Smartphone usage is growing, generating a huge increase in data traffic over mobile networks, and also changing the nature of the applications that users access. This Telecoms HotHouse, in association with Juniper Networks, asks how those factors are presenting different and increased security challenges to operators. More importantly, it seeks to identify the technical and organisational means with which operators can ensure network security in a smartphone age.

At the table:

GIJS VAN KERSEN
Head of Mobile & Convergence Marketing, EMEA, Juniper Networks. Gijs works closely with operators – leading to his awareness of the need to raise the profile of network security strategies.

FRAN HOWARTH
Senior Analyst, Bloor Research. Fran specialises in the field of security, primarily information security, but also in physical security and how the two are converging. Focuses on the business needs for security technology.

KEITH DYER
Editor of Mobile Europe. Keith is looking to foster a debate that will help others in the industry think about how operators can deal with security as they enter the smartphone age.

DAVID?RODGERS
Director of External Relations for OMTP. David has deep knowledge of mobile web applications and is OMTP's advisory committee representative to the W3C, currently working on the BONDI web applications initiative.

STEVE BABBAGE
Vodafone's head of security research and group chief cryptographer. Steve is also the chairman of ETSI SAGE, the standards body that specifies cryptographic algorithms for GSM, UMTS, LTE etc. 

SMARTPHONE GROWTH AND IMPLICATIONS

KEITH
Gijs, perhaps you can frame for us what changes your mobile operator customers are experiencing in terms of network traffic, and the immediate implications of that?

GIJS
We are finding that the mobile network is going through a transition. In the past it was based on closed proprietary protocols, such as TDM and ATM, and it was very easy to secure it from outside influences. Also there was not so much data on the network, it was mostly voice. Now, with a lot of laptops, 3G dongles and smartphones accessing the network, the amount of data traffic flowing through the network is increasing. In addition, this is all IP traffic, so the network is opening to more potentially malign users, abuse can be not just by college kids but by people motivated by money. This is something we need to address, to make sure that consumers and business people alike will remain confident to use the mobile network, for their business and for their entertainment.

FRAN
The smartphone market is developing at 25-30% a year at the moment. By 2012 it's going to outpace laptop sales and that's going to be more and more important. Last year we were looking at mobile web and email, and now we're looking at a lot more applications and access to corporate data. And this is really putting a strain on the networks. It's challenging for the operators to know how to deal with it; which policies to put in place, what sort of technologies they need for protection and encryption.

STEVE
The bulk of the current data load is really coming from laptops and data modems rather than smartphones. But smart device use is increasing and as it does so, with the growth of consumer application usage, this leads into something that is certainly different in nature in terms of the security aspects.

DAVID
There's a lot of movement to applications now, a lot of app stores being launched, a lot of work going on in the mobile web around widgets. A further aspect of this is that the convergence of applications onto smart devices has driven the control points away from the networks slightly. You have smartphones with WiFi connections, for example, which means that whatever applications are on the devices they are probably not solely from the operator themselves. By opening up web applications to devices, and device functions such as SMS, calling and location, we are potentially opening up a Pandora's box. So the mobile industry has to step up and take leadership, and continue the good work we have already done to ensure that users continue to be protected in terms of their privacy and exposure to fraud.

STEVE
There are a host of very good reasons why you want to open up all this rich functionality to creative developers; it brings enormous benefits to customers. But on the other hand if you open this up to developers you know nothing about, that's exactly what brings you into security problems. So either you tighten up and only allow rich applications from developers you know well, or you restrict the functionality all developers can access, and then you can limit creativity.

WHAT IS THE THREAT LANDSCAPE?

STEVE
Thinking about it from the point of view of a malicious developer in the mobile space, the most obvious way they are going to try to make money is using premium rate fraud, but there's also potentially access to customer data, banking data and passwords and so on. Plus you have the general concerns about customer privacy in areas such as location.

GIJS
And there are different ways you can get access to that data – you can get access on a cell phone by a malicious application, or someone could try to get access to information residing in the network on a database. I think that's a worse problem because you are getting access not to one person's data but to millions of people's data. And you could do this either through hacked devices or through other networks, for example from the Internet or from a peering network. So you need to protect not only the devices but also the interfaces of the network through the use of firewalls and intrusion detection systems.

Also, because of the exploding volumes of data traffic, the firewalls will have to be upgraded not every 3-4 years but almost every year.

DAVID
As well as opening up the device APIs, there's a general trend towards opening up network interfaces, such as to billing and messaging functions. You are opening yourself up to a whole new base of attackers and it's traditionally an area that the operators and the mobile industry aren't experts in. There needs to be some support from the security community to help and support operators, because the internet world and the mobile industry are clashing together.

FRAN
That's why in the general security area threats are coming via the web, and it's not just about malicious programmers. It's the fact that security is often not included at the requirement and planning stage of application development, yet it's so much more expensive and difficult to put in later. And there are so many apps coming out developers really are under pressure to get them functional and get them out, especially in the consumer space. The new Web2.0 programming languages put a lot more of the logic up at the UI level which makes it much easier for the hacker to get at. This is going to be a big, big problem; it hasn't been to date, but it will be.

THE IP-CONNECTED BASE STATION

KEITH
As well as the spread of internet-based applications on devices, we are seeing the spread of IP to the edge of the network, and into the RAN itself, as operators seek to support that traffic and its growth. Will that have an effect on the security threats to the base stations themselves?

STEVE
I think it does bring some new issues. I think the most extreme example of this is the femtocell in the home that customers can potentially start fiddling around with. And to a large extent the same thing could happen with LTE. It brings two issues to address; first the integrity of the base station, which takes you into areas of secure boot, software protection in the device and trusted computing, as well as testing of devices through penetration testing. And then there's the IP backhaul which needs to be in a secure tunnel that ends securely inside the device and isn't just easily plugged into.

KEITH
And Gijs, as operators overhaul their backhaul networks with Ethernet-based solutions, do they have to be more aware of the security implications of the connected base station?

GIJS
It has become an issue, not only because of IP, but because operators have the opportunity to lease capacity from other companies, such as metro networks, so you are not controlling all the elements in the network anymore. I think the way to counter that is by compartmentalisation, to protect not only the perimeter and then assume if someone has passed the perimeter they have full access, but to make sure you have different layers of security in different parts of the network. So you can have some access protection at the backhaul end, but then again when you go towards the data centre you should implement further protection.

I can also imagine somebody writing a piece of software for a PC that emulates the femtocell and using that to exploit some potential loopholes to carry out theft of service. And with LTE, base stations will also have an Ethernet connection, so you need to protect those physically and logically by not exposing any of the routing protocols to the base station, because if you can tamper with the routing protocols you can potentially bring down the whole network.

WHAT SOLUTIONS ARE REQUIRED?

On the device

DAVID
One of the reasons that the OMTP started the BONDI initiative is that we want to open up these device functions to the users, but we want to make sure the user is secure. What we're going to do is have a policy layer in between the internet and the device so the user themselves can use a policy provider to regulate application access to their device's functionalities. So for example you don't necessarily want every app to see your location, and you might not want to give access to any premium rate numbers for messaging.

So having an adaptive policy layer on handsets, and potentially on the network itself, allows a much richer suite of tools for the operator and manufacturer to protect users.

It deals with privacy, fraud protection and a whole host of other attacks, and any third party could be a provider of policy – it doesn't necessarily have to be the operator.

In the network

KEITH
So that is one approach, the concept of a policy layer for managing security and access. But what can the operators do at a network level to protect themselves if a device is compromised?

STEVE
David said that mobile devices don't only connect through mobile networks, they sync with PCs, through Bluetooth, through WiFi, so it isn't possible for mobile operators to provide 100% protection to every single device. But what we can try to do is limit the damage from a single infected device to prevent the proliferation of malware to lots of devices, or stop a device accessing or damaging the data for lots of other users. The most obvious way that malware can propagate between mobiles at the moment is through MMS. It's therefore natural to put some measure of AV filtering or something similar in the MMS infrastructure to stop that happening.

GIJS
It's possible with appliances in the network to detect dynamically if a device has been compromised, and then change the access policy of that user so that he or she is redirected to a captive portal. So they see a web page saying. ‘We have detected a virus on your device, please download the remedial software'. That is one in way you can protect infected devices from accessing other resources and possibly infecting other devices.

But we are also expecting more and more apps on mobile devices that may not have the power to run locally. So we're now seeing thin client software on mobile, meaning security is not only a device and network issue, it's also a computing security issue. With data server virtualisation, it's no longer enough to have a firewall running in front of your servers, because there can be different applications running on the same server. You need to provide a virtual firewall application running inside the data center.

DAVID
That is the advantage mobile operators have, at least they control the network and can take some measures inside the network to protect the user. And that's partly the reason we've been so successful to date. We need to continue that trend – and being able to identify trends through traffic analysis and things like that will be key to identifying new emerging threats in terms of fraud, or perhaps botnets or P2P abuse.

GIJS
That is one aspect certainly. There are signatures developed by security companies that detect known viruses or malware based on the coding patterns, so as soon as the traffic matches such a signature then they can redirect that traffic or block access altogether. There are other more statistical methods: for example if a company uses a particular mail protocol and the suddenly there is traffic with a different protocol then the network can throw up an exception, and at least alert the administrators.

Security designed-in

KEITH
Steve, when a new service is launched within Vodafone, how is security handled within the process – does Vodafone expect security to be handled as part of your ongoing efforts, or do you get involved at the project design level?

STEVE
There are several stages. First, services will be built on mobile standards that have security built into them inherently. Clearly there will also be an element of constructive security in the application or service design. But then there also needs to be a detection element as well, you can't build total constructive security into applications without making everything a brick. You have to try and strike the right balance, and so we need the detection capabilities to try and catch when something is going wrong early.

KEITH
So do you feel you have the scale and the level of detection technology you need in the network to deal with the increased threats we have identified?

STEVE
It is something that has to evolve, and yes our capabilities are evolving as well: we are always reviewing and adding to that.

WHO PAYS, AND WHEN?

KEITH
So we've seen that operators need to constantly refresh and evolve their technology, will that have a big impact on budgets, and is the cost of that something that operators will just have to put up with, or can it be mitigated?

STEVE
It probably is an increasing cost, yes, but it's not a vastly increasing cost, so it's something that frankly we have to swallow. You could invest as much as you like but you don't get unlimited budget and you have to use your budget wisely, that's obvious.

GIJS
I think the point that both Steve and Fran made earlier is very valid: if you build security into the design of the network from the start it's a lot less costly and a lot quicker than trying bolt on security afterwards. And when I ask operators whether they would delay the launch of a new service if the security hasn't been proven, quite often they say they will go ahead and see what happens, because they haven't seen any outbreaks or intrusion so far. But the risk they are taking is not only loss of revenue but of their credibility and reputation.

FRAN
Especially if that intrusion leads to data being lost that someone is forced to disclose it through regulation. Even if no-one uses that data, the fact that everyone knows the data has been lost can ruin a company's reputation.

DAVID
I think this is an engineer's nightmare – they are always under pressure to keep costs down and not to delay things, but we have to live in the real world. If we wanted to create the most secure system ever it would never get launched. But everything is converging on the mobile device. Suddenly we have to look at banking security, credit card security, pay TV hacking; so all of the attackers are now converging on the mobile device from different communities. It's up to companies to recognise that and invest in their own security departments. Otherwise they're going to lose money.

STEVE
The sensible approach is to allocate a realistic percentage of turnover, and then leave it to the security experts to use that to the best advantage to the company,

GIJS
Another way operators can optimise the use of that budget is to have a central department looking at security, rather than have security as part of individual projects, so you can centralise your resources.

WHO TAKES RESPONSIBILITY?

KEITH
Where does the balance of responsibility for ensuring security lie, between the user, the handset vendor, the applications community and the operator?

FRAN
At the enterprise level this is something that enterprises are looking for the operator to do. If you ask them whose responsibility it is, probably around 60-65% say it should be the operator should takes responsibility. And at a consumer level if someone has a malware problem you might consider it acceptable to put someone into quarantine, but you can't wholesale block someone off, it's got to be the responsibility of the operator to help the user to get their access back as quickly as possible.

STEVE
And I think it's clearly in the interest of the operator to solve that as well. In the mobile industry if the mobile is infected the user gets onto the operator. That's different from the fixed internet model.

DAVID
And this is something that's not necessarily understood by the browser vendors and people in the internet world. The customer has a contractual relationship with the operator and therefore there are obligations and expectations on the operator. We need to help W3C and organisations like that understand that users do need protection. We can't just let them loose on the world and expect them to take responsibility for everything that might happen.

STEVE
If you really want high end security, you need to put something on the device, but from the point of view of the consumers, who don't want to pay extra, and from the point of view of the operators, who don't want to bear the costs of the support calls or any other associated costs, it makes sense to put security in the network to keep the level of infection as low as possible.

IS THERE AN OPPORTUNITY FOR OPERATORS?

KEITH
Fran, you mentioned that enterprises might be willing to pay for security services. So might this be an opportunity for operators, as well as a cost and a contractual responsibility?

FRAN
I'd say there was. There are a number of software types you can put on a phone to protect it. But you may need further things as new threats present themselves. Pushing proper updates out is a service operators can provide, and potentially people will pay for it.

DAVID
So this is potentially where the policy layer could really help. Policy isn't static, whereas access control at the moment is pretty static and binary. The other advantage is you can update something remotely, for example using the OMA DM standard to update devices, or update firmware over the air so vulnerabilities can be dealt with almost immediately.

STEVE
I think the really big enterprise customers will take control and have expectations of the service from the operator to deliver security up to their domain. And at Vodafone I don't think we'd see that as a paid extra. But for smaller companies there's more potential for operators to provide managed communications with security services as a part of that.

KEITH
Everybody, thank you very much.

Watch the video of the debate here  

Mobile Europe takes its annual look back at the stories and features that made the biggest  waves in 2009. How was it for you?

At the start of the year, what did we think 2009 would look like for the mobile industry? It's always interesting to look back and revisit what we thought would happen, and compare that with what actually happened. For one, it looked like a waste of time trying to get mobile operators to invest any capital, but it didn't turn out quite like that.

Continuing a long "over the top" discussion, Nokia launched its mapping strategy.

"Nokia used its Nokia World event in Barcelona to launch its Maps on Ovi and Mail on Ovi services.
Both services extend its service capability within Ovi, and represent Nokia's latest attempt to tie desktop usage to mobile.

The services take the vendor into a head-on fight with Google and other web-based service providers for mapping, navigation and messaging services, as well as extending Nokia's competitiveness with mobile operators keen to do the same.

But there was also word from Nokia that it is looking for operators to support its Nokia Messaging service.The vendor also released details of the N97, its new phone, as well as saying it has completed its acquisition of Symbian."

And we reported that Vodafone was seeing a drop in service revenues, something related, of course, to the increasing challenge from others in the sector. This topic would run an run through the year, as operators sought ways to add value to the flat rate data tariffs that were proving so popular, but unrewarding. And on the other hand, there were cost savings to be made.

"Vodafone's ceo Vittorio Collao has said that its five prong strategy, formed in May 2006, is now no longer suited to current markets. The company has said it is going to cut £1 billion a year from its operating costs, reflecting a re-forecast missing £1 billion in future revenues.

And although the company is betting on future data revenues, there is still a substantial gap to make up to cover the impact of dropping voice revenues.

There is clear evidence of decline almost across the board in Europe in monthly revenues per user. In Germany for the quarter ended December 2006, total (ie contract and prepaid) average monthly mobile revenue per user (ARPU) stood at €20.9, with contract ARPU at €36.7 and prepaid at €7. Now, total ARPU is at €16.8, with contract ARPUs at €32.4 and prepaid at €4.6.

Across Europe, voice minutes have risen from just under 40 billion minutes in the quarter to December 2006, to over 48 billion minutes in the quarter just reported. But voice revenues dropped 5% on an organic basis for the quarter just ended. Overall service revenues declined in Spain, in the UK and in Germany. And rose only 0.9% in Italy."

February and so on to Barcelona, where the industry put on a dark suit and stalked the halls of Barcelona with a serious face. The green agenda pushed aside in place of concerns about financial survival. And operators began the long road back to a coherent content strategy. But the first question was – how many people would turn up to Barcelona. In the event, the number (47,000) was some way down on the GSMA's "same level" predictions, but not disastrously so.

"Certainly, when this article was written, the GSMA was officially stating that it expected visitor numbers to be up at the same level as last year, and that's somewhere around the 55,000 mark. Visitor pre-registrations were up, exhibition space was about the same, all was set for just as big a show as ever.

The GSMA's chief marketing officer Michael O'Hara, says, "We've seen no call down on space at all. Let's see what happens on re-bookings for 2010, but the signs for this year, in hotel bookings and registrations are that we are ahead of last year."

O'Hara says that although the economic crisis may not appear to be affecting people's travel plans for Barcelona this year, it has certainly pervaded the conference programme. Some late footwork sidestepped the original programme and swiftly headed off down the path called "Whooaah…", or rather, as O'Hara puts it, "At our leadership conference on the Monday there will be a key focus on how to sustain growth at times like this." Indeed. As for other areas, O'Hara says the GSMA and operators will be using the opportunity to bend a few regulatory and governmental ears on the 400MHz spectrum due to be freed up as part of the digital switchover. The industry wants 25% of that made available for mobile. "I think you will see a consolidated industry voice on that subject at the event," O'Hara said.The GSMA will also be pushing its line on next generation messaging, having brought the Rich Communications Suite item under its wing. The idea is to push the adoption of the idea of access to content and other services from the contacts book, using messaging as the driver. There will also be a programme on mobile advertising, and specifically on mobile advertising measurement, to drive the process of delivering to the media industry the measurements and analytics it needs to have trust and confidence in mobile advertising."

As for advertising, we held a round table debate to call for concerted industry action on the topic. The result? Only one person (Kieron Matthews) on that round table is still in the job they were in at the time we held the debate. Well that's some change we managed to effect there. It's worth quoting a lengthy passage of the debate to show how slowly this industry can move at times.

What's needed In 2009?
Keith Dyer: So what are your plans for 2009, and what do you require from others in the industry to make it work?

Kieron Matthews: From an industry point of view, what's missing is an appreciation of how big the market is. None of us knows. One of the things we are doing is measuring the size of the market – because seeing that growth pattern, seeing that pot of money grow, will make it more attractive to operators, agencies and advertisers. When they start to see this is a proper medium, we can sell that back into the industry and the quicker it can grow.

Thomas Curwen: One thing that will help accelerate it is offering flat rate broadband for PAYG, that's still a stumbling block. There are a vast group of people out there as yet untouchable. Make it easier for us, give us big statistics like the growth of adspend. Help brands understand what consumers are doing with their mobile. Somebody has to help our clients understand what people do with their mobiles and when they are going to be most receptive to a message. There are fantastic opportunities that we need to help the brands understand.

Kent Ferguson: When it comes down to it there are only two components that truly matter; the consumer and the companies that are paying the bills. Now the consumers are there, this isn't just hype that we are talking about. The mobile internet audience has grown by 36% in the last year. That's significant. The users are there and as long as you engage them properly this thing will grow.

James Macdonald: We will be making announcements that specifically address many of the concerns that have been raised here. There is obviously some huge value to O2, and without being specific we are looking to build on our very successful mobile advertising piece, O2 Active, and make that one of the major market leading sites for mobile advertising. And we will also be looking, in a judicious manner, to work with different channels and different opportunities throughout 2009 in a way that's relevant to our customers.

Andrew Grill: The first thing is, are we talking advertising language or mobile language – because we need to talk the language of the people with the money. It's not about mobile, it's about reach, relevance, all those sorts of things. The ­second thing is, let's get together.We want to give them the one place to help make mobile easy. Make it easy to buy and measure and they will spend more. So for 2009 it's about action, doing things collaboratively, and speaking the language of the industry and also of the consumer.

Into March, when the fallout from Barcelona was fairly severe. Predictions for the NEPs were gloomy- esopecially in Western Europe.

"The global telecommunications equipment market grew by close to 5% in 2008, a rate of growth that involved a shift in the contribution made by handset components and infrastructure hardware, according to IDATE.

"From a geographical standpoint, Asia was the prime source of growth – specifically China and India – which accounts for two-thirds of the increase in sales worldwide, while Western Europe and North America lost six and five points, respectively.

IDATE said that in mature markets, operators are tightening their belts further still to be able to maintain their margins, and are being particularly cautious about their investments. For equipment manufacturers, this means added pressure on sales, especially since the handset market, of which mobiles represent 90%, is also suffering a downturn after three to four years of double-digit growth. IDATE described these markets as having " lifeless services markets – worsened in recent times by the prospect of a looming economic crisis."

Yikes. And yet the operators themselves were in fact forging ahead with services that looked like the over the top services being launched by their rivals. Vodafone was the first to go DRM free on music.
"Vodafone has signed deals with Universal Music Group, Sony Music Entertainment and EMI Music to offer their tracks DRM free across Vodafone markets for both mobile phones and PCs.

The new deals are the first of their kind for a mobile network operator enabling dual delivery of DRM free music to a wide range of mobile phones and PCs with no need to sideload or synchronize.  Customers will be able to play music bought from these three labels via the Vodafone Music store without any limit to the type of device provided they belong to the customer.

In addition, those customers who have already bought tracks or albums from Universal Music, Sony Music or EMI in WMA format (with DRM) will be able to upgrade them to MP3 at no extra charge within the existing download allowance.  DRM free music will be available through a number of Vodafone countries by the summer and will complement Vodafone's current music offerings.
"Music is central to many of our customers' lives," said Pieter Knook, Vodafone Internet Services Director.  "By Vodafone pioneering DRM free on mobile and offering MP3s on PC, they will now have the freedom to download tracks from their favourite artists without any device restrictions allowing them to experience their music however they want it, wherever they are."
 
April and May saw the industry being told that they faced oblivion unless they seriously changed the way they did business (it's not as if they haven't been trying, surely?) But the point was still being made that operators were in a sticky place. Solutions, please, people?

"Operators that refuse to adapt to the "post voice" world face "oblivion", the former Orange CEO and current Chairman of Augere, Sanjiv Ahuja, has warned.

Speaking at the TM Forum's Management World conference in Nice, Ahuja said that operators need to address the opportunities provided by the new way information and entertainment is accessed and distributed. But, he warned, failure to do so would result in several operators becoming either bit pipes, or losing market value altogether.

"We need to plan for post-print media life and work out how to deliver digital content. We are still delivering digital content in a linear way, and we need to be thinking of a different way," he said. "We have to figure out how we are going to monetise this infrastructure to deliver this digital content."

Ahuja said that telcos must reduce cost rapidly, even if that can't be the whole scope of their strategy.
"Cost reduction is an absolute imperative, and I understand that shouldn't be the sole strategic priority, but  companies that don't retool themselves will find themselves going out of business. Several telcos will become dumb pipes and go back to what we have seen before," he added.
Ahuja said telcos need to take the take the real-time information and infrastructure that telcos have, the billing, authentication, location info, and monetise that.

"It's not that telco infrastructure providers don't see that, the challenge is it requires a complete transformation of their business model and that is very hard for successful businesses to go through. No company has truly succeeded in making that transformation of the business model happen," he said.

"What we in telcos have failed to do is take the data and truly turn that into business insight  – and then transformed it into services our customers need and demand. That's where we as an industry are lacking, that's where we as OSS/BSS systems providers have tremendous opportunity," he said.
Keith Willets, Chairman of the TM Forum, said that the two-sided Telco2.0 business model is not a new idea, but that the challenge is in making it happen.

"The hard bit is taking the powerpoint slide and turning it into operational, technical and business reality. A lot of thinking is needed on where you differentiate and where you standardise," he said.

"There are areas where we can look for standardisation, in how content flows around at very low unit cost, in enabling advertising. Because this can't add cost, it has to make money."

Simon Torrance, CEO of the Telco 2.0 initiative, said that the time is ripe for the telco industry to seek investment, as it is seen as a defensive sector during a recession.

But it will require organisational change at all levels, he said, to align with the new business models.
"Often the metrics that drive activity within service providers are not aligned with the new business opportunity you are trying to create," he said."

A sign of the pressures this would place on the vendors came from Nokia Siemens Networks, which decided that it really had to do something about its support for IP services. It looks like a technical piece of the jigsaw puzzle, but it was a pointer to the fact that incumbent providers and operators needed to come to grips with new service and network platforms.

Nokia Siemens Networks has added MPLS and IP domain capability to its NetAct network management system, in a bid to enable operators to support end to end configuration of multi-vendor and multi-layer networks.

A deal with EMC Corporation means that EMC Smarts, an automated IT management solution, is being added as a component to NetAct. 

Juhani Hintikka, Head of Operations and Business Software  Business Unit, Nokia Siemens Networks, told Mobile Europe that operators need a single solution that enables them to configure their networks across all the multiple layers and domains that they operate. EMC's Smarts product adds the IP skills to Nokia's solutions.

Increasing network complexity, allied to a squeeze on revenues and growth in traffic, means that operators are caught in a vice. But by consolidating their network-specific  management and fault management systems into a harmonized network management system, they can reduce annual opex by up to 80%, he claimed, whilst supporting demand for IP services and increased IP network utilisation.

The issue of providing assurance, performance management and network configuration across IP and TDM networks, as well as into the service and application layers, is one that mobile operators are now having to address in earnest, as IP service growth drives the need for investment in core and IP access networks.

NSN's view is that harmonising transport configuration management, is essential to operators' efficiency.

Hintikka said that NSN was well-placed to drive this harmonization as it is "number one" in this OSS space, and has broad experience of managing multi-vendor networks on behalf of its clients.
But others were less convinced.

"Smarts is a good solution, and we respect it," one competitor told us, "but who really views Nokia as vendor-independent. You're only going to buy the whole OSS thing from NSN if you are a major equipment purchaser as well."

The summer was now drawing on, and we saw further evidence in June of the impact the expansion of IP was having in the market.

"Ixia CEO Atul Bhatnagar told Mobile Europe that the company will buy again in the mobile and wireless space to fill gaps in its portfolio.

The company has a bid for wireless test vendor Catapult , a deal that sees Ixia move from its core market as an IP test vendor into the edge of mobile networks.

The reason for this strategy is the fact the operators are set to move to IP networks in an end to end manner, even if some investments in LTE may take a while to materialise. When they do so, they will not be able to manage and monitor services and applications in the existing manner, Ixia argues,
Bhatnagar said that choice of acquisition would be taken once Ixia had "learnt more" about the wireless market, and that "customers will drive this company now".

"We will start working out what the gaps are in our business, and then the next move will be to fill those. This is what you will see from us," he added.Mobile Europe's best guess is that the next step for Ixia would be to move further into the assurance space, particularly as operators compete to differentiate around class of service and service quality.

Ixia bought Catapult because it thought it had the best LTE strategy and development path, and history of investment, of the available wireless test vendors on the market. So any likely target in the future would more than likely need to mirror that focus on IP and 4G networks.

Not only this, but we saw NSN (them again) and Juniper establish a joint venture.

Juniper Networks and Nokia Siemens Networks (NSN) have said that they are forming a joint venture to provide carrier Ethernet products to the market.

The plan is to combine NSN's access products with Juniper's heavy-lifting routers, giving both companies wider coverage of the market. 

Ethernet is increasingly becoming the choice for carrying mobile data and voice traffic back from cell sites to the core. Backhaul investments are currently increasing, one of the few growth areas for the NEPS at the moment in mature markets. The JV, to be based in The Netherlands, will combine Juniper's MX Series Ethernet Services Routers with NSN's A-series Carrier Ethernet Switches. The plan is for the new Carrier Ethernet solution to be sold by both companies with a targeted introduction date is the fourth calendar quarter of 2009s.

Away from the networks,  we saw Sony Ericsson come under serious pressure, and promise more from its future handset range – including a branching out into teh Android OS and staying loyal to Windows Phone at the same time. How were those Xmas Satio sales, guys? Get the returns issues sorted out?

Sony Ericsson said it is aiming to play catch up with, and overtake, Apple and Nokia, with the three handsets it launched yesterday – the Satio (formerly known as the Idou), the Aino and the Yari.
With the phones offering tight integration to content services (BBC iPlayer, YouTube, Facebook) and applications (gaming, TV) the buzz from Sony Ericsson was around the "Communications Entertainment" experience.

Although Sony Ericsson has announced it requires funding and investment, Lennard Hoornik, Sony Ericsson's Corporate Vice President and Head of Marketing, who said that there is "massive confidence" in the company and that the staff working for the vendor have "a twinkle in their eye because they know what's coming".

"Operators are confirming that excitement that we have," he added, claiming that Sony Ericsson is on the march to creating "new experiences" in the industry. One of the issues he highlighted is making content and services more discoverable and easy to use.

What, we wanted to know, do operators make of Sony Ericsson's renewed focus on the services it can offer, up to and including a re-launched App Store that is coming soon? For instance, the Yari will push content to the idle screen, such as new game releases, that consumers can download. Do operators willingly give up that real estate on the handset?

"It's a good question. Two to three years ago specific operators were very much of a mind to be in control of customisation. But if you look at the last 18 months you can see that relaxing on their part. We've been very loyal to operators, and still are," Hoornik said. "Operators are very focussed on increasing the data subscriptions, and on the increased use of more services. A focus on improving the discovery and experience on the handset will speed these things up. So we work with them."

Hoornik admitted that the company is behind Nokia on its services strategy, behind Apple on its user experience focus, and as a smaller company struggles to make itself heard. "We have a lot of respect for Apple in the way that it reshaped the market," he said. "And we haven't done as good a job on our music service as Nokia [with Comes with Music]."

But he is confident that is going to change. He said that the coming app store is really a evolution of the existing content portal Sony Ericsson runs.

"We are confident we offer an easy path to monetisation for developers, and content owners," he said. 
He said the company would have an Android-based device out soon, but couldn't go into any further details. He added that SE is also committed to the Windows Mobile platform."

Into the autumn and the great Nortel collapse and sell off was well under way – despite NSN's continuing failure to get a piece of the action.

"Nortel Networks has defended its plan to sell its CDMA and LTE assets to Ericsson, refuting the suggestion that the deal should be investigated by the Canadian government because Nortel is selling assets funded by Canadian taxpayers.

Following the July announcement that Nortel plans to sell the assets to Ericsson for $1.13 billion, Michael Lazaridis, co-chief executive officer of Research in Motion (RIM), asked the Canadian government to look at the sale, saying the transaction would deprive the country of a vital technology.
"The Nortel transaction as currently structured isn't in Canada's best interest," Lazaridis said."
The deal went ahead of course, followed by further sales of the enterprise, optical and GSM units. And Nortel, for so long one of the great networking companies, was no more.

There was also change at the operator level. Vodafone started the app game rolling with the launch of V360. And Orange was not far behind with its Apps Shop. Vodafone's was the more far-reaching announcement, as it went far beyond a mere app store annoucement, something that many missed at the time. The announcement also gave succour to those in the LiMo camp.

"LiMo will be used as the main platform for operators looking to provide a differentiated user experience from the iPhone and Symbian, Morgan Gillis, executive director of the LiMo Foundation, told Mobile Europe.

Gillis said that Vodafone's adoption of LiMo as the OS for its H1 and M1 Vodafone 360 phones from Samsung is proof that operators will move to the platform as the basis for a user experience that can provide operator and brand differentiation around the handset, and around access to applications and services."

Ad-funded Blyk's model proved confusing for many – as it rolled up its operations into host operators in the UK and Netherlands. Was this a sign that these operators wanted to reach Blyk's demographic, or that Blyk itself was struggling.

Ad-funded MVNO Blyk will cease operating as an MVNO in the UK, and will move its customer base to Orange outright, with the Blyk brand existing with Orange's operational base. The move mirrors Blyk's recent news that it will partner with Vodafone to bring the Blyk brand and media model to consumers and advertisers in the Netherlands.

O2 went a slightly different route, with a group of its executives splitting off to form giffgaff, another MVNO that would take a different approach to the market.

"Former O2 exectives have announced the launch of giffgaff, an MVNO that will target customers  with a SIM only offering that will reward users who contribute most to the network. The aim of Mike Fairman, who has founded giffgaff as an autonomous unit, owned by O2, is to enable O2 to reach a different type of user looking for a different kind of user experience. Launch is scheduled for "before the end of 2009."

And of course we saw major consolidation in the UK?market with Orange and T-Mobile agreeing to pool resources, and form a 50-50 venture. Nokia Siemens and Ericsson announced more cuts, and we seemed, at the end of 2009, to be back where we began. Except, and it's a major exception, LTE is a year closer. And it is now live in Europe. Have a happy 2010.

Will 2010 be the year when operators fight back against Apple, Blackberry and Google, and put  themselves centre stage of the services space? Or will it deliver the final rites to the idea of the operator empire? We asked a cross-section of the industry for its views on what will happen in the industry in 2010. And our survey said…

Key

AC =  Andrew Cassini, VP Sales & Marketing    EMENA, Andrew Solutions
BN =  Bengt Nordstrom, CEO of independent consultancy Northstream
CLa =  Chris Larmour, Chief Marketing Officer, Actix
CL =  Chris Lennartz, Product Manager at Airwide Solutions
CR =  Cato Rasmussen, Head of Solutions Strategy, Martin Dawes Systems
D Ed =  Darryl Edwards, CEO, AIRCOM International
DE =  Dave Evans, CTO, SurfKitchen
DS =  Daphna Steinmetz, Comverse
FS =  Faraz Syed, CEO of DeviceAnywhere
IG =  Ian Goetz, core network solutions director, AIRCOM International
IL =  Ilja Laurs, CEO, GetJar
IS=  Ilan Seidner, Marketing Director, RAD Data Communications
JL =  Jan Linden, GIPS vice president of engineering
MD =  Mat Diss, founder of bemoko
MS =  Mike Short, VP & Head of R&D, Telefónica Europe
MW= Mark Watson, CEO, Volantis
RDP= Roberto Di Pietro, VP, Qualcomm CDMA Technologies

What will be the most pressing challenge for operators in 2010?
"The capacity crunch. Stimulating customer penetration of mobile broadband, large bundles for small prices have been the order of the day. However, for the operators, this means a large network investment in HSPA and ultimately LTE with the Evolved Packet Core." (IG).

"2010 is the year when Ethernet backhaul becomes essential. The elephant in the room is synchronisation – without proper timing calls get dropped and hand-overs are fumbled. Beyond this, expect to start hearing about the ‘intelligence crunch'. It is now clear that LTE deployments will require much smarter backhaul networks to support the new RAN architecture, the need for performance and traffic management and the need to make the packet network truly resilient." (IS)

"The most pressing challenge for mobile operators will be upgrading and optimising radio network infrastructure to cope with a large increase in data traffic whilst maintaining a highly accessible and available voice capacity. The parts of that equation that involve radio access include innovative solutions for cell splitting, radio coverage optimisation and the ever-increasing co-existence of macro, micro and in-building traffic. Innovation of this kind at the network infrastructure level will serve to optimise operating costs for the mobile operators as well as reduce visual and environmental impact." (AC)  

"There is the belief that LTE/EPC will provide a cheaper network for mobile broadband than HSPA due to its ‘flat' IP architecture. It's true that a key focus of network evolution is to dramatically reduce the cost per bit of delivery, but there are some major issues that need addressing before this can happen. Operators now need to understand the business impact and how to apply the new technology, whilst evolving the legacy network to ensure the lowest cost per bit of delivery for their networks. Innovation is required in the physical architectures and vendor solutions to facilitate profitable mobile broadband." (IG)

"Partnering with the right companies to deliver the next phase of Data wave growth, and navigating through some of the sectoral barriers to adoption (for example eHealth)." (MS)

"Put simply, the biggest challenge operators' face in 2010 is to avoid commoditizing themselves as bit pipes. To avoid this, they must open their network APIs to enable innovative value-added services and also focus on delivering a personalised customer experience that not only encourages data and service usage, but also delivers brand loyalty." (DE)

"Mobile VoIP. The pressure to allow VoIP over 3G and adapt to growing demand for bandwidth intensive content and services." (JL)

"We'll see…LTE roadmaps accelerating faster than anyone currently expects; Self-Optimizing Networks (SON) becoming a reality within months, not years; techniques like SON propagating backwards into legacy 2G & 3G networks.

"We'll see…new ways of measuring customer experience and network quality based on geo-location of actual subscriber events; much more accurate understanding of the quality of experience received by the consumer, but still little being done about it; start to see new measures like accessibility and reliability instead of blocked and dropped calls; a move towards marketing and sales directing network quality improvement efforts as they get access to stats they can understand."  (CLa)

"All carriers will still fight hard against becoming a "dumb pipe" although the number of app stores launched will be lower than in 2009 (mainly because of market consolidation here). Various consumer services, from integrated social networks to content distribution will be regularly announced, although the vast majority (90%) of these efforts will fail, so by end of the next year we will see carriers actually controlling mobile content and services much less than today." (IL)

What will we see in the device market?
"Nokia can make two moves. It can either strengthen the brand at the very low end cheap handset market, for developing regions, or secondly, be forced to open up its operating systems much wider and provide better interfaces to cope with flexibility offered by Android, iPhone et al to target the medium & high end phones market." (DS)

"2010 will be the year of Google Android and it will impact almost every handset manufacturer. As a greater proportion of handsets start to run Android, operators will need to carefully evaluate how they differentiate their services on Android to ensure they don't get lost in the inevitable explosion of Android applications and services that will be launched over the next year. Consumers will continue to turn to smart phones for data services in 2010. This trend highlights the importance of operators making data and service usage on mass-market feature phones as accessible and personalised as possible." (DE)   

"A focus on applications and the enablement of 3rd party development. The bar will be raised for great applications. As more application developers build on Android it will put pressure on the iPhone to open up their APIs.

"While Nokia, followed by RIM, will continue to dominate the smartphone market, there will be an explosion of new smartphones on the market from smaller/different players. Both Apple and HTC will continue to grow their market share too. Rumors of a Google phone also signal that the balance of power may be tipping away from carriers and toward device manufacturers and app developers." (JL)

"In 2010 the smartphone market will continue to tier, and mid-range devices will proliferate as operators address the demand for devices that offer an app store experience at a lower price.
"The big new arrival in the mobile space will be the smartbook – a new class of device that combines the user experience of a smartphone with the processing power and performance of a notebook in an ultra-lightweight, ultra-portable form factor. The first smartbooks will launch in the first half of 2010."  (RDP)

"You'll see the first HTML5 browsers. Why is this significant? HTML5 and CSS3, still developing as standards, will allow developers to, in turn, use mark-up instead of programming. That's a more portable approach, it's more efficient from a data transfer and processing point of view, it allows for more capability within browser-based applications (such as offline data storage) and it allows for more a compelling user experience. All of those things are a big deal on the mobile Internet.

"And, by the way, it means that a web application, run in a browser, will, in many cases, be able to do most of the heavy lifting that right now could only be performed in a native application, such as an iPhone app. That's significant when it comes to getting an iPhone experience on other phones. It's even a big deal on the iPhone, since web applications don't have to go through Apple's approval process." (MW)

App Stores or App Bores?
"Very few carriers could create their own reasonably large, successful app stores. However, even those carriers that do launch their own store next year will eventually switch to platform (like android market) app stores or independent cross-platform app stores. This entire process may take a little more than a year – in fact it's likely to take more like three years. In five years I doubt we will still have more than five carrier app stores of any importance. (IL)

"Operators will try. And like Vodafone, they will fail. In 2010, look for over-the-top service providers from the fixed Internet world to not only continue their struggle with mobile operators for ownership of the subscriber, but up the ante by offering competing voice and messaging apps that rival the operator's own." (BN)

"Vodafone has realised that they have the opportunity for innovation – mobile data and revenue growth by working with innovations in the Internet space, which is exactly what Vodafone 360 is about.

"This goes beyond an app store; an app store is already part of Vodafone 360, but this is the first attempt at unleashing the power of the Long Tail, by enhancing external Web applications and services with operator capabilities, like charging, address books, messaging, browsing, location, profile information and more.

"However, it only works on two handsets which need to be Vodafone 360-customized, so it is still too closed and too controlled. More applications need to be enabled and enhanced – and not just web applications – and they should be enabled and enhanced for any phone." (CL)

"Whilst the industry is being dragged along by social networking brands like Facebook and Twitter, we are not taking time to fully understand the implications of building a service versus building a business.

"In rushing to embrace smartphones, operators are further adopting a culture of over-subsidising the likes of the iPhone in the hope of driving up mobile data revenues when voice revenues are flat or falling.  But, this is illusory when the devices are sold with all-you-can-eat data packages, and operators get little or no share of the revenues being made from buying apps and content from independent content store fronts, such as iTunes.

"What I want to see the industry doing is spending more time on thinking through viable revenue models that are fit for purpose.

"The model needs to take account of product cross-subsidy on a per item basis and do so dynamically. Operational processes in billing, charging, provisioning and support need to be thoroughly reviewed and streamlined to give an operator the agility to not just compete with new entrants on the same level, but quickly pre-empt those initiatives." (CR)

"In 2010, operators will focus on delivering and aggregating social networking services as part of a broader push around new and innovative data services. Operators are in the perfect position to deliver application stores, but to be successful they will need to invest in delivering an intuitive, compelling and personalized user experience. If they ignore this opportunity, 2010 could be the year that operators lose the app store race." (DE)

"App Stores will continue to grow, especially as open platforms like Android become more popular. Both RIM and Nokia may make a high profile attempt to obtain more developers on the application side where they both are lagging significantly." (JL)

"Whilst app stores have been the big story of 2009, I suspect this will not be the case in 2010, and any operator looking to invest its money in this way will likely be disappointed.  The route to a more effective and universal mobile experience is still through the mobile web.  The issue is delivering a compelling experience across every phone – not just the 2% of people globally who have an iPhone. Operators who address this issue will find a healthier return on investment than creating yet another app store." (MD)

"There is third way for operators to cope with this reality: work with the external independent app platforms to better tune them to network and devices. Operators need to empower the external app stores with unique value. Operators can help improve services by delivering it with consideration for dynamic network conditions and tariffs, with superb adjustment to the user's device. Operators can perform excellent profiling of users to assist them in finding apps they would enjoy (according to their social circle and other considerations). Operators can also help in over the air configuration, installation and download and recovery." (DS)

Clouds or shrouds?
Outsourcing of some IT and Network infrastructure already occurs and Cloud Computing (CC) will take this onto a higher level!  However, until some clearer CC definitions emerge it is less likely to have a big impact on Mobile in 2010, unless benefits at a wholesale or retail level are made more obvious. Eventually online storage will be more widely shared provided an ecosystem that is usable, trusted and cost effective for customers emerges. (MS)

"The clouds will reign …eventually"  (JL)  

Statistics and lies:
"Growth rates will be in line with GDP, and fastest growth will be in emerging nations with high GDP growth rates. In Europe growth rates will largely depend on the adoption of the datawave and levels of regulatory impact." (MS)

"Though the focus may be on devices, operators will maintain or increase revenues by the sheer increase of smartphone adoption and the associated data plans."  (JL)

"My biggest wish for 2010 is that investment certainty returns for the whole Mobile value chain – clearly economic stability, the role of government and regulators, and actual demand all play a role. But all infrastructure needs longer term planning and resilience , and pragmatic dialogue is the best way to start the new Digital decade. This could be even stronger than the last." (MS)

Which services will drive revenues?
"Operators will not make any significant money on advertising next year. It's worth remembering that Mobile Operators combined global yearly turnover is already in the USD$800 billion range. Google has the bulk of online advertising revenues in the world today, a figure of about USD$30 billion – none of which comes from mobile. We are many years from meaningful mobile advertising revenues and when it happens, Google will have the bulk of it there as well." (BN)

"The uptake of smartphones and the available time-saving applications and features offered on the phones." (JL)

"Operators' revenue growth in 2010 will be directly tied to their ability to drive mobile data and service usage as opportunities for further consolidation or new customer acquisition will be limited.

"To make a meaningful impact on revenues, operators will need to evaluate their data service strategies on both feature and smart phones. In doing so, they need to consider how they will provide a differentiated and personalized service that leverages their unique market position as if they fail, it will be difficult for them to significantly expand revenues in 2010." (DE)

What is the industry not addressing but should be?
"Next year will be about margin retention or improvement. Massive competition is already forcing operators to share networks in order to reduce costs of network operation. Fierce tariff competition compounds the situation. At the moment, there is very little in terms of network centric applications which is exactly why the network operators are frantic to lock in the latest smartphone devices from Apple, RIM Google, Palm and so on. Assured revenue from these data hungry devices will provide the means for operators to maintain their margins." (DE)

"The OS ecosystem is no longer fragmented as much as splintered. This issue of too much choice is unlikely to dissipate any time soon, but I expect OS and application store consolidation to be a clear theme this time next year."  (FS)

"What is becoming apparent is that ordering or managing a service is a huge differentiator when it is easy and seamless across all services. However, a single converged view of a diverse range of services is incredibly difficult to achieve. The development of self-care functionality, which allows a customer to manage their account in their own time, offers a solution that can overlay existing systems and be operational much quicker. In fact, as telcos become increasingly "webcos" putting more customer care handling online looks like the best approach." (CR)

"Sponsored communication will definitely be BIG, as people wont be able to pay for all their communication needs. Operators are still hesitant how to go there (but they are all evaluating this topic!)so it will still not happen this year. But soon!" (DS)

"I would say security. The rate at which security threats are emerging is spectacular and protecting mobile PC-like devices is very different from protecting PCs, given the pervasiveness of SMS and the difficulty to install and manage security software on handsets.

"If we don't address this issue before it starts causing real problems, we will be too late for unleashing the revenue potential of services that require security, like mobile banking, marketing and advertising." (CL)

"Net neutrality, Mobile VoIP and mobile video calling." (JL)