By Dr. Mehmet Unsoy (with contributions from Falk Mller-Veerse, Jan Vocke and Dhananjay V. Rohini)
Dallas, USA / Munich, Germany – February 24, 2010
Year of Mobile Advertising? Mobile advertising has seen some real activity lately. JP Morgan predicts that industry would be worth $3.8 billion in the U.S. in 2010. The ecosystem has changed dramatically since last year’s report with Admob now (almost) belonging to Google and reporting success with video ads on smartphones. Quattro Wireless was bought by Apple and RIM is launching its own advertising platform. It’s not only the big names that are creating waves. Smaato from Hamburg has received much attention lately for its SOMA ad optimisation platform. Location based advertising currently driven by iPhones also has a bright future ahead. Out There Media’s mobile advertising platform MoBucks created significant buzz at this Congress and it now has a reach of more than 150 million subscribers having won Russian operator Vimpelcom.
Pay, surf, navigate with a SIM: It never fails to fascinate me how much technology can be embedded (or squeezed!) into the SIM card. The Subscriber Identity Module card has clearly long outgrown its name. Sagem’s launch of a WiFi-ready SIM outlines the progress made in this regard. With this SIM, any phone can be converted into a router to create a hotspot! The use case is compelling; most netbooks use SIMs to authenticate the user anyway and now a WiFi-enabled SIM can turn any phone into a 3G connection for the netbook.
Seperately, Sagem along with Telenor and ST Microelectronics showed how to use the WiFi enabled SIM and an NFC key fob to turn any device into an NFC payment device for e-ticketing in public transportation applications. It is clear that operators intend to fully manage and control the NFC apps!
Yet another major SIM-based NFC payment system trialled with live Congress attendees, was from Samsung (Handset), Telefnica (Operator) and Visa (Transaction Clearing), with Giesecke & Devrient (SIM card provider), Ingenico (Payment Terminal) and La Caixa (Bank). The SIM card from Telefnica was preloaded with €60 that could be used to pay at select food and beverages stalls. It gave Congress attendees a realistic feel of how m-payment might work with SIM-based NFC technology.
SK Telecom has also made a couple of interesting demos and announcements related to SIM cards: (1) Android OS and processor in a SIM card, with 1GB of memory, intending to power mass-market phones, and (2) Theme SIMs, with sufficient storage for pictures, music and apps, to power mass-market phones. Both of these are interesting and promising developments!
M-payment is finally taking off although some would argue that it is already well-established in the emerging markets! Mobile transactions facilitated by operators in Africa have given access to banking services to previously unbanked segments of the population. Vodafone / Safaricom’s M-Pesa in Kenya, launched in 2007, now has 8.5 million customers and received the Best Mobile Money Service Award at this Congress. It plans to extend to other Vodafone markets in the developing world such as India. Fundamo, a South African mobile wallet player scored the largest ever deal in this space last year with MTN. Gemalto’s recent acquisition of Valimo, a digital authentication supplier underscores the amount of activity the segment is seeing. Watch this space!
M2M pledge and Mobile Healthcare: In a major development in the M2M market, the GSMA and 25 mobile organizations joined to draw up guidelines on design of M2M devices in order to drive down costs and drive up sales. An alliance between the GSMA and Continua Health Alliance has decided to work together on the standardization of embedded mobile applications. The GSMA suggested that the healthcare industry could save $175-200 billion annually by managing chronic diseases through remote monitoring. Companies such as Bluegiga in Finland that are members of Continua, were demoing Bluetooth modules for healthcare apps including remote monitoring at this year’s Congress.
In fact, several mobile-healthcare apps emerged at this show – apps include collecting health related data from patients, delivering key information, and provisioning of healthcare services, including apps as simple as SMS reminders to patients when and how to take medication. Incidentally, the GSMA winner of the embeded mobile offering was Cinterion, a company focused on sleep therapy for patients!
Facebook Zero: For all the buzz regarding LTE and high speed networks, Facebook painted a sober and realistic picture of networks in the developing world by launching Facebook Zero, a text only, stripped down version of the Facebook site. Recognizing that 100 million users access Facebook using phones, Facebook’s offering targets the slower networks of the world. Yet, it might be missing a key point. Slower networks often go hand in hand with usage of mass-market phones. Popular social entertainment services such as Qeep have been cleverly exploiting the mass-market by offering a truly entertainment experience with a rich function set even for feature phones, not just smart phones.
To Skype or not to Skype, we asked last year. Verizon’s decision to tie-up with Skype at this Congress is a significant development. It is an acknowledgement of the changing world where voice is essentially another sort of packet traffic, albeit of central importance to operators, making up 70-80% of their revenues. According to Verizon’s announcement, smartphone users (including those using Blackberry and Android phones) will be able to call other Skype users but would have to pay for calls to normal U.S. phones. Further, calls using WiFi will not be allowed and Verizon’s own network would be used to route calls. A data plan is still required, but on balance it is a move that could change the game. Skype’s service with Verizon is therefore not true FMC, as it is not seamless. Still, we should expect similar deals with Vodafone, Orange and Telefnica in the near future. Skype already represents 12% share of the international voice traffic market with 54 billion minutes per year causing a $13 billion revenue impact on fixed line operators around the globe last year. The key message here is that mobile operators are coming to the realization that voice has become marginalized and there is no way they can keep their revenues or margins focusing on voice going forward.
Smart Grid tops green initiatives: GSMA realizes its role in reducing the global carbon footprint. The recent smart2020 report mentions that global emissions can be scaled back by 15% by 2020 through extensive use of ICT. While green technologies such as Smart Grids represent a massive ecological opportunity, they also offer a huge business opportunity to the industry. Connecting smart meters and other devices to the smart grid could be bigger business than connecting people (at least from a volume perspective). The industry sees itself as a key enabler for Smart Grids using power line communication (PLC) as well as wireless ZigBee standard. PLC has tremendous traction in Europe where large utilities such as Enel, Aldeasa, EDF are already deploying PLC meters based on chipsets from ST Microelectronics, Texas Instruments and promising start-ups such as ADD Semiconductor from Spain and Watteco from France. The U.S. market is expected to lean towards wireless technologies, although both wireless and PLC standards should co-exist. Another promising technology is coming from EnOcean, a Siemens spin-off, that has pioneered self-powered wireless sensors for use in buildings and industrial installations.
Telenor and Vodafone announced their commitment to the GSMA’s Green Mobile Manifesto that targets cutting CO2 emissions by 40%. The central measure here is to take base stations off-grid and use solar power for 90% of the time backed up by diesel for the remaining 10%. We also observed that ZTE is focusing more on solar powered handsets targeting the mass-market in emerging countries.
M-Education: Queen Rania of Jordan, gave a very impressive speech at the Congress, promoting ‘education for all’. The wireless industry has to set targets to help reduce illiteracy and eliminate poverty around the globe, given its unparalleled reach. Now the GSMA has taken a step in the right direction by joining with the FIFA and other organizations for the 1GOAL initiative that aims to hold world leaders accountable for providing primary education to all children by 2015. Currently, there are 72 million children in the world who are denied the chance of primary education. The mobile industry can help by holding mobile campaigns, mobile advertising, messaging and creative apps for marketing of such initiatives. For more information on 1GOAL initiative and how to help, please go to http://www.join1goal.org/
Operator consolidation and M&A environment: Mobile operator consolidation is continuing; India’s Bharti is bidding over $10 billion for Zain’s operations in 14 African countries. After 2 rounds of failed merger / acquisition talks with Africa’s largest operator MTN, Bharti’s bid looks promising, considering that Zain has been losing money in Africa. We should expect to see several similar bids for operators in emerging markets in the coming years.
Recognition: Some of the major awards given during MWC:
Best Mobile Game – Iricom – The Last City – Fight For Your Life!
Best Mobile TV Service – CBS Mobile – TV.COM
Best Mobile Enterprise Product or Service – RIM – BlackBerry Enterprise Server v5.0
Best Mobile Handset – HTC – HTC Hero
Best SDP – Huawei Technologies Co Ltd – Huawei SDP solution
Best Mobile Technology Breakthrough – Orange – Mobile High Definition Voice
GSM Chairman’s Award – Carl-Henric Svanberg, Former CEO of Ericsson
Mobile Industry Personality of the Year – Steve Jobs, Co-Founder and CEO Apple
Various rumours that MWC may be moving to another city are not correct. The MWC 2011 will be held in Barcelona from 14-17 February 2011. See you there!