Open Wireless Access:  Will the carriers retain control?  eComm, Mountain View CA, USA Dean Bubley, 14 th  March 2008 [ema...
So what does Open mean in Mobile? <ul><li>Open OS & smartphones </li></ul><ul><li>Networks + unlocked devices </li></ul><u...
But…… <ul><li>International differences </li></ul><ul><li>Slow pace of regulatory change </li></ul><ul><li>Consumer apathy...
Two worlds in mobile Copyright Disruptive Analysis Ltd 2008 Mar 2008 USA Canada Japan Korea >90% handsets sold via carrier...
How openness works in much of the world Copyright Disruptive Analysis Ltd 2008 Mar 2008 $30 from electronics store SIM “st...
Openness in the UK Copyright Disruptive Analysis Ltd 2008 Mar 2008 Starting @ $20 / month for 1GB No roaming premium on-ne...
Devices, arbitrage and IP Copyright Disruptive Analysis Ltd 2008 Mar 2008 THE PAST Cellular Operator Voice, SMS Internet 3...
But do “Normobs” care about openness? Copyright Disruptive Analysis Ltd 2008 Mar 2008 On the shelves at my local branch of...
<ul><li>“ Is Vodafone better than Orange? It’s just they have a pretty pink phone & I’m tempted” </li></ul><ul><li>Theoret...
What normobs actually care about <ul><li>Aesthetics </li></ul><ul><li>Camera </li></ul><ul><li>Bluetooth </li></ul><ul><li...
Benevolent dictator or tyrant? Copyright Disruptive Analysis Ltd 2008 Mar 2008
The $100bn fly in the ointment of openness <ul><li>SMS will be difficult to substitute </li></ul><ul><li>$100 billion reve...
Open wireless vs. Deep Packet Inspection <ul><li>False positives </li></ul><ul><li>Legal & regulatory risks </li></ul><ul>...
Convergence vs. Open multiplicity <ul><li>One device? </li></ul><ul><li>One number? </li></ul><ul><li>One operator? </li><...
Multiplicity: users have choices  Copyright Disruptive Analysis Ltd 2008 Mar 2008 (2nd phone: close friends) Multi-tasking...
Open spectrum? Copyright Disruptive Analysis Ltd 2008 Mar 2008 An Irishman stopped cutting the hedge, as a car drew up bes...
A fundamental problem Copyright Disruptive Analysis Ltd 2008 Mar 2008 <ul><li>Radio signals >2GHz struggle to go through w...
And more problems……. Copyright Disruptive Analysis Ltd 2008 Mar 2008 1.1bn shipped in 2007 Opportunity cost of ‘elegant’ b...
Steps towards spectrum openness <ul><li>Tentative acceptance of UWB </li></ul><ul><li>Technology Neutrality / WAPECS </li>...
Conclusions <ul><li>About 10 definitions of “open”  </li></ul><ul><li>Little public awareness of, or support for, abstract...
Don’t be a dumb pipe, be a tiger-stripe pipe Copyright Disruptive Analysis Ltd 2008 Mar 2008 (Huawei 3G HSDPA dongle modem...
About Disruptive Analysis <ul><li>Analyst house & consulting firm </li></ul><ul><li>Blog at disruptivewireless.blogspot.co...
<ul><li>www.disruptive-analysis.com </li></ul><ul><li>disruptivewireless.blogspot.com </li></ul><ul><li>[email_address] </...
 
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Disruptive Analysis Will The Carriers Retain Control Ohead

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Disruptive Analysis Will The Carriers Retain Control Ohead

  1. 1. Open Wireless Access: Will the carriers retain control? eComm, Mountain View CA, USA Dean Bubley, 14 th March 2008 [email_address]
  2. 2. So what does Open mean in Mobile? <ul><li>Open OS & smartphones </li></ul><ul><li>Networks + unlocked devices </li></ul><ul><li>Devices + multiple networks </li></ul><ul><li>“ Vanilla” devices - no feature lock-downs </li></ul><ul><li>Off-portal content, apps & VoIP </li></ul><ul><li>Interop across providers & devices </li></ul><ul><li>No packet/app filtering in the network </li></ul><ul><li>Innovation in unlicenced spectrum, UWB etc </li></ul><ul><li>Open access & tech-neutrality in spectrum auctions </li></ul><ul><li>Cognitive or software-defined radio </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  3. 3. But…… <ul><li>International differences </li></ul><ul><li>Slow pace of regulatory change </li></ul><ul><li>Consumer apathy & inertia </li></ul><ul><li>Laws of physics </li></ul><ul><li>Scale economies </li></ul><ul><li>Conflicting financial imperatives </li></ul><ul><li>Public safety concerns </li></ul><ul><li>Practicalities (eg antenna sites) </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  4. 4. Two worlds in mobile Copyright Disruptive Analysis Ltd 2008 Mar 2008 USA Canada Japan Korea >90% handsets sold via carriers <10% prepay <10% Nokia Globally: 50% phones sold by carriers 70% prepay, 40% Nokia Mixed Pretty much everywhere else 0-80% handsets sold via operators >50% prepay >40% Nokia Carrier-control
  5. 5. How openness works in much of the world Copyright Disruptive Analysis Ltd 2008 Mar 2008 $30 from electronics store SIM “starter pack” c$5, inc $3 credit. Bought anonymously. No contract needed. Credit top-up from $1. Bought from kid leaning through bus window + + Downsides: Poor support for data, number portability, few “services” beyond voice & SMS
  6. 6. Openness in the UK Copyright Disruptive Analysis Ltd 2008 Mar 2008 Starting @ $20 / month for 1GB No roaming premium on-net Or prepay $200 for modem then $1 per day / $10 per month No restriction on applications Competing against 4 other networks with other cost/policy
  7. 7. Devices, arbitrage and IP Copyright Disruptive Analysis Ltd 2008 Mar 2008 THE PAST Cellular Operator Voice, SMS Internet 3G IP data Bluetooth THE PRESENT Smart OS Inflexible RTOS Memory card USB Complete control of all voice, data & content that goes to/from device WiFi
  8. 8. But do “Normobs” care about openness? Copyright Disruptive Analysis Ltd 2008 Mar 2008 On the shelves at my local branch of Carphone Warehouse in London last week 9 Types of Smartphone 11 Types of Pinkphone + 9 Brandphones – Prada, Armani, Ted Baker, Levis, Porsche, Mandarina Duck, D&G, JCB, Apple
  9. 9. <ul><li>“ Is Vodafone better than Orange? It’s just they have a pretty pink phone & I’m tempted” </li></ul><ul><li>Theoretical physics undergrad - Advanced software user who uses Mathematica on a PC to model fluid dynamics. </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  10. 10. What normobs actually care about <ul><li>Aesthetics </li></ul><ul><li>Camera </li></ul><ul><li>Bluetooth </li></ul><ul><li>Music Player </li></ul><ul><li>Battery life </li></ul><ul><li>And in some cases </li></ul><ul><li>Language support </li></ul><ul><li>Qwerty </li></ul><ul><li>Car kit </li></ul><ul><li>Memory slot </li></ul><ul><li>Video </li></ul><ul><li>Quad-band </li></ul><ul><li>3G </li></ul><ul><li>GPS </li></ul><ul><li>Touchscreen </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  11. 11. Benevolent dictator or tyrant? Copyright Disruptive Analysis Ltd 2008 Mar 2008
  12. 12. The $100bn fly in the ointment of openness <ul><li>SMS will be difficult to substitute </li></ul><ul><li>$100 billion revenues worldwide </li></ul><ul><li>2 billion active users (twice that of email) </li></ul><ul><li>3 trillion messages per year </li></ul><ul><li>Interoperability can be costly </li></ul><ul><li>Implies mobile numbers in many countries </li></ul><ul><li>For at least the next 10 years, SMS support is table stakes </li></ul><ul><li>Source data – credit Tomi Ahonen </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  13. 13. Open wireless vs. Deep Packet Inspection <ul><li>False positives </li></ul><ul><li>Legal & regulatory risks </li></ul><ul><li>Competition </li></ul><ul><li>Protocol obfuscation – eg VoIP in HTML </li></ul><ul><li>Encryption & VPNs </li></ul><ul><li>Reverse-engineering of policies </li></ul><ul><li>Proof & audit trail </li></ul><ul><li>Applications are moving to XML & browser </li></ul><ul><li>DPI / Anti-DPI war similar to viruses </li></ul><ul><li>PR & marketing risk to reputation </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  14. 14. Convergence vs. Open multiplicity <ul><li>One device? </li></ul><ul><li>One number? </li></ul><ul><li>One operator? </li></ul><ul><li>One identity? </li></ul><ul><li>One message box? </li></ul><ul><li>One phonebook? </li></ul><ul><li>One broadband? </li></ul><ul><li>One femto? </li></ul><ul><li>One social network? </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008 … . users have complex, individual mobility preferences. NO This is not what convergence is about
  15. 15. Multiplicity: users have choices Copyright Disruptive Analysis Ltd 2008 Mar 2008 (2nd phone: close friends) Multi-tasking, multi-access, multi-operator, least-cost-routing software In bag: Old college friends Former colleagues Best mates Informal business contacts Parents Work Home: PSTN, DSL & VoIP (calling Granny in Australia)
  16. 16. Open spectrum? Copyright Disruptive Analysis Ltd 2008 Mar 2008 An Irishman stopped cutting the hedge, as a car drew up beside him and an English visitor enquired, &quot;Could you tell me the way to Balbriggan, Please?“ &quot;You know, sir, if I was going to Balbriggan I wouldn't start from here at all .&quot; Source: http://www.abitoblarney.com/irishjokes.htm
  17. 17. A fundamental problem Copyright Disruptive Analysis Ltd 2008 Mar 2008 <ul><li>Radio signals >2GHz struggle to go through walls. So….. </li></ul><ul><li>Use more power </li></ul><ul><li>Use more sites </li></ul><ul><li>Indoor solution </li></ul><ul><ul><li>Repeaters / antennas </li></ul></ul><ul><ul><li>Dual-mode </li></ul></ul><ul><ul><li>Femtos </li></ul></ul><ul><li>Helped a bit by MIMO etc </li></ul>
  18. 18. And more problems……. Copyright Disruptive Analysis Ltd 2008 Mar 2008 1.1bn shipped in 2007 Opportunity cost of ‘elegant’ but complex & slow solutions
  19. 19. Steps towards spectrum openness <ul><li>Tentative acceptance of UWB </li></ul><ul><li>Technology Neutrality / WAPECS </li></ul><ul><li>Spectrum Trading </li></ul><ul><li>Spectrum Usage Rights </li></ul><ul><li>White space reuse </li></ul><ul><li>Bandsharing in military / government spectrum </li></ul><ul><li>Wholesale models </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  20. 20. Conclusions <ul><li>About 10 definitions of “open” </li></ul><ul><li>Little public awareness of, or support for, abstract concept of openness in mobile in any of its forms </li></ul><ul><ul><li>Inertia, apathy, convenience & familiarity are powerful forces </li></ul></ul><ul><li>Competition should make it a non-issue </li></ul><ul><ul><li>It’s happening already, but slowly </li></ul></ul><ul><li>Utopian visions fail to provide a route from here & now </li></ul><ul><li>Full spectrum deregulation currently implausible </li></ul><ul><li>Plenty more flexibility & openness in spectrum & devices </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008 Bottom line: Carriers & Governments will retain a lot of control…. but it will be earned, subject to competition & arbitrage, and not just by default
  21. 21. Don’t be a dumb pipe, be a tiger-stripe pipe Copyright Disruptive Analysis Ltd 2008 Mar 2008 (Huawei 3G HSDPA dongle modems, sold by 3 UK) $10 patterned sticker = higher margin than most services
  22. 22. About Disruptive Analysis <ul><li>Analyst house & consulting firm </li></ul><ul><li>Blog at disruptivewireless.blogspot.com </li></ul><ul><li>Established 2002, covering Wireless VoIP since Day 1 </li></ul><ul><li>Deep research into: </li></ul><ul><ul><li>FMC </li></ul></ul><ul><ul><li>VoWLAN, VoIPo3G, femtocells </li></ul></ul><ul><ul><li>Wireless broadband </li></ul></ul><ul><ul><li>Spectrum issues </li></ul></ul><ul><ul><li>Handset technology </li></ul></ul><ul><li>New VoIPo3G report published Nov 07 </li></ul><ul><li>“ Don’t assume” – Consensus viewpoints are often flawed </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008
  23. 23. <ul><li>www.disruptive-analysis.com </li></ul><ul><li>disruptivewireless.blogspot.com </li></ul><ul><li>[email_address] </li></ul><ul><li>+44 (0) 7941 100016 </li></ul>Copyright Disruptive Analysis Ltd 2008 Mar 2008

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