Summary of “Where’s the Mobile Industry Going?” Panel at the Sigma System’s User Conference

Sigma Systems’ first User Conference (June 4th-6th, Barton Creek Resort), explored the next generation of consumer and business oriented services, including insight and discussion around emerging trends and technology developments in the following areas:  targeted advertising, evolution of commercial VoIP & data services, global deployments in mobile broadband services, evolution to on-demand services, converged applications over video networks, data and multimedia services and IT back-office transformation.  In the OSS Consolidation article I included Sigma Systems in the Service Fulfillment Landscape.

At the user conference I ran the panel session “Where’s the Mobile Industry Going?” with John Namovic, Managing Partner at Deloitte; and Wedge Greene, Industry Guru.  The session’s objective was to help the audience understand how mobile is going broadband from those working on the ‘bleeding edge’ of the mobile industry. Providing a comprehensive global overview of the mobile operator’s evolution to broadband; including network evolution, new services and applications, emerging business models (MNO vs. MVNO), and review of important lessons learned.  In particular we’ll be reviewing mobile broadband services, evolution to LTE (Long Term Evolution), xVNO economics (Virtual Network Operator (where x = mobile, fixed, converged and possibly even cable)), and FMC (Fixed Mobile Convergence) successes and failures.

Summary of panel discussion:

LTE Summary
1) What is Long Term Evolution (LTE)?

  • Also know as 4G, LTE is an OFDM (Orthogonal Frequency Division Multiplexing) radio system that can flexibly use radio spectrum, rather than the restrictive paired 5 MHz spectrum of old mobile radio systems.  In a 10MHz slot you could see 100-150 Mbit/s of capacity, though it’s not much more spectrally efficient than HSPA+ (High Speed Packet Access).  See my Mobile World Congress 2008 article for a discussion on HSPA+.  The big advantage LTE has over WiMAX is global volume; LTE will be adopted worldwide, with DoCoMo and Verizon Wireless leading the way.  LTE also includes some useful operational features, but I’ll not go into that here.

2) What are the operator’s drivers to adopt LTE?

  • Utilize new frequency bands being auctioned, for 3GPP and 3GPP2 at 1.7 GHz, 2.1 GHz and 2.6 GHz.
  • Finally use unpaired (TDD) spectrum resources.
  • CDMA operators with no future upgrade path can use LTE in existing spectrum to provide increased capacity and new services.
  • GSM operators without 3G licenses can use LTE to upgrade the network.
  • Fixed network replacement in rural areas could use LTE.
  • Mobile operators HSPA coverage can use LTE selectively, building as the network needs to grow.

3) When is LTE likely to happen?

  • Verizon and DoCoMo will likely have a commercial launch in 2010.
  • For the rest of the world, HSPA+ will be a significant impediment to LTE adoption, as well as the change-out in the core network required.  So LTE will likely be delayed until 2011-2013.

4) What should a CableCo do?

  • Verizon realizes that global volumes matter, and is moving away from its “CDMA island’ to LTE.
  • WiMAX makes sense in developing nations that lack a copper infrastructure to provide voice and mid-band internet access.  However, a lack of spectrum co-ordination leads to the creation of lots of ‘WiMAX islands.’
  • For a MSO with spectrum, WiMAX is the only game in town at the moment, though wait 3 years and there will be a global standard that leverages global volumes which is critical for CPE cost management.
  • Recommendation for MSOs is to focus on what your customers want: the battle is video as Verizon and AT&T enter the market.  The mobile part of a quad play will become important in the US market (all those shared minutes plans), the battle isn’t there yet and an MVNO could be a stop-gap.  Perhaps it makes sense to wait for LTE, than bet on the “son-of-LMDS/MMDS.”

FMC Summary (not covered in session)
1) What is FMC?

  • The most successful FMC service by far is the mobile phone, if by FMC you mean Fixed Mobile Conversion.  When consumers have unlimited nights and weekend minutes, FMC offers little benefit.  So let’s take an enterprise centric perspective, there are 4 approaches to FMC:
  1. The handset centric dual-mode approach where the enterprise replaces the mobile network with short-range radio (WiFi, DECT or Bluetooth) in the office.   They retain the mobile network for off-premises mobility.
  2. The enterprise uses signaling and/or VPN (Virtual Private Network) functionality to give it more control over call routing and costs.
  3. The mobile operators’ favorite, is the substitution approach.
  4. An evolution from (c) is the inclusion of femtocells in the office network, generally to offload some of the mobile traffic from its own backhaul network.

2) What are an operator’s drivers to adopt FMC?

  • For a fixed line operator as an attempt to stop fixed line revenue erosion, e.g. BT Fusion.
  • For US mobile operators to manage indoor coverage, e.g. Sprint’s AIRAVE femtocell trial.
  • For a mobile operator it’s to offload traffic from its backhaul network (femtocell).

3) What is happening with FMC today?

  • For consumer: BT Fusion has failed, Sprint’s AIRAVE (Femtocell) is still in trial after 9 months, though Orange Unik is achieved success with 500k+ customers.
  • For enterprise: Most enterprises view the ‘integration’ and ‘dual mode’ approaches as unproven technologies.  When IT decision makers think convergence, it isn’t about FMC; their convergence perspective is around voice and data (IP telephony).

4) What should a CableCo do?

  • FMC has struggled as the benefits do not accrue to the customer; the benefits mainly accrue the operator.  So any FMC voice or internet access service must be transparent to the customer before they’ll take off.  However, there are a range of FMC services that are gaining traction, for example Slingbox: watching my cable service on my PC or mobile when I’m away from home.  Accessing my home DVR from my mobile or laptop to record a program a colleague just mentioned while I’m in the office.  Home security service (e.g. home WiFi camera) enabling secure remote access from a PC or my mobile.  The list goes on…  What these services have in common is allowing me to do something new that I could not imagine doing 10 years ago and has value to me.  10 years ago I could call from home, and FMC has not changed that, only made it a little more complex and frustrating when I thought I was on the home hub, but instead was on the mobile network, so my international call cost $5 rather than 50c so I’ve got to waste an hour with a CSR (Customer Service Representative)…
  • Recommendation for MSOs: Only use FMC for the basic services when it’s completely transparent to the customer (and that includes handset range).  Focus upon new services that leverage cable’s unique position in people’s lives, cable = video.