One Mobile Operator Apps Consortium Dies, Another Gets Ready to Launch

One very large mobile service provider effort to create a stronger Web applications business has given up the chase, while another more-focused consortium is getting ready to launch.

The Wholesale Applications Community, a large consortium of leading GSM-based mobile service providers from around the world, has decided to sell off it sassets and merge the remainder of the effort into a parallel GSM Association effort.


Separately, AT&T, Deutsche Telekom, Vodafone Group, Verizon Wireless and Telefónica, for example, separately are setting up an interoperable way of allowing all of their customers to buy any mobile application available in any member  application store.


As often is the case, very-large consortia can become unwieldy, especially when time to market is a concern, as arguably is the case for any mobile service provider effort to create a viable app store effort able to compete with the likes of Apple and Google.

Apigee, a leading provider of API products and services, has acquired the technology assets of WAC, principally a carrier billing programming interface. for in-app purchases.

WAC was started in 2010 and was backed by 60 operators and suppliers, including Samsung, Intel, Nokia, Ericsson, Qualcomm, Fujitisu, NEC, Hewlett-Packard, HTC, LG and Research in Motion.

The objective was to create a common standard for Web applications usable by all GSM service providers, rather than common mobile applications in a direct sense.

As you might guess, the initiative was intended to create more value for mobile service providers in a world where applications were viewed as rapidly consolidating in the ecosystems run by Apple and Google.

You might say the results have been unspectacular, but that might not be surprising to industry watchers who have been saying the odds of success were high to begin with. The global telecom industry has had a rather mixed record of success creating key standards that drive a significant amount of market success.


ncluding the building of substantial third party and “owned” applications that can use the APIs.

55% of U.S. Smart Phone Owners Compare Prices Inside Stores, Study Finds

Some 55 percent of smart phone owners said they’ve used a mobile device to compare prices between retailers, while inside retail stores, according to Emphatica.

Thirty-four percent said they’ve scanned a QR code, and 27 percent have read online reviews from their devices before making purchase decisions.

Carrier Ethernet Growing at 17% Annual Rate

U.S. enterprises and consumers are expected to spend more than $47 billion over the next five years on Ethernet services provided by carriers, according to a new market research study from The Insight Research Corporation.

With metro-area and wide-area Ethernet services readily available from virtually all major data service providers, industry revenue is expected to grow from nearly $5 billion in 2012 to reach just over $11 billion by 2017.

However, year over year spending growth is expected to gradually stall and by 2017 the annual revenue growth rate will be half of what it is today, Insight Research says. Growth is generally moderating gradually, for a number of reasons.

For starters, the installed base of revenue is growing larger, so it is harder to maintain higher growth rates. Also, at some point, most U.S. cell sites will have been converted to carrier Ethernet.

Pricing pressures will continue as competition remains significant in the market, and as Ethernet displaces most private line and frame relay services.

According to the study, Ethernet's central driver continues to be its ability to meet seemingly endlessly growing bandwidth demands at lower cost and with greater flexibility than competing services.

A major growth driver in years past had been the large-scale migration of wireless backhaul cell sites from TDM to Ethernet, and though still a contributory growth factor, backhaul growth will start to moderate as LTE deployments are completed.

"Wireless backhaul had been a major factor in this fast-growing telecommunications services sector, but with much of the conversion of TDM to Ethernet completed, we are forecasting that spending on Ethernet will moderate," says Robert Rosenberg, president of Insight Research. "Over the five year forecast period we project a compounded annual revenue growth rate of 17 percent, with growth slowing by 2016 to be more in the range of 12 to 15 percent.”

Digital Local Media Ads to Grow 13.1% in 2012, According to BIA/Kelsey

Local online advertising revenues will grow 13.1 percent in 2012, BIA/Kelsey forecasts.

Mobile search will grow faster, at 77.2 percent. Online video will grow 51.6 percent and social will grow 26.3 percent.

Compound average growth rates between 2011 and 2016 include:
* newspapers – online revenues: 5.0 percent
* radio – online revenues: 11.8 percent
* television – online revenues: 12.8 percent
* digital out of home: 11.7 percent
* online: 9.4 percent
* mobile: 44.9 percent
* Internet Yellow Pages: 12.5 percent
* email, reputation and presence management: 14.9 percent
* social media: 21.0 percent
* online video: 36.7 percent.

Devices Now Becoming a Way for Application Providers to Connect Consumers with Apps

“We always wanted to be in the hardware business,” Google Chairman Eric Schmidt says. That comment, whether fully accurate as a description of Google's thinking or not, does seem to describe current thinking in much of the applications business.

Sony has for decades argued that ownership of content was important for selling TVs. Apple found that iTunes enabled it to create a dominant position in the MP-3 player market. The App Store has been crucial for iPad and iPhone sales, in the same way that the Android Market and Google Play have been important for sales of Android devices.

Amazon's content richness is a key reason for the success of the Kindle Fire. So though it might not be a feasible strategy for every application provider, it certainly seems true that an integrated device plus content and software strategy makes increasing sense.

In other markets, the success of the Square mobile software that turns a tablet or a smart phone into a retail point of sale terminal provides another example of how hardware enables a software or service business.

And Oracle has seen value in bundling hardware with enterprise applications.

Sprint Accelerates Roll-Out of Long Term Evolution Network

Sprint appears to be accelerating its deployment of its new 4G Long Term Evolutiion network, announcing availability in 15 cities where it had promised availability in just five cities. Those cities include:
Atlanta
Athens, Ga.
Calhoun, Ga.
Carrollton, Ga.
Newnan, Ga.
Rome, Ga.
Dallas
Fort Worth, Texas
Granbury-Hood County, Texas
Houston
Huntsville, Texas
San Antonio, Texas
Waco, Texas
Kansas City, Mo.-Kan.
St. Joseph, Mo.

Now TV Moves Users Closer to Internet TV Delivery

Dish Network CEO Charlie Ergen has said that, if he were starting today, he probably would not choose to launch a video entertainment service using satellites, and might opt for a "Netflix" style, over the top over the top delivery method. 


In the United Kingdom, BSkyB, the dominant satellite video service provider, is going to try something similar, if restricted for the moment to movie fare. 


Instant access to hundreds of the latest titles on Sky Movies, with new and exclusive premieres available each Friday, at least a year before any other online subscription service, as BSkyB launches Now TV, without a contract, using online delivery, not a satellite connection.


Now TV is launching in the United Kingdom on PC, Mac and selected Android smartphones; on iPhone, iPad within the next month, on XBox later in 2012. That is not entirely revolutionary. Online delivery of movie content is fairly well established.


The next big breakthrough will come when single TV episodes, an entire TV series or a complete TV channel or network can be purchased separately, with online delivery, without the requirement for first buying a standard TV service. 

It Isn't Yet Clear How Visa-MasterCard Settlement Affects Mobile Payments

Though it is not a specific issue in the developing mobile payments business, historically hostile retailer relationships with credit card issuers continue to underpin retailer interest in rival methods of processing payments.

The big hope, of course, is that new mobile payment systems will allow retailers to process payments at lower cost than traditionally has been the case. To be sure, friction between participants in any ecosystem can get testy when one participant's revenue stream is another participant's cost.

Relationships between video subscription providers and the programming networks provide one clear example. But that also is the case in the retail payments business. A revenue stream for an issuing bank and a payment network is a direct cost to a merchant. And those costs might be changing.

Visa, MasterCard and their issuing partners have reached a legal settlement with merchants regarding interchange fees (fees charged by issuing banks for use of a credit card), and the implications for mobile payments are not yet completely clear.

Nor are the legal challenges entirely over. The National Association of Convenience Stores, for example, seems intent on continuing the fight against the settlement, even though plaintiffs and Visa and MasterCard have agreed to a settlement.

The lawsuit by merchants claimed Visa and MasterCard were in collusion to keep those rates higher than would otherwise be the case.

To settle the suit, merchants will be compensated in three ways. First, Visa, MasterCard and their issuing partners will make a $6.05 billion cash payment to merchants to compensate them for previous interchange charges.

Second, Visa and MasterCard will lower card acceptance fees by 10 basis points for a period of eight months, providing $1.2 billion in additional relief to merchants.

The third part of the settlement may have the largest impact on consumers' day-to-day shopping experiences, some think. Merchants will now be permitted to charge higher prices on transactions paid for with a credit card, a practice that had been prohibited by the networks' earlier terms.

The mobile payments business could be affected in a number of ways. In most cases, mobile payment transactions are based on payment of such fees. For consumers, there are few immediate effects, since the fees are paid by retailers, not end users directly (though the total cost of operating a retail outlet, including such fees, is built into retail prices).

Lower fees will reduce the mobile payments revenue opportunity, and also make harder the task of creating a value proposition that is easy to understand. Lower revenue might also reduce the incentive for issuing banks, and the payment networks, to spend so much on mobile payment systems.

On the other hand, should the uncertainty be cleared up, it also is possible issuing banks and payment networks could move with more assurance on mobile payments, since they would have greater understanding of the revenue part of the operations.

Less revenue from interchange also will continue to spur thinking about other ways revenue can be earned, and that should help mobile wallet efforts, which are expected to rely on loyalty programs, advertising and promotion revenue streams.

Every Leading Tablet Supplier Will Support Multi-Screen Formats

Leading tablet suppliers are going both smaller and bigger, depending on where they have been positioned in the tablet market, in large part because, as some have suggested, there is room in the market for devices of varying screen sizes.

Most 10-inch devices get used on couches, and many tablets essentially never "leave the house." In other words, a 10-inch tablet is an "untethered" device, not a mobile device. They aren't used when people are really "on the go." There are some exceptions.

Some people do carry their iPads "everywhere." Many business people substitute a tablet for a PC. But most people also carry a smart phone, which suffices for the quick Web and app experiences one typically wants to use when out and about.

Some might argue pricing differentiation is the reason for the "smaller device" demand. In that view, less-costly tablets allow more people to buy them. There certainly is logic to that point of view. It worked really well for Apple's line of iPods.

On the other hand, over time, it is likely that application differentiation also will occur. An iPod shuffle is better suited for listening to music than a full-size iPod, if you are running, for example. In that case, the application setting drives the purchase, not the cost of the device.

Something like that eventually will be true of the tablet market as well.

Most 10-inch devices get used on couches; they are not really "mobile" devices. A greater proportion of seven-inch devices likely are carried in purses, backpacks or pockets, and one might argue that is because a 10-inch device is too big to carry everywhere, or most places.

The other argument might be that, as more people carry a smart phone, there is not such a compelling reason to carry another web-capable device "on the go."

Maybe the "Mobile Payments" Hype is Misplaced; Maybe it is Really Mobile Commerce That is the "Revolution"

Making a mobile device act like a credit card or a wallet, as important as that might be, might not be the "big" change coming to retail commerce. A potential shift from cash or credit or debit card payments would be a key change for many in the ecosystem, to be sure.

But it just is possible that such a change winds up being only part of a broader transformation of retailing. Changing the way a customer pays for purchases is important, don't underestimate that. But it might be the visible, end user tip of a whole series of changes that might ripple through the backend of a retailer's business processes.

That is a lot less visible, and a lot less sexy, than using a mobile device to pay for a purchase. But it arguably is more important to the way retailers do business, retailing and commerce, than "mobile payments" are.

Not that any of the changes will be especially easy. Changing the way people "pay" will involve investments by retailers and, to some extent, users (they will need new devices), as well as a significant change in behavior.

On the other hand, the "smarter" and contextual value of transactions and behavior that could be gleaned from use of mobile devices could allow major changes to the rest of the retail operations, from marketing to inventory management to channel.

Zuckerberg Says "Mobile First" is Biggest Challenge

Facebook Chief Executive Officer Mark Zuckerberg says his hardest job right now is figuring out how to adapt the world’s largest social network to mobile devices, Bloomberg reports. Zuckerberg said the vast difference in user experience was the big challenge.

That, as much as anything, shows why "mobile first" is a strategic challenge faced by many application providers, and arguably is a challenge faced by many service providers as well, including those who provide access services.

Just how much global wireless revenue exceeds fixed network revenue varies from forecast to forecast, though all forecasts now show that wireless is a majority of revenue, on a global basis.

According to International Telecommunications Union estimates, mobile revenue is about 4.5 times bigger than fixed network revenue, and it has been that way for several years. In a literal sense, the global telecommunications business has become a largely mobile business, with some important fixed line applications and revenue sources, the ITU data suggests.

What Implications for Unified Communications if Today's Teens Don't Use Email, Twitter, IM?

To the extent that communication preferences tend to vary by generation and age, current communication preferences of teenagers might have implications for entirely "unrelated" business communications.

Consider what the implications might be for "unified communications," for example. The basic question might be the amount of "need" for unifying some communication modes that don't get used very much.

One study of U.S. teenager behavior suggests that a majority of them text and check Facebook everyday, but few, only about 11 percent, use Twitter daily.

At a high level, that only suggests that one app using point-to-multipoint or "multicast" communications is preferred, over another.

Clearly, multicast is an established way of sharing information, and getting information, whether Twitter is the preferred medium, or not.

You can draw your own conclusions about why Twitter has such low usage among teenagers.

Some might suggest the usage pattern has something to do with user interest in "news."

The theory is that teenagers actually are little interested in news, and Twitter is a medium ideally suited for news distribution.

In fact, that is the main reason many other users engage with Twitter.


The study also confirms what you already knew, namely that teenagers hate talking on the phone. 


Only four percent of them consider talking on the phone their "favorite" way of talking to friends.

They instead prefer commenting publicly on each other's Facebook profiles or texting.

Email and instant messaging also are not so favored. Oddly enough, that might have at least some implications for unified communications. 

Why unify all tools if email and instant messaging are not preferred or used? Granted, teenagers are, for the most part, not in the workforce as they will be in a decade. But it current habits do not change, they won't prefer to use IM and email when at work. They will text and post, the study might suggest. 

"Bundling" Occurs 2 Ways, at Wholesale and Retail Levels

Lots of consumers doubtlessly would prefer to buy their video content one program at a time, or one "channel" or "network" at a time. It isn't so clear, yet, that either video distributors or programming networks would prefer to sell that way.

In fact, traditionally, programming contracts have carried stipulations about how content could be packaged, and those terms generally prohibit a la carte sales of programs.

Programming networks, in fact, prefer to bundle networks when they sell to distributors, as it allows them to "force" a distributor to buy a new network, or a network with little viewership, because doing so is a requirement for getting rights to air a popular network.

Currently involved in a major contract dispute with Viacom, DirecTV is trying to remind its customers that it, DirecTV, disputes proposed Viacom pricing and bundling because prices would rise.

Email "Overload" Isn't a Myth, But Can't be Replaced, Either

"Email overload," like message overload of any sort, is a problem, but likely is not a truly "solvable" problem, either. Some would say other one-to-many messaging formats work better. If you are on the receiving end of all those messages, you might not agree, though. And that's probably the bigger problem: most people have to do more work, more collaboratively, with more people, much faster.

Email might not be the best medium for all types of messaging, as one-to-many often works better. But not all communications can be handled that way.

According to Dawna Ballard, associate professor in the Department of Communication Studies at UT Austin, “The feedback loops in organizational communication are becoming more compressed, leading to an increase in the quantity of work, which in turn requires faster communication with a greater number of people in the same time frame as before.”

Telefónica Digital Launch "Wanda" for Mobile Payments

Telefónica Digital and Visa Europe have launched what they call "a wide ranging strategic partnership" to drive new business opportunities within mobile commerce across Telefónica's European footprint.  


The deal includes cooperation in areas such as mobile wallet, contactless payments (NFC), acquirer services for mobile point of sale, and merchant offers.

The agreement builds on Telefónica and Visa Europe's existing relationship in markets such as the United Kingdom and Ireland, establishing Visa Europe as Telefónica's preferred partner for the issuance of branded payments cards and the development of related mobile payment services, Visa Europe says.

Separately, MasterCard and Telefónica have a joint venture, called “Wanda,”created to lead the development of mobile financial solutions in 12 markets in Latin America.

Wanda will provide mobile payment solutions to the over 87 million Movistar customers in the 12 markets where it will operate. These mobile payment services will be linked to a mobile wallet or prepaid account that will allow for money transfers, mobile airtime reload, bill payment and retail purchases, among other services.

Mobile commerce is a key focus area of Telefónica's new Digital unit which was formed to drive business opportunities within the digital space. Within Europe, Telefónica has launched a mobile wallet service to customers in the UK and is working to launch mobile wallets across its other operating businesses.


The deal highlights one key aspect of growth strategy for tier-one European mobile service providers. The problem is that, if you are an executive leading a firm earning a score or two billion dollars a year, and you think you might have to replace perhaps half of that revenue over perhaps a decade's time, you really need big new sources to offset the loss of revenue of that magnitude.


And, as it turns out, at the moment there are just a handful of revenue generators theoretically capable of generating billions of dollars worth of incremental revenue each year, for a single service provider. Those opportunities are said to include mobile banking operations, in a broad sense; mobile advertising and machine-to-machine mobile services. 


After that, the potential list of new businesses fall off fairly dramatically, in terms of revenue opportunity. 


That is why Telefónica Digital's joint venture with Visa Europe is so important.