2007

Last week, we attended the 3GSM World Congress in Barcelona, a major global wireless trade show held every February. This year's event hosted 55,000 participants and had significantly expanded the presence of media and entertainment companies, both in terms of its keynotes and panel sessions along with exhibit space. Edgar Bronfman, head of Warner Music, delivered a keynote speech. Qualcomm had a big presence at this year's event with Paul Jacobs, its CEO, making the rounds.

Handsets: Can Never Be Too Thin or Too Rich (Media)!

If you are a mobile phone these days, the competition is heating up, especially in light of the availability of all the iPhones. On one hand, phones are getting thinner. Samsung introduced the thinnest phone: Ultra Edition 5.9 which, as the name suggests is 5.9mm thick. Sony Ericsson demonstrated its W880 Walkman phone at 9.4mm, a real cool looking phone. LG's Shine series had a model at just under 10mm. Even BlackBerry got thinner with the new 8800 model at 15.5mm. As a reminder, the iPhone is 11.6mm thick.

On the other hand, rich multimedia including music and video support first and now broadcast TV are coming to mobile phones, as evident by Nokia N77 with mobile broadcast TV capability using DVB-H technology. Other new features included: touch screen phones as in LG Prada model and Samsung F700 (both close rivals to iPhone), support for HSDPA high speed networks as in Motorola's new Q, better cameras, and expandable memory. Motorola also showed a "kicker" mechanism on RIZR Z8 model where the candy bar phone would flexibly slide out into an angled phone for better fit around the face.

Flying through Future Networks

Performance improvements to current 3G-UMTS networks, in the form of High Speed Packet Access (HSPA) technology, both for downlink (HSDPA) and uplink (HSUPA), are being rolled out by many carriers. There are several flavors of HSDPA technology at progressively higher speeds, starting last year from 1.8 Mbps to now 28 operators supporting HSDPA of 3.6 Mbps, and moving soon to 7.2 Mbps. In a bold move, Telstra of Australia just switched on its 14.4 Mbps HSDPA service, as part of its "Next G" mobile broadband offering. The initial target for these high speed networks are generally laptop data cards. High speed downlink rates will improve the web browsing and video streaming experiences, whereas high speed uplink rates will help with uploading of data such as user generated content.

Looking way into the future, the 3GPP standardization committee is working on the next generation of UMTS networking technology, called Long Term Evolution (LTE). The objective is to provide data rates of up to 100 Mbps in the downlink and 50 Mbps in the uplink, a truly broadband experience. LTE is envisioned to be launching in 2010-2011 timeframe. Ericsson, who partnered with Telstra on its high-speed HSDPA rollout, demonstrated its LTE technology at the show.

Of course, with improvements in the network technology, we need receiving devices such as handsets, PC cards, or embedded components in laptops that could take advantage of these higher speeds. A quick note: Many at the show think of Mobile WiMax as a competitor to the above roadmap. Vodafone CEO, Arun Sarin, urged the industry to work faster on LTE in order to beat WiMax.

Mobile Content: Beyond the Hype

According to Informa, less than one dollar out of every seven dollars spent on mobile services is spent on mobile data. In 2006, SMS took more than 65% of mobile data revenue. Despite the hype, mobile content beyond ring tones (in the consumer market) and email (in the business market) has not really taken off.

Price, complicated discovery and purchase methods, and slow process have been identified among main barriers to wide spread adoption of mobile content. Meanwhile, content providers are working on compelling content, such as made-for-mobile Sundance flicks, mobile Bollywood, extensive music and video catalogs, and mobile TV.

Omnifone, a London start-up, announced MusicStation, a subscription-based music service for about 3 Euros/week that would first be offered by Telenor of Norway and Vodacom of South Africa.

Pricing and pricing non-transparency are major issues with subscribers. Customers are never sure how much it would cost them to download a piece of mobile content. So far, there are not many operators that offer all-you-can-eat data plans to remedy the situation and potentially help with the uptake of mobile content and open mobile Internet. We see 3 UK's recently-launched "X-Series" flat-rate data pricing as a step in the right direction, and hope other operators would follow suit.

Mobile for All

In spirit of expanding mobile and wireless to all and especially the emerging markets, we have noted the following GSM Association (GSMA) initiatives:3G for All: LG's KU250 phone won the

3G handset campaign which aims to expand the accessibility of 3G services. Qualcomm collaborated closely with LG on this design. LG says the phone will be priced 30% less than an entry-level 3G phone in the market today with similar multimedia functionality. We heard figures of 65 Euros and under $100 from other sources.

2G for All: Motorola won the GSMA award for Best Ultra Low Cost Handset of 2007. MotoFone F3 is targeted for developing regions. Price was not mentioned.

Global Mobile Money Transfer: GSMA has launched a pilot to enable the world's 200 million international migrant workers to transfer money across countries as easily and as fast as sending a text message. The international remittance market totals more than $230B a year, with current transactions costing up to 24% of money transferred. Pilots are being rolled out in India and Philippines.

Fixed Mobile Convergence

Mobile and fixed line operators are equally interested in Fixed/Mobile Convergence (FMC) as a way to offset the erosion in their core voice services. FMC's aim is to provide voice and/or multimedia services on cellular and fixed networks from a single handset with proper Quality of Service and seamless handoffs between networks. According to Wi-Fi Alliance, 82 converged Wi-Fi/Cellular phones have been certified so far. BT announced additional handsets for its FMC service, called BT Fusion, with the new line of HTC mobile phones powered by Windows Mobile 6.

Mobile Web

Successful web applications are naturally moving into mobile space. Social networking and user generated content had a big buzz at the conference. MySpace just signed a deal with Vodafone UK to provide its members access to the service via their handsets, after a similar deal with Cingular in US, which they claim to have been successful. The company said they are looking to ink more operator deals. NewBay, a new start-up in this space, thinks operators must design features such as one click video and photo uploads for a successful mobile experience.

Mobile advertising was another hot topic, and developments were all over the map. Blyk, a new European MVNO based on an ad-sponsored business model, targets 16-24 year old market and plans to launch in summer 2007. They believe in ads that have high relevance and hence "good" for their subscribers. Rhythm NewMedia, a start-up offering ad-platform for operators, believes in keeping things simple and scalable, and is centered around TV content. Meanwhile, Yahoo plans to show display ads on mobile devices in 18 new markets in addition to current offerings in US and Japan. We hope to see major developments around mobile ad formats, ownership protocols, and measurement standards in 2007.

And, More...

There was plenty of action in DRM land: Heard SDC was acquired by PacketVideo, heated reactions to Steve Jobs' letter, OMA IP licensing proposition by Intertrust and Microsoft's release of PlayReady DRM. Look for our upcoming article in DRM Watch for details.

We see sign of IM interoperability across carriers via bilateral agreements, such as the one between Telefonica and Vodafone Spain and another one between Telecom Italia and Vodafone Italy.
In mobile TV land: MediaFLO is giving DVB-H a run for its money in the US market, by winning Cingular over to its camp, in addition to its current partner Verizon.

Microsoft announced Windows Mobile 6 with improved integration with Office applications.

4GB microSD HC (High Capacity) memory cards are coming to market from multiple vendors.