THE NEXT BIG THINGS
The annual event provides invaluable insights into the direction the cellular industry is taking. This year it’s clear that it is heading rapidly in new technological directions. Mobile communications is merging with broadcasting, and new wireless broadband technologies — with arcane names such as HSDPA, HSUPA and WiMax — are going to have a profound impact on the way people communicate. “Broadband wireless,” says Motorola CEO Ed Zander, “is going to make the past 10 years pale in comparison [to the next 10].”
There’s also a big drive to introduce cheaper handsets so that the world’s poor can get access to basic telecom services. There are an estimated 1,7bn cellphone users worldwide, which equates to about one in every four people. The GSM Association, which represents GSM operators, is working with handset manufacturers such as Nokia and Motorola to drive down the price of handsets. The GSMA wants 80% of the world’s population to have access to cellular communications by 2010.
This focus doesn’t mean the handset manufacturers are going slow on innovation in high-end devices. The big device manufacturers — Motorola, Nokia, Samsung, LG Electronics, Sony Ericsson, BenQ-Siemens — are in a race to be the first to introduce handsets that use the latest broadband technologies and that deliver a richer multimedia experience to consumers.
Nowhere is this more evident than in the move to mobile TV and to wireless broadband.
Mobile TV
The cellphone industry wants to make television just as pervasive as radio. As always, there are a number of different technologies competing to become the new global standard. There are also two ways of delivering TV content — it can either be provided via a conventional cellular network, from the same third generation (3G) towers that operators use to provide their customers with access to telephony and broadband Internet, or it can be delivered over new broadcast networks, using the same type of signal that delivers terrestrial TV into consumers’ homes.
It’s in mobile broadcasting that the handset manufacturers are focusing their attention right now. It’s cheaper to deliver TV signals using broadcast infrastructure than it is to deliver it using “point-to-point” cellular networks.
There are two main competing technologies vying to become the new global standard for mobile TV broadcasting. The first is DVB-H (digital video broadcasting — handheld). DVB-H is the European standard and is the one likely to be adopted in SA. The principal rival to DVB-H is a technology called MediaFLO, developed by US equipment manufacturer Qualcomm Because MediaFLO is proprietary, many handset manufacturers have spurned it in favour of DVB-H.
Nokia’s director for mobile broadcast solutions and multimedia, Markus Lindqvist, says DVB-H has “very good potential” to become the global standard.
It’s difficult to predict where the market might go but there are a number of reasons to believe mobile TV broadcasting will be successful. They include its relatively low cost (compared with delivering TV over 3G networks) and the fact that there are already field trials under way on every continent. One disadvantage is that operators need to get access to new spectrum, whereas this is not the case with TV over 3G. In many markets, operators will also have to apply for broadcasting licences to operate DVB-H networks.
Because of this, and for other reasons, Lindqvist expects that 3G TV and DVB H will be complementary technologies.
What’s less clear, he says, is whether cellular operators and broadcasters will work together to deliver TV to mobile devices. The cellphone companies lack the content that broadcasters have access to; the broadcasters do not have access to the millions of cellphone users. It’s likely, therefore, that the two industries will work closely together.
Cell C marketing head Simon Camerer says operators need to work out what their core competence is. Cell C believes other parties are better suited to provide content. “Broadcasters and operators will probably come to the conclusion that it’s in the best interests of the consumer to work together.”
The other challenge is finding the right revenue model. Operators in Korea charge monthly subscriptions for unlimited access. Operators in other markets might choose to implement a “pay per-view” approach. A hybrid model of the two seems most likely. Samsung SA’s vice-president for mobile phones, James Munn, says it must be affordable if it’s to take off.
Lindqvist expects people will use mobile TV for viewing short-duration video clips, such as weather forecasts and news and sports updates. Interestingly, market research suggests that consumers will mostly use mobile TV in the home.
But not everyone agrees that mobile TV is the next big thing. “TV on handsets is rubbish,” says Jim Morrison, CEO of Windows-based handset maker i-Mate “People won’t pay to get TV on their mobile phones. Imagine watching it on a train. You’d lose signal as soon as you entered a tunnel,” he says.
Wireless broadband
HSDPA, which is an abbreviation for high-speed downlink packet access, was all the rage at this year’s 3GSM conference. HSDPA is sometimes referred to as enhanced 3G because it’s an evolution of 3G, though it provides download speeds of more than five times the original 3G networks. Both MTN and Vodacom are expected to launch HSDPA networks this year.
Then there’s WiMax. Though it’s still in development, WiMax, sometimes referred to as 4G, is already creating bucketloads of anticipation — and trepidation — in the telecom industry.
In many ways, WiMax is to the cellular industry what the Internet was to the fixed-line network. It has the potential to transform cellular in the same way that broadband Internet has undermined fixed-line operators’ voice business. Provide a high-speed wireless data link and voice — still cellular operators’ biggest moneyspinner — becomes little more than another application on their networks.
The first commercial WiMax deployments are expected later this year. Many operators — both mobile and fixed-line — are experimenting with it.
WiMax is seen as a direct competitor to 3G. “HSDPA . will educate people as to the use of mobile broadband,” says Motorola Networks WiMax principal Andy McKinnon This will pave the way for higher-speed WiMax networks.
“It’s exciting but also potentially a threat to current 3G networks,” adds Samsung’s Munn.
The technology holds particular promise for developing markets, where fixed-line infrastructure is often poorly developed. In many markets, WiMax will be used to provide broadband where fixed lines do not exist. In these markets, fixed access is the first priority, though the promise of mobility is important, says Caroline Gabriel, a director at research firm Rethink Research Associates
Munn says WiMax is a huge opportunity for SA operators, particularly if they focus on providing not only voice services but also universal broadband data access. “WiMax opens up a whole new opportunity for all segments of the market,” Munn says.
McLeod travelled to the 3GSM World Congress as a guest of Motorola.
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