What stories will be hitting your screens and desks across 2008? If we knew that, then we wouldn’t be merely publishing the best wireless industry title in Europe, we’d be rich beyond our wildest dreams. But we can guess at the areas the news will come from, and ask a few of those involved to make their own guesses.

Sometimes the easiest way to look forward is to look back. If we do that with 2007 you can see several themes developing that would give us continuity into 2008.

At a broad strategic level, it appears likely that 2008 will see a real increase in the usage of internet services over mobile. 2007 say operators begin to offer "half open" internet services, with tight integrations done between the major players, the Yahoo!s and Windows Live properties, or YouTube and the major social networking sites. In 2008 we can expect that model to continue, but also to see the walls come down even further, aided by the increasing number of handsets with presence and location capabilities, with search embedded.

Of course, there will still be movement the other way, and expect client-led on device portals to have their say too, together with tight integration at the application level. Also expect to see a de-coupling between the on-device technology and the application, allowing operators to service and update a far higher number of features on the handset.

One further area of high interest to us at Mobile Europe is the impact Nokia's OVI initiative will have on the market. With Vodafone, and Telefonica, and TIM signed up to certain degrees, the question is, will other operators see the benefit of such a closely integrated structure with the dominant handset player in the market. The other question is, will other handset vendors follow tune. It doesn't seem likely that they are in a position to. They don't have the market share that Nokia does, which gives it the ability to strike deals with operators and with the content providers, such as the music publishers for its "comes with mobile" play. Sony Ericsson perhaps comes closest, especially in music where it can leverage Sony's Walkman brand to great effect. It seems likely that the other vendors will be targeted by the client providers for pre-installations of on-device portals and other client-server based applications, giving a more direct experience to online services and applications outside of a click-to-the-browser experience.

Incidentally, another area of content consumption ripe for exploitation in 2008 is the background download – or mobile podcast if you like. This is ideal for mobile because the download can be sent direct to the mobile, without having to be downloaded to a player from a PC. It also lends itself to longer downloads, which operators can't achieve through WAP. As Podcast proponent Monte Silver sayd, "Compare paying 2 Euro to download a one minute clip to paying five Euro a month for subscribing to five daily full-length podcasts as a major multi-national carrier/operator has just launched. Which would you prefer?" Further advantages to operators are that the download takes place at night when networks are emptier, and the handset is likely to be stationary too.
We're also expecting to see a shake out in mobile broadcast TV, as rising revenues in Italy convince many that the wholesale DVB-H model is the way to go ahead. France probably offers the most interesting market, and will also offer Alcatel-Lucent the most likely outlet for its DVB-SH version of the standard. OMA BCAST will continue its development, with smartcard profile really beginning to develop interoperability across the market.

There will also be a major shake out of operators' convergence strategies – either for the better or otherwise. We'll begin to see if this will impact consumer consciousness and really start to eat into fixed minutes and broadband provision in a meaningful way. To achieve this, though, there's a major battle to be fought at the brand and marketing level – get out there and spend, operators, and don't forget the customer service! Prediction for 2008 – some femto, a lot of advertising, not much WiMax, some tinkering with VoWiFi.

It also seems lkely that advertising is going to be a hot area – not least amongst those bidding to convince operators they are there for the operators' benefit, and not for the benefit of the ad service company. This now traditional split in the conent/mobile industry will be fierce in advertising. Yahoo! and Google offer huge market share and eye catching clients, mobile operators can offer brand extension. A handshake, such as bewteen Vodafone UK and Yahoo! and money can be shared around. On the other hand, if operators work with a company to serve their own ads to their clients, they can cut the dreaded internet giants out the loop. Can't they? So, to our prediction for 2008, a fierce war in the advertising market. The fascination with Blyk will die down.

Another service we'll tip for 2008 is banking. As we've seen this year, mobile banking is starting to be the area consumers are trusting – and the mobile lends itself very well to the model. The key here will be access to services from a full range of handsets, not just those loaded with a particular app, or those with certain operators who have certain partnerships with a particular bank. NFC of course will continue its push in payments and. Interestingly, may start to open itself up as an avenue for other applicaitions. According to IMS Research, Transport for London is currently trialling ‘touchpoints' that, when in close proximity to an NFC-enabled mobile phone, transmit local maps, directions and real-time travel advice to the handset.  Value added services such as mobile coupons, identification/ authentication and peer-to-peer connections can also be implemented in this way.

IMS' John Devlin says, "What we envisage will be a multitude of applications all designed to benefit the user, improve their experience of transit, banking and payments solutions. However, it is definitely not a case of one size fits all and consumer adoption will vary widely, affected largely by cultural differences in consumer behaviour but also by the demands and competitive influences of local businesses. Of course, this all depends on the various stakeholders agreeing a suitable business model, and relevant revenue streams, for each particular case."

But there's so much more than these likely hot services, applications and delivery methods likely to make a splash in 2008. Don't just take our word for it, read what our experts have to say on areas as diverse as backhaul to mobile device interface developments.

VoWiFi meets its demise

"With or without Femtocells, the much over-hyped Voice over WiFi will still not gain traction in 2008.
"With ‘Home Zone' pricing and operators taking a decisive lead in Fixed Mobile Convergence (FMC), arbitrage advantages of VoWiFi have already met their demise.  Already, companies no longer talk about potential, promised cost-savings of VoWiFi, but instead seek to achieve vast hardware cost savings by not installing IP desk phones and expensive private voice networks.

"This shift is hardly surprising as (unused) deskphones and private voice networks comprise 80% of the cost of an IP telephony deployment – and  VoWiFi only adds significant hardware costs without even a hint of mobile call cost savings.  Aside from a complete lack of cost-savings prospects for VoWiFi, the technology is not market ready.

"In this age-old war of hardware vendor pitted against service provider, it is the service provider that will win this battle – it is a simple matter of economics, and know how.  Operators will come armed with advanced lower-cost software, QoS, and even femtocells to provide low-cost spot coverage.
2008 is the year of ‘Death of the Deskphone', and of  the ‘Death of the Private Network'.

Marie Wold, President & CFO for OnRelay

2008: the year of personal navigation

It is a strange paradox of the mobile industry that it spends its time teaching consumers that their mobile phone is not really a mobile phone. That's one of the reasons that mobile operators spend millions on advertising and consumer education – while technology has evolved, the imagination and engagement of consumers has lagged behind. Consumers want relevance and immediacy from their mobile. Information and content must be immediate, and above all, useful.

The arrival of device convergence and high-speed networks within the mass-market means that the next year will see mobile applications with the kind of interactivity and depth that hasn't been seen before. Best of all, we will see a dynamic change in the use of mobiles as a seamless navigation device. More than just instructions on how to get from A to B, mobile personal navigation brings together content, location, reach and personalization in an experience that has often been promised, but seldom delivered.

Personal navigation is about searching and sharing information that is directly relevant to the individual based on the context of where, when and even who they are. This moves beyond maps as a static route planner, instead moving the concept of navigation towards real-time personal content. Imagine the advantages of such tailored information about local neighborhoods, foreign cities or even whole countries, with maps, information and points of interest all generated dynamically in real-time.
From an operators perspective, a readily deployable service like personal navigation has the potential to increase ARPU from existing subscribers, as well as the potential to attract new ones. With more operators offering flat-rate data plans coupled with high-end devices, always-on data services like navigation have become a realistic proposition to a broad consumer base. Personal navigation could prove to be the killer application that brings together the technologies that have so far existed in isolation; personal navigation is about the advantages of convergence.

We have already witnessed the beginnings of an evolution in personal navigation with the launch of the GPS enabled Nokia N95, Samsung P550i and BlackBerry 8800 and 8310 handsets. Next year 10-15% of new mobile devices launched in Europe will be GPS enabled, 15-20% worldwide, and over 50% within 5 years. With worldwide sales of mobile phones set to hit the billion mark in 2008 that means almost a quarter of a billion phones worldwide with GPS by 2008.

In October this year, Morgan Stanley forecast the market for mobile navigation will be worth more than €150 billion by 2015. Unrealistic? Perhaps when compared to other mobile-centric applications like gaming, music and video, but personal navigation is something which is much more than the sum of its parts, offering something that could not have existed before now. The technology is here; consumers are ready. The stage is set for 2008 to be the first year in the history of personal mobile navigation.

Oren Nissim, CEO of Telmap

Five top mobile trends for 2008

1) Open Source Mobile Applications – As the development of applications for Google's highly anticipated Android platform becomes a topic of discussion, several open platform devices will rise to the surface, fostering new innovations in mobile application development, however we will not see any devices until the end of 2008.  Most large carriers and applications developers will take a "wait and see" attitude. Introducing yet another mobile operating system into an already fragmented market will take years, and the thorough testing of a platform with 30+ parties will be a significant hurdle. 
2) Femtocells – Femtocells are a cost-efficient method for providing improved mobile phone coverage at home, small businesses and enterprises. In 2008 we will see the first roll-outs of femtocells by large wireless and wireless/converged operators. We expect a variety of business models, such as enterprises receiving subsidised femtocells with new service contracts and direct sales of femtocells to consumers. Along with the challenge of creating small form factor base stations, there remain technical obstacles of operational and billing support systems, and the network management of femtocells
3) WiFi Ubiquity – 2008 will witness the break-out of WiFi. It will no longer be restricted to PC usage. We will see wide-spread WiFi integration with consumer electronics, such as digital picture frames, automotive infotainment (download of music, podcasts, latest navigation maps and traffic information), cameras and music players.
4) IMS – IP Multimedia Subsystem (IMS) will enable futuristic applications, such as still photos to the set-top box, video home surveillance for mobile phones and location-based technologies that combine a fixed and mobile presence. The biggest challenge for IMS is integration and interoperability with existing networks. In 2008 we will see the introduction of Voice Call Continuity architectures, developed to support existing handsets and new VCC-client based handsets.
5) Complexity – The advent of WiMAX, femtocells, fixed mobile convergence, open source mobile devices, all indicate that life for mobile network operators, equipment manufacturers and device manufacturers will continue to get more complicated. However, in 2008 consumers will seek the brands that make this complex experience simple.

Sanjay Dhawan, President & Chief Operating Officer, Aricent

Four key issues for the year ahead

1. IP comes to mobile
As data traffic continues to increase, and operators increasingly promote data tariffs, 2008 will see mobile operators beginning to optimise their networks for data. Carrier-class Ethernet will become more prominent in backhaul networks – particularly with microwave backhaul. The coming twelve months will see the mass launch of IP-enabled basestations following their trial throughout 2007.  2008 will see operators use these basestations to add capacity and scale up their networks – notably using the features of IP to route information between nodes to make best use of the available backhaul links. This advancement is leading the move to wireless carrier Ethernet, supported by the work of the Metro Ethernet Forum (MEF). The forum recognises that Ethernet is not just for fixed networks, but also for wireless communication. Harris Stratex Networks' Eclipse carrier Ethernet wireless transport platform was the first wireless product to receive certification from the Metro Ethernet Forum (MEF).

2. Machine-to-machine communications
Where 2007 saw a growth in data services for people, 2008 will see massive growth in data services for machines.  Machine-to-machine communication over cheaper wireless broadband services will see remote devices deployed in places and applications that would have been impossible before – such as providing remote video surveillance of large areas like borders.

3. WiMAX – is it the future?
There continues to be a lot of activity in the area of WiMAX, namely the first consumer based WiMAX handheld devices going on sale early next year. If companies like Nokia have read the market correctly, is the infrastructure in place currently to support mass consumer demand?
The reality is that the future of mobile telecommunication will not just consist of one single technology, such as UMTS – it will be a big mesh of UMTS, WiMAX and home WiFi. Users will experience a seamless mobility through a combination of all these networks.
In the past there has not been a great deal of technological progress in terms of integrating these different technologies. 2007 has seen the launch of many new pre-WiMAX and WiMAX networks – something that will continue into 2008. Complete integration of these technologies is not likely to happen for some years, so consumers may have to wait to fully benefit from all WiMAX has to offer.

4. Solving 3G bottlenecks
One of the key issues to mobile operators in 2007 has been provisioning of high bandwidth services to customers. Widespread deployment of technologies that will allow operators to get higher capacity through their networks, such as adaptive modulation for microwave, will help solve the backhaul bottlenecks in 3G networks.The emergence of adaptive modulation will give mobile operators the ability to dynamically adapt the speed of a link to improve customer mobile broadband speeds and also launch new bandwidth intensive services.
 
David Bonner, product-marketing manager, Harris Stratex Networks.

Phed up with the iPhone? Over Ovi? Furious about femto cells? Keith Dyer takes a look back at 2007 as seen by Mobile Europe and its contributors.

DEVICES AND DEVICE SOFTWARE
An apple a day…
What to say about the iPhone? Locked or unlocked, blocked or unblocked, EDGE or not, its impact was quite remarkable, taking the mobile industry into the main TV and daily news programmes in a way no other mobile story has done. It's worth asking, why? Well, there's always a circular motion to the hype in such stories, and this one became a virtuous media circle for Apple – the more the media hyped, the more the launch became an event, the more the queues grew, the more the media could report on the launch becoming an event, drawing more people in. Certainly the distribution strategy helped, creating the sense that this was a limited release of rare gems on to the market, rather than some smart, yet mass-produced, consumer electronics. And, most simply, it looks great, there's no argument with that. It's the sort of phone that people see and want – think the Nokia 8810  back in 1998 (no, really) and treble the impact, at least. Owning one said a little about how people wanted to be seen by their friends and colleagues (cool, technically literate but not geeky, non-corporate, an individual). Of course, the industry readership of this piece will scoff and say it was all about the apps, the functionality, the UI and the UE. But the iPhone was a piece of marketing genius in which the brand got fat feeding on a status obsessed culture. It may have been geek fashion, but it was high fashion all the same and fashion, as everyone knows, doesn't make any sense. 

Top Quotes:
Jerome Buvat, Global Head of Research for Capgemini Telecom, Media & Entertainment,
"By entering the mobile phone market, Apple hopes to thwart increasing competitive pressure from 'converged' handsets such as the Nokia N-Series and the Sony Ericsson Walkman phones. Improvements in storage capacity are allowing handset vendors to compete with MP3 players for capacity. MP3 handsets, like the Sony Ericsson W950i, can store up to 4,000 songs – as much as standard iPod minis."

"As IMS Research predicted, the high price tag and single carrier did prove to be an obstacle for some consumers," explained IMS Research Analyst Bill Morelli. "The launch was still a significant success for a new entrant to the handset space. The key issue for Apple is to build on the initial launch numbers. With plans to launch in select countries in Europe and Asia in 2008, the stated goal of ten million units by the end of 4Q08 should be an achievable goal."

Android's OS space odyssey
Just another Linux OS, or a true open OS capable of creating a new class of device in the market? That was the main question around Google's "It's not a phone" Google Phone.
There were two elements to this announcement, of course. The first was the development of Android itself, the Linux based OS that has been developed within Google on the platform developed by Android. The second is the Open Handset Alliance, a grouping of some 30+ software and hardware players invited to innovate devices and applications on the platform. The third element is Google's recent bid for spectrum in the US. It's a level of vertical integration that has some scratching their heads a little. 

Top Quotes:
"The key difference, is that Android is developed to be an open platform, and that applications from one device can be sent or exchanged without issues of interoperability, and that is not the case with several Linux devices today." Florian Seiche, vp HTC Europe.
"Google is up against it in this market. It has had little traction with mobile services and next to no traction with US carriers. It might be why they've applied for an operator license – because they've got nowhere up to now."

SERVICES
Messaging in an instant
Two main themes here. First – it's all been about IM, the delivery of it and the creation of a workable business model for mobile operators. Second, there was the shake up of the traditional SMS vendors, with LogicaCMG's messaging business being taken private by Acision. Back in February we interviewed Neustar's senior management in our lead interview slot, and really that set the agenda for much of the year in messaging. Operators can gateway to existing web communities, but can they, and indeed should they, make the leap to developing their own mobile IM communities? Immediately after that, Telefonica, T-Mobile, Vodafone and others all made IM announcements. Usually these were agreements with one or more of Yahoo! Microsoft and AOL, but occasionally we got a glimpse of what SMS+ services would look like if operators took the lead distinct from the internet service providers. The two approaches look set to continue, with the added attraction of using the presence capability of IM clients to allow users to manage their social networking profiles from their mobiles. As 2007 turns into 2008, MIM looks to be about far more than MIM.

Top Quotes:
Jeff Ganek, Neustar; "There's a huge end user demand for mobile instant messaging (MIM), and this is in our view the largest, most material, new revenue opportunity that the mobile network operators have. And that is reflected in a fundamental change in the way end users want to use their handsets. Mobile Network Operators (MNOs) are acting now to capture this opportunity and respond to market demand. Things are happening now in the networks and within marketing programmes to change the offering operators put before the end user."

Paul Harvey, partner at Atlantic Bridge Ventures, said that the Acision deal represented "the return of the empire".."It's not just Larry Quinn, it's Gilbert Little, Jo Cunningham, the founders of the SMS industry whose Aldiscon platform formed the messaging platform for CMG. These guys are so passionate about messaging and getting more people to use and send messages I am so pleased to be owning this asset, we can do a lot with it and free up the business. Not that Logica managed it poorly, they just didn't have the resources."

"Both Operator-owned and Internet-based Mobile Instant Messaging services have a crucial role to play in driving consumer adoption of MIM. These two models will grow side by side." Lars Kristian Roland, CTO Colibria,

TV
Italy scorched a path, with H3G obviously in the lead, but Vodafone and TIM both joining in the DVB-H path. France is due to make the big calls next year. The UK, such an active trial market for FLO and DMB, now looks sluggish given spectrum difficulties and the endorsement at EU level of DVB-H. And is there even such a demand for mobile broadcast among the broadcasters? Well, yes there
is. SKY TV have had great success with 3G streaming with Vodafone, but not all relationships will be, or have been, so happy. The question for mobile operators is, how will they best remain in the distribution loop for mobile TV, so they are not, as the industry expression has it, disintermediated?
 
Top Quotes:
"While we continue to support open standards and interoperability, we believe that the pace of technological development precludes the adoption of any one standard for mobile broadcasting at this stage." Fritz Pleitgen, President of the EBU, said

"Let me be very clear: I know that competition among different standards can, for some time, be a good way to let the market identify the best solution. But, we have been waiting for too long. The opportunities are slipping away. It is time to break the deadlock". Viviane Reding, Member of the European Commission responsible for Information Society and Media,

"Expectations for the commercial uptake of full-length broadcast TV on mobiles as subscription services are over-optimistic and the demise of Virgin's mobile TV service reflects that. Most mobile TV viewing is for just a few minutes. To be commercially successful, you have to provide a combination of live news, sports updates and video-on-demand made-for-mobile content which is instantly engaging. Simply broadcasting linear TV to mobiles is not the answer." Bruce Renny, ROK TV.

MUSIC
The iPhone and Apple aside, and perhaps because of the iPhone and Apple, 2007 was definitely the year in which music services reached mass public consciousness, and it was also the year in which operators began to look at models other than per-event full track downloads. Telenor and Vodafone signed up to Omnifone's subscription based music station. Nokia waited until December to put its LoudEye acquisition to work and announce, following its OVI launch, its "Comes with Music" strategy – a device plus record industry tie-up. At root, the reconrd companies need their share and consumers will pay for their music, even it appears free – there's the hidden price of the device. Yet there were also accusations that operators are still very poor at making the most of their existing music assets – the long tail, for instance, remains very short in most instances. Then there were the work-around solutions that all but cut the operator out of the deal altogether. The side-loaders and "direct from your PC" streamers.

Top Quotes
"The launch of the MusicStation service marks a fundamental change to the way people experience music on their phones". Tim Yates, CMO, Vodafone UK

"Whilst manufacturer solutions have a place in the market, there can be no doubt most carriers believe a first class music experience is a key strategic asset in ensuring long term customer loyalty and network differentiation." Rob Lewis, Omnifone

"Most handsets have limited storage capacities, which is a restraining factor for mobile music adoption. phling! addresses this issue by allowing customers to listen to their music by wirelessly streaming these files to their handsets," says Julien Blin, research analyst in IDC's Wireless and Mobile Communications program.

LOCATION
Nokia buys Navteq for an eye-watering amount and suddenly location leaps up the list of services everyone is tipping for grand success. Mobile Europe readers will know, though, that location has been bubbling away all year. Nokia itself gave a hint back in February when it made its smart2go mapping and navigation platform free to download o certain devices. Tom Tom and Vodafone got together to work on delivery of a joint location and navigation service – due to go live in early 2008.

Wayfinder signed up Blackberry, and also "a large handset vcndor" in a deal worth nearly SEK20 million. True Position continued to bang the drum, commissioning reports to show there was demand for LBS. Jentro's Hans Henrik-Puvogel launched his company's vision of a client-server solution, that feeds web information into the navigation and mapping tool. And operators began to work on integrating local search with location information – delivering contextual results based on user profiles plus location. The last issue is perhaps the most important, as operators began to realise that in future, rather than  only selling network access to consumers, they will be increasingly reliant on selling network information to third parties. And what is one of the crucial pieces of network information they hold? Location.

Top Quotes:
"Nokia believes location context is the most essential feature of mobile devices going forward, Spend on these [navigation devices] has bypassed the mobile operators and the mobile handset makers entirely,"" Michael Halbherr, director of Location Based Experiences.

"Brands are extending their presence beyond the Internet to deliver an enhanced experience via the mobile Web," Eaton observes. "Location takes this experience to another level." Mike Eaton, Vodafone UK head of content.

"Online navigation on a mobile phone will be a much richer experience. Local search is not just about a local mapping database, but about integrating the content available on the web with the navigation experience," Hans-Henrik Puvogel.

"We think there is more to this acquisition than meets the eye. Nokia's vision for the services is very ambitious and today it does not have all the technology pieces it needs to realise that. But did it have to buy Navteq to achieve this?

VoIP
Little annoys some mobile operators more than the thought that users will be able to use their mobile phones to get onto an IP network over WiFi, and start making calls out over IP, bypassing the clutches of the mobile operator's billing system. The fact that up to no, the user experience of VoIP clients on the handset has been a bit clumsy, and WiFi operators have really yet to get their acts together to offer any sort of uniform experience, has meant that in fact revenue loss to such services has been small. But wait, this year saw a load more dual mode handsets on the market, and even the analysts began to produce their reports saying that dual mode handsets were set to be a massive growth area. Also, the VoIP clients got a bit more elegant. T-Mobile was forced to court by Truphone, a company incensed by the termination fees it was being charged  by the mobile operator, and lost the first round in court. Yet instead of pure defence, as might be expected, mobile operators started to be turned on to the possibilities of VoIP – to make it work for them. Of course, 2006 had already seen operators start their march towards FMC and FMS solutions, with the Orange Uniq service and acquisitions of ISPs by all the other major mobile only operators. 2007 saw that policy do little more than consolidate. But late 2007 saw further moves to cellular VoIP from 3, ever the disruptive influence, as it announced the Skype phone tie-up, and actually offered free calls to users. Not that this met with universal approval with even other VoIP providers – who decried the device- and provider-specific approach of the operator. Even so, consumer mobile VoIP continued to rise up the agenda, and right at the end of the year Nokia launched a SIM based USB VoIP device.

Top Quotes
"You need to buy a Skype phone, which is based on the irrelevant BREW operating system. It's hardware based, with one operator in eight countires and you need to be a customer of that network." Vyke's Aaron Powers doesn't hole back on 3's deal with Skype.

"3G networks are increasingly capable of supporting VoIP, both for traditional mobile operators and independent internet-based VoIP challengers. Rather than competing head on, partnership models have the potential to create win-win propositions." Dean Bubley, Disruptive Analysis.

"The injunction is good news not only for Truphone but for every company trying to develop internet-era services and for every consumer wanting freedom of choice and lower prices. We are determined to bring better-value mobile calls, text messages and other innovative services to mobile phone users, and it's right that we should not be prevented from doing so.
"To be granted interim relief means we successfully demonstrated that we have an arguable case to make at a full trial. We didn't want to go to court but we had no choice: T-Mobile was effectively preventing the launch of the Truphone service so we had to take urgent action." James Tagg, Truphone's chief executive officer.

NETWORKS

RADIO
4G, that catch all term for LTE, mobile WiMAX and whatever the CDMA grouping is calling its progression path these days (Really Ultra Wide Broadband More Than 3GPP Can Offer Anyway) was on the agenda, as the industry really started to work up to getting the specification done (LTE) or actually start with the implementation (WiMax). This meant that, for the 3GPP progression particular, it is the test and measurement companies that are having their say at the moment. Wider bandwidths, faster transmission speeds and multiple protocols means developers face an increasingly heavy testing load. The test companies showed their first LTE equipment at 3GSM (as it was still called) and were predicting the need to move fast to meet demand from operators and OEMs. OBSAI incorporated LTE into its specifications in July, and then in December Verizon and Vodafone announced a coordinated trial plan for LTE that begins in 2008. Trial suppliers include Alcatel-Lucent, Ericsson, Motorola, Nokia-Siemens, and Nortel.

Top Quotes
"The industry is faced with developing physical layer test products for networks and devices for technology that is very different from the current WCDMA and GSM environments. LTE takes mobile operators from a WCDMA environment into an air interface based on OFDMA and MIMO antenna technology." Mobile Europe.

"OFDMA as a basic technology is understood but in a mobile network it's a very complicated algorithm to the handset and base station. MIMO is literally just coming out of the research environment. It's now about understanding how it will work in the real world, in the street and with real interfaces. So new algorithms will be the big challenge." Jonathan Borrill, Anritsu.

" With a host of new devices and applications, and a particular focus on embedded wireless in virtually every piece of electronics you buy in any store, we believe LTE is the best technology with global scale to deliver on the promise." Richard Lynch, executive vice president and cto, Verizon Communications.

BACKHAUL
The number one issue facing operators from a cost perspective? Everyone says so and in 2007 backhaul became a true battlefield for the multi-service switch vendors. Whether vendors offered translation from one protocol to another, or offered multi protocol support natively, the race was on to offer operators flexible and efficient backhaul solutions that meant that there was a solution other than flinging bandwidth at their access networks. Tellabs, Telrad, Celtro, RAD Data Communications, and a range of others all spied the opportunity. Ovum, not normally the most aggressive of analysts, even reckoned 3G traffic would drive the backhaul market to grow at an annual rate of over 40% over the next five years. There was also a boost for microwave, and need for increased ease of management of microwave transmission networks.

Top Quotes:
"Backhaul has today become the new, "weakest link" in provider networks," Shahar Gorodiesky, Celtro.

"Mobile operators today are challenged to grow backhaul capacity quickly, flexibly, and economically, to support rapid growth in bandwidth-intensive mobile data services," John Lively, Vice President, Ovum RHK.

"Backhaul typically accounts for up to 30% of mobile operators' OPEX today and with traffic set to rise exponentially as new, bandwidth hungry technologies, such as HSPA, are introduced, mobile service providers are desperate for innovative solutions that will lower costs." Asaf Wachtel, Product Line Manager at RAD Data Communications.

FEMTO
Every year gets its hot technology – and this year it was femto as pundits started to realise that a combination of getting DSL to do your backhaul for you (see above) plus a presence right into the home, could increase revenues and decease costs at the same time. So work was on to get production of the femto access units down to a manageable price. Ip.access ipressed with its cell, based on chips from PicoChip. Network vendors such as Nokia and Sonus saw the market for gateway and core network aggregation and service control. Femto became a real "eco system". All we're waiting for is operators to decide fully on the business model – how far to subsidise, how to manage the tariffs, and it seems likely there will be a major femto rollout very soon. Notes of caution were sounded, however. How will these network elements be managed and controlled within an operator's larger networks? How will they be integrated into a Pre-IMS and IMS architecture, once they are out in the field?â?¨But the discussion also highlighted something more fundamental in the industry:  that the pure play mobile operator may be staring down a long, narrowing, tunnel. One of the reasons there was so much noise about femto is that it offers operators a chance to avoid being cut out of broadband and digital home revenues. And as we move into 2008, that will continue to be a key issue.

Top Quotes:
"Voice over WiFI rollouts have already taken place and there are lots of hotspots. But it doesn't promote data usage on cellular networks and there are issues around possible interference on the
unlicensed brand. A homezone tariff gives away margin, and with a femto cell that doesn't happen, because although you may have femto zone pricing, your cost of delivery per minute is much reduced as well. The pros for femtocell are that only a cellular license holder can do it, and it promotes data usage in the home. It gives operators a physical footprint in the home and something to build their brand from." Stuart Carlaw, ABI Research

"There's major marketing and commercial issues. I'm concerned operators will use the price angle. If you see the applications you can run on it, like presence, and local storage and synchronisation of devices, that's the compelling value add. We need to focus on that rather than just cheaper and cheaper minutes." Phil Kendall, Strategy Analytics.

Whichever business model mobile operators choose to follow to ensure that they remain key players in the mobile TV value chain – the protection of the content they serve to their users will be key. Keith Dyer hears from Jean-Luc Jezouin, Senior Vice President, Mobile Business, Nagravision – Kudelski Group, on how operators can manage mobile TV subscribers and content partners to their mutual benefit.

MOBILE EUROPE: Perhaps it might be a good starting point to ask what benefits mobile broadcast TV offers to mobile operators. After all, with broadband mobile networks such as HSPA now widespread, operators are already seeing success with streaming 3G – why the need for broadcast?

JEAN-LUC JEZOUIN: As your readers may know, I have 15 previous years working in the UMTS and HSPA field around the world, with Nortel and latterly with Alcatel-Lucent. And, yes, there are about 12-15 million mobile broadcast TV users in the world and 30-35 million 3G streaming mobile users in the world. So why the need for broadcast? The truth is they are complementary. If you only use 3G mobile for TV then fairly soon you have to start dedicating radio carriers to cope with the extra traffic. To install another carrier is simple operationally, but it's a high value solution in terms of the resources required, from  engineering, to the radio power amplifiers and channel cards required. Second, it places a great demand on bringing transmission lines from the core RNC to the base station. And this backhaul opex cost is today the number one focus of attention of mobile operators. That's why broadcast technology is good for network operators faced with rising transmission costs. And you know, in recent meetings I have had with Vodafone, Orange and China Mobile, the number one focus they all expressed at the moment is the threat of spiraling transmission costs.

ME: So broadcast may help affray those backhaul and radio network costs, but is it not itself a fairly expensive solution to roll out nationally, for mobile operators?

J-L J: The cost of a mobile broadcast network to cover a large European country like Germany, France or Italy, will range from €3-15 million Euros per year per TV channel, depending on population served and coverage quality, from outdoor to deep-indoor. That's a lower number than many people expect. The reason is, if you start with the high points in a country, like an Eiffel Tower, you can broadcast to thousands of square kilometers from one point. There are perhaps 30-50 such points in a country, so it will not cost a fortune to achieve wide coverage. Most of these towers/ points are already equipped with DDT capability and could be used for DVB. Then you can add in the medium high points like 50-story buildings, and today  from those points you can get good coverage in-building – certainly better than just into the front room of a building. So that's good enough to get started and if you need to get very deep inside buildings then you can think of other cellular or femto/access point types of coverage. People tend to think you need a combination of cellular type coverage with the Eiffel Tower – but there's no need for that to get started.

ME: Even so, €15 million per channel requires a considerable return on investment. With many people used to free access to some broadcast services, do you think operators can sustain a "free to air" model for mobile TV?

J-L J: Experience from the fixed TV world suggests that if advertising alone were to finance such costs, the average user would have to watch TV on his mobile for over one hour per day, which is unrealistic. But the truth is, people are used to paying for broadcast TV, whether it is a few dollars subscription or by buying a piece of equipment, such as a set top box, which contains a fee invisible to the consumer. The latter is what typically happens in the fixed Digital TV world. Contrary to a popular belief, Korea exactly illustrates this point for Mobile TV. Even though seven million Korean consumers regularly watch mobile TV, none of the six terrestrial, and one satellite, operators is yet making money. As they need to expand their networks to increase delivery quality, they are starting to collect a fee per handset sold to fund such expansion. Additionally, what's happening today in some countries is that governments give the market confidence – and that is good for business. In Japan and Korea, say, the government thinks, "Mobile TV is good for the country's economic development" so operators say, "We are going ahead, will try to make it work, and then after deployment make the money."

In Europe, with perhaps USA in the middle ground between the two, operators are more business case aware, and there's a mindset which adds up the pros and cons, usually with fairly conservative assumptions, and then they hesitate to get started.

ME: So one way or another, operators need to extract payment, what do you think the most likely sources of revenue are, and how can operators protect them?

J-L J: Market research and real life experience consistently show that consumers will pay a moderate fee to watch TV on a mobile device – in different ways. In the first model, the fee can be collected from each mobile broadcast device sold, as we have discussed already; this one-time service access fee is invisible to the consumer and is used to fund the deployment of the network. This model can be used to deliver "free" channels without subscription. Alternatively, the fee can be a periodic subscription paid by the consumer, which is the most common pattern of pay-TV. Finally, the fee can be linked to individual purchasing decisions, such as pay-per-view, pay-per-time, etc. Of course all three methods can be combined to offer flexible business models permitting both free channels and pay channels to coexist and optimise operators' revenue.

The key to all this, even in the "free to air" model, is to ensure that the service access fee is collected, encryption of the video stream should be enforced, because even "free to air" doesn't really mean free.

For pay TV operators up to now, this has been critical. Protection just means the effective monetisation of the services provided. Yet in Pay TV, of course, the number one income flow is what customers will pay. In mobile TV, mobile operators' number one income is voice revenue, then comes data revenue. For them, pay TV can be an anti-churn measure, or even a customer acquisition tool. For example in Italy, because Hutchinson 3G has a very good DVB-H network then they attracted premium subscribers from other operators. The crucial thing for mobile operators is to realise that content protection is just as vital to their business cases as it is to the fixed TV providers.
And Nagravision can offer a view of both worlds because it plays between two worlds. At Nagravision we have people from the broadcast and mobile industries who can cover both sides of the coin, spending time evangelising. It gives us a good idea of the sort of products required for operators to make money. It's given us a 95-98% DVB-H market share worldwide in the Service Protection area, which in turn has given us real good life experience of network operator requirements.

ME: And what role do you think the nature of the content can play in boosting the mobile TV business case?

J-L J: The good news is that consumers have been trained for years to pay a premium for thematic channels, such as sports, news, or entertainment, and also for mobile communications, so there is little doubt that they will pay for Mobile TV, as long as attractive content and pricing are offered with simplicity and good usability. A prerequisite is the emergence of a media industry making content specifically designed for mobile consumption, ie short episodes measured in minutes, repetitive, likely several times per day, and interactive so that users can modify the course of the stories.
Even if someone has a broadcast-only device, their mobile handset will still be the natural place for them to interact, through SMS for example. So what is required is the ability to feedback through a nice GUI, or even through podcasting from your fixed internet connection at home or in the office. So you need that user experience with the right information protection, so that the user is serially protected too. That's why service protection is not just about securing the content.

ME: So service protection becomes a critical tool for mobile operators?

J-L J: Yes, the secure element in the mobile device is invisible to most people but is indispensable to guarantee the generation of value by this new industry. This can be a special variant of a SIM or a micro-SD card. Distributors, be they broadcasters or mobile operators, will be empowered in the value chain, if, and only if, they control a secure card in each mobile TV device. A software based approach is just not enough.

If the terminal has a built-in security mechanism provided by its manufacturer, for example by software, then distributors can (and will!) just be removed from the value chain, since an external server can simply introduce entitlements into the terminal without their approval. Therefore a device-independent secure card is required in all devices to ensure that distributors are the ones who control the entitlements given to users and stay with a dominant role in the value chain.

At Nagravision, we work with SIM card vendors to integrate our security software on the secure chip of the SIM, implementing either the DVB OSF standard or the OMA BCAST Smart Card Profile specification. We have also developed a micro-SD card, targeted at "non-mobile-phone" devices, such as pocket TV, PMP, GPS. The micro-SD format includes a secure computing chipset, as the SIM card does, plus additional memory in the order of several Gigabytes. This micro-SD form factor is very important, since markets which have launched mass Mobile TV teach us that Pocket TV's represent nearly half of all devices sold, the other half being mobile phones equipped with a tuner.

ME: With so much horse power in each device, you can surely do more than just decrypt the video streams, can't you?

J-L J: Absolutely. The micro-SD format can really turn a mobile device into a very powerful "set-top-box in your pocket". And then all the great innovations which have made the success of the pay-TV industry can be applied to mobile TV.

I can list many capabilities such as PVR; push-VOD, which optimises network bandwidth by pushing content outside of peak hours; usage monitoring, which provides user-by-user viewing information, which programme was watched at what time; datacasting, to deliver information truly in mass and real-time: stock, news, weather, government messages, and so on.

The secure micro-SD card can also be a micro-DVD to deliver encrypted premium content, giving a lot of value to the consumer. And it can include a complete environment personalised with the distributor's look and feel in order to capitalise on, and greatly enhance, its brand.

ME: So how developed are these technologies, and what do you see as being the big issues the industry will address in the first half of 2008?

J-L J: The first shipment of commercial micro-SD cards will be made before the end of 2007 to one of our customers in Asia, and we continue to lead the race with OMA BCAST smart card profile, as witnessed with our full  Interoperability Tests campaign at the November 2007 OMA test fest against real SIM cards and terminals of our partners Gemalto and LG for instance. And we also participate fully in the STIMI ecosystem in China, MediaFLO with Qualcomm, and DVB-SH with Alcatel, the satellite-based evolution of DVB-H, which I believe will have a great role to ensure complete coverage.
As we move into 2008, I think we will see mobile network operators and regulators come together and find proper business models for this industry. Germany is moving slowly but a process is agreed in France. Italy clearly did this two years ago, but this will be the big thing in other markets in the first half of 2008. Regulators are keen for services to be available for the Football Euro 2008 and the Beijing 2008 Olympic Games. Even the UK has started to move, although it remains the only major country in Europe where frequency allocation is an issue in the short term.

We'll also be monitoring what's happening in Spain – where we are waiting to see the direction the newly-elected government will take in March/ April.

We're also very active in promoting OMA BCAST to become the choice of service provider standard for 3G MBMS. We believe that at the end of the day users must have their TV rights follow them on any of their devices, be it a 3G HSDPA or MBMS phone, a DVB-H broadcast mobile device, and even on their PCs and TV at home.

We know we're ideally positioned to educate and support the industry as all these choices are made across the world.