Mobile Europe:
Andy, it’s been a year since we last spoke at this length. In that time data usage of 3G networks has really begun to take off, and there are now a host of live commercial HSDPA networks. Mobile internet use, as well as increased music and video downloads and streaming are finally giving mobile operators a nice problem. They anticipate a bandwidth bottleneck on the backhaul, and are planning right now how to get around that. What’s your view on that market trend?

Andy Singer:
It’s true that growing usage of HSPA and WCDMA networks is driving the need for an increase in backhaul capacity. The end users are taking up offers for high speed data, taking and sending high spec photos, streaming video and increasing their internet browsing. There’s a lot more usage and you can clearly see the market driving forward strongly for mobile data. So operators are faced with the imminent need for higher capacity backhaul, but at the same time they want to cut operations costs. But if they add more leased lines, or more fibre, then that just adds to that ongoing expense. Point-to-Point and Point-to-Multipoint Microwave, for a relatively small capital expense, can give a substantial reduction on opex, and I think this explains why we are seeing a surge for a demand for microwave.

Mobile Europe:
Of course, Microwave isn’t the only option for leased line replacement, so what would you say the advantages are?

Andy Singer:
If you make a comparison with the other would-be similar options, then you are probably looking at Free Space Optics (FSO), Satellite and WiMax. FSO has several things against it that are clearly the reasons for its lack of success, despite many predictions to the contrary. It has a limited range, it has deep fade in fog and rain, and it also suffers from a lack of commercial experience. Satellite is dealing with issues around SDH radio, and it offers a lower capacity. There are also quality issues in urban and suburban areas and of course it’s not very cost effective for most areas, although clearly it has useful applications in rural and remote areas. WiMax is easily and rapidly deployable but again it has limited bandwidth, and if the capacity is going to be shared with other users making use of high bandwidth services, is there really going to be the high capacity operators need for backhaul?

Compared to this, point-to-point Microwave is very proven and scaleable, and is relatively inexpensive. There’s also new products available offering increased capacities – up to a GB as we move forward into the future.

Mobile Europe:
Along with drive in demand for mobile backhaul, the other big networks theme recently has been on network sharing. Yet mostly that has concentrated on the radio access part of the network. Could you envisage a situation where operators share the capacity on the backhaul link as well?

Andy Singer:
Well, there is an interesting model we see currently in the US, which is the business that FiberTower are making for themselves. FiberTower has built out a network of Point-to-Point Microwave links, then they have gone to the mobile operators and instead of the mobile operators building the network they lease capacity from Fiber Tower. From our point of view, whether capacity is leased or owned by the operators, that still drives a demand for microwave radio links.

Mobile Europe:
Yet can available frequencies support the range and capacity required for Microwave backhaul?

Andy Singer
Now obviously, along with this huge increase in the need for backhaul, operators are looking for frequencies that are available to them. A lot of the Microwave bands are getting pretty full. So a lot of people are looking at licensing the 31.8-33.4GHZ band, and this is very new. I mean, even within the last two months we have received a surge in interest and orders for antennas in this band.

The other area we speak to our customers about – and an area that is certain to be exploited – is the E-band, the new technology I just mentioned. Here we work with our global partner Bridgewave Communications in the 71-86GHz range. Now, depending on propagation factors such as climate and environment, E-band can give you a 1GB link over a range of between one and four miles. The thing about that is that in most cities across Europe, that is more than enough for the required link.

The other nice thing about the E-Band is that many countries are applying a “light regulation” touch to the licensing of the band. In some cases there are online databases established into which an operator or other applicant can enter their proposed usage data and so on. Now, if there are no conflicts with existing plans, many people can have their license within literally 15 minutes, for what is really a nominal administration fee. Certainly this is something we have seen in the USA, and in Europe CEPT (European Conference of Postal and Telecommunications Administrations) is suggesting E-band is opened up across the continent.

Mobile Europe:
So are mobile operators the only likely users for high capacity Microwave links, or are there other potential users for the technology who could also benefit from this light touch licensing regime?

And Singer:
There’s a large spectrum of users for these types of services, many of them enterprise users — for example universities or hospitals that need to share large amounts of data between sites. The 1GB nature of the link, where the client needs a relatively short hop, offers great capacity for a really nice price, and that is really attractive for a while host of users.

Mobile Europe:
And that leads us into another topic that we touched on the last time we spoke. A year ago, you were really enthused by the innovation and usage around the 5GHz unlicensed band, what are you seeing in that area that justifies that enthusiasm?

Andy Singer:
Well, we’re seeing a continued demand for the unlicensed spectrum bands. Distributors can carry the radios on the shelf, and that makes the services very quickly deployable. It’s amazing what applications people are using Microwave for. Mobile operators are using it for temporary types of installation where they are not sure if they need a permanent or a high capacity solution – and they can go down this path before investigating a licensed link if needed. Communities are using it for area networks, and Wireless ISPs are utilizing he spectrum, with some companies in the US making a business out of selling internet capacity using these networks. And of course [WiMax operator] Clearwire is building a nationwide network at 5GHz, making good use of unlicensed spectrum.

In fact there’s so much usage that people are starting to get more worried about congestion, but we have developed a product for that. Traditionally 5GHz has been about standard performance dishes, but now we are marketing high performance dishes for unlicensed spectrum, with better side lobe performance and a much higher front-to-back ratio.

Mobile Europe:
With all of this growth in demand for microwave, how do you make sure that a company like Radio Waves can meet the market needs, given the competition that’s out there?

Andy Singer:
It’s like any market. There are people who buy cars who just want something with four wheels that will take them from A to B. Then there are people who want a car delivered to their specification, delivered on time, delivered to the quality and performance they expect with the right service support once they own the car. When it comes to Microwave antennas, those latter people are our kind of customers. We are fixated on impeccable service, quality and customer support. If we say we can deliver something to you in three weeks we will deliver it in three weeks. We won’t have pretended we can have it with you in two weeks just to win the business, then take four, six or eight weeks to deliver the product. So although we may cost a little bit more out of the box than some competitors, when you look at the total cost of ownership, we really have a value offering. We really are the high performance and quality manufacturer in the market place, with support close to our customers.

Mobile Europe:
You’ve also prided yourself on operating close to the European market, despite being a US based company, and on always differentiating on quality.

Andy Singer:
Just this year we have again increased our manufacturing capacity in the UK to get closer again to the European market, and we have started producing a number of six foot dishes from that facility to meet a specific demand for six foot, as well as two and four foot, dishes.

We’ve also increased the number of OEM partners we work with to reach our markets – adding Codan this year. Codan is a company known for their high reliability Microwave radios, making our integrated antennas a perfect match for a reliable microwave solution. We’re also working with MNI to enable the quick delivery of their solutions for point-to point-Microwave.

We also retain our relentless drive on quality. Last year when we spoke I think we were at about a 0.2 % production return fault rate. We now have that down to 0.1% and we have a number of Lean 6 Sigma green belts in the company. We’ll have some black belts by the end of the year. We will also have ISO14001 certification by June 2007, which added to our RoHS compliance, means we will be committed to the best environmental practices.

All of this backs up our claim to be the high quality, high service, high performance supplier in the market.

ABOUT Andy Singer
Andy Singer, President Radio Waves, Inc.
Prior to joining Radio Waves, Andy held senior marketing and product management positions with a number of antenna and R.F. system companies, including RFS(Alcatel) and Allen Telecom Group. Andy began his career as an antenna design engineer and has a B.S.E.E. and M.B.A. degree. He has received multiple patents in regards to remote tilt antenna systems. Andy is a well-known speaker and writer in the industry. Andy has had numerous articles published in industry trade journals. He is a member of a number of industry organizations such as the IEEE and the Radio Club of America.

ABOUT Radio Waves, Inc.
Radio Waves offers a diverse range of reliable and innovative microwave antennas. Microwave and broadband wireless antennas are available that cover 1.3 GHz to 86 GHz for Point-to-Point, unlicensed ISM, UNII, 802.11 Wi-Fi & 802.16 WiMax broadband wireless bands at 2.4, 3.5 and 5 GHz, LMDS, Point-to-Multipoint and broadcast microwave applications. Radio Waves is known globally for their rapid delivery and reliable microwave antenna designs.”

According to Ernst & Young, the Top ten risks in telecommunications 2010 report finds that this data explosion is occurring at a time when operators face an intensifying cross-sector battle for ownership of their customer relationships, as innovative technology and device providers enter their core market.

This is the driving force behind why for the second consecutive year, “losing ownership of the client” is the biggest risk faced by operators and the “failure to maximize customer value”, new to the table this year, is the second biggest risk.

Vincent de la Bachelerie, Global Telecommunications Leader at Ernst & Young, said:
“This is a challenging environment where technology and device companies such as Apple and Google have been setting the pace in industry innovation, having shown themselves to be attuned to what consumers actually want, and able to innovate to deliver it.

“A demand for faster internet services is driving rising data usage in fixed broadband, and mobile data traffic is growing exponentially, reflecting rapidly-increasing usage of smartphones and mobile internet services.

“Operators are now challenged to monetize the growing volumes of traffic and must shift their business models from the anti-churn ‘all-you-can-eat’ flat-rate packages, which are not optimized for the explosion in data traffic, to a tiered usage policy around free and premium service elements.

“Operators must also recognize their potential as agents of change in other industries. Smart metering initiatives play to operator capabilities while the launch of mobile money transfer services in emerging markets shows how telecommunications infrastructure can be repurposed in a way that transforms societies.”

Regulatory pressures
The challenges of managing this explosion in data traffic are compounded by the rise of “network neutrality” as the dominant regulatory issue globally, with “rising regulatory pressures” cited as the third biggest risk.

La Bachelerie says: “Net neutrality means operators can gain little financial benefits from the rising volumes of data on their networks. The effect is that operators are facing a “Catch-22″, in which they need to invest in building out next generation access to meet customer needs, but cannot be sure of generating sufficient financial return to justify the capital expenditure.”

At the same time, the regulatory burden is rising as we see fixed and mobile broadband markets converging while the internet transforms the supply of content. Ensuring a level playing field for all market actors while also upholding consumer rights in the digital world is far from straightforward.

Investor expectations
While telecom operators have benefited during the crisis from their status as a “safe haven” for investors, this defensive posture is no longer sufficient to attract investors’ cash in 2010, thus “Inability to manage investor expectations” is also a new risk this year, at seventh on the table.

Jonathan Dharmapalan, Global Deputy Telecommunications Sector Leader at Ernst & Young, says, “Instead of telling a short-term story of cost reduction and strong cashflow, as markets recover, telcos now need to convince investors that they have a long-term growth and innovation strategy.

“To close this innovation gap with the likes of Apple and Google, operators need to make the most of their assets  including their wealth of customer data  and tap into the best internal and external talent. To reassert the value of their networks and tell the right story to investors, telcos will need to reprioritize R&D and deliver ongoing innovation for consumers. Building the right partnerships, dialogue with policy makers and strategic hires from technology and media will be critical for reclaiming the industry’s fair share of value among both customers and investors.”

The 2010 top business risks for the telecoms sector are:
1.        Losing ownership of the client
2.        Failure to maximize customer value
3.        Rising regulatory pressures
4.        Ineffective infrastructure investment
5.        Inability to reduce costs
6.        Lack of talent and innovation Inability to manage investor expectations
7.        Inability to manage investor expectations
8.        Inappropriate systems and processes
9.        Poorly managed M&A partnerships
10.      Privacy, security and piracy

By Keith Dyer

Nokia Siemens Networks nearly there

Try as they did to pretend it didn’t matter, it must have been disappointing for Nokia Siemens Networks only to be able to “soft launch” the company.

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Due to have hit the ground running at the beginning of the year, the target for commercial launch was announced as due for the “first quarter” of 2007, pending the growing investigation into the Siemens Comms backhanders scandal. The company was in Barcelona with its brand, with its proposed product portfolio and with appointments made down to the fourth tier of management.

Referring perhaps to the recurrent holding pattern, ceo designate Simon Beresford-Wylie said, “We were ready and we will be ready for day one.”
Yet in what felt like a slightly under-rehearsed presentation, he somewhat stumbled his way through the brand (if not the commercial) launch of the soon-to-be inaugurated Nokia Siemens Networks.
SB-W said that the two mega trends driving the industry were mobility and broadband. “Value chain boundaries” were blurring, and moving fast, there is “massive, massive cost pressure on every element of the sector. But although that cost pressure was hitting margins, it was driving great technological innovation, he said. It was also leading to sector segmentation and some technology fragmentation.
This meant that NSN would need to respond by developing “solutions” appropriate to the market it is playing in. “We need to go from a technology-driven industry to an internet driven one,” SB-W said, “and we need to lose the religion. We have faith in GSM/ EDGE/ WCDMA but equally we see the opportunity in WiMAx. It’s about having the right technology for the right customer, the right market and at the right cost structure.”
What would this mean for NSN? Well, SB-W said that the company had the broadest technology portfolio, from radio access to core network and transmission to OSS and support services. This would enable it to take advantage of the mega trends that are driving the industry.
The company would need to start moving to the “rhythm of the internet”, he said, in terms of its ability to develop and implement technologies. He also said the company aimed to be a “loyalty leader”.
In terms of the product portfolio, where there is a big overlap between products and a large installed based, for example in Base Stations, the company will continue to offer support for both legacy products. But future development will be on a single-track, converged product basis. So the nascent LTE programmes, for instance, are being merged. Where there is only a little overlap, then basically only the strong will survive. One of the current solutions will bite the dust. Where there is no overlap then obviously everyone is happy.
The company has identified €1.5 billion in “synergies savings” annually, with 40% of that coming from R&D. Asked how the company could cut total R&D to that extent whilst continuing to exploit new technologies, SB-W rather sidestepped the issue. But the company will still be in the top 40 globally in terms of R&D spend, he said.
Christoph Caselitz, CMO (designate), said that the company could claim to be joining the leading FMC and fixed provider (Siemens) with the leading mobile player (which is arguably not true in either case). Even so, combined sales of €22 billion in Western and Southern Europe puts the company second in the continent, and €21 billion puts it first in Asia Pac. The company is number six in the US, and number three in China,
Caselitz, normally very clear, seemed to be getting a bit confused though. Integration of the business would be “a complex but also a rather easy process”. The company would be new, young, innovative, passionate and pragmatic. It would “understand and unite communities.” There was also a separate announcement that Siemens’ existing 3G relationship with NEC would continue within the new company.
Mikka Vehvilainen, COO designate said the company was number one in WCDMA and EDGE, number one in IMS and number one in packet core and converged charging. This was interesting because earlier in the day Ericsson had said it was clear number on in HSPA and also number one in IMS. Let battle commence.

Ericsson plays up rivals’ troubles
At Ericsson’s do, Carl Henric Swanberg, the impressively square jawed ceo, said that the company was pushing ahead with its three prong strategy on networks, multimedia and services. The company was leading in mobile systems, and is the only company left with R&D commitment to GSM, he said. Any player in the market needed scale, service capability and technology. And they needed to be able to respond to markets which have to be profitable on a user base generating $2 per month ARPU. 2006 was a “breakthrough” year for HSPA and Ericsson now has a 40% share of that market.
Content is only one part of the business. It’s about securing business with telecoms grade reliability and revenue assurance solutions.
The company needs to be more open minded about its partnerships and how it will secure business.
The company’s market share had risen because “the weaker players such as Alcatel Lucent” had lost business quicker than we thought”. Ouch.
Network sharing, far from being a threat to equipment sales is an opportunity, because BTS node is only 15% of the installed cost of a base station. The other 85% is where the savings from network sharing lie, and then you need management and services to control the shared network.
Marconi, Redback and new acquisition Entrisphere give the company all the presence it needs in IP access and multi service edge access capability, but Ericsson may yet look for some bolt on buys in other areas.
IMPRESSIVE STAT: The company rolled out 18,000 base stations in India alone in 2006, which was one every half an hour or so, 7/24/365. And there will be more in 2007.

Alcatel Lucent announces new product portfolios
As the merged company presented for the first time at 3GSM in its new livery, the emphasis was on convergence, multi access support and IP everywhere. There was even a reflection off some of the same language from Nokia Siemens Networks, with head of convergence business unit Marc Rouanne saying that the company had no “religion” when it came to which access technology to support.

Rouanne said that the company has identified three areas to support amongst its customers, in service transformation, networks transformation and business transformation. It would support service transformation with its IMS products, its subscriber data management and its payment technologies. Networks would be transformed with IP routing, NGN networking and multiple wireless and broadband access technology support. The whole would be stitched together with control systems that are service aware and network aware, that can provide quality of service dependent on which users are accessing which services.
Mary Chan, who is heading up the radio access business, outlined the product portfolio. To a point. There will be a “renovated” GSM portfolio, aimed at low cost emerging markets (so presumably Ericsson isn’t the only company still investing in GSM R&D, despite its claims to the contrary). There is also a “ rationalized” W-CDMA portfolio, with a Femto Base Station Router and a Macro Remote Radio head cell solutions already announced. WiMax, LTE, W-CDMA, everything, is going to be integrated into one product, Chan said, The three companies are each contributing, with smart antenna MIMO technology, OFDMA knowledge, and IP skills.

Chan said that the company was now winning contracts it wouldn’t have won before without the tripartite union of Alcatel, Lucent and Nortel’s wireless knowledge. One example was a femto cell announcement with SoftBank in Japan.

We also had what was the third claim to be “number one” in IMS. As Rouanne claimed 20 IMS service contracts, and Nokia and Ericsson (who count softswitch deals as IMS sales) said they each had north of 100 contracts, it’s hard to make sense of this any more. IMS contracts numbers are the new peak data rates, it seems.

Heather McLean, freelance journalist, takes a look at one of the hottest topics at the show, mobile TV, and finds that despite warnings to move on, there are still battles being fought over the best technology for digital broadcast mobile TV.

3GSM for me this year was a frenzy of discussion and argument around mobile TV. Talks on what technology would be the best to run services over, from DVB-H and MediaFLO to DVB-SH, dominated conversation. However, realists urged the industry to stop speculating on specification and start questioning which frequencies would actually be available in the UK and Europe to purchase.

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Realist Peter MacAvock, executive director at the DVB Project, states there is no point talking incessantly about whether to use DVB-H, DVB-SH or MediaFLO, when currently the choice of where to put the technology is slim: “Everyone is talking about technology for mobile TV. What we should really be talking about is the combination of what frequencies do I have available, then what technologies do I have available to use in that frequency.”

However, the speculation continued unabated. The vast majority of strategies, devices and services showcased at 3GSM seemed focused on DVB-H. Lagging behind in second place, primarily thanks to outspoken support from the FLO Forum and Qualcomm, was MediaFLO, which is currently trying to make headway into Europe on the back of trials of the technology with BSkyB.

While DVB-H pervaded the entire show, MediaFLO was buoyed by pockets of enthusiastic supporters. In the next 12 to 18 months, KDDI and Softbank in Japan will begin trials of MediaFLO. Over the same period, Verizon will roll out a MediaFLO-based service on CDMA, and AT&T-Cingular will launch the technology on GSM. The latter roll out will see handsets being made that incorporate the European standard, which is a red flag to a bull as far as MediaFLO proponents are concerned that see AT&T’s MediaFLO preference as the ultimate case study for Europe.

At 3GSM, Qualcomm and the FLO Forum announced the results of the second trial of the technology with BSkyB, carried out in Manchester. Omar Javaid, senior director of business development, Qualcomm MediaFLO, states that the results of the trial showed the MediaFLO physical layer performance ran around 4.5db better than its rival, DVB-H, which interprets to mean a MediaFLO network could be rolled out at cheaper cost or double the service offering when compared to DVB-H.

Kamil Grajski, president of the FLO Forum that today has over 70 industry members, said that the BSkyB trial proved that FLO outperformed DVB-H considerably. He adds: “FLO technology was able to support twice as many channels and had better channel switching speeds than DVB-H.”

Yet both DVB-H and MediaFLO run best in the UHF frequency. MacAvock states: “Everyone is talking about UHF, but analog TV is in that frequency, congesting the band. Digital TV will go in there as well, also congesting the spectrum until all analog TV is switched off, and now people are talking about putting mobile TV in UHF too.”

DVB-H and MediaFLO will also work in L-Band, however, which is a possibility for operators that want a more immediate solution to the lack of UHF. L-Band is going to be auctioned in the UK very soon, but MacAvock says L-Band will be more expensive to buy than DVB-H. He adds it is more suited to areas where broad coverage is not required, such as for bi-directional and point to point services.

S-Band is a possibility for those that are willing to wait until later this year to early 2008 for a terrestrial service for mobile TV that will become part of the fully fledged DVB-SH service in 2009. In 2009, Alcatel will launch a satellite that is currently being built. DVB-SH, which was approved by The DVB Steering Board on Valentine’s Day, uses line of sight to deliver IP-based media content and data to handheld devices. The terrestrial fillers will provide the missing coverage in highly populated areas where line of site fails.

Marketing positioning director in corporate marketing for the wireless group at Alcatel-Lucent, Denis Pagnac, states: “S-Band was freed at the time of the 3G auctions. Traditional DVB-H is based in lower frequency bands which are congested, so DVB-SH is being pushed by Alcatel because the bandwidth is free and the service will work across Europe. With one satellite you can cover a large number of people, cheaper than other mobile TV technologies.”

The last possibility for mobile TV being touted heavily at 3GSM was for UMTS operators across Europe, in the form of TDtv, which runs on an unused part of 3G spectrum, TDD, that most operators bought along with their 3G licences. TDtv comes from IPWireless’ UMTS TD-CDMA solution, put together with the 3GPP Release 6 multimedia broadcast and multicast services (MBMS), which operates in the universal unpaired 3G spectrum bands.

IPWireless spoke at the show about the results of a trial of TDtv in Bristol late last year. Vodafone, Orange, Telefonica and 3UK took part. Roger Quayle, co-founder and CTO of IPWireless, says that as a result of the trial, the operators saw that the technology can provide the same coverage as WDCMA, but on only 35% of WCDMA sites.

After discussions on technologies and frequencies waned, content became a strong topic of conversation at the show. While trials in the Uk tend to show that scheduled TV is on the money, at 3GSM made for mobile content hit the headlines.

Made for mobile TV made a big impression at the show, with the Sundance Film Institute showcasing several short films made specifically for the small screen by top directors with a penchant for the experimental. Each director or team was given $20,000 to produce their short, with the results ranging from the ‘home made’ style of the likes of Maria Maggenti’s (Puccini for Beginners 2006) Los Viajes De King Tiny with its flying dog, to the highly stylised and cool, as in Justin Lin’s (Tokyo Drift and Annapolis 2006) short, titled İLa Revolucion De Iguodala!

One team of film makers, Jonathan Dayton and Valerie Faris (Little Miss Sunshine 2006), commented at the show on creating their short, A Slip in Time: “This is a new medium, and it has its own challenges for the film maker. We’re in for new experiences with this screen size in mind, and this audience in mind.”

However, all the film makers agreed that made for mobile is not going to be solely the financial and creative jurisdiction of broadcasters and operators. With mobile content distributing over the airwaves with more freedom than data over the internet, directors predicted that home made film would make its mark. The exploitation of this imaginative streak is an open opportunity for creative mobile TV network operators.

It’s who you know – and how you know them – that’s going to be important in the future, says Alun Lewis.

Given the sheer size and scale of a 3GSM event these days, it’s become increasingly difficult in recent years to spot the start of really important major trends – beyond and above the usual promotional wallpaper about the latest technology fashion. Indeed, it’s more often a case of spotting what people aren’t talking about if you want to try and find out what’s really lurking below the surface froth.

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For me, one of the largely unspoken themes of this year’s show was around identity – both of the industry ‘previously known’ as mobile telecommunications and of the end user. On the corporate front, a number of previously high profile niche players had disappeared, absorbed into larger IT companies as part of their regular attempts to get into the telecoms sector. Cramer into AmDocs, Vallent into IBM, Portal into Oracle and Ubiquity into Avaya were just some of these recent acquisitions. Similarly, the attention generated by the content, adult, gaming, search and social networking sectors showed that

While these are significant, there are far bigger questions surrounding how our own identities are managed in the infinitely connected world of the next few years – and indeed how the telecommunications industry is going to respond to this challenge. Some of this debate has already started, driven by the emergence of the Generic User Profile in IMS architectures, through it extends far beyond this as Rick Halton, product director at Apertio commented, “Security and privacy issues tend to grab the headlines but the real work to be done is around managing the multiple identities of today’s consumers. Customers may be accessing their services via their handset, a broadband connection at home or a public WiFi link. That’s three separate profiles and multiple IP addresses – all requiring various authorisation and authentication requests. That, however is just the tip of the iceberg. Introduce third party services into the mix – all of whom will hold different flavours of a single consumer’s identity and the complexity rockets.”

These potential pitfalls for the industry were also highlighted at the show in conversation with the Liberty Alliance, who’d just released a freely available report authored by the Telecompetition Group entitled’ Digital Identity Management – a critical link to service success’. 

The conclusions ? It makes grim reading for those service providers who have yet to grasp the identity nettle, concluding that, “While certain operators may be able to ‘beat the odds’ on a local basis, the overall picture is not pretty. The ability to use appropriate identity data, deliver a personal user experience and protect user identities is necessary to maintain the enviable market position that operators have had in the past. Indeed, a large percentage of network operator revenue is already at risk through the ubiquity of IP, convergence and the emergence of powerful ‘Webcos’ such as Google. While the deployment of an identity management solution is not the only factor that will preserve revenues, it is a fundamental platform – indeed requirement – for any company intending to be more than a bit-pipe in the future.”

Indeed, it’s going to be richly ironic if the mobile industry eventually loses its identity through a failing to recognise the importance of identity in a wider context….. 

HSPA and enhanced speed mobile networks are beginning to drive heavy data usage at the edge of mobile networks, and mobile operators are realising that their existing backhaul infrastructure will not be up to the task of shifting the traffic from the edge of their networks into the core. While there’s a host of solutions out there, Keith Dyer hears why Andy Singer, president of Radio Waves Inc, a manufacturer of microwave antennas, thinks that high quality microwave links provide the best answer.

Mobile Europe:
Andy, it’s been a year since we last spoke at this length. In that time data usage of 3G networks has really begun to take off, and there are now a host of live commercial HSDPA networks. Mobile internet use, as well as increased music and video downloads and streaming are finally giving mobile operators a nice problem. They anticipate a bandwidth bottleneck on the backhaul, and are planning right now how to get around that. What’s your view on that market trend?

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Andy Singer:
It’s true that growing usage of HSPA and WCDMA networks is driving the need for an increase in backhaul capacity. The end users are taking up offers for high speed data, taking and sending high spec photos, streaming video and increasing their internet browsing. There’s a lot more usage and you can clearly see the market driving forward strongly for mobile data. So operators are faced with the imminent need for higher capacity backhaul, but at the same time they want to cut operations costs. But if they add more leased lines, or more fibre, then that just adds to that ongoing expense. Point-to-Point and Point-to-Multipoint Microwave, for a relatively small capital expense, can give a substantial reduction on opex, and I think this explains why we are seeing a surge for a demand for microwave.

Mobile Europe:
Of course, Microwave isn’t the only option for leased line replacement, so what would you say the advantages are?

Andy Singer:
If you make a comparison with the other would-be similar options, then you are probably looking at Free Space Optics (FSO), Satellite and WiMax. FSO has several things against it that are clearly the reasons for its lack of success, despite many predictions to the contrary. It has a limited range, it has deep fade in fog and rain, and it also suffers from a lack of commercial experience. Satellite is dealing with issues around SDH radio, and it offers a lower capacity. There are also quality issues in urban and suburban areas and of course it’s not very cost effective for most areas, although clearly it has useful applications in rural and remote areas. WiMax is easily and rapidly deployable but again it has limited bandwidth, and if the capacity is going to be shared with other users making use of high bandwidth services, is there really going to be the high capacity operators need for backhaul?

Compared to this, point-to-point Microwave is very proven and scaleable, and is relatively inexpensive. There’s also new products available offering increased capacities – up to a GB as we move forward into the future.

Mobile Europe:
Along with drive in demand for mobile backhaul, the other big networks theme recently has been on network sharing. Yet mostly that has concentrated on the radio access part of the network. Could you envisage a situation where operators share the capacity on the backhaul link as well?

Andy Singer:
Well, there is an interesting model we see currently in the US, which is the business that FiberTower are making for themselves. FiberTower has built out a network of Point-to-Point Microwave links, then they have gone to the mobile operators and instead of the mobile operators building the network they lease capacity from Fiber Tower. From our point of view, whether capacity is leased or owned by the operators, that still drives a demand for microwave radio links.

Mobile Europe:
Yet can available frequencies support the range and capacity required for Microwave backhaul?

Andy Singer
Now obviously, along with this huge increase in the need for backhaul, operators are looking for frequencies that are available to them. A lot of the Microwave bands are getting pretty full. So a lot of people are looking at licensing the 31.8-33.4GHZ band, and this is very new. I mean, even within the last two months we have received a surge in interest and orders for antennas in this band.

The other area we speak to our customers about – and an area that is certain to be exploited – is the E-band, the new technology I just mentioned. Here we work with our global partner Bridgewave Communications in the 71-86GHz range. Now, depending on propagation factors such as climate and environment, E-band can give you a 1GB link over a range of between one and four miles. The thing about that is that in most cities across Europe, that is more than enough for the required link.

The other nice thing about the E-Band is that many countries are applying a “light regulation” touch to the licensing of the band. In some cases there are online databases established into which an operator or other applicant can enter their proposed usage data and so on. Now, if there are no conflicts with existing plans, many people can have their license within literally 15 minutes, for what is really a nominal administration fee. Certainly this is something we have seen in the USA, and in Europe CEPT (European Conference of Postal and Telecommunications Administrations) is suggesting E-band is opened up across the continent.

Mobile Europe:
So are mobile operators the only likely users for high capacity Microwave links, or are there other potential users for the technology who could also benefit from this light touch licensing regime?

And Singer:
There’s a large spectrum of users for these types of services, many of them enterprise users — for example universities or hospitals that need to share large amounts of data between sites. The 1GB nature of the link, where the client needs a relatively short hop, offers great capacity for a really nice price, and that is really attractive for a while host of users.

Mobile Europe:
And that leads us into another topic that we touched on the last time we spoke. A year ago, you were really enthused by the innovation and usage around the 5GHz unlicensed band, what are you seeing in that area that justifies that enthusiasm?

Andy Singer:
Well, we’re seeing a continued demand for the unlicensed spectrum bands. Distributors can carry the radios on the shelf, and that makes the services very quickly deployable. It’s amazing what applications people are using Microwave for. Mobile operators are using it for temporary types of installation where they are not sure if they need a permanent or a high capacity solution – and they can go down this path before investigating a licensed link if needed. Communities are using it for area networks, and Wireless ISPs are utilizing he spectrum, with some companies in the US making a business out of selling internet capacity using these networks. And of course [WiMax operator] Clearwire is building a nationwide network at 5GHz, making good use of unlicensed spectrum.

In fact there’s so much usage that people are starting to get more worried about congestion, but we have developed a product for that. Traditionally 5GHz has been about standard performance dishes, but now we are marketing high performance dishes for unlicensed spectrum, with better side lobe performance and a much higher front-to-back ratio.

Mobile Europe:
With all of this growth in demand for microwave, how do you make sure that a company like Radio Waves can meet the market needs, given the competition that’s out there?

Andy Singer:
It’s like any market. There are people who buy cars who just want something with four wheels that will take them from A to B. Then there are people who want a car delivered to their specification, delivered on time, delivered to the quality and performance they expect with the right service support once they own the car. When it comes to Microwave antennas, those latter people are our kind of customers. We are fixated on impeccable service, quality and customer support. If we say we can deliver something to you in three weeks we will deliver it in three weeks. We won’t have pretended we can have it with you in two weeks just to win the business, then take four, six or eight weeks to deliver the product. So although we may cost a little bit more out of the box than some competitors, when you look at the total cost of ownership, we really have a value offering. We really are the high performance and quality manufacturer in the market place, with support close to our customers.

Mobile Europe:
You’ve also prided yourself on operating close to the European market, despite being a US based company, and on always differentiating on quality.

Andy Singer:
Just this year we have again increased our manufacturing capacity in the UK to get closer again to the European market, and we have started producing a number of six foot dishes from that facility to meet a specific demand for six foot, as well as two and four foot, dishes.

We’ve also increased the number of OEM partners we work with to reach our markets – adding Codan this year. Codan is a company known for their high reliability Microwave radios, making our integrated antennas a perfect match for a reliable microwave solution. We’re also working with MNI to enable the quick delivery of their solutions for point-to point-Microwave.

We also retain our relentless drive on quality. Last year when we spoke I think we were at about a 0.2 % production return fault rate. We now have that down to 0.1% and we have a number of Lean 6 Sigma green belts in the company. We’ll have some black belts by the end of the year. We will also have ISO14001 certification by June 2007, which added to our RoHS compliance, means we will be committed to the best environmental practices.

All of this backs up our claim to be the high quality, high service, high performance supplier in the market.

ABOUT Andy Singer
Andy Singer, President Radio Waves, Inc.
Prior to joining Radio Waves, Andy held senior marketing and product management positions with a number of antenna and R.F. system companies, including RFS(Alcatel) and Allen Telecom Group. Andy began his career as an antenna design engineer and has a B.S.E.E. and M.B.A. degree. He has received multiple patents in regards to remote tilt antenna systems. Andy is a well-known speaker and writer in the industry. Andy has had numerous articles published in industry trade journals. He is a member of a number of industry organizations such as the IEEE and the Radio Club of America.

ABOUT Radio Waves, Inc.
Radio Waves offers a diverse range of reliable and innovative microwave antennas. Microwave and broadband wireless antennas are available that cover 1.3 GHz to 86 GHz for Point-to-Point, unlicensed ISM, UNII, 802.11 Wi-Fi & 802.16 WiMax broadband wireless bands at 2.4, 3.5 and 5 GHz, LMDS, Point-to-Multipoint and broadcast microwave applications. Radio Waves is known globally for their rapid delivery and reliable microwave antenna designs.”

It’s a growing concern that as HSPA networks roll out and, more importantly, as data intensive service start to be used across those networks, the existing backhaul infrastructure will become too expensive to run, with bits costing more to transport end to end across the network than operators can charge for them. What solutions are out there to help operators as they face up to this issue?

Today, many operators’ backhaul requirements from a single cell site often amount to only one E1; in some cases this even includes both 2G service and 3G service (R99 version).
However, operators are marketing HSDPA with aggressive performance metrics in response to expected threats such as WiMAX.

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These marketing efforts should be viewed against a backdrop where ARPU and customer churn continue to challenge mobile
operators’ business models. In order to meet customer expectations and provide a high quality user experience, it is critical that HSDPA furnish the bandwidths advertised – even as the number of subscribers grows. Thus, operators acknowledge that HSDPA threatens to increase bandwidth requirements in the RAN by 2x, 4x, or more. To achieve these capacities while simultaneously keeping the cost of HSDPA economically viable, operators openly admit the cost per bit absolutely must be reduced compared to today’s leased-line E1 backhaul.

HSDPA Offload Using ADSL
To meet the requirement for increased bandwidth with lower cost per bit, the logical first step is to offload the HSDPA traffic onto a packet network. HSDPA represents the data
portion of a “best-effort” mobile service: the service is asymmetric in nature, user traffic tends to have bursty characteristics, and expectations are satisfied with non-continuous, brief utilization of the network bandwidth. This is quite different from the nature and expectations for voice traffic, which tends to have a more continuous rate, and where a continuous, reliable connection is essential – even if the traffic is formed in packets or cells. Thus, separating the HSDPA traffic from the voice traffic, continuing to use leaseline E1s to backhaul the voice and using a low-cost packet transport to backhaul the bursty HSDPA traffic makes sense.
DSL is a logical choice for the packet transport. It is a mature technology that has been widely deployed for residential and business data traffic. DSL enjoys the economies of scale of a mainstream data technology, with low-cost DSL modems readily available using the ubiquitous Ethernet interface to connect with users’ data traffic. xDSL furnishes the advantages inherent to packet transport, including statistical sharing of bandwidth among multiple users that is ideally matched to HSDPA needs.

In particular, ADSL2 and ADSL2+ provide the speed and asymmetry that match HSDPA while retaining the cost and availability advantages. Plus, Carrier Ethernet is emerging as the next-generation technology for backhaul of ADSL2 traffic. A new generation of Ethernet DSLAMs has come to market that enables ADSL2 and ADSL2+ backhaul over Carrier Ethernet.

Pseudo-Wire for HSDPA and ADSL
As much as ADSL is the first logical step for offload of HSDPA traffic, Pseudo-Wire technology is the logical solution for matching HSDPA traffic to ADSL backhaul. In its broadest sense, Pseudo-Wire includes service emulation for transport of frame-based and cellbased services over MPLS, IP, and Ethernet networks. Because HSDPA uses ATM cells and ADSL modems use an Ethernet connection, Pseudo-Wire is a perfect interconnect technology.

A typical Pseudo-Wire deployment in the RAN using both access devices and gateways would deploy Pseudo-Wire Access Devices, available with 1, 2, 4, or 8 E1 ports, at the cell sites where they connect to the existing NodeB equipment. The access devices offer E1 interfaces that can be configured to perform ATM service emulation – recognising the native ATM cells used for HSDPA service and even terminating the IMA protocol from the NodeB. The result – HSDPA service from multiple E1s is aggregated onto a single, efficient Pseudo-Wire and delivered to the ADSL modem on a single Ethernet connection.
The ADSL traffic is backhauled to the mobile operator’s RNC location using either an ATM network or, increasingly so, a Carrier Ethernet metro network. A Pseudo-Wire Gateway is deployed at the RNC, where it terminates the ATM Pseudo-Wire services and functions as a gateway to the RNC. Notice that the Pseudo-Wire gateway aggregates and delivers consolidated ATM flows to the RNC. This functionality, taken with the IMA capability in the Pseudo-Wire access devices, obviates the need to pass the HSDPA traffic through a legacy ATM switch at the RNC location.
The gateway furnishes STM-1 interfaces (VC4) to deliver the consolidated ATM flows directly to the RNC.

Beyond ADSL
While ADSL is a logical technology for offload of HSDPA traffic, many see it as only a first step. A number of questions remain unanswered regarding the overall capacity of ADSL to handle the expected quantity of HSDPA subscribers, both in the aggregation network and the last-kilometer link to the NodeB site. ADSL2 transport in the last kilometer can typically furnish 8 Mb/s of downstream bandwidth and 2 Mb/s of upstream bandwidth. Given typical oversubscription ratios, these last-kilometer link speeds are expected to support growth of HSDPA services for some time. However, in the aggregation network, existing DSL networks (both the ATM-based and the Ethernet-based) have already been architected with significant oversubscription ratios for fixed line
ADSL services. These oversubscription ratios are often as high as 50x for residential consumers and 20x for business customers. Overlaying mobile services on top will surely stress the capacity of these DSL networks with yet another layer of oversubscription.
In addition, HSDPA is itself only a first step. While HSDPA is well matched to the downstream rates of ADSL2, new generations of services, including HSUPA and beyond, are already on the horizon. However, it  appears certain that a new generation of backhaul beyond ADSL is needed to handle these services.

New Transport Technologies
Several new technologies have emerged that can meet the challenge of next-generation backhaul beyond ADSL, including VDSL, copper bonding using Ethernet in the First Mile (EFM – based on IEEE 802.3ah), and Carrier Ethernet over optical fiber.

To support this Pseudo-Wire Access Devices could be deployed at cell sites using VDSL, EFM, and optical Ethernet for backhaul transport.
At each cell site, the access devices connect to both NodeB and BTS equipment, enabling backhaul of GSM, R99, and HSDPA traffic over any of these transport technologies.
Each access device offers not only E1 interfaces for ATM service emulation, but also E1 interfaces that can be configured for circuit emulation service (CES) to support the Abis interface for 2G services. In addition, the devices provide customer facing Ethernet interfaces for future service needs, such as WiFi or WiMAX hot spots, as well as connectivity needs specified for the R5 NodeB.
While VDSL, EFM, and optical Ethernet are all supported for last-kilometer transport to the cell site, typically each of these technologies would funnel into a switched Ethernet or IP/MPLS network. VDSL would use an Ethernet DSLAM, while EFM may use stackable EFM termination nodes, and optical Ethernet may use a carrier-grade Ethernet aggregation multiplexer. Traffic hand-off from the Carrier Ethernet network to the Gateway at the RNC/BSC is typically performed using Gigabit Ethernet.
The Gateway offers not only ATM STM-1 connectivity, but also channelized E1 and channelized STM-1 ports for interfacing to legacy BSC equipment. In GSM applications, the CES Pseudo-Wires (that originated as E1s with Abis at the BTS) are transported across the packet network and then
consolidated in the gateway into TDM bit streams on STM-1 or E1 interfaces to connect with the BSC.
So multiple generations of mobile services could be carried over a single converged RAN. But also notice that both voice and data are carried over this packet-based RAN. In fact, there is no E1 or SDH transport used at any of the cell sites.
With no SDH in the backhaul network to furnish synchronization, the Pseudo-Wire solution must supply very accurate and reliable clocking at the BTS and the NodeB. Accurate, jitter-free clock sources are critically important for both GSM and UMTS services. Axerra’s Pseudo-Wire solution, for example, obtains clocking from the BSC or RNC and extends the timing across the Carrier Ethernet packet network. The result is that multiple generations of service can aggregated onto a single Carrier Ethernet network.

*The above is extracted and amended from a white paper available from Axerra Networks. www.axerra.com

The rise of mobile communities, social networks and user-generated content represent a seismic shift to a participatory culture in which each individual can co-create the content they consume and choose the mobile space in which they wish to share it. Users syndicate, blog, tag, and distribute on-the-fly – and they will join mobile communities that can keep up the pace.

Caught off guard by the explosive growth of online social networking sites like MySpace and Flickr, many mobile companies are in a race to replicate this success in the mobile space. However, building mobile social networks to meet the needs of diverse user communities is no small task and many companies lack the DNA within their organizations to encourage widespread user acceptance let alone active participation.

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Mark Donovan, senior vice president and senior analyst at M:Metrics, a company specialized in measuring consumer consumption of mobile content and applications, expects many of the current highflyers to “crash and burn as it becomes obvious communication, not technology, is the killer app.”
In his view, too many companies are focused on monetizing their eyeballs when they should be thinking of new ways to capture them. “Building communities around games or music is all very merchandising-oriented; it’s not what creates sticky and robust communities.”
Likewise, companies should not seek to limit the user’s choice of mobile community or communications channel. “Social networks, by nature, have to be cross-operator,” Donovan explains. They must therefore support a broad range of interaction, ranging from IM between friends to publishing content on a blog for everyone to see.
Strong communities are built by companies that provide users platforms, tools and a hands-off approach to the social networks they create, Donovan says. “A company that assumes users are passive consumers or ignores their need to create, share and socialize, is leaving money on the table.”
The stakes are high, according to new research from Informa Telecoms & Media. The report, Mobile Communities and End-User Generated Content, produced by Informa and the Mobile Entertainment Forum, the global trade association for the mobile entertainment industry, estimates the market for mobile communities and user-generated content will be worth $13.1 billion by 2011, with photo and chat-based services being the top revenue generators. It calculates digital community services on mobile phones were worth $3.45 billion globally last year.
Indeed, chat services currently represent the largest segment of the market. This is because the interaction is based on SMS, a form of communication which is both intuitive and handset agnostic. However, as increasing numbers of photo- and video-enabled devices enter the market, the volume of users uploading images or clips is expected to grow significantly. In 2006, 46 million users are forecast to have submitted videoclips to social networks and mobile communities from their mobile phone, rising to 198 million by 2011.
But there are pitfalls that must be avoided if services are to achieve success, the report says. Moderation is vital to protect users and to adhere to industry guidelines, and pricing is another key consideration. More importantly, mobile community services need to offer value to the target demographic.
Predictably, youth are the most committed members of mobile communities. According to the M:Metrics October 2006 survey, 70 percent of 13 to 17-year-olds engage in social networking or otherwise create content. The survey examined the usage of photo messaging, video messaging, IM, chat, dating and user-created content, including video content and ringtones, among mobile subscribers age 13-17 and 18-24 in France, Germany, Italy, Spain, the U.K. and the U.S.
Mobile operator and media company 3 in the U.K. caters to its youth demographic by providing services to encouraging user interaction and user-generated content creation. “Providing social networking services are no longer an option; customers expect to have them on their mobiles,” observes Peter Northing, 3’s Director of Products and Services.
The operator also recognizes that wall-garden approaches and social networks don’t mix. “People don’t select their social networks based on the mobile networks their friends are on, so we’re looking at how we can work more closely with other networks to prevent customers from being blocked,” Northing says. Top of the agenda is making sure “users can access 3’s two social networking offers from any network.”
SeeMeTV – which allows users to share videos and earn money from viewings – and Kink Kommunity – which offers members a forum to contribute and rate photos and videos, as well as chat – are seeing a “boom” in user interest and user-generated content, Northing says. SeeMeTV counts over one million downloads a month, and 3 has recently extended the service beyond videos to include user-generated wallpaper and ringtones. In comparison, 3’s Kink Kommunity counted over 60,000 members, “who are swapping hundreds of thousands of messages between them every month.”
Moving forward, social networking and content-sharing are services that will see “significant development” this year, Northing says. In line with this product roadmap 3 will extend its own services, introduce pricing to reflect the user demographic and “work more closely with social communities that wish to mobilize their offering.” In addition, 3, which has recently run successful campaigns with brands, including Coca-Cola, Canon and Adidas, will aggressively develop an advertising model to lower costs and encourage usage.

Value-“ad”
Despite the variety of communities flourishing on the mobile Web, the range of business models and strategies is limited by a lack of imagination and vision. Most are based on a calculation of the future value of aggregating eyeballs for advertisers. Not that the approach won’t drive its share of revenues. The market research firm eMarketer reckons ad spending on online social network sites will reach $865 million this year, with MySpace.com capturing 60% of the spending. Total ad spending is set to top $1.8 billion by 2010, and account for 8.5% of the projected $25.5 billion in online ad spending.
While no figures exist for spending on mobile social networks, it’s likely to be a significant portion of the $11.35 billion Informa forecasts will be the worldwide spend on mobile advertising by 2011. “Communities are viral by nature and advertising are eager to tap into that,” observes Russell Buckley, Managing Director, Europe, for Admob, a mobile advertising marketplace that brings advertisers together with independent mobile content publishers.
As of January 2007 AdMob has served a whopping one billion mobile web advertisements in the past six months. Admob figures also reveal the most sought-after content. Publishers of community content generate the lion’s share of traffic (45 percent). This category is followed by Downloads (44 percent), Portals (8 percent), Entertainment (2 percent) and News & Information (1 percent). “To make mobile communities work the services they offer must be free, open and ad-supported,” Buckley says.
Social media companies are getting the message. Peperoni, Germany’s made-for-mobile answer to MySpace, counts more than 350,000 registered users and another 6 million unique visitors per month who frequent the community to check out new sites and fresh content. In fact, Marcus Ladwig, COO of Peperoni, estimates the actual figures could be higher. This is because Peperoni only requires active participants to register and allows all visitors to browse for free.
Access to so many eyeballs has also excited content companies – who want to advertise to Peperoni’s tight-knit Peperonity mobile community. To date Peperoni has run campaigns with several major brands, including Adidas and Disney. More recently, the company has launched a campaign with 4th Screen Media, a U.K.-based mobile advertising company with “some major brands in the pipeline,” Ladwig says. Member survey shows users don’t mind the advertising, provided it is useful and unobtrusive. “In the right context ads even benefit the community,” Ladwig explains. The current campaign with mobile operator O2 in the U.K. – which revolves around giving away free SIM cards, is a pitch that “provides real value for users.”
To keep the momentum Peperoni plans a slew of new functions and features. These include tools to upload mobile videoclips, moderation (to keep in touch with members and give them a feeling that “someone is looking after their home space”) and a “send-to-a-friend feature (to allow users to update friends on community happenings and even recruit new members). The company is also developing a “recommend-this-site” service that will allow users to share cool content they find on Peperonity with their friends via SMS. “Peperoni will pick up the costs of this service because we believe in the potential of this to promote viral marketing,” Ladwig says. 
Monetization models at the site go in both directions. Peperoni sells ads to deliver services to its members – but it also offers its members an eBay-like marketplace where they can sell their user-generated content. To this end Peperoni has teamed up with Bango, a company that has developed a global infrastructure platform that enables content providers to market, sell and deliver their products and services directly to mobile phone users on all mobile networks. The collaboration allows members to commercialize their content, enabled by Bango’s global access and payment technology.
However, advertising is not the only game in town. Just as search has become the de facto interface to content on the Web, so have social networks become the entry-point to a much greater and richer Internet experience, suggests research from Hitwise. A recent study revealed the impact that social sites have had in driving traffic to other destinations on the Web. Shopping and classified sites, for instance, received 2.4% of their visits directly from MySpace in September 2006 –an 83% increase since March.

Targeting the Long Tail
Against this backdrop, social networking has what it takes to become a significant force on the Web and a part of users’ daily lives, observes Ken Doctor, an analyst at Outsell, Inc., a market research company specialized in the global information industry. “The sites are replacing search as the interface to content.” He imagines dozens of business models that could spring up around this new level of interaction, and the opportunity for companies that can monetize the Long Tail of social communities.
Sensing a business opportunity, Pitch, a U.K. advertising-funded mobile content provider, is set on transforming its Pitch.mobi community of some 25,000 members into subcommunities and chat group subsets based on their common interests, according to Lourens de Beer, Pitch CEO. He sees the strategy is a natural extension of human behavior and the desire to get away from the crowd at a party and split of in smaller groups.
“Niche communities encourage more interaction because everyone is on the same wavelength,” de Beer explains. What’s more, brands and advertisers – which effectively subsidize the service and the content in line with Pitch’s ad-funded strategy – “can get more intimate with niche communities.”
In his view, knowing a community’s passion allows a better fit between the message and the member. Pitch has run campaigns with several major brands including EasyJet, Gameloft and O2. Pitch also has encouraged skaters to create their own subcommunity, known as skate 365. Pitch will help create a community catering to the interests of fans of Red Dwarf, the British cult sci-fi comedy series.

Come together
While some companies focus on monetizing the variety of content, others have built a profitable business on bringing together the variety of social networking applications, empowering users to interact on their own terms
One company that benefits from being a mobile impresario, connecting members with a breadth of mobile messaging and social networking services directly on their mobile phones, is OZ. To date the company’s OZ mobile IM and mobile email solutions have shipped on 85 million mobile devices. The solution, which allows mobile operators to offer their subscribers access to mobile communities and if desired, immediately leverage their own mobile communities with presence, has been deployed operators and providers including 3 Scandinavia, Alltel, AOL, Boost Mobile, Bouygues Telecom, Cingular, Telefónica Móviles, T-Mobile USA, Virgin Mobile USA and Yahoo! In December OZ added social networking to the mix in the form of a client that gives users access to multiple social networking sites.
Hilmar Gunnarsson, OZ Executive VP Sales and Marketing, believes there will likely be a community to match every interest. In fact, he argues, there is no reason why there shouldn’t be as many communities as there are users. “For operators it’s no longer about connectivity to two or three IM services; it’s about instant access to dozens of communities directly on the device.”
In Gunnarsson’s view, improved usability will catapult these communities from the fringe into the mainstream. “Users should have a social networking button or icon on the top level menu on your phone. They could simply click it, select Facebook and be in their Facebook account,” he explains. “Making users download all sorts of clients and go through all kinds of hoops won’t deliver a good experience or high usage.”
Put simply, users require a dashboard of social networks and a single access to their buddies and their activities across multiple communities. “Delivering this service will put carriers in a great spot,” Gunnarsson says.
And, if mobile opportunities are too shortsighted to see the business advantage of providing easy access to all the communities flourishing outside their walled-gardens, a growing number of IM services providers are happy to oblige. One company to watch is eBuddy, a Dutch provider of ad-funded IM services that gives users free access to all IM services (MSN, AIM and Yahoo) – without need of a software download. The company, which recently welcomes its 5 millionth member, is growing at a rate of 33 percent, according to Jan-Joost Kraal, eBuddy director of mobile.
With a strong position in plan-vanilla IM assured eBuddy is set to explore new advertising models and features that will transform its users into a tight-knit community. “It’s important to create stickiness,” Kraal explains. Moving forward, content – ad-funded or user-generated could be part of the mix. ~
In Germany Nico Lumma, who founded Mabber.com, a provider of universal messaging combining mobile, Web and desktop IM from all the usual suspects, has similar ambitions. His service, which includes functionality to deliver alerts and bursts of content at prices lower than SMS text, has already attracted interest from content companies eager to connect with Mabber.com members one-on-one. It may be that mobile messaging is the feature that gets users attention, but content – both user-generated and commercial – may be the lure that keeps them coming back for more.

In amongst all the 3GSM feeding frenzy on mobile IM and social networking, you may be wondering what had happened to dear old SMS. After all, it’s still the biggest profit earning service for most operators.

Yet with the furrowed brows over IM cannibalisation of SMS revenues, you’d be forgiven for thinking that SMS’ days were in some way numbered. Not so, say analysts at Portio Research who, despite predicting an “exciting future” for other messaging technologies, think that SMS revenues will continue to grow, despite declining prices, reaching $67 billlion by 2012. That said, the quality of mercy is strained at Portio, because they also think that by 2011, IM will be the dominant messaging technology in the USA, and mobile operators are going to have to cut their cloth to suit.

The message then, is that there is still plenty of scope for SMS in developing markets but in others, where IM has a deep hold in the PC world, mobile IM will be more of a threat. Well, up to a point.

This is relevant to a messaging giant such as LogicaCMG, say, that tries to sell its SMSCs and MMSCs in on the back of its systems integrator contacts in developed markets, such as Europe. Perhaps eyeing that breaking free of this successful but increasingly limited business model was going to be more trouble than it was worth, LogicaCMG made the decision to offload its messaging and telecom business, into the waiting arms of private equity.

Headed up by former LogicaCMG man Larry Quinn, Atlantic Bridge Venture’s angle is to get into emerging markets, and into the US where LogicaCMG is weak, through an expanded set of channel relationships. It also hinted that it would consider acquiring other companies to exploit the opportunities for next gen IP based messaging.

It seems that this is a clear sign that the established order messaging is breaking down. The old SMS dominant players are far from confident about their relevance as the industry moves forward, despite the convincing talk. There is an element of “back to the future” about Acision, as if the ex-Logica people involved felt there was unfinished business still in SMS, in the markets LogicaCMG left untouched because of its business model. That is fair enough, but it is the other part of the strategy – the next gen messagin, IP convergence piece in its existing markets that is of most interest. Here there are genuinely disruptive players and models emerging. Does Acision want to be part of that, or do its best to ignore it?