Entry through Barcelona airport was strange this year, no queue at immigration, no queue for the taxi, and there were even a couple of spare seats on the plane. This uncrowded entry was in line with the number of people letting me know they were not attending this year.  Many western European operators had only 2 to 5 people attending when in the past it would have been 50 or so, and American operators remain notably absent except for a few senior execs.  Its the impact of operator cost controls and many suppliers cutting marketing budgets to focus on regional rather than global events.  Though, with that said, there was good operator attendance from Middle East, Eastern Europe, APAC (those countries not celebrating Chinese New Year, as a festival think of it like the western Christmas and New Year combined then doubled) and LATAM.  This re-disribution of operator attendance calls into question whether MWC should permanently reside in Europe.  Compared to last year, attendee numbers were up by perhaps 10%, most of my customers were happy with traffic to their stands by the end of Wednesday.

But back to my entry into Barcelona, the experience at the airport contrasted to a city organized fun-run that closed the roads into the city.  There were some heated discussions between the taxi drivers and guards stopping their entry, which the snow shower didn't cool down (that's right, snow in Barcelona).  Sunday-Wednesday were cool (compared to NJ it was warm) and overcast, but the sun did finally come out on Wednesday afternoon.  Last year in a discussion with a local policeman to report with a friend his stolen bag, the policeman revealed that thefts are tolerated by the locals because the thieves only target visitors, this avoids it becoming a political issue.  I pass no comment on the rule of law being a 'political' issue.  His advice was to look like a local to avoid being targeted.  Its a sad indication on Barcelona that I consider MWC the most dangerous conference I attend, a view shared by attendees from many other parts of the world.  But with that said, MWC remains the only conference I must-attend every year.

Getting down to the meat of what happened at the show...

WAC (Wholesale Application Community - not Committee) was the biggest news of the conference, its 5 years late, but at least the fragmentation issues are being tackled.  24 operators have signed up to create an application warehouse including América Móvil, AT&T, Bharti Airtel, China Mobile, China Unicom, Deutsche Telekom, KT, Mobilkom austria group, MTN Group, NTT DoCoMo, Orange, Orascom Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telenor Group, TeliaSonera, SingTel, SK Telecom, Sprint, Verizon Wireless, VimpelCom, Vodafone and Wind.  Together, these operators have access to over three billion customers around the world. The GSMA and three device manufacturers (LG Electronics, Samsung and Sony Ericsson) also support this initiative.  The release looks like it was done in a rush, so there are many more questions than answers, some of my views on the announcement include:

• Enables operators to efficiently fill the crapp-store part of their inventory.  That is copy the apps in the Apple Store which are racing to zero price.  This is a key point, Apple is a CE (Consumer Electronics) manufacturer so does not care about the profitability of its app store (iTunes is different); Apple cares about selling more devices.  I use the term crapp-store as the margin generated for operators is likely to be low to negative, however there's lots of customer value -  especially those free apps.
• Enables operator developer community / open innovation programs to focus on the 'fat middle' of services that use and differentiate their network compared to OTT (Over The Top) services; and focus on partners as well as app developers, e.g. enterprises, local content, local system integrators, local authorities, etc.
• Enables the industry to focus on specific platforms and form factors, e.g. Java, Symbian, Android, to minimize fragmentation.
• Endorses OneAPI and BONDI as the supported network and device APIs.
• JIL has joined WAC, perhaps they realized the error of their ways in their widget obsession?
• Must start with a 70:30 revenue split as per other stores, with a business plan that can support 80:20.
• Must have a common ingestion process into a warehouse that allows developers to select the operators; and the app just goes into those stores.  No ifs, ands, or buts.
• Must support updates, this is very important, updates show the customers they're continuously loved and reminds them of their applications; but sensible limits should be applied, e.g. max update of once per month.
• Operators must sort out the confusion WAC generates with their development / open innovation programs.  Each operator should state clearly the focus given WAC, they still need both if they want to innovate.  WAC will help fill the crapp-store, and depending on its focus enable innovations from other markets to be available to all.  
• Operators must focus on creating a compelling store front across the handset, web, STB (Set Top Box), CSR (Customer Service Rep), and retail stores.  And build an engaged customer base for that store.  Store must including search, rating and community features to make finding apps / services as easy as the web, and critically ensure adequate performance of store - some browser based solutions may struggle.  
• In the limit there will be as many 'apps' as their are web sites, web games and web services, its all just the internet not the "mobile internet."  I'll do an article on the evils of the investment house analysts creating the contrived category of the Mobile Internet soon, it is their attempt to continue to steal money from our retirement accounts.
• WAC must be more than widgets (a current obsession of some operators).  A widget running on a widget engine in a browser on a mobile OS has significant  limitations in performance compared to a native app.  Operators need to be very careful in not focusing on technology, user experience is orders of magnitude more important.  Apple has a highly optimized proprietary stack, so just choosing 'widgets' will not give an Apple-like experience.
• I currently put WAC's chances of success at 20%, JIL I had down at 5%.  Once operators start to announce how WAC works with their open innovation programs, we understand better WAC's focus, and operators better understand the difference between the 'crapp store' and their 'network services store' (apps/services that use their network and make money for them) I'll revise the chances.

Set against the WAC fragmentation reduction opportunity we have increasing OS fragmentation: Bada from Samsung, MeeTo (sorry MeeGo the Nokia/Intel OS) and Windows Phone 7 Series.  Hopefully WAC can help focus this fragmentation.  Windows 7 now looks like a 2 year old mobile OS with the inclusion of some community aggregation features and a rather 'square' looking start screen.  As its not available until the end of the year it will only be 3 years behind the pack at launch.  In playing with many of the devices at the show, it still looks like functionality is being pushed in preference to performance, e.g. app switch times, time to fire up the browser, and importantly scrolling through the address book all feel a slightly sluggish compared to my acid test of the good-old Nokia 6310i address book experience.

Ericsson came late to the table with its app store - that's so 'last year.'  Ericsson Mobility World, sorry Developer Connection, is a great way to waste a developers' time.  To be relevant, the store must have direct access to an engaged customer base; sitting in a demo lab is of little value.

Applications / Services I'd like to highlight that operators should have deployed last year include:
HomeCamera - world's easiest to use home surveillance service;
Dial2do - voice control to text, tweet, or conference;
4dk - context aware communications;
Aonta - next generation software based conferencing; and
hSenid - customer created VAS.

All of the above services use the operators' networks, they need the operator to be the trusted agent, and will make significant margin for operators, rather than the 'race to zero' crapp store.  Open Innovation is about enabling operators to launch tens/hundreds of these services per year by working directly with these companies who obsess about their services.  Operators should really only be wasting one or two junior engineers' time on having one hundred thousand bookmarks (sorry widgets) in a store.

During Eric Schmidt's speech there was some churlish questions, Google is entitled to compete in whatever markets it chooses using all available legal means, though its been quite naughty with Buzz and EPIC will sort them out.  The industry must realize Google's model is not aligned to the end users' best interests as Google's customers are the advertisers and they will pass that information to whomever will pay.  As scams get more sophisticated people will realize the risks of being a 'means to an end,' rather than an 'end in itself,' and the Buzz incident is just one small example.  Telcos must focus on how to remain the trusted agent for their customers in this emerging web 3.0 world, rather than stamping their feet in front of a great competitor that forces us to step up our game.

Congratulation to Huawei for winning the Best Service Delivery Platform at the GSMA awards, as the global SDP (Service Delivery Platform) supplier to Telefonica group this is great endorsement by the industry.  Congratulation to Ecrio for winning the best RCS (Rich Communications Client) mobile client and second place in the PC client; and congrats to WIT software for the best PC RCS client.

At the NEPs (Network Equipment Provider) stands LTE, femtocell, mobile advertising, WiMAX, and IMS were still being talked about, and the problems were again being swept under the carpet.  Such an approach does not move the industry forward.

Some of the BOSS (Business and Operational Support Systems) vendors appear to be moving away from the scary-complex TMF architecture and putting a customer centric model in its place.  That is lining up telco operations around the value delivered to the customer, rather than continuing to fuel the IT and Network Operations internal war.  All Telco CEOs should but network ops and IT under the CIO as its all just "software running on servers", including the switches, messaging gateways and many other network elements.  This bring me back to Google, they understand that in the limit costs of operations will be dominated by the data center.  Operators should compare their data center economics to Google's ('Gloud' economics) as in the limit they're both service providers with software running on servers.

On industry sentiment: optimism is up, but the skies are not blue, clouds still linger.  There's a tiredness from many of the large organizations as further consolidation / downsizing is inevitable. Yet there's still much dynamism from the small and medium companies that are the factories of service innovation for this industry and which operators need to work with much more closely to capture that energy, rather than crushing it through a strategic supplier.  Hence why an open innovation program remains critical - props to Jose Vallez for what he's doing on open Innovation with Open Telefonica.

Overall, I think MWC is a global show in transition.  Devices are really now the focus of CES (Consumer Electronics Show), the crapp store is a passing fad, this is not the right location / forum to engage the web development community.  The core of MWC is the mobile network, its operations, and the gap is a serious focus on the services that use the network.  There should be halls dedicated to Enterprise, M2M, Smart Grids, Telemedicine, Green networks, Open Innovation, etc.  Where not just the suppliers to mobile operators, but the other ecosystems members are there.  Mobile is no longer an ecosystem to itself, to survive it must work with other ecosystems.  It must not impose self-focused standards, but work together with those ecosystem.  Just like Canoe Ventures is working between the cable and advertising industry in the US for targeted advertising.  And serious consideration should be given to a new location given the shift in operator attendance away from Europe.

As a final note, around the show and outside in the hotels (because its cheaper than being in the show), there were lots of incremental innovations taking place in mobile backhaul congestion mitigation; the tying together of operators' channels across web, physical stores, devices and CSR in selling services; low energy technologies; batteries; cloud services; well thought through on-device store experiences; and cute user interaction technology. This time next year it looks like we'll finally be able to point to specific operators who are making the necessary first steps in remaining their customers' trusted agent and service provider. Keep an eye on what operators are doing in India, Canada, Nordics, Singapore and possibly the UK.

I presented at a recent sales conference for a large security / IT solution provider on the evolution of the telco industry and the role security and protection plays in that evolution.  I show below a cut down version of the slides I presented, removing the discussion on specific market opportunities and actions.

In the discussion on telco evolution I focused on 4 area:

• Web evolution: discuss the 3 phases of web evolution and the emerging role of a "trusted agent." Operators know much more about their customers than web service providers.  Critically, ad-sponsored models mean the advertiser is the customer not the user.  However, for telcos the users are the customers, hence telcos have far better fit in being the trusted agent than most web service providers. Yet operators remain dumbfounded on how to adopt this role.  TiVo and Amazon are two examples of trusted agent, e.g. with TiVo I turn on my TV and my favorite shows as well as suggestions of shows I may like are there.  TiVo uses my data to create a vastly better experience than flicking through uninteresting channels.  Operators can do what TiVo does but on a much broader scale.
• Power of devices: we've moved to the PC model for mobile devices, and as STBs include Java so that will be the case for IPTV within a few years.  In mobile we'll likely consolidating onto 5 OS (Operating Systems), significantly reducing the fragmentation that's stifled growth in mobile applications.  However, end devices will need protection.  An operators' security layer must focus on the device, as well as the network and services.
• Customer perceptions:  I've covered this in several previous articles, customers no longer make a distinction between web and voice services they're all just services.  For operators to remain relevant as service providers they must play a role across a broader range of services, and not just act as a pipe-provider also a trusted agent.
  
• Rate of service innovation:  Operators are opening their networks to increase the rate of service innovation, but in doing so its never been easier to get malware onto a phone and in time a STB.  The 'elephant in the room' in opening the network is security.  Operators must take an integrated approach using their SDP (Service Delivery Platform): including network, devices and services - because its about their customers NOT just their network.
  

In summary: customer data, trust, security and protection are critical for operators to get right in this emerging environment.

Operators need an integrated security and protection layer, not point solutions for each service as is the case today.  That is protection from malware across all network services e.g. IP, SMS, MMS, WAP push, widgets, apps, etc.  And protection in the network, in devices and in services.

SDP vendors need an integrated security solution across network, services and end-points, which means a partnership with a leading security/protection technology provider is key.  Its a rapidly growing problem as its a highly profitable and more importantly safe criminal business compared to drugs or prostitution; hence a specialist security/protection partner is essential.

Even though M1 is a small mobile operator, roughly 1M customers, it remains one of the most innovative mobile operators.  M1's business strategy is simple: to constantly deliver value to its customers by rolling out new and innovative applications and services.  In mid-2008, M1 began its search for a next generation service delivery platform (NG SDP) to provide a framework for traditional telecommunication services, next generation of value-added services, and enabling it to remove its old IN that limited its ability to innovate.

M1 selected an open source JAIN SLEE (Java™ APIs for Intelligent Networks Service Logic Execution Environment) solution provided by its long-time IT partner hSenid, called the mChoice SDP.  M1's relationship with hSenid goes back to 2002. For nearly eight years, hSenid has helped M1 implement major projects such as the deployment of MySQL cluster, mChoice Rewards, mChoice Recharge, and mChoice Reporting - a comprehensive business intelligence system to help M1 to make strategic decisions and revenue calculations. These solutions were built on open source, resulting in significant cost savings in terms of licensing and maintenance fees.

The standard application programming interfaces (APIs) help M1 provision, control and bill for all the value-added services they provide, whether the services are developed in-house or created by third-party application.  This is a key point the APIs are not just for third parties, they're for internal consumption as well.  M1 set out with the objective of looking for a SOA (Service Oriented Architecture) based solution, given their enterprise architecture.  I discussed SOA in this article.

For M1 its main benefits in adopting a NG SDP are:

• Opens up service innovation, letting third parties offer services to M1's customers or using M1's network capabilities to their customers, which opens up 1000s of new applications and services;
• Launch new services faster, moving from months to days in launching new services (factor of 10 improvement);
• Protects existing investments while enabling future growth, i.e. reusing amortized equipment, e.g. SMSCs, while putting growth onto lower cost platforms (a 10/100 factor cost reduction for growth); and
• Lower operational overhead by simplify on-boarding, contracts, etc. enabling M1's limited people resources to launch 100s more services each year.

hSenid's whitepaper provides more details on the M1 case study. 

There's an interesting discussion the industry needs to have on whether a SOA or a looser web-centric integration framework is the right long-term approach.  For smaller operators this distinction is mute, but the larger the operator, the closer its cost-basis need to tend towards Google - as in the limit they're both service providers.

Previous articles have raised the problem of poor customer service from US mobile operators based on my own experience, with the punative charging regime that severely limits the trust customers place in operators for experimenting with new services.

I was chatting yesterday with Ed Finegold from Validas, who help consumers and companies save on their mobile bills.  As a result, they have a vast repository of information about usage and charging across US operators.  Their stories on the savings they've provided to customers are both heart warming and depressing as it is a sad indication of the lack of customer centricity in the US mobile industry.   As an international example, O2 in the UK makes a point of ensuring its customers are on the best plan given their usage, and has offered business customers free of charge bill optimization services for many years.

Below is just one sample of the punative US charging regime in place on voice calls; overage minutes are billed at an exorbitant rate; nearly 2000% of the standard cost per minute, or 700% of cost per plan minute.  This is nothing less than extortion, no wonder customers rapidly adopt other service providers such as Apple and Google for new services when they're treated like this by the US mobile operators.  And its not just voice, comparing the cost of data between iPhone and Blackberry users shows Blackberry users are also getting stung just based on the device they're using.

Operators must urgently adopt a customer-centric approach, they should be offering services such as Validas to their customers; else risk loosing customers for all value added services in the future.

This article reviews some upcoming themes and the passed year's themes.


What will probably be the main themes of MWC (Mobile World Congress) 2010?

• Unfortunately, LTE (Long Term Evolution) will be a key focus of the show.  I've discussed previously why most operators do not need to jump on this bandwagon immediately.  We do not appear able to change our focus from "feeds and speeds" to also encompass service innovation with the same level of investment (at least of time if not cash); this risks further relegation to dumb pipes.  Being a Utility business is OK if you have a monopoly over supply, operators do not, and therefore their price/earnings multiple will move from 7 to 1 or 2 with the current focus on pipes.  Also there are very few unique 4G services, if any; most also work on today's deployed networks.  Note IPTV does not work economically on LTE, no matter what some suppliers claim.  Please remember to raise these points when some suppliers start rambling on about 4G services, they're just re-branded services that can be provided today.
  
• Android will be on a significant number of smartphones, this is obvious, though the handsets will all look samey and do stuff we've come to expect, e.g. easy access to web based services.  You'll find few operators innovating with services specific to their local market, check out Smartone-Vodafone (respect to Chris Lau and his team) for one of the impressive few.  On a related matter, we keep getting excited about there being over 100k apps in the Apple app store, but there are 180M+ web sites on the internet, so Apple has a long way to go.  But this point does highlight the convergence of both web and application search / social recommendation.  Also we keep focusing on the application part of the App Store, but it's a device store front for the sale of lots of stuff including content, and it's an efficient content delivery channel at 70:30 revenue split.
• Common Micro USB charger standard will be touted, a very small step is dealing with the critical issue of device fragmentation - a serious impediment to our industry, which I'll come back to later when I discuss what I'd like to see at the show.
• Symbian will remain a question mark, its attempts at open source have not yet been successful; will it become just a Nokia OS (Operating System)?  At the show we'll likely see continued questioning about its future, especially given the number of Android based devices at the show.  On a tangential point, what I don't understand is Android means resembling a human; Android's lego-like 'metal mickey' logo looks nothing like a human - perhaps this is what Google wants us all to become....
  
• Service exposure will be a theme and I hope we'll see a move from technology demonstration to commercial reality.  I'm hoping for some significant progress on OneAPI with operators driving it, not just the GSMA.
• OTT (Over The Top) service growth, in particular video, and its attendant backhaul congestion will be theme; LTE will likely be thrown at that problem even though it's a radio interface and the SAE (System Architecture Evolution, LTE's core) will not solve backhaul congestion.  Instead a range of compression, optimization and content delivery solutions that are video aware will be presented as an integrated access network solution.
• In summary, we'll see handsets and pipes, the usual gap in service innovation and only a few bright spots in OneAPI and a few operators doing cool services in their local markets (e.g. Smartone-Vodafone)

What I'd like to see (wish list) at MWC!

• ALU (Alcatel Lucent) and NSN (Nokia Siemens Networks) announce their merger and halving the joint workforce in an attempt to create an oligopoly in telecom supply rather than the emerging duopoly of Ericsson and Huawei.  Duopolies are never good for the customer, and watching ALU and NSN's death march is not fun, just boring.
• GSMA join forces with the Cable Industry's Canoe ventures to achieve a global telecom approach to targeted advertising with a focus on the advertisers needs rather than the many failing / niche self-focused attempts.
• Operators announcing services, e.g. SFR did recently did with HomeScope, its easy to be critical about the service (see Home Camera for a better option, though I'm biased) but SFR are actively innovating on services and we need much much more of it.
• Operators, as an industry, tightly define 2 or 3 handset OS and a few handset display formats they will only ever buy, in a long overdue attempt to constrain the fragmentation that is killing the industry; and as critically they will actively enforce compliance.
• The industry finally owns up that there is no such thing as the mobile internet, it's just the internet which is accessed from different devices, e.g. mobile, PC, eReader, TV, and STB (Set Top Box). Should we be talking about the STB internet?
• Operators sign up to OneAPI and do something about it.  With many incumbents, I hear them worrying about helping competitors in working together on OneAPI.  I can not contain my frustration at such self-defeating thinking.  Risk is minimal, not working together will ensure OneAPI is dead on arrive which will hurt everyone, and further push operators into being dumb pipes.
• Apple gets on board with the industry, in particular OneAPI.
• Operators announce API management solutions across ALL the APIs they can expose including BONDI, OneAPI, web, content and other operator's capabilities.  All under a common policy and security framework: Sonoa Systems, 4DK and ALU's Service Exposure Suite are good examples of technologies that enable operators to deliver on this.
• Enterprise services, CEBP (Communication Enabled Business Processes) becomes as important a theme as consumer content.  Enterprise services remains one area where operator service innovation has remained solid - though the cloud initiatives from IBM, Microsoft, and Google will start to become a significant threat in the coming years.
• An LTE reality check: a honest assessment on the lack of customer acceptable devices (not clunky demo phones), and the reality of migration through HSPA/HSPA+.  So we stop the hype that distracts the industry from the 'bread and butter' work of customer service and service innovation.
• The Java community gets its act together and makes Java certified mean something and is aggressively backed by all operators.
• People leave the show talking about services, not the latest phone or how LTE solves all problems.  People talking about how Dial2do, Home Camera, Fonolo, Voicesage, Fun Mobility, Bubble Motion, Ifbyphone, Affle, etc. make their life better.

Then looking out a little further, into the coming decade a few themes I think will be important:

PayTV Industry Disappears in 2020

OTT (Over The Top) services will continue to flourish, from Amazon on Demand, Sony Store, AppleTV, Netflix and Hulu; customers like them, use them and in some cases pay for them. We've talked about this for years, with services like YouTube, which is fun but is commercially limited by the quality of its content.  Hulu, Netflix, Amazon on Demand, BBC iPlayer, and TiVo all mean customers can now get what they want when they want through an integrated (PC/Console and STB) experience - this is sowing the seeds of change in customers' expectations.

The PayTV industry is currently a $140B business, growing to $222B by 2013. By 2020 that industry will collapse in most developed markets as customers and the 6 major content conglomerates fundamentally change the industry with a direct relationship over the internet. The critical enabler is not technology but a fundamental cultural change in how people consume TV content, the seeds of which are being sown today. From being frustrated that there's nothing to watch on TV today, in 2020 as they turn on the TV their favorite programs, shows, movies, as well as popular and relevant stuff will all be there with none of today's waste. Customers win with lower costs, better entertainment, more time and real choice. Content owners win with greater revenues.

What will this mean to the US Cable Industry in particular?  We're already seeing consolidation between the producers and PayTV providers with Comcast / Universal and Time Warner / Time Warner Cable (TWC).  Will the industry start to consolidate with smaller MSOs (Multi Service Operators) being swallowed into these two conglomerates?  Can the industry continue to throw lots of low quality "channels" at customers for which most would not pay if they had a choice?  For example, my wife hates the fact that we have no choice but to pay ESPN $3.80 for channels she dislikes, as they're in the basic package - Governments can get away with it in how they spend our taxes, but can a competitive commercial business?  The US ecosystem is very much an established old-boys network, which is resistant to change; perhaps the PayTV industry outside the US will change first.  Though we're already seeing cracks here in the US as Fox is advertising that TWC may drop it.  As long as I can access 'Lie to Me' and 'Lost,' I really don't need the Fox channel.  Once a significant minority of customers think like that, things are going to change.

Operator Consolidation to between 6 to 10 Global Consortia by 2018

We'll likely see a hold out for 3 or 4 more years through outsourcing and margin erosion, but size matters in the economics of a commoditizing industry.  If large operator groups get there act together by reducing the regional overlapping roles and force through commonality, we'll start to see a large gap in operator economics which will trigger a consolidation bandwagon, likely beginning in 2015 and in full swing by 2018.  

IPTV becomes Hybrid TV

Hybrid TV is defined by the presence of a hybrid STB that is part IPTV (using a managed IP network) and part broadcast (receiving the broadcast digital content from a non-IP service like Digital Terrestrial, Digital Cable, or Digital Satellite).  There are many examples including Verizon FiOS and BT Vision.  For many IPTV over DSL service providers, to provide a basic competitive product requires they deliver the popular TV channels at the expected quality; which in many cases requires the IPTV provider to use the free to air digital terrestrial service.  Put simply, IPTV by itself is inadequate, interactive services are only nice-to-have.  Customers still prefer to select by means of channels - e.g. BBC1, Sky1, etc.  So through 2010/11 IPTV will become HybridTV; however the long term prognosis of such payTV systems does not look so rosy as described previously.

Clearwire's Long Slow Death

They backed the wrong technology, costs will remain 50-100% higher than the global LTE standard, their capacity per customer compared to fiber is minuscule (<1/100th), wet leaves impact the reception of the service, and it can not adequately support OTT TV (which will become a customer decision criteria).  It would be best for their business to admit the mistake and restart, but with so much money poured into a broken business model it will likely take until 2013/2014 for the business model gap to become apparent to the analysts.

Service Exposure Industry Litmus Test in 2011

If we can not make service exposure work as a business it's a good litmus test for the industry that we're likely well down the road to being a pipe provider.  I think by 2011 we should do the test and then plan accordingly...

Cloud Computing's Impact on Telecom

Cloud computing is a big business, in 2008 it was $16B and it looks well on its way to $43B by 2012.  Its mainly been the focus of web based service providers and early adopter businesses, e.g. cash strapped start-ups; but things are slowly changing, though security and reliability remain the main inhibiting factors.

Over the next couple of years we'll likely see telecom operators taking over content delivery networks as the margins in that business get squeezed and it becomes a value added service on any national / global transport agreement.  For example Deutche Telekom could likely buy Edgecast, Global Crossing or Level 3 could buy/merge with Limelight.  Though not technically cloud computing it demonstrates an important merging of transport and web-centric business services.

Cloud Computing and the Enterprise is a real threat for operators as the likes of IBM, Microsoft and Google build out their services for, in particular, the small and medium sized businesses (SMB).  Also Skype's initiative in targeting SMBs is creating a global VoIP community, if partnered with one or more of the above cloud service provides it could provide very attractive economics, again reducing an operator to nothing but a pipe provider to the cloud.

Motorola and Cisco Merge to Become a Video Powerhouse?

Droid will not be Moto's savior, unless you're a 220lb+ person who may think the phone is not that heavy.  Moto has a strong STB / cable business, yet it continues to struggle in the rest of Telco.  Cisco remains focused on routers and anything that encourages the sale of more routers (e.g. their Telepresence initiative has little to do with video conference, its really just about selling more and bigger routers.)  Cisco also has a strong cable business thanks to the acquisition of Scientific Atlanta; perhaps Cisco and Moto together will have enough momentum to create a globally robust router and CPE business across all segments including Telco.

Copper Retirement and VDSL (Very high speed Digital Subscriber Line) Fails

By 2015 we'll likely see some operators (outside those with national FTTH (Fiber To The Home) plans like Singapore) announce the retirement of their copper plant.  Operators using VDSL will continue to struggle in achieving the promised 50 Mbit/s.  So after three decades of talking about FTTH we'll likely see those telcos finally bite the bullet and make the ultimate commitment, else die as a business, unless they're a laggard state run monopoly in which case they'll act as a tax of business and social prosperity.



The key theme has been as an industry we're being driven by customer behavior, rather than leading it we've become reactive.  This is new, as an industry we've always been way too far ahead of customers, launching services sometimes a decade before customers were ready.  We're never going to regain that position as web and telecom converge, the emerging challenge is defining if telecoms has a role beyond pipe provider.

Some of the trend this year were:

• App Stores.  Let's face it, the ODP (On Device Portal) which has been around for many years is the app store, its just we blew it and let Apple take the lead.
• A focus on widgets, or a hope that a browser can remove device variations.  This works to a limited extent but its not an answer; JIL (Joint Innovation Labs) is going to struggle if it just focuses on widgets.
• Customer service gap.  I've referred to my own experiences in the weblog with telcos' poor customer service and how that limits an operator's role in service innovation as customers simply do not trust them when experimenting with new services.
• Web services and telecom services: customers do not differentiate and as such they increasingly view some telecom value added services as dated and out-of-touch.
• OTT services' relentless growth, the continued explosion in video over the internet, and the failure of mobile TV. 
• Regulation - open access is inevitable for the good of the national economy (competition / innovation) and just as importantly the voting public like it.  Nothing gets the public angry like BT blocking BBC iPlayer - they paid for internet access and now it comes with strings!
• Power is at the edge.  Witness the latest Samsung TVs with internet access built-in, TiVo, iPod Touch (iPhone that costs $300 rather than $2400), games consoles, eReaders, and smartphones which are reaching near 70% of phone sale for some operators.  Power at the edge is empowering the customer to choose their service provider.
• Focus on other ecosystems. Advertiser just want to buy inventory they understand and can measure as part of their existing business; content owners want a direct customer relationship (device store fronts with a 70:30 split is a good deal).  Telco is a small piece of each of those and many other ecosystems, we must understand how fit in to maximize value rather than trying to own customer as in the end we risk owning nothing but a pipe.
• SDP (Service Delivery Platform) became mainstream, so the technology is now in the network, the challenge is changing the culture to harness what it enables.
  
• IMS (IP Multimedia Subsystem) regardless of hype has been internalized by operators and is generally being used for core voice applications where appropriate. See my IMS report for more information. 
  
• O2 Litmus showed operators get it in the importance of direct access to an engaged customer base.  Open Telefonica and Verizon Developer Community show a similar trend.
• CEBP (Communication Enabled Business Processes) started to gain main stream attention.  See Pat Murphy's CEBP report.

We witnessed this year the passing of many telecom-centric start-ups focused on service innovation.  Operators are taking too long to get new apps to their customers, a culture change is required to focus on service innovation, not just network operations.  Given the infrastructure is now being put in place to protect the network (SDP) there should be a far greater willingness to launch many new services.  This is NOT copying the bookmarks of Apple (that drives data traffic which is good), but communications centric services and enabling other ecosystems to deliver their goods and services to their customers with greater value and satisfaction all round. 

Its no longer a technology issue its an industry-wide culture change to accept much more risk to innovate around services and business models (which means failing much more often) to remain relevant to our customers as service providers, else they will choose our future...

Apologies for the gap in publishing, with the birth of my son, Liam, on the 28th Nov, and a rush of end of year projects; I've just not had the time.  But with the holidays coming up, I have a backlog of material to publish :)

Today I had an experience that is critical to a theme of this weblog on how operators can remain relevant as service providers.

I asked Verizon for a cablecard so I could record programs on my DVR (Digital Video Recorder), they were due to come round this morning, they did not.  It appears a dispatcher was required to confirm the appointment, it would have been nice for them to have let me know, but they did not.  As they're my telephone, internet and TV service provider they should have been able to contact me; there are enough presence indicators so show I'm connected to their network; and they could have sent a message to my voicemail, mobile, STB or even email.  So half a day of my life wasted waiting for Verizon, a spoiled Christmas surprise for my wife and not even a Saturday appointment.

Compare this to my experience in getting Amazon on Demand working through my DVR.  I connect to the internet, entered my credentials, and within minutes a vast library of content is available, and a couple of great titles already downloaded; at least the DVR is not completely useless this weekend.  Its just a sad example of why customers are increasingly  turning their backs on operators as their preferred service providers.  Telcos need to utilize their networks much more effectively in the basics of customer relationship management.  The network APIs I've discuss for use by third party developers should be used by their internal systems as well to avoid the poor experience I had today.

Last year I was reading Jack Weatherford's book "Genghis Khan and the Making of the Modern World."  One of Genghis Khan's early critical achievements was stopping the inter-clan wars, so the Mongols focused outside Mongolia, and went on to conquer most of the known world.  Taking each city-state in turn through a simple 3 step plan:

• Shock and awe;
• Containment with the latest siege weapons; and
• Logistical support to outlast the city and cause its fall.

The above summary is a gross simplification as they also innovated in war technology and strategy (feigned retreat).  The simplification is for the purpose of this analogy.

The success of open web-based APIs got me thinking about that early achievement of Genghis Khan.  It has enabled a far richer service environment over the web than any individual service provider could hope to achieve.  One simple example, check out the latest Samsung's InternetTV with a whole range of widgets built into the TV covering YouTube, Flickr, Yahoo! etc.

Telcos are still behaving like the city states.  Thinking they're safe with the wall granted by a state license from the OTT (Over The Top) threat.  But looking to history showed those walls were of little use against the 3 step plan.  So drawing an analogy to today's situation:

• Shock and Awe: The financial analysts and investment bankers (both of whom grossly lack regulation, but that's another story) have partially created the 'shock and awe' in the valuations they assign to telcos versus the cloud/web-based service providers.  As well as the popular prophesy-type messaging on the inevitably of the Telcos' demise, it reminds me what Cisco did in the '90s with its evangelical marketing on the inevitability of IP.  But more importantly, operators themselves are creating a self-fulfilling prophesy: I've presented many service innovations, and talked about some of them in this weblog, yet the common refrain remains "Yes, but..."
• Containment with the latest siege weapons:  Service innovation is the latest weapon of choice from the cloud-based service providers, its success is evidenced by customers increasingly using OTT (Over The Top) services, not just on mobile phones such as iPhone, but on any internet connected device, e.g. Samsung's InternetTV.
• Logistical support:  The vast global data centers of cloud-based service providers; e.g. Google has over 350k servers distributed throughout the world.  It is so vast that it has changed the structure of the internet in the passed 2 years, creating a category of hyper-giants such as Google and Microsoft who are no longer dependent on a global transit backbone and directly connect to IXP (Internet eXchange Points) forming a significant component of the internet backbone.

For operators to avoid the fate of the city states, in becoming vassals of the Mongolian state they must harness the same principles of acting together, open APIs, service innovation, and global logistics.  

• Act together: this goes beyond GSMA's OneAPI, which is critical.  Cable Labs in the US is a great example of an industry co-coordinating.  Fragmentation is killing the industry, co-ordination is required in committing to common OS(s), committing to devices over multiple years (like Apple's commitment to the iPhone), committing to common cross-carrier services that do not require IMS, committing to acting as a vibrant innovative services industry.  Also as a petty peeve of mine; there are very few 'special requirements' - the number of meetings I have with multinational operators and hear about how one OpCo (Operational Company) has special requirements based on what appears to be no other rational argument than maintaining their job.
• Open APIs: operator must bring together the web, network and device based APIs in a way that's easy to use for developers, content owners, enterprises and their customers.  I've discussed API management in the SDP Asia Summary article and will also be discussing it in more detail in a later article in December.
• Service innovation - just do it, no more "Yes, but..."  We should be honest with ourselves as an industry, we just don't know exactly what is going to be a successful service; so its important to fail and fail often as that is the essence of innovation (as long as you learn a little each time you fail.)
• Global Logistics.  The telecoms industry as whole has a combined computing resource far in excess of the Cloud-based service providers.  Operators need to examine how to create a federation of clouds to share services, capabilities, and application-level connectivity to deliver valuable services to end customers that just work.

The Telecoms industry must meet the 'Genghis Khan' challenge head-on with the same tools and strategies, else become a vassal (pipe provider) of the Cloud-based Service Providers.  Being a pipe provider does not give an operator the same valuation multiple as a utility (generally 7), Telecoms operators do not have a monopoly like water or electricity - hence their multiple will tend to 1!

The Broadband World Forum is the main telecommunication industry's event for broadband, drawing thousands of attendees from more than 100 operator companies and all the top broadband vendors.  Keynotes at the event came from industry leaders such as Hans Vestberg, CEO Ericsson, Jean-Phillip Vanot, SVP of Innovation and Marketing for Orange, and Mika Vehviläinen, COO of NSN.  The plenary sessions packed out and main theater at CNIT in Paris, and at the same time the exhibition floor was packed.

One of the highlights at the event for me was HomeCamera, who I reviewed on this weblog as a start-up to watch, won the InfoVision Award.  Its great to see innovative services being recognized by the IEC at the same level as the big names such as Huawei and NSN.  This was a key theme of the conference, across all the keynotes was the importance of enabling open innovation from third parties to maintain an operator's relevance as a service provider to customers, not just a pipe provider. 

Following this theme I ran a session "Stimulating Service Innovation through the Application Developer Community: Open Innovation".  On the panel were:

• Varun Arora, CEO HomeCamera;
• Christophe Francois, VP Mobile Multimedia Products and Services, Orange Partner;
• Sean O'Sullivan, CTO Dial2do;
• James Steadman, Senior Director, Product Management Oracle; and
• Ian Valentine, CEO, Miniweb.

The panel covered the ecosystem of operator, middleware and developers, so we could achieve an adequate breadth of views.   The panel is also a mix of voice 2.0, web 2.0 and TV 2.0 developers.  There is much to be gained by mobile and broadband operators looking at how the TV guys package their content, and for the TV guys to see the challenges operators face in creating development communities and application stores.  The session was purely discussion, no slideware.  An interactive session with the audience.  I only asked the opening question, the audience and the panel did the rest.

To set the scene I reviewed some of the challenges operators face given their decade long search to work with developers.  I reviewed the critical result of a developer survey I ran earlier this year were 50% of developers who had engaged with operators have given up, its described in the slides I gave at the Cable Labs conference.  Another example is Fonolo, at the 4GWE conference the CEO made a statement I hear too often; "We tried working with operators, it was too hard, we gave up and now go direct."  BTW, Fonolo, is one of Time Magazine's Top 50 websites, I reviewed Fonolo as a start-up to watch last year.  I tried (and failed) to help Fonolo get into operators; the general reaction from operators was "Cool, I love it.  But I'm not sure because...."  I was hoping for the reaction, "Cool, I love it.  Let's get it in the App Store and see what customers think."  Its not just processes, a cultural change is required in being open to innovation; rather than risk avoidance.

I opened with the question, "If you could have one wish to make working with an operator easier, what would that wish be?"  Some of the issues raised included:

• Fair revenue share, with 70/30 being one limit, but operators taking increaing share for additional services such as marketing;
• Speed: short time to get to market, Apple claims the fastest time from code for customer, Microsoft claims 10 days, Verizon Developer Community aims for 14 days;
• Simplicity in the processes for getting in front of the customer.  Most operators hide their customers away from developers, leading to developer frustration.  An operator's core value is delivering a large engaged audience to developers; and
  
• Let customers decide, operators have proven poor in consumer service selection, let's face it they're mostly grey-haired or balding 40/50s males; its not an ideal demographic for 'picking' services.

From that, the discussion moved onto the challenges of:

• Visibility, given Facebook's >350k apps and iPhone's >65k apps; what can operators do to help developers promote their apps;
• Marketing, the importance of the operator to actively market applications;
• Device fragmentation, a critical technology issue for operators to mitigate;
• Value and relevance of customer info, such as phone activity, SMS history, in network / out network, etc; and
  
• Similarities between TV and Mobile industries in the emerging app ecosystem with many insights on packaging provided by the TV industry from Ian Valentine of Miniweb.
  

In the time available we were only another to scratch the surface of the topic, we did not have a chance to cover:

• Charging for APIs (Application Program Interface);
• Charging for testing;
• Enterprise stores;
• Operator in competition with developers, as some operators plan to build their own apps/widgets;
• Store within a store concept, e.g. an Orange store in Nokia Ovi store; and
• Operator collaboration to avoid re-certification, e.g. say Telenor approves an app, why is that not good enough for other operators.

After the session the organizers came in and asked us to move onto the next sessions as the discussion was continuing long passed the end of the panel session.

In a later article I'll review some of the sessions I attended in the Conference agenda which included more than 250 speakers in over 50 breakout sessions, keynote addresses, plenary panels, and workshops.  Sessions such as 'Demystifying SaaS/ Cloud Computing: The Myths versus the Facts' with presenters from Amazon, Salesforce.com, Amdocs, BT, and IDC proved very interesting.

As a consumer, of all my bills my mobile/wireless phone bill remains the most troublesome.  Electricity, water, gas, broadband, TV and even fixed/VoIP telephony appear with few surprises.  A quick search online shows there is a significant problem with mobile operator's billing.  My recent experience with T-Mobile US made me realize they do not understand me as a customer, and their behavior is a disincentive to trusting them to use new services.

After a busy July and August a big mobile bill arrived, thanks to the punitive overage charges US mobile operators impose on their customers.  For customers of mobile operators outside the US, imaging a phone bill arriving where the operator decides to charge all your in-country calls over a certain number of minutes as if you're internationally roaming.  So a $70 bill can become a $300 or higher bill.

In discussing the extortion with T-Mobile, I was told to check my minutes from my phone using the shortcode, which is OK if I'm actually in the country.  If they checked their records they'd see I travel regularly, and more importantly have never checked my minutes.  I asked why they could not automatically move me to a higher plan as my minutes run out.  The suggestion was ignored, even though its fair to both parties.  From this experience I will not trust T-Mobile to experiment with new services.

In the end I was blackmailed into signing to another contract to partially reduce the bill.  This as a critical barrier for US operators, why will customers play with innovative new services, when even on the basic telephone service they run the risk of getting stung by unforeseen charges.  Until operators get the customer service basics right, why would they be trusted like Apple or Google?

North America is an exception in the mobile broadband (MBB) market amongst developed nations.  At the end of Q1 2009 there were 17.3 million data-only HSPA subscriptions in Europe, 14% of all broadband connections are now mobile and mobile is growing at 5 times the rate of fixed broadband.  Depending on how you calculate it, the MBB connections in the US are somewhere around 4% of all broadband connections - and the overall broadband penetration in the US is only 60% with the US at number 20 in the broadband league.  At the end of 2008 mobile operator 3UK was the third largest UK ISP (Internet Service Provider) after the incumbent operator (BT) and cable provider (Virgin) with nearly 1M MBB subscriptions; the merger of ISPs Carphone Warehouse and Tiscali knocked 3UK off that spot.

Just comparing MBB contract plans:

• At the low end in the US 250MB costs $40, while in the UK 1GB costs $7.50; and
  
• At the high end in the US 6MB costs $60, while in the UK 15GB costs $25 - and even netbooks are bundled with the plans in the UK.

The US is between 6 to 20 times more expensive than the UK!

Roughly 95%-97% of MBB traffic is from laptops/netbooks (source EU operator).  Mobile broadband is now a mass market service in many developed markets.  Data-only subscriptions involve either a USB dongle (>90%) or embedded broadband (<10%), data cards are no longer relevant in most markets.  Customers prefer the USB dongle as it can be shared between devices and customers.

The USB modem has created a separation of network and device, minimizing many scaling issues faced by smaller operators.  This enabled small operator 3UK (roughly 4M customers) to disrupted the UK market with its aggressive MBB tariffs, bundled netbooks and prepay mobile broadband.  In the UK, customers now expect a netbook when signing up for a MBB contract - the US gap is not just the 600 to 2000% higher price!  The European netbook market in Q4 '08 accounted for 20% of laptop sales, in Q1 '09 this accelerated to 29% - that's >5M units per quarter principally driven through mobile operators.  Below I show a comparison of MBB plans that include bundled netbooks from Broadband Genie. 

The US has a long way to go before it reaches the value being offered in other markets.  The reasons behind this are ineffective regulation (e.g. local loop unbundling regulation in the US in embarassing compared to other countries) and we have essentially a duopoly in fixed and mobile broadband.  Something needs to change.

Opening Points:
A smart pipe strategy is now critical to an operator's service innovation plans as we saw with Vodafone, Joint Innovation Labs, Orange Partner, Telenor CPA; plus there are many more operators making money today in working with third parties, e.g. Globe, Telus, etc.

However, all is not well in this ecosystem.  Yesterday we saw there is a large gap between operators and developers on their needs and expectations.  This conference provided one of the few times I am aware of in this industry where such as open and frank discussion took place.  The most dangerous thing we can do is right off these opinions as just the usual developer 'whinging and operator bashing.'  Developers have a choice, and they're not choosing the operator; rather the consumer electronics and operating system channels to market.  And when technology reaches a point of simplicity that Amazon.com enters; this gap can not exist.

We are seeing some important initiatives in reducing fragmentation, but they're technology biased.  We saw yesterday most of the developer frustrations are process and business related; and hence this is where we must focus.

Matt Millar provides a great summary of his thoughts from being on the developer panel on Day One.

James Parton, O2 Litmus: The first six months

• Litmus's objective is to grow their fan base by delivering unique services and experiences - note use of the word fan!
• Looks like O2 aspires to be the 'Apple' of Telco - the 'cult of O2.'
• It's a collaboration community, with the presence of real customers - this is a key difference to most other operator initiatives.
• Focus is customers: Web 2.0 has created opinionated, educated, connected and engaged audiences - where O2 wants them to act as virtual product managers.
• James is focusing on trying to meet developer's needs - fair and simple process, direct customer access, paid in 5 weeks not 90 days.
• Latest Litmus stats: 3000 customers, 560 developers (50 countries), 320 apps - about to promote across 600k of O2 customer base.
• Fring a VoIP service is in the store - this demonstrates the open access model, allowing experimentation.
• Roadmap includes subscription pricing, sale of services not just apps, URL based applications, SMS API, and opening up across the Telefonica footprint (260 customers)

David Stewart, OFCOM

• UK has achieved 130% penetration
• Mobile is >50% of total communication revenues (this includes broadband and corporate data services)
• 1 in 5 voice connections are through BT, O2 will over take BT in about 1 year with respect to number of connections
• Camera is the top selection feature for customers, browser is still small interest
• What is it that's driving next phase of development? - Mobilization of the internet and the separation of applications and the network
• Will not regulate on openness or net neutrality, area they'll likely regulate on is customer risks/protections (e.g. scams)

Grahame Riddell, Nokia Ovi

• Positioned store as next generation personal media network - personal, location-aware, content and apps, social buying experience.
• Beyond smartphone and S60 into S40 range based on Java.
• Leverage Forum Nokia's 4M developers
• Free apps and looks similar to the apple app store experience
• Uses behavioral algorithms in search to enhance relevancy
• Global and local content
• App provider gets 70% of customer price (less operator charges) - Nokia keeps 30%
• Targeting 300 million devices by 2012 (50M+ at launch)
• Nokia is going to have a rough ride from the operators!

Sean O'Sullivan, Dial2do: Social Phone

• Gave examples how the voice experience can be enhanced by the web
• Social phone book, e.g. INQ1
• Enhancing calling - bringing contextual information about the caller/callee (Dialplus)
• Key issues for Sean are: fragmentation, payment, share more rev, get at network assets, for the operator to get out of way - similar to Day One's developer panel session
  
• Everything is an asset - e.g. data such as when customers first use phone in the day, turn it on, etc.  And these can be monetized.  There are lots of operator opportunities.

Wrap-up panel session

• Enterprise is where to focus on monetizing APIs - gap within the conference - important focus for next year
• The large gap between operator and developer needs/expectations must be closed.  As an industry we're going to struggling to compete with the consumer electronics and OS provider stores, until that gap is closed.
• Suggestion that the web model does not apply to mobile - location can not be given for free.  Unfortunately on location the 'horse has bolted,' its now available for free on the phone.
• APIs go well beyond OneAPI - e.g. memory available on the phone
• Multiple stores on the phone are OK - let the customer choose
• We're entering a period of intense experimentation to determine what 'recipes' work.  This time next year, it will be interesting to see what has worked and what has failed.

The Smart Pipes conference had about 80 attendees from across the value chain; not just operators, suppliers and consultants.  In attendance were Steve Glagow, head of Orange Partner; Pieter Knook, head of Vodafone Internet Services, Sune Jakobsson, Telenor Open Services; James Parton, head of O2 Litmus; plus many more operators.  As well as leaders from Nokia Ovi, Google, Bebo, Fox, Opera Software, Microsoft, OpenAPI, OMTP, etc.  The conference was a who's who of those trying to create new business models in telecom.

Reviewing some of the sessions.

Sean Kane, Head of Mobile of Bebo: The Importance of Business Model Innovation
Bebo Mobile is currently working with 20 operators in mobilizing access to Bebo.  The main problems they have in working with operators are:

• Long deployment cycle, operators need to be prepared to give up some control, and move to new service launch in weeks not months;
• Pain of custom and extended contract negotiations, need to move to 'Fair and Simple,' contracts with web-based service providers;
• Constant organization changes and HQ versus country battles, need a persistent single point of contact; and
• Operator specific and arduous technical hurdles need to be simplified and 'trust' Bebo application as its working elsewhere.

Bebo Mobile are not interested in network based APIs, they're not looking for location, which given they represent a very large user base is a critical issue for OneAPI.  Their view of the world is they provide the platform, and operators customize as required, as they can not form 750+ versions of their mobile app.  What they'd really like is a standard camera photo uploader API/app - perhaps something OneAPI should consider?  A major concern is the proliferation of app stores.  It's not possible to work with them all, they think there will be a wash-out within the next 12-18 months, which means many developers will wait and see.

Pieter Knook, Internet Services Director, Vodafone Group: Why Open Access?
Set out their recently announced mobile widgets strategy.  Copying O2 Litmus with a 70:30 revenue share, and quoting James Parton of "Get out of the way" between developers and customers.  Initially the widget platform will be based on the Opera browser.  Over time the Joint Innovation Lab (Vodafone, Verizon, China mobile and Softbank) will spec out what is required of BONDI, OneAPI, and other relevant standards. 

These first two presentations set out an interesting dichotomy between VF's and Bebo's view - they're both providing platforms - who's providing the applications?  In the limit, Bebo would likely build a 'widget' - little more than a bookmark, c.f. the Facebook app on the iPhone / iPod Touch.

Steve Glagow, Orange Partner

• Orange have 130m customers - but they want to work more broadly across operators - great approach in building broader industry consensus.
• 3 foci: Orange API initiative, Open Innovation, and Application Shop.
• Currently they have 28APIs, and soon will have 36 APIs.  4k active users of APIs.
• Apps can be accessed via the App Shop, Orange World WAP site (most popular), web site, and an ODP (On Device portal).
• Why is an application that is Symbian signed / Java verified not adequate?  Its incurring additional costs to make it 'Orange Compatible.'  Steve indicated they're looking into ways to build in Orange requirements into Symbian signed / Java verified.
• Interestingly Orange only aims for 500 rotating applications through their stores.

Graham Trickey, GSMA: OneAPI
Provided a great update on OneAPI, interestingly they're looking at how to create a common commercial framework - which is by far the bigger problem than technology.

Panel Discussion: Developer Requirements

• Fragmentation is getting worse, multiple widget engines, multiple app stores, multiple stores within an operator.
• Network APIs are not that relevant, however a flat rate location API could be.
• Billing is critical, especially timely payment and fair rev share.  Working through an aggregator is disliked as they take 50% of revenue for no perceived value add.
• Customer access in any app store / developer community is critical.
• We have a significant gap between operators and application developers - this must be addressed if telecom is going to compete with the web-based SPs.

Erik de Kroon, Vodafone: Vodafone App Store Plans

• App Store is just a way of packaging content, they've been doing that since the start of Vodafone Live.
• W3C is the only widget platform that will survive - if universal commitment can be achieved in the industry this would address some of the fragmentation issue.
• The JIL (Joint Innovation Lab between Vodafone, Verizon, China Mobile and Softbank) developer website launched, www.jil.org.
• Will open JIL to other operators.
• Defining a privacy framework.
• Looking beyond widgets (as it is not adequate to run games) - no decision yet on how that will be implemented.
• VF plan to launch an App Shop soon across the UK, Germany, Italy and Spain.
• Will have the widget engine pre-integrated on devices.
• Will allow multiple widget platforms on a phone, e.g. Nokia Ovi and VF Widget platform.
• JIL could be the centre of gravity the industry needs, critical will be addressing developers needs given the gap exposed in the previous session.

Day One provided a lot to think about, there's a surprisingly large gap between operator and developer needs/expectations.  As an industry we're going to struggling to compete with the consumer electronics and OS provider stores, without rapidly closing this gap.

There's a great saying from Benjamin D'Israeli, 'There's lies, damned lies and statistics.'  To read the press, you'd think the trillion dollar telecommunications industry has been shaken to its core by Apple, a $33B consumer electronics company.  In April 2009 the Apple app store achieved 1B 'application' downloads in 9 months, estimates vary on the revenue generated by all these downloads, it is likely a few $100M, as most of the downloaded apps are free.  Given the volume of prime-time national TV advertising Apple is running for the App Store, I doubt as a line of business its even profitable.  I put quotation marks around the word application as in many cases it's just a bookmark; on an iPhone for iPod Touch check out iphone.facebook.com in the device's browser and then the Facebook app - spot the difference?  Charging people for bookmarks would definitely be an interesting business model, though its sustainability would be questionable.

But contrast Apple's App Store revenue to the total telecom content revenues in 2008 of $71B, $30B of which was for mobile.  Apple has definitely done well, and there are some important lessons in Apple's success for operators, but as usual hype and fashionable concepts are causing the industry to knee-jerk react and focus on the less-important part of the problem - service exposure.

Some of the learning points Apple provides to the telecom industry:

• They do not charge for any of their 1k+ APIs; and still operators think they can charge consumers for location.  As a proof point, consumer LBS (Location based Services) based on a charged for network location API (which is generally much worse than GPS on a phone) has not been successful.
• A great store experience that encourages people to linger, browse and buy something they did not plan, just like in a mall.  The ODP (On Device Portal) was created for just this reason, but unfair revenue share, lack of platform commitment, inept ingestion process and charged for APIs stopped this innovation creating market success.
• You can easily find the application once its downloaded!
• People love free (and that's free without the sting of an end of month data download charge), and after using the free stuff a few upgrade to the paid for app.
• Simple fair revenue share (70/30), with a clear path to cash, O2 Litmus is the leading light here.  A friend of mine sells his apps through Apple's App Store at $4.99 and another store (which has both the store, pSMS aggregator and operator taking their unfair shares) at $24.99 - he makes more money through Apple!
• Market size in the tens of millions of units (I'll come back to this as fragmentation continues to stifle the industry and in the limit could kill the operator store.)
• Platform/Device commitment measured in years, not months as is the case with most mobile phones.
  
• Simple process to publish with direct customer access.  Again O2 Litmus leads the industry, but the volume of customer access could be better.

Examining the fragmentation issue in a little more detail.  GLU.com had to create 25k versions of its Transformers game.  On average developers build about 400-600 versions of any game.  There are about 20k phone types on the market today, 750+ operators and depending upon how you count 25-200 different OS, that's a lot of permutations.  And even with this stifling fragmentation the industry has achieved $30B in revenue.  Just imagine what could be done by applying all the lessons Apple has shown!  Its too late to selectively apply just a few.

If operators really do want to charge for service exposure, then they're going to have to focus on the enterprise segment; I'll look at that in a later weblog article.  To the answer the question in the title "Is There Any Money in Service Exposure for Consumer Services?" The answer is no if an operator simply wants to charge for APIs.  I'll be covering these concepts and much more in my workshop at the Mobile Operator Smart Pipes and Applications Conference. 

Just a quick reminder: On May 19-20th in London will be the Mobile Operator Smart Pipes and Applications Conference.  In attendance will be Steve Glagow, head of Orange Partner; Pieter Knook, head of Vodafone Internet Services, Sune Jakobsson, Telenor Open Services; James Parton, head of O2 Litmus; plus many more operators.  As well as leaders from Nokia Ovi, Google, Bebo, Fox, Opera Software, Microsoft, OpenAPI, OMTP, etc.  The conference will be a nexus of the people trying to move the telco industry from being viewed as "a pipe to the internet" to a "value-adding network of customers and application developers."

Before the conference, on the Monday 18th, I'll be running a pre-conference workshop, "Achieving the Economies of Scale Necessary to make the Smart Pipe Strategy Commercially and Operationally Viable," details show below.  Here I'll be sharing a view of what 2015 will look like if we continue along the current trajectory; where increasingly Google Latitude becomes the default aggregation of people's context and Google buys Skype from eBay, social networks interoperate which includes messaging and voice inter-working, customers increasingly subscribe to music/video experiences rather than 'buy' content, mobile VoIP finally arrives, devices manufacturers have to copy Apple's experience to stay in business, and customers' expectations on services continue to change so mobile voice/messaging is considered like fixed telephony is today.  What does this mean to the mobile industry?  What are we doing, and what must we be doing?  The workshop will be a mix of presentation, roundtable discussion, and interactive Q&A.  For more background on the workshop see these weblog articles:

• Options on how the Telco industry can work with the App Development Industry
  
• When everybody wants to be your Friend: What's an Application Developer to do?
  
• If you are an Operator who is not selling iPhones, why haven't you built your iPhone App already?

And finally I would like to extend my thanks to John Holloway, CEO of ZingMagic; and Matt Millar, CEO, Live Talkback for their guidance, help and support at the pre-conference workshop.

The previous weblog article described the learning offered by Canoe Ventures to the mobile industry in working successfully with other industries.  For the non-Cable (mobile) folks this article provides a little more depth on what the cable acronyms mean, how they fit together, and some analogies to the mobile industry to aid understanding.

Tru2way was formerly known as the OpenCable Application Platform (OCAP), that's the last time I'm going to mention OCAP.  Tru2way has a number of capabilities including allowing digital TVs to connect to cable without requiring a set-top box, just like those old unsuccessful cableCARDs. But of relevance in the comparison to the mobile industry is it provides a Java platform on the STB (Set Top Box) to run applications.  Similar to the J2ME MIDP 2.0 (Java 2 Platform, Micro Edition Mobile Information Device Profile) specification on mobile phones, but with much more processing power and a standardized screen.

EBIF (Enhanced TV Binary Interchange Format) is designed for older / cheaper STBs with limited processing power and memory, such as the Motorola DCT-2000 set top.  An ETV (Enhanced TV) user agent is downloaded to the STB.  The ETV app is inserted into the digital TV bit stream (MPEG-2 transport stream) of the channel being watched, when the user agent receives the ETV application it decodes and display the clickable object on the TV screen.  It enables polling, instant weather and traffic, and other simple point-and-click features - a bit like WAP-push (Wireless Application Protocol) just much more visually pleasing.  Verizon FiOS users can experience this using the widget button on their remote to see local traffic and weather.  EBIF is a subset of tru2way, so tru2way STBs will also run ETV applications.

Using Comcast as an example, only 15% of their STBs will be able to support tru2way by the end of 2009; while over 90% of STBs will be able to support EBIF.  Hence Canoe Ventures is initially focused upon EBIF.

In the Mobile World Congress Summary weblog entry I made reference to the Cable industries targeted advertising initiative, Canoe Ventures.

Canoe Ventures is backed by most of the US cablecos, including Comcast, Cox, Cablevision, Charter, Bright House, and Time Warner.  Its purpose is to make cable's advanced advertising applications easier to buy and use, and on making the results easier to measure.  N.B. this is a quite customer focused mission; not one mention of technology or esoteric audience qualifiers.  The head of Canoe is David Verklin, the former CEO of Aegis Media Americas.  N.B. they brought in an ad-man, so the organization understands what the customer (advertising industry) needs.

So Canoe can work among disparate MSOs and cable systems, its platform uses the Enhanced TV Binary Interchange Format (EBIF) and tru2way, and defines a common way to collect and report audience data. Focusing on CableLabs's EBIF enables coverage of most set-tops in the market today, including those used by Verizon FiOS.  Canoe is initially focused on a product called 'Creative Versioning,' which will use the cable industry's architecture and ad zones in an effort to make targeted ads more relevant to their viewers.   They've defined two templates, based on EBIF: One for voting and polling, and one for "request for information" applications.

Imagine these scenarios, you're watching the game show and as the presenter asks you to vote and some cute buttons appear at the bottom of the screen, and from the remote you place your vote.  Or an advert for a national pizza chain comes on, at the bottom of the screen appears a button with 'place your order with your local pizza place now' which again is activated with the remote.  All designed for easy viewing on the 10 ft viewing experience.  But most importantly on the back-end; the system makes it easy to target and measure within how advertisers do business today.

Canoe is focused squarely on serving the cable industry at this point.  But EBIF is relevant to both the satellite TV and telco TV service providers.  In fact, Verizon is a leader in EBIF, recently announcing its Verizon FiOS Widget Bazaar based on EBIF.

The critical characteristics in Canoe are:

• Industry acts in co-ordination, not multiple independent operator activities.
• They create a JV, so competitive issues between operators are removed
• It's led by someone from the customer's industry, so its focuses on what matters to the customer (advertisers).
• Its starts small, with incremental improvements that are easy to understand, and then quietly quantifies and tests them out before bringing them to market.

For both the advertising challenge and the third party developer challenge facing the mobile and broader telco industry, Canoe provides a clear case study how another industry is tackling the problem.  But as a note of caution, Comcast's cable ad business accounts for 5 percent (and falling) of the MSO's total revenue.  Don't expect these JVs to have a dramatic change on the existing business model.

On May 19-20th in London will be the Mobile Operator Smart Pipes and Applications Conference.  In attendance will be Steve Glagow, head of Orange Partner; Pieter Knook, head of Vodafone Internet Services, Sune Jakobsson, Telenor Open Services; James Parton, head of O2 Litmus; plus many more operators.  As well as leaders from Nokia Ovi, Google, Bebo, Fox, Opera Software, Microsoft, OpenAPI, OMTP, etc.  The conference will be a nexus of the people trying to move the telco industry from being viewed as "a pipe to the internet" to a "value-adding network of customers and application developers."

There will be keynotes from Sean Kane (Bebo) on the importance of business model innovation, Pieter Knook (Vodafone) on why Open Access matters and what it means - which I discuss in this weblog article, James Parton (O2 Litmus) on the importance of customers' desire and commercial viability in creating developer programme success; and David Stewart (OFCOM) on maintaining consumer confidence in Open Access - an important topic an aspect of which is discussed in this weblog article.

For developers, attendance at the 3rd party stream of the conference is free, which provides a great opportunity for developers to network with the decision makers in getting your applications into customers' hands.  This demonstrates how the tables have turned, application developers both big and small matter.  Slowly operators are learning to treat developers as customers rather than as expendable revenue sources.

There will be panel discussions on business models, sharing best practices (e.g. Telenor Content Provider Access), learning from mistakes, learning from other industries (e.g. from the wireless device industry), technologies, standards and emergent opportunities.

I'll be running a panel session on Day One (Tuesday 19th) "Understanding the requirements of Developers: Developer Interviews with the Most Vocal In the Business."  On the panel is an impressive line-up: Phil Mundy, Creative North; Paul Golding, Wireless Wanders; John Holloway, Zing Magic; and Tom Montgomery, Mobiun.  Our objective is to provide a frank review of where the industry is and what needs to happen from the people originating innovation, and who today have a choice in how to reach the customer: its no longer just the operator.

Before the conference, on the Monday 18th, I'll be running a pre-conference workshop, "Achieving the Economies of Scale Necessary to make the Smart Pipe Strategy Commercially and Operationally Viable," details show below.  Here I'll be sharing a view of what 2015 will look like if we continue along the current trajectory; where increasingly Google Latitude becomes the default aggregation of people's context and Google buys Skype from eBay, social networks interoperate which includes messaging and voice inter-working, customers increasingly subscribe to music/video experiences rather than 'buy' content, mobile VoIP finally arrives, devices manufacturers have to copy Apple's experience to stay in business, and customers' expectations on services continue to change so mobile voice/messaging is considered like fixed telephony is today.  What does this mean to the mobile industry?  What are we doing, and what must we be doing?  The workshop will be a mix of presentation, roundtable discussion, and interactive Q&A.  For more background on the workshop see these weblog articles:

• Options on how the Telco industry can work with the App Development Industry
  
• When everybody wants to be your Friend: What's an Application Developer to do?
  
• If you are an Operator who is not selling iPhones, why haven't you built your iPhone App already?

Pre-Conference Workshop, Monday May 18th, Achieving the Economies of Scale Necessary to make the Smart Pipe Strategy Commercially and Operationally Viable

Today we have hundreds of initiatives from operators opening their networks, working with developers, and finding new ways to unlock the value contained in their networks. A common lament from developers is, "I really should not have to sign up to 3 or 4 platforms per market." With Internet-based brands it is one relationship and it's global. Apple makes it easy for developers to reach its 30M+ customers, how can operators make it just as easy for the other 2B+ customers? There is work by the GSMA, One API, that is putting some of the technical standards together; but is this what developers require? What about the pragmatic commercial and process issues? This conference has brought together the leading figures in Smart Networks, an opportunity has been created to achieve a common understanding on the need for consensus and a chance to set out a pragmatic plan to achieve that consensus. This workshop provides a forum for this unique opportunity to be realized.

Objectives:

• Understand the impact of achieving consensus across operators in Smart Pipe Strategies
• Understand the degrees to which consensus can be achieved, with agreed prioritisation
• Discuss options to achieve industry consensus in working with developers
• Provide an open and frank forum for operators to discuss how to achieve consensus in their smart pipe plans.
• Set out an action plan to move from the agreements achieved to real consensus in the market place.

Timetable:

• 8.30 Registration and Refreshments
• 9.00 Introductions
• 9.15 The Call For Action: Understanding Why Economies of Scale in Smart Pipe Strategies Matter
• A view of the future - what happens if we remain an archipelago, how will 'global warming from the internet' impact the industry?
• Is the GSMA One API initiative enough?
• Is this just a mobile problem, does cable, broadband, satellite matter?
• What do developers require?
• 11.00 Networking Break and Refreshments
• 11.30 Facilitated Round Table Discussion: Where Can Consensus Be Achieved in
• Smart Pipe Strategies?
• Objective: to agree a prioritised list of areas where consensus/co-ordination can be achieved.
• 13.00 Lunch
• 14.00 Interactive Q&A session with Developers: Understand What They Need, and Where Coordination Matters to Them
• 15.00 Networking Break and Refreshments
• 15.30 Facilitated Round Table Discussion: Agreement on What Should Be Achieved, What Steps Can Be Undertaken To Achieve Co-ordination in Internet-time, Not Telco Standards-Bodies Time
• 15.00 End Workshop

Examining the factors necessary for app store success:

• Direct customer access: a critical factor in Apple's success, and why operator third party developer initiatives continue to languish.  However, this is changing.  O2 Litmus was launched with direct customer access at its heart.  Similarly Vodafone's Betavine Widget Zone is also allowing direct customer access.  Critically the store, whether it be for downloadable apps or network based value added services, must be pre-loaded and on the home screen of the device.
• Avoid device diversity: the bane of many operator initiatives, and the reason behind the failure of the ODP (On Device Portal - an early attempt at an app store).  Apple has it easy with one device platform.  RIM and Nokia are constraining the problem.  For operators there's a need to balance device coverage with the complexity it generates.
• Scale: 10s of millions of customers directly addressable, this is the critical metric for developers.  And a problem for most operators, even across Orange group they could perhaps match the size of Apple's iPhone and iPod Touch market; yet there is significant device diversity in that addressable group.
• Coverage: As seen in Norway, presenting a common front across operators to third party services promotes innovation and commercial success.  Apple works great for apps that use the platform (e.g. games) or the internet, but glaringly does not use the operator's network other than as a pipe.  This is a key battle ground for operators as the market decides are they pipes to the internet or networks.  Given most people's friends are within the same country, use a variety of phones, and are on multiple networks - can operators work together to open-up the richness of Apple App Store to a broader segment of their customers?
• Web-centric operational model:  Most of the apps on the iPhone are simply existing web-apps/pages; for example iphone.facebook.com and the Facebook app are the same experience.  Operators have had application stores for years, yet none achieved the engagement of Apple.  An important factor is being able to deliver applications / value added services in a web-centric operational model not as a traditional telco.

Given these factors, let's now examine the groups that could offer the applications:

• Device Manufacturers: Apple, RIM, Nokia, etc.  They avoid/limit the diversity problem, provide scale and direct customer access; and apart from Apple with its exclusive operator deals are available across most operators within a country.
• OS Suppliers: Android, Microsoft, etc.  Similarly provide direct customer access, limit the diversity problem, in time Android will provide scale, and Microsoft will likely be limited to high-end / business phones.
• Network Equipment Providers: As NEPs are selling the service platforms that expose capabilities and ingest applications to tens if not hundreds of operators around the world, they definitely have scale.  However, NEP's delivery processes are not designed to cope with the web-centric application delivery model, their margins are too high, the process too slow and ill-equipped to cope with an app that is popular this holiday and passé next month.  On coverage, because operators tend to choose different suppliers to their competitors, they will generally not provide good in-country coverage.
• Individual Operators: The group that's been at this the longest in offering app stores; remember those walled gardens?  Who now have renewed energy as Apple has worked out the recipe.  However, today's individual initiatives suffer from a lack of scale and coverage, and struggle with adopting a web-centric operational model.
• Aggregators: They started with SMS, enabling applications to have a single interface across multiple operators, and expanded to MMS and location; so why not provide an aggregation point for applications?  As operators realize they can also perform such aggregation roles, it's a business model potentially under threat.  In addition, they are dependent on the operator opening up access to customers, and are not adept at managing the device diversity problem.
• Industry joint venture: This could be considered a wishful state, but other industries have achieved such JVs.  Operators create a single entity across the industry to present a common ingestion method for apps, its operated as a web business not a telco business (but backends into telcos).  Enabling rapid ingestion, global coverage, mitigating device diversity as aggregating networks achieves a critical scale when the addressable base is perhaps over one billion.

Below is a simple comparison of the groups against the success factors.  The market has shown device manufacturers can be an appropriate channel.  But what is surprising is how NEPs and individual operators perform so poorly against the factors necessary for app store success.  The time for coordinated industry action in creating a JV is now.

Following up on my presentation at eComm last week, I was asked to provide a little more background on my comment about the three degrees upon which customers pay.  They pay on three dimensions: cash, time and privacy; creating a 'Customer Pay-Space.'  It's important to remember with the non-cash dimensions (time and privacy) value is originating from the user and that value has ownership, as Facebook learned last month - disregard customer privacy at your peril.

Paying by cash is a tradition in the telco industry, e.g. for internet access or voice minutes. 

Paying by time (i.e. advert sponsored) is a tradition in web-based services, e.g. search or portals.  I use the term 'time' to identify the value customers are providing, as attention is perhaps too strong a term.  Examples of the time I refer to are: the distraction of advert banners or sponsored links, the time taken to download banner adverts (experience the premium weather.com service to realize the time it wastes), the time taken after clicking 'no' on the sponsor's redirect, and those euphemistic 'breaks' in TV programming.  Now cash does flow from the advertiser to the service provider; but my focus here is the customer and their pay-space; not the service provider.

Today we see growth in the use of privacy (personal information) for targeted advertising and aggregated services such as road traffic monitoring.  For example, TomTom partnered with Swisscom to introduce its TomTom High Definition Traffic system in Switzerland - which caused much consternation in Switzerland even though the data was anonymous.  The privacy of personal information matters intensely to people, hence why I draw it out as a separate dimension in the pay-space.

Examining the dimension of the pay-space in a little more detail:  

• Cash: When people pay for a service, even if it's a token amount, their expectations are much higher than when the service is perceived to be free because of payment through time and/or privacy   For example, fixed mobile convergence services continue to struggle because customers expect the service to be as good as their traditional fixed line service.
• Time:  We've see the emergence of ad-sponsored services such as Blyk, and the recently announced tie-up between ZingMagic (checkout link at bottom of main page) and Liquid Air Lab for innovative ad-sponsored mobile gaming.
• Privacy: Covers the use of personal information such as context (e.g. location and status), through geo-demographic information, to user-generated content.

A critical issue in the time and privacy axes is the large variation in the value customers' assign to these axes.  For example, at my stage in life time is precious, so advertising annoys me (intensely as a matter of fact, that's one of the reasons I do not use ads on my weblog - do unto others...).  On privacy while I'm happy to share much information with friends and colleagues, however, I draw the line at my travel plans (I don't do Tripit).  I also hear people talk about how 'teens' have few privacy concerns, as they are 'net natives.'  Here are the results from a Pew Internet & American Life Project, "Teens, Privacy & Online Social Networks:"  55% of online teens have profiles online; 45% of online teens do not have profiles online.   Among the teens who have profiles, 66% of them say that their profile is not visible to all internet users.  3% of online teens and 5% of profile-owning teens disclose their full names, photos of themselves and the town where they live in publicly-viewable profiles.  So clearly most teens do care about privacy, the media tends to pick up on a few sensational outliers and the classic observation error ensues.  We're all different, and will continue to be so.

As we explore the third dimension of the pay-space; privacy.  And with the renewed focus on the second dimension of time, as advertising becomes increasingly intrusive to counteract the low click-through rates and conversion-to-sales rates.  It's going to be critical to let the customer choose where they want to be in the pay-space.  It may be that the space collapses into 2 states; cash or targeted advertising.  But I hope we can find a way to give customers choice over where they sit in the pay-space that enables the current rich service experience to continue unabated and expand into the mobile and cable industries.

Overall view of the show: Better than ever to do business.
The number of meetings, their quality, and the decisiveness of the people involved was up.  MWC (Mobile World Congress) has returned to the days where the focus is business not hype.  I hope they can keep this quality and focus in the years to come.  This was in part because the attendance numbers were down; 20% was the last figure I heard, which was aligned to my observations.  For example, at noon on Wednesday there were no queues at the sandwich shops in the central courtyard, which I've never seen in all the years MWC has been at Barcelona.  Also the GSMA daily newspaper appeared to have trouble finding content, repeating articles across the days.  At least 10 companies I met at the show only had meeting rooms, giving up on the stand.  Perhaps the old stand format is becoming obsolete given the availability of marketing materials on the internet?  But regardless of absolute numbers attending, the event was better then ever to do business.

Devices: Touch screen phones become 'samey.'  
There's certainly no lack of choice of touch screen phones from LG Arena, Samsung Touch, Acer, HTC, Huawei, Blackberry, etc.  However, they are all becoming very 'samey,' very quickly.  Though with that said, the Vodafone Magic (HTC's Android phone) appears to be distinctly lacking some of the user interface edge of its competitors such as 3D navigation, cute layering, and smarter touch technology.  And most surprisingly lacked significant service integration, which should be the principle reason for creating a 'Signature device.'  This is a serious issue; telcos are focusing upon a service platform (mobile device) that's increasingly outside their control; and critically lacking in pre-loading services that leverage their network (other than voice, messaging and internet access).

LTE (4G): Causes some suppliers to take their eye off the immediate UMTS/HSPA revenue opportunity.
According to In-Stat, Huawei has secured 42 new UMTS/HSPA contracts, representing 40.4 per cent of the total number of new contracts signed globally in 2008.  The 'bright and shiny' LTE has caused some suppliers to take their 'eye of the ball.'  LTE will not see serious volume deployment until 2013, as discussed in this article.  So UMTS/HSPA is where the money's to be made for the next 3 years.  Huawei continues its business acceleration through focus on what matters to customers; not materketeers.

4G services:  There's no such thing as 4G Services!  
With all the hype on LTE/4G, the marketing departments couldn't help themselves but announce 4G service initiatives.  When HSPA+ provides 40Mbps (which we know well as Telstra likes to remind us they've got the biggest), and LTE gives 80Mbps; I'm struggling to see what new services are enabled, apart from a fatter pipe to the internet.

Mobile Advertising:  We've got to start learning from our mistakes
There was no mention of last year's statement where Vodafone, Orange, O2, T-Mobile and Three announced that they would work together to develop a common measurement standard for mobile advertising.  The reason: because it failed, through a lack of agreement and also a lack of engagement from the advertising industry.  The cable and broadcast TV industries understand that to work with the advertising industry they need a common body, e.g. Project CANOE was created by the cable industry to enable targeted advertising to be introduced in a way that media buyers understand and can buy.  The media buyers have the cash, so the telco industry must treat them as customers, understand their needs and deliver on that; rather than today's individual operator initiatives and self-focused processes/APIs.  Without exposing our mistakes at MWC how can we learn as an industry?  This leads me onto the creation of a similar mistake this year with OneAPI.

OneAPI: Repeating the mistakes of mobile advertising
The GSMA announced OneAPI, essentially ParlayX which has been around for years.  As explained in previous aticles based on extensive developer research; the API must be RESTful, stateless, and aligned to web developers needs.  As with the mobile advertising initiative mentioned above, the telco industry has created something based on its own needs without first clearly understanding what the customers (developers) need.  OneAPI is just a techy bit of a much bigger problem, as clearly set out by James Parton head of O2 Litmus who doesn't talk about technology at all in his presentations, rather focuses on how to get applications in customers' hands and making money for developers.  As discussed in this article the industry needs to act as a co-ordinated entity; and focused on needs of developers, not the current self-focused approach.

App Stores:  Multiple stores can survive, use all channels and let the customer decide
There was a rash of announcements from Microsoft, Nokia, Android, RIM, etc. on their application store plans.  Prior to MWC we've seen several operators make announcements on their application stores / widget platforms, e.g. Vodafone. The challenge operators will have is that the consumer electronics manufacturers (Apple/Nokia) only care about device sales, the app store is simply to add value to sell more devices.  Hence the current 30:70 split will likely drop to 20:80 with competition.  Apple iTunes only cares about you if you have a credit card, Nokia's reach is much broader, Microsoft and RIM are more business focused, and Android will deliver to phone's running its OS.  Whether other device manufacturers follow suit with app stores is unclear, but it's likely at least half the mobile market will be served by the operator.  And operators should not forget to also use the device manufacturer's stores for their applications, as discussed in this article.  In the limit it's going to be the customer that decides whether an operator provides services or just connectivity, so operators have no choice but to get out there and use all possible channels to deliver cool, easy-to-use services.

One's to watch.  A round-up of innovative companies at the show.

There is a long list of cool apps at the show; here are a few worth considering:
Home Camera, previously discussed in this entry, all operators I introduced to this application were impressed;
Nano Equipment, previously discussed in this entry, a common reaction from operators was they should be doing this already;
Dial2do, exciting integration of voice with the web;
Bubble Motion, voice messaging and so much more; and
Useful Networks, a range of interesting LBS that work across all operators in the countries they operate.

O2 Litmus was everywhere at the show, James Parton did a great job of promoting O2's co-development community.  An impressive statistic is the first email inviting customers to join received a 27% response rate!  I've covered Litmus in previous entries; it is an important initiative that is gaining momentum.  As an industry, we must help O2 Litmus succeed.

IMIMobile: Outsourcing Content Management
The operational issues in outsourcing the network continues to limit its potential savings, yet it is a current vogue.  However, for the lower margin content services no operator should own and maintain a content management platform, yet many still do.  IMIMobile through its acquisitions of dx3 and NSN's music download service now has a complete converged VAS (Value Added Service) solution, as discussed in this article.  IMIMobile has achieved significant success in emerging markets, now is the time for operators in mature markets to evaluate their content operations and start improving margins.

Google Latitude: The location game's up!
The location game's up, for those happy to let Google own such personal data.  Google has bypassed the regulatory restrictions that have strangled LBS in countries such as the UK.  So will likely become a default location aggregation point over the years to come, bypassing operators' networks.

Next Generation IN and Services Middleware.  
I avoid using the terms JAIN/SLEE and SIP Servlet as it tends to encourage some people to become rather animated.  Suppliers in this field include Oracle, OpenCloud jNetx, IBM, Aepona, Red Hat, SailFin (Sun/Ericsson), Personeta, hSenid, and Argela.  Two more need to be included in this list: 4dK and APEX Voice, both are taking a unique approach, and both are ones to watch.

Revector: SIM (Subscriber Identity Module) box fraud is one of those 'elephants in the room.'  It's costing operators hundreds of millions of dollars a year, if not billions.  Yet awareness is low.  It's simply using SIMs illegally to bypass international call charges.  Revector has been tracking down these boxes for years, if you're not monitoring, then there's money being left on the table.

Cloud Computing and Telecoms
Cloud computing has been around for a while in the IT industry, its now starting to impact telecoms.  IBM announced the formation of its cloud computing division which appears to be built from the brains of the Telco group.  It will be interesting to see if there's a merging of the Telco and Cloud computing groups. There will likely be a dynamic tension between the cloud services offered by IBM, and those of operators.  And any operator serious about the future of its enterprise service will need to have a clear cloud computing strategy within the next 12 months.  In discussions with enterprise buyers at the show the emergence of thin clients (remember back in the early 90s!) appears to be gaining ground for cost and security reasons; so cloud computing will definitely be a hot topic for next year's show.

Wadaro is now integrated into the SIMs of several manufacturers.  It uses the phone to monitor real performance of network.  Its surprising this isn't done already. As mobile connectivity and cloud computing become pervasive it will mandate operators to extensively monitor their network as customers experience it.

Only a few years ago application developers were spurned by VCs as not being able to generate the returns they seek: 'only platforms could do that.'  Now there's a $100M fund for just iPhone apps.  Application developers were also subject the vagaries of operators' new product development teams, who are expert on what will not work on their networks; now most operators are building third party developer initiatives.  Developers were also collected and categorized by some of the big network equipment and handset suppliers into nothing more than a fashion accessory not a business tool; now even more suppliers are doing it.  

Today there are hundreds of developer partner programs, mash-up events, developer garages, jams, code days, geek camps, pizza crust basements, and any other term that can be considered 'geeky cool;' though isn't that an oxymoron?  The tide has changed for application developers, but with everybody wanting to be your friend, what is an application developer to do?

Just reviewing my inbox there are events such as: wipjam, Orange Partner developer camps and partner days, Vodafone Betavine events, at MWC there's the GSMA Mobile Innovation @ Mobile World Congress, Mobile Application Developer Garage, and many more events; CTIA is starting its publicity on events such as the AT&T Fast-Pitch Platinum Awards; and of course there's Facebook developer garages and Android Code Days.  Don't forget all the mobile internet, smart phone and web development conferences/events targeting developers.  In just the past month I could spend nearly every day at some developer event; helping me understand how to create an app using yet another API and trying to sell to me the benefits of premium membership: but few actually helping me get that app into customers' hands and making money!

The current expense and noise is counter-productive.  The telecom industry is falling into the same trap as before of all doing the same thing but differently, leaving developers tired and confused.  Apple provides a great example of keeping it simple: put it all online, have a simple process, and just let stuff happen.  If your APIs are so complex face-to-face events are required to educate potential developers, then its going to fail.  App developers care about a clear path to the customer and cash.  However, this analogy to Apple misses one critical difference, for operators its not one platform.  But developers do not need to create to all platforms, rather focus on a few that give the best 'bang for the buck.'  Here operators can help, c.f. Telenor CPA (Content Provider Access) and their list of most popular devices.

Orange claim 120 million customers, but how many are on an addressable S60 or above device?  Say 40 million.  How many of those will care to access such services? Let's be generous and say 10 million.  That's less than iPhone / iPod Touch addressable market.  And let's not forget Orange Partner lacks a simple clear path to the customer and cash.  So if the big telcos can not complete against the consumer equipment and internet brands, its time for operators to stop working alone.

Initiatives such as OneAPI (network API based on ParlayX) and BONDI (web service APIs for handsets) are useful, but that's just the techy bit of the problem and they are critically lacking involvement from the web development community.  Just as the cable industry created project CANOE for a coordinated approach to targeted advertising, which is likely to achieve the success the mobile industry has not.  The telco industry (mobile and broadband) needs to do adopt the same principle; create an entity that is a single point for all developers and finally start to complete against the global internet and consumer electronics brands rather than fail.