Vodafone U.K. Lowers Data Barriers

Vodafone UK has created a new plan that aims to remove the barrier to use of mobile email and mobile Web access, allowing 500 megabytes of data use each month on plans costing GBP 25 or more.

Postpaid customers who take a GBP 40 or higher package also will be offered a choice of unlimited text messages, unlimited landline calls or unlimited Vodafone to Vodafone calls, as well.
This move essentially sweeps away the last remaining cost barriers to entry for both mobile email and the mobile Internet, helping Vodafone UK to make mobile data more applicable to the mass market, says Emma Mohr-McClune, Current Analysis principal analyst.

The new plan will encourage more users to experiment with the mobile Internet. For customers who do not want the mobile data feature, Vodafone allows a monthly discount of GBP 5.

Standalone mobile data pricing currently runs about GBP 7.50 a month, Mohr-McClune says. "This is the first time" that a U.K. operator has offered bundled mobile Web access and email across its entire pay monthly portfolio, starting at GBP 25 per month.

French Broadband at 94% of Internet Users

One of the enduring claims observers make about the state of U.S. broadband is how woeful it is compared to other nations around the world. Consider France, which deregulated its telecommunications market in 2004, leading to heavy competition. In fact, broadband now is nearly synonymous with Internet use.

In March 2008, 93.5 percent of at-home Internet users in France enjoyed a broadband connection to the Internet, down slightly from the 94.2 percent who did so in the previous year. That's significant. The primary reason consumers buy broadband access is to use the Internet. Someday that will change, but right now broadband really is a way PCs can connect to the Internet.

So 94 percent of all home users of the Internet use broadband to do so. That's serious penetration. So note that about 52.4 percent of French homes had a broadband connection in 2007. That's a bit higher than U.S. broadband penetration, which is just about at 50 percent.

The point is that France has been highly successful at getting broadband adopted by Internet users. Fully 94 percent of all Internet users have broadband.

But note that household penetration is about 52 percent. There seem to be more dial-up users in the U.S. market than in France. But the point is worth noting: household penetration might not be the best way to measure penetration.

A household that doesn't use the Internet is hardly a candidate for broadband aimed at Internet users. The more relevant measure is how far broadband has penetrated homes where the Internet actually is used.

Apple iPhone Sales to Blow Through Roof?

As reported by Silicon Alley Insider, RBC analyst Mark Abramsky thinks Apple will sell 14 million phones this year, up 40 percent from his previous prediction of 10 million and more than eight times the 1.7 million phones the company sold in the first three months of the year. He also thinks Apple will sell 24 million iPhones in 2009.

The 3G model will help. So will new carrier deals in Europe and Asia, broader consumer interest thanks to Apple's forthcoming apps platform, and broader corporate interest.

He also thinks Apple might drop or reduce exclusivity requirements in some markets. This would let people buy iPhones without being forced to use Apple's hand-picked carrier partner.

He also thinks Apple will allow carriers to subsidize pricing, and also will allow sales of unlocked phones.

T-Mobile FINALLY Launches 3G

T-Mobile USA has taken the first commercial step in the roll-out of its third-generation (3G) wireless network, launching its UMTS/HSDPA network in New York City. Also, contrary to some early reports suggesting only voice service might be available immediately, the network will be data-enabled from the start.

T-Mobile plans to continue the rollout of its 3G network across major metropolitan markets through the year. By year's end, T-Mobile expects its high-speed data network will be available in those cities where a majority of its subscribers currently use data services.

Yay!

Femtocells: Technology or Business?

ABI Research projects that 100,000 femtocell units wll ship in 2008. Volume deployments won't begin until 2010, when $100 price points will be possible, in volume. The other issue is whether femtocells are embedded in other widely-used consumer gear, such as Wi-Fi routers.

The really critical issue will be whether initial carrier deployments are supported by robust business models and service plans that extend beyond pure fixed-mobile substitution goals,” says ABI Research vice president and research director Stuart Carlaw.

The issue there is that some innovations are very useful and widely deployed, but don't necessarily create a business model. Wi-Fi is the best example of that. So one has to wonder whether femtocells will wind up being a very-useful technology--reducing service provider investment in macrocells, for example--or whether a new revenue stream of some sort can be created.

The most obvious example would be enhanced ability fo wireless providers to compete effectively in the wireline substitution business, where the new revenue stream is cannibalization of fixed line subscriptions. The other obvious issue is ability to sell voice-optimized fixed line broadband subscriptions.

Enterprise Mashups Coming

Mashup tools have so far been used mostly for simple enterprise applications like adding geographical information--typically Google Maps--to corporate data. But that's changing. IBM, for example, has introduced two offerings for building mashups that pull together data from multiple data bases and applications.

One of the tools is aimed at non-technical users while the other development is a mashup environment. WebSphere sMash supports dynamic scripting languages and widget-development tools. IBM Mashup Center allows business users to drag and drop components from local, enterprise and Web sources to create new applications.

JackBe Corp. and Kapow Technologies also have added support for Excel to existing mashup tools.

JackBe uses a plug-in is connected to a spreadsheet so that whenever data is changed, the Presto server updates the data, allowing the most-current version to be consumed by other applications.

Kapow sells an on-demand enterprise mashup service that allows companies to incorporate data from various Web sites and services directly into Excel spreadsheets.

Same DRM for Windows, Adobe, Silverlight: Widevine

Widevine Technologies has announced immediate availability of Widevine Cypher to protect content delivered to Microsoft Windows Media Player versions 9, 10, 11 and Silverlight versions 1 and 2.

The new capability means content now can be securely delivered in Windows Media, Silverlight and Adobe Flash environments using a single content protection solution. The innovation is an example of lots of the important "wrap around" features that will be necessary if digital content businesses are to be built with any scale.

Internet Use Now Totally Mainstream

More than a third of U.S. consumers born before 1946 (seniors) use the Internet, according to Pew Internet and American Life Project. Pew also said that more than half of the younger members of this group (ages 62 to 71) are online.

Older users also use the Internet for the same reasons younger users do: to stay in touch with other people. Nearly six out of 10 U.S. Internet users 62 and older use search engines. Among other activities, almost one quarter of the group banks or pays bills online and one fifth are video gamers.

Multichannel video, PCs, game consoles, mobile voice and use of the Internet now are totally mainstream.

Use of digital video recorders is nearing that point, as are text messaging and MP3 players.

But there's still a ways to go with other innovations such as VoIP and mobile broadband. Unified communications is no where close to being mainstream. It typically takes three to seven years for a successful mass market digital innovation to reach 50 percent penetration of households.

The big exception is high definition television, which will reach--and surpass--that status virtually overnight as a result of government mandate in February 2009.

As for the thousands of other bleeding-edge applications, most will fail to gain widespread mass market adoption. That's always the case for digital consumer electronics.

67% Growth in VoIP Server Licenses

Whatever instability may be coming in some parts of the U.S. VoIP market, global growth--especially in Europe--is robust. The most recent analysis by iLocus shows 67 percent annual growth in VoIP server licenses sold globally, with traffic up 35 percent.

For the second consecutive year, Europe outpaced rest of the world in VoIP penetration. All major European operators--whether wireline or wireless--have a VoIP offering in place and have announced that they will be deploying IMS platforms.

The difference between deployments in the U.S. and European markets is the attitude and actions of incumbents. In the U.S. market, incumbents have not yet decided to make a major effort to sell VoIP; in Europe that already has happened. Because of carrier reluctance, challengers, especially the cable companies, have made significant market share gains.

What happened in Europe will happen in the U.S. market, however. At some point, AT&T and Verizon will decide to push VoIP aggressively, and the dynamics of the market will shift as much as they have in the fdial-up and broadband access markets, which initially were dominated by independent providers.

But fixed line replacement isn't the only place to watch for change. VoIP as a mobility and Web or enterprise application is early in its development right now. Though it might seem inconceivable, revenues from those sorts of applications will one day be significant. If that is not apparent it is simply because applications and business models in the mobility and Web and software spaces are seminal. Even Skype, as popular as it is, only represents two percent or so of global long-distance traffic, for example. So it will take some time before anybody notices.

Still, note that nearly 25 percent of mobile virtual network operators--wireless providers that do not own their own networks--already offering or testing mobile VoIP. By 2010 more than two thirds say they will have a mobile VoIP offering in place.

Scottsdale Muni Wi-Fi Shuts Down

Scottsdale's muni Wi-Fi network, operated by Wildfire Broadband, has gone out of business, according to the Scottsdale, Arizona-based East Valley Tribune. As has been the case for nearly all other municipal Wi-Fi efforts, the networks have failed to attract enough customers.

It is reason at this point to theorize that mobile broadband--both data cards for PCs and smart phones--arecannibalizing some of the potential demand. Some of the remainder of demand is satisfied by free Wi-Fi at coffee shops, hotels and other locations.

Wi-Fi is a great technology. It just might not be much of a service provider business.

BroadSoft Targets Mobility, Web

BroadSoft has announced compliance with the 3GPP Multimedia Telephony standard and launched BroadSoft Xtended, an initiative to open its functionality to makers of Web-based and productivity applications. At the same time, BroadSoft has created at developer program

The trio of moves might be viewed in several ways. Most significantly they reflect BroadSoft's belief that the next wave of growth will come from mobile applications and integration of core communications capabilities with all manner of Web and enterprise applications.

At some level the moves also signal that the significance of hosted communications is not limited to replacing legacy Centrex or phone systems, but is part of a larger move towards more sophisticated communications capabilities for many, if not most, Web and enterprise applications.

It's a tough market to quantify, but looking at the size of unified communications services is a part of the whole picture. Ultimately, some communications service revenue will shift from existing categories to "Web enabled" categories.

Beyond that, some of the value will be intangible, such as "stickiness" leading to lower churn or higher ad revenues. Over the near term, unified communications "revenue" will be hard enough to quantify. Web-based rich communications will be even tougher.

"The full-blown developers program and an online marketplace will enable service providers and end users to download applications that integrate BroadWorks with a wide range of productivity, personal, and social applications," says Joe McGarvey, Current Analysis principal analyst.

While the transformation of services to IP presents opportunity for BroadSoft, it also creates challenges. While the company is well-recognized as a leading provider of enhanced VoIP applications, its application suite is also considered by some service providers to be overkill for residential services, says McGarvey.

At the low end of the application server market, BroadSoft faces significant challenges from traditional telecommunications equipment makers, e.g., Alcatel-Lucent, Thomson/Cirpack, MetaSwitch and Sonus.

McGarvey says it will be important for BroadSoft to capture the middle ground of the application server market, where service providers are looking for some enhanced features but do not require the complexity of applications associated with PBX replacement.

To be successful in this space, BroadSoft needs to move down the complexity curve than it is for challengers to move up, McGarvey says.

To be sure, BroadSoft now finds itself challenged by a new set of competitors, including softswitch providers, which have been gradually increasing the breadth and sophistication of their Class 5 application offerings.

Ultimately, market success might not be as dependent on unique features as on ability to make those features available widely on mobile, Web and enterprise applications.

T-Mobile and Sprint: A Transformative Acquisition

If T-Mobile USA parent Deutsche Telekom does decide to attempt an acquistion of Sprint Nextel, and if that bid were to succeed, T-Mobile would emerge as the largest U.S. mobile provider by quite some measure.

Up to this point AT&T, Verizon Wireless and Sprint Nextel have held roughly equal shares of the market, and all three have had more than twice the market share of T-Mobile.

There are many regulatory, technical and even psychological issues to surmount, though.

Consider that T-Mobile and Sprint now operate three classic mobile air interfaces. Xohm will create a fourth. And then there's Long Term Evolution. Complexity means cost, and that's t0o many different networks to continue operating.

Still, Sprint's low stock price and strong Euro have to be driving some hard thinking about the feasibility of pulling such a merger together. Regulatory or other concerns might ultimately deter making of an offer, or scuttle a merger attempt.

But it would be a transformative move for T-Mobile.

VOD: First You Have to Find It

Before any form of on-demand media can be watched or purchased, it has to be found. That's been a growing issue even for linear media as channel counts have risen over the last two decades, not to mention user-generated video found only on the Web, or the growing range of on-demand video options.

In a parallel but almost-perfect metaphor, paper "viewing guides" have become dysfunctional. Even in the walled garden, linear programming, one screen world, there's just too much information, and too many choices, to display. And that means content isn't found.

Those of you who use the Netflix or Blockbuster DVD rental services, or simply try to find something to watch online, will understand the greater problems beyond linear-formatted TV. Search engines are helpful to the extent of locating pieces of content.

But trailers, sampling mechanisms, user recommendationsand recommendation engines and other sorts of processes are about the only way people can discover content they might enjoy.

Even in the walled garden, linear viewing world there are new efforts to aid the discovery process. ReelzChannel is a "media highlights" channel showing movie and TV clips, commentary and content-focused news.

The channel's research suggests its viewers purchase 24 percent more pay-per-view titles than non-viewers.

Also, in a recent study, 76 percent of users said they found out about a movie they had never heard of by watching the channel. About 21 percent watched a movie on premium services because of something they had seen on ReelzChannel. Another 16 percent ordered video-on-demand or pay-per-view titles, the company says.

Some 87 percent of those polled say ReelzChannel's “What2Watch“ promos were helpful when making a viewing decision.

Dead Company Watch

Azaire Networks, which sold a fixed mobile convergence security gateway product, has gone out of business, iLocus says. IPXstream/IPtelephony.org, a content and newsletter provider, also has gone under.

There always are periods of consolidation after big investment waves, and we are at the front of a winnowing process that already has claimed Pulvermedia and Verso.

Similar contraction cycles hit venture-funded CLEC and Internet firms between 2001 and 2003. Now it is VoIP's turn.

The next cycle, which will not begin for some time, is a similar weeding process for consumer-focused video start-ups.

O2 to Blanket UK with Broadband

O2 will extend its broadband coverage to the whole of the United Kingdom using BT's wholesale broadband network. O2 also seems to have earmarked a sizable amount--£6m (€7.7m)--to grab new customers.

O2 can do so because BT has created a separate business unit that sells wholesale broadband access to any retailer that wants to use it. The U.S. policy framework took a different route, and relies on vigorous competition between the local cable and telephone companies.

One might argue we'd see faster uptake, but less innovation using the functional separation model. Conversely, slower diffusion but more differentiation using the U.S. model. There are different benefits.

After a slower start, it looks as though access speeds and "price per megabit" propositions, plus managed services wrapped around the access, are finally starting to get interesting in the U.S. market.