CTIA Wireless

San Francisco
September 2008

CTIA Wireless IT and Entertainment had its Fall show September 10–12 at Moscone Center in San Francisco. We estimate about fifteen thousand people attended the show. We attended the Mobile Entertainment Live pre-CTIA event along with CITA and bringing you the highlights.

According to CTIA, US mobile subscribers can't get enough of text messaging. In June 2008 alone, 75 billion text messages were sent in the US. At the same time, the US data revenues for first half of 2008 are estimated at around $14.8B. Given the retail price of a text message in US at about $0.20, we would have had $15B in text message revenue in US just in month of June alone if we paid full retail price. We are either paying very little for our text messaging (through packaged offerings, non-P2P messages, etc.), or we are not buying a lot of other mobile data.

Carriers Wrestle with "Open" Issues

"Open" is an over-loaded term. Each carrier defines it somewhat differently, as it was apparent in the keynote panel on Day 1 of CTIA by CEO's of Verizon, Sprint-Nextel, and T-Mobile.

Verizon's open initiative is mostly around certifying devices that can go onto Verizon's network. This effort that started about a year ago has resulted in two launched devices, and two more to be launched soon. One of the launched devices is a phone from prepaid service provider AirVoice. There are also non-voice distributed sensor devices that will be getting onto Verizon's network.

Sprint really didn't show anything regarding openness for devices. Instead, they deferred the question of true openness to their 4G WiMAX network, Xohm, which is being built in collaboration with Clearwire.

T-Mobile's CEO, Robert Dotson, thinks their network has open access for devices due to the nature of its GSM technology. Any unlocked GSM device can run on T-Mobile's network, but it will most likely lead to a suboptimal user experience. Carriers should do their magical network integration on the devices to create optimal user experiences. T-Mobile USA is advocating Android as an open source platform, with its phone debut in October. All agreed that there is a place for seamless integration between the devices, network and services. And there is a place for unleashing power of the open web. And, both can coexist.

On a Day 2 keynote, John Stanton, who founded Western Wireless (now Alltel) and VoiceStream Wireless (now T-Mobile USA), urged operators to do more of integrated combination of devices, content, and networks. Otherwise, they will risk becoming just access providers (aka dumb pipes). Providing access is a commodity business, growing at the rate of economy.

Mobile Video: Demand is Low But We'll Build More Capacity

Demand for mobile video, whether streaming, download or broadcast, seems to be low in the US. According to M:Metrics January 2008 report, only 4.6% of US mobile subscribers watch mobile TV or video. MediaFLO, the self-claimed Tiffany of mobile video, doesn't share their subscription numbers. So, we can presume the current demand for mobile TV and video is not impressive.

However, the low demand has not stopped folks from creating new content, new services, and new infrastructure. A group of local TV stations have formed a new coalition, called Open Mobile Video Coalition (OMVC). The charter of OMVC is to create standards to deliver mobile digital TV to handheld devices using a modification of ATSC.

It's a Good Time to be Mobile Developer — or Is It?

It seems like everywhere you look major companies are creating attractive open and not-quite-open development environments to lure application developers into their ecosystem. Yahoo announced their Blueprint platform for developing and distributing mobile web applications. Blueprint is used to create mobile websites or standalone mobile applications for Java, Windows Mobile, and Symbian devices.

Nokia just launched their Nokia PRO Accelerator developer support program to provide a broader set of technical and business services to select venture-backed developers.

Some platforms — iPhone, Blackberry, Android — offer cash incentives to application developers. On the carrier side, T-Mobile USA announced their devPartner Community program. The program is intended to simplify the process for third-party developers to work with the operator. The revenue share for developers will start from 50% and can go up to 70%.

Now, the main question for developers is "which platform(s) to build upon?"

Not Just Surfing Anymore — Dive Into Mobile Internet Ocean

The fundamentals for the explosive growth of the mobile internet are falling into place. We can use our concept of DNC (Device-Network-Content) and apply it to the mobile Internet. Devices are getting more capable of becoming a viewport to the Internet with iPhone as a major driver and a tipping point. According to comScore, the US rate of 3G penetration (28.4%) has caught up with that of Western Europe (28.3%). In terms of content, the debate is whether there should be one web (on PC and mobile), or multiple parallel universes (iPhone-optimized web, PC web, etc.). There is also the question of whether mobile web content should be viewed through browsers or widgets. On the CTIA Mobile Web 2.0 carrier panel, Alltel and Sprint both agreed that a carrier should provide different ways for subscribers to connect to the Internet, and offer the choice to the end users.

Mobile Marketing and Advertising: Making Progress at a Snail's Pace

According to Neilsen, as of Q2 2008, there were about 259 million US mobile subscribers. Of that total, about 77 million US subscribers recalled seeing a mobile ad on their mobile phone. That shows a growth of 81% from last year. Despite the huge potential, the carriers are being careful in rolling out big targeting and marketing campaigns, worrying that they would compromise their customers' privacy. Currently, the biggest mobile advertising potential lies in text messaging and mobile Internet channels, with potential reach to 138 million users (text) and 43 million users (mobile web). The challenges for winning over the advertisers continue to be demonstrable reach, proper targeting, and tracking and measurement to deliver the desired ROI.

Future of Enterprise Handsets

Azita led the panel on Handset Capabilities – What's Next? at CTIA's enterprise track. The panel agreed that in defining an enterprise handset, device vendors consider requirements from both the end users and the IT departments. Enterprises are seeing mobile devices and services more and more as strategic investments as opposed to tactical expenses. More of an enterprise's mission critical applications are moving to mobile handsets. Small businesses have a higher propensity to deploy mobile services. Important applications for enterprises on handsets include: browsers, productivity applications such as field force automation, CRM, and, generally, any piece of information or transaction that can add a business value. In the next 12 months, look for seamless PBX integration, advanced messaging, navigation, improved user interfaces, and better browsers.

Interesting Little Tidbits

From all accounts, mobile social networking is becoming more and more popular. However, its monetization remains a challenging exercise. MySpace mobile started with some carriers on a subscription basis. But now, it is free and ad-supported.

RIM's co-CEO, Jim Balsillie, delivered a keynote speech on Day 2 of CTIA. Most of his talk was around consumer applications such as music, gaming, social networking, news, sports, and TiVo. He spent only a few minutes talking about Blackberry Enterprise Server and how it supports 400 IT policies, in addition to PBX synchronization and native SAP. It seems we have found Canada's answer to Steve Jobs.

And, One More Thing ...

Sprint introduced their One-Click user interface on three new handsets. One-Click provides a personalized carousel-style widget menu that launches an application directly from the phone's home screen. RIM showcased its iPhone-killer, Bold, with 3G and advanced multimedia capabilities. Bold is already released in Europe and will launch in US by AT&T in October. Nokia announced adding Microsoft Exchange Activesync to all its 80 million Series 60 3rd edition phones. The company is also getting ready to launch its Comes with Music device in the UK soon. The device will include a one-year unlimited access to the entire music catalog and user keeps his downloaded music. Pricing is still not announced.

In the Day 3 Keynote there was an interesting panel of kids aged 13 to 19 discussing their likes and dislikes about wireless services and devices. If money was no object, they would have iPhones. They got their first phone when they were 11 or 12. All depended heavily on their cell phones to connect to their family and friends. Some complained about cost of data services and the high cost of games.