25 posts tagged “wireless”
3G value-added services will be cheap, but not so cheap as you have expected.
[+] The pricing of video phone service
As a result of the fierce battle for subscribers between operators, 3G value-added services eventually become a secondary role. In the long-term, however, mobile subscribers will gradually accept the services and use them more than they did in the 2G time. In fact, subscribers first switch to 3G because of attractive voice fee rates. Then they begin to use more value-added services because of faster Internet access speed.
Generally speaking, the most talked-about 3G services include video phone and streaming media. With video phone, you will be able to see the one you are calling. Of course, you can also dial a number to watch a live broadcasting program. Streaming media, on the other hand, enables users to watch audio/video programs via the Internet, mostly by logging onto portals of operators with handsets.
Voice service, video phone and streaming media, how should the three services be appropriately priced? First, as video phone consumes 4 times of bandwidth than general voice calls do, should it be 4 times as expensive? The answer is no, because 4 times is pretty scaring. Most operators offer rates ranging between 1.2 to 1.5 times.
Due to privacy and courtesy concerns, video phone is rarely used. Some people argue that operators should offer lower rates to increase use of video phone services. The fact is, however, low price is probably not sufficient to eliminate the privacy concern. Operators even believe there are reasons you have to use video phone (e.g., your wife requires you to). Is there any other chance of earning such easy money?
[+] The pricing for streaming media
Streaming media service, which enables mobile TV and movies, has been in a dilemma of whether to charge by traffic volume (e.g., RMB X for watching Y mega bytes per month) or by service time (e.g., RMB X for Y hours per month). Eventually, all operators chose service time-based fee rate models.
As most users are still not accustomed to traffic based models, while charging by service time also seems weird (nobody pays TV bills by minutes), the best solution would be monthly packages without time or traffic volume limit. Fearing that users might turn on their handsets 24 hours a day, which would result in considerable waste of wireless network resources, most operators dare not choose the solution.
If they choose to charge by service time, how much per minute would be appropriate? Streaming media service usually consumes twice bandwidth as much as video call does. Nevertheless, I suggest its fee rate be set similar to, or even lower than that of general voice calls. As streaming media service is delivered through IP-based packet-switched network, it could use network resources more effectively than video phone, allowing larger bandwidth for users.
That billing model encourages the use of streaming media to improve the efficiency of the network resources of operators. A challenge for operators is that they have to collect payments for content providers, which would increase the total cost of users. However, that seems to be a problem without solution, because content providers need to be paid, too.
[+] WAP monthly package and the pricing for mobile Internet access
In my view, WAP, the service that has been available since the 2G time is more profitable than mobile TV, which is wildly betted on because of the Olympic Games. Some operators have already offered WAP monthly packages without traffic volume limit. With the advent of 3G, they now face a problem: whether to raise or lower the package rates?
As the costs of operators are based on traffic volumes and 3G, with higher speed, will generate far larger WAP volumes than 2G, maintaining the monthly packages does not seem to be a good deal. However, in order to encourage 3G subscribers to use WAP services, it makes no sense to raise the price. But operators do not want to cut price. Eventually, the fee rates are usually kept at the same level of the 2G services.
As to the monthly mobile Internet access packages (via computers) for current China Unicom's CDMA network, no substantial change is expected because the speed of 3G service remains low (384k for WCDMA). However, as 3G has just been launched in mainland China, it would be well equivalent to the level of 3.5G (HSDPA) right from the beginning. As a result, the fee charging model would change.
For example, there might be packages of RMB X/month for the speed of 128k and RMB Y/month for 256k. Such a pricing model is similar to that of ADSL. Theoretically, the peak rate of HSDPA could be up to 14.4M (it is reported that 3.6M Internet access services would be available soon in Taiwan). Therefore, it is possible to introduce different fee rates for different speed.
[+] The fee rate of value-added services is not the key to attract subscribers
Why operators are so reluctant to cut fee rates of 3G value-added services? Because in the fight for subscribers, they have already cut prices of general voice calls. How do they compensate the loss? Through the above value-added services, of course. Will the value-added service fee rate level affect their subscriber base? Basically not. Then why not setting the fee rates a little bit higher?
Many consumers would consider switching to operators who offer lower voice rates, not the one who offer lower value-added service fee rates. The pricing of value-added service is not the key for operators to attract subscribers. With this user experience and such a mindset of operators, 3G value-added services will be cheap, but not so cheap as you have expected.
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Prev : New Landscape in China's Telecom Market (6) Insight into 3G Price War in Taiwan
Next : New Landscape in China's Telecom Market (8) WAP Sector Is Slowing Down
- Today in History
New Landscape in China's Telecom Market (7) The Pricing of 3G Value-added Services - 2008/07/27
New Landscape in China's Telecom Market (6) Insight into 3G Price War in Taiwan - 2008/07/20
From Idea to Business (2) How to Estimate Your Income and Cost? - 2007/07/22
New Era of Online Advertising (2) from Exposure to Deal - 2006/07/23
Ultimate Mobile Device (5) Universal User Experience - 2005/07/24
As a matter of fact, Apple's understanding of Internet remains to be around computers, not handsets.
[+]The rises and falls of Apple
In March 2008, Apple, led by "legendary" Steve Jobs, topped Forbes Most Respected Companies in the United State, where Google ranked No.4 and Microsoft far behind - No.16. Being respected while making money is not an easy thing.
Nobody foresaw the company, once in its low, would come back in glory. Back in history, Apple was left alone in the cold due to the introduction of product platforms (open standard) and industrial platforms (labor division within the industry) built by the PC group led by Intel and Microsoft.
Apple's proprietary system throttled the enthusiasm of players in the industry to collaborate in the manufacturing of hardware/software and peripheral products, resulting in few applications usable, which, on the other hand, held consumers back from buying its products. Eventually, Apple was cornered by the PC group into a niche market.
Nobody would deny that Apple's computers had more elegant and appealing shapes. However, it was no rival of the Wintel legion, because they could dig deep into the personal computer market with the power of the entire industry after open standards were formed.
Remarkably, the first surprise Steve Jobs brought the world after coming back to Apple was iPod, which was launched in October 2001. Back at the time, iPod could only be connected with Apple computers through iTunes. Persisting on Apple's tradition for fashionable design, however, it was able to win the favor of its loyal users.
In June 2002, Apple launched iPod Windows version, and then the mid/low-end series, and successfully infiltrated into non-Apple users. Once mocked by its rivals as a "clumsy MP3 player with a mini-hard drive", iPod finally became an icon of imitation.
[+]Beginning to reap the benefits of a "platform"
iPod successfully built two platforms. The first one was a platform of peripheral products, with open interfaces allowing other hardware manufacturers to develop products compatible with iPod, e.g., plug-in FM radios, special voice record pens and digital cameras.
The second platform was iTunes, the one most talked about but none of the rivals could successfully copy. It was first introduced to enable users to synchronize music files with iPod and assist them to manage music files in their computers. Surprisingly, Steve Jobs used it to build his music stores.
The more iPods were sold, the more likely users would buy music. For the traditional music industry, iTunes turned out to be a platform to sell music products in the digital world. With the increase of users who chose to pay for digital music, labels found themselves tied more and more tightly to the platform.
So when Steve Jobs insisted USD 0.99 per song, the labels that originally planned for a price rise had no choice but to agree. Some labels did build their own music distribution websites, but failed to achieve the sales level of Apple.
The support of the admirable iPod sales is the key to the success of Apple, which offers the benefits of a powerful platform of hardware + software + Internet service - benefits which Yahoo! and other Internet players cannot offer. Maybe it is the reason that Google wants to introduce its own cell phones.
The platform can be further expanded. The first approach is to infiltrate into the film distribution market. Now that Steve Jobs has reached his hand into their pockets, film makers, however afraid of following the fate of the music industry, cannot afford to ignore the presence of the platform.
[+]Building a powerful platform with contents
The second approach is that iTunes, while adapting to the Web 2.0 trend, enables ordinary people to make music, broadcasting programs or even films themselves and move them onto Apple music stores. A wide range of PodCast programs are really amazing and of good quality. What's more, the rich contents have increased the confidence of iPod buyers in its value.
However, it is time to use the content platform to introduce new hardware. In June 2007, Apple launched iPhone, an unprecedented achievement through a partnership with AT&T. To use iPhone, users had to register an iTunes ID, and telecom operators share income with Apple.
Such humble operator was never seen before. If not for Apple's bargaining ability backed by the powerful content platform and the user number, the arrogant operators would never have given in.
Interestingly enough, it is said that the same cooperation model proposed by Apple was rejected by China Mobile. Apart from that the latter was the largest mobile operator in the world and hence even more arrogant, it also indicated that the platform was not powerful enough in China to offer a bargaining ability against China Mobile.
Will Apple, which was beaten in the PC market a decade ago, realize the importance of platform and open its iPhone? Currently, iPhone uses Mac OS X operating system. With the increase in sales, there would be more hardware/software and service vendors around the OS, and eventually, new platforms would emerge.
This, however, is not the style of Jobs. iPhone is a proprietary device. In each country, Apple would choose only one operator as its partner. In addition, Mac OS does not have many software service developers. Completely relying on itself, Apple is expected to sell only tens of million cell phones at most.
In terms of building a large cell phone-based platform, wouldn't Nokia, which has much larger sales, present a bigger chance than Apple?
[+]Continue to be proprietary?
Currently, Google is trying to build a series of platforms ranging from cell phone operating system to browser to online service, which it intends to offer free of charge. Apple is doing virtually the same things, but doesn't seem to consider to offer them free to other manufacturers.
The key is Apple does not regard Internet as its core business, at least as of the present time. Both Google and Yahoo! hold Internet as their core business. While the former chooses to develop hardware standards independently and offers them free of charge to the public, the latter chooses to be compatible with all hardware standards.
Other than its own online stores, Apple does not seem to be interested in any other Internet service. Unlike ordinary cell phones, which can only view WAP sites, the iPhone browser enables the viewing of HTML websites. Nor has Apple considered building a wireless portal for all iPhone users to make itself more popular.
As a matter of fact, Apple's understanding of the Internet remains to be around computers. A China Mobile executive once had a negative comment on Apple, saying that downloading music from a computer to a cell phone was not consistent with the experience of cell phone users, who were supposed to download music directly from portals of telecom operators.
Anyhow, Steve Jobs has successfully attracted the eye of the world. Although traffic volume or ad revenue-based profit model is beyond his vision of the Internet market, the success of iPod, iTunes and iPhone is powerful enough to shock traditional cell phone manufacturers.
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Prev : Great Changes in Wireless Internet Industry (3) Nokia's Strategy
- Today in History
Great Changes in Wireless Internet Industry (4) Apple's Strategy - 2008/04/06
The Mist of 3G in China (2) TD-SCDMA is a Hot Potato - 2007/04/08
The Mist of 3G in China (1) 3G Makes No Profit - 2007/04/01
Predictions on China Internet Market (6) Community Services - 2006/04/09
Media, Community, and Blog (5) The Power of Media - 2005/04/03
3G Time Comes (4) Video Phone - the Killer Application - 2003/04/06
Nokia must turn itself into a platform, which must be more open than existing ones.
[+] Handset operating systems are getting increasingly unimportant.
In the mobile communication industry, Nokia is a legend of invincibility. According to the data released at the end of January, Nokia sold 134 million handsets in the 4th quarter of last year, with a market share as large as 40%, way ahead the 15% of Samsung, the closest follower.
If you were the CEO of Nokia, you would think: "can I further do something with these users?" when you see the data. Lucrative as the handset business is, isn't it better to squeeze something more out of the users? Internet becomes a target.
For years, Nokia has been dedicated to the development of its handset operating system Symbian and a series of smart phones to battle with Microsoft - with eye-catching sales. Worldwide, 60% of the smart phones are driven by Symbian. Only 11% use Windows Mobile.
What's clear is, however, amid the tide of wireless Internet, handset operating systems are getting increasingly unimportant. It is not that players on the stage will give up operating systems, but they have found that the ability to provide services is even more important.
If, as described in the previous section, Yahoo! introduces Yahoo! Go to enable service delivery across operating systems on the wireless Internet, and Google's operating system becomes available to handset developers for free. Where is the value of those different operating systems? The users would care nothing else but the services available.
Apple iPhone is an amazing product. But the central topic is not the operating system iPhone uses. In terms of sales, it would have a long way to go before becoming a threat to the market leader Nokia. However, iPhone's ability to drive sales with its music service is something that Nokia cannot afford to ignore.
[+] Nokia moves into the Internet market.
According to data released by Google internally in January 2008, during the 2007 Christmas season, page views of Google through iPhone was next only to that through the Symbian smart phones. iPhone's share of the smart phone market was as low as 2%, while that of Symbian was 63%.
What's the reflection it would give Nokia? Obviously, iPhone offers better Internet experience than Nokia - easier to use, more user-friendly browser functions. Maybe Apple is better able to attract users with high demand for Internet accessing to buy its smart phones.
To Nokia, both the improvements to the interface and the selling model of handsets bound with Internet services are shockingly new. A player that has been traditionally regarded a computer manufacturer is now one step into the telecom industry after a successful transformation into an Internet service provider and a consumer electronic product manufacturer.
What will be the right move for Nokia to infiltrate into the territories of its rivals? The first idea would be to provide proprietary contents, which could be obtained through M&A or through partnerships. Fortunately, many Internet players are interested in getting their services available on Nokia phones.
Therefore, Nokia introduced a series of services, including Nokia Search, Nokia Maps and Nokia Music. Most of the services, however, require download of special software into handsets in prior, and are not compatible with all Nokia handset models. Therefore, pre-installation of the software becomes a necessary means to sell handsets.
Nokia Search is a service offered jointly with search engines such as Google, while Nokia Music is a fee-based online music store through partnerships with leading labels - something similar to the iTunes music store of Apple. To Internet players, Nokia is both a partner and a rival.
Nokia service list: http://europe.nokia.com/A4496273
[+] WidSets: an open platform that pulls together the Internet world
It takes time to build such services. To establish itself in the Internet world as soon as possible, Nokia will have to pull the entire Internet over to its side. Don't forget that the Internet is a huge eco-system that needs a common leader to open the gate to the world of wireless Internet.
Nokia must turn itself into a platform, which must be more open than existing ones, to enable the upload of any service, regardless of the handset operating system - Symbian, or whatever else. If the handset operating system is no longer important, sticking onto Symbian would become Achilles' heel.
To Internet players that Nokia wants to pull over to its side, the prospect of handset-based Internet services available on any handset is a deadly attraction. Perhaps it was based on this idea that Nokia introduced its open platform WidSets.
For handsets, this open platform is a small Java program. Any handset that supports Java can run the software. Theoretically, Internet players would be able to provide services to all Java-enabling handsets, so long as the services are developed on the basis of the small program.
In terms of operation logics, what WidSets offers is similar to that Yahoo! Go does. Internet service providers could ignore the specifications of various handsets and make their services available on the wireless Internet through simple programs, so long as the receiving handsets have WidSets.
Currently, a number of leading Internet players, such as Wikipedia, Blogger and Flickr, as well as news media including Routers and BBC have started to develop applications on the Widsets platform. In addition, many amateur players are developing small games on it for downloading by users. Obviously, application development has become an easy thing.
Download WidSets at: https://www.widsets.com/widgets
[+] Can handsets be free?
Theoretically, Nokia's WidSets can be installed into a GPhone, or an iPhone, so long as it supports Java. In this regard, what operating system a handset uses is really unimportant. Why then is Google still sticking on the development of its own handset operating system?
What's really in the mind of Google, perhaps, is to extend its advantages in online advertising. By knitting Google services closer with handset functions, it would be able to continue its leadership in the handset-based advertising market as the wireless Internet population grows, or even use the income to offer cheaper or free handsets.
Of course, Nokia and other handset manufacturers would hate the idea. Instead of selling products, they would have to depend on advertising to make money. Will this wild dream of Google become true? First of all, handsets will never really be free. They are just paid by somebody else.
Telecom operators were once bill payers that made handsets free through bound service contracts with consumers, who were thereby requested to pay subscriptions, which they had no way to cancel for a given period of time. With the subsidies of telecom operators and Google, it is indeed possible to further drive down the prices of handsets.
If the appearance of GPhone means that telecom operators would pay less subsidy, that's absolutely good news for them. The problem is it will have to be paid, either by telecom operators, or by Google, because handset manufacturers such as Nokia will not sell handsets at prices below costs.
If Google pays the subsidy to make handsets free, it will have to earn the money back from follow-on handset-based ads. To spend the money before there's an income, is this a good deal? Google will have a huge amount of cash to give away as subsidy. It seems exactly what powerful telecom operators did in the previous years.
Compared with those of Yahoo! and Nokia, Google's wireless Internet plan seems more like a big bet.
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Prev : Great Changes in Wireless Internet Industry (2) Yahoo!'s Strategy
Next : Great Changes in Wireless Internet Industry (4) Apple's Strategy
- Today in History
Great Changes in Wireless Internet Industry (3) Nokia's Strategy - 2008/03/23
Predictions on China Internet Market (5) Search Engines - 2006/03/26
Media, Community, and Blog (4) Production-Marketing Relations - 2005/03/27
Media, Community, and Blog (3) Deconstruct Blog - 2005/03/20
Stop Internet Marketing (3) All Determination; No Distribution - 2004/03/21
3G Time Comes (3) SMS, Email and MMS - 2003/03/23
Success or not, Google has made a smart move to bid for the license.
[+] The conflict of mindsets of two industries
Rumors about Google's introduction of GPhone have been flowing around for quite a long time, but never confirmed. Nobody had any idea about how ambitious Google's blueprint was until it announced to bid for FCC 700MHz spectrum and to launch the Android mobile platform.
Mobile operators are in a fortress that Internet players have been unable to conquer so far - largely due to the gap between the basic business modes of the two industries. In the mind of telecom operators, there's nothing to be offered free. Once launched on a telecom platform, any service would entail a cost and should generate an income.
Therefore, when the ringtone download service is released on WAP portal, telecom operators charge the users two types of fees, one for data transmission and the other for use of the content. While the former is most likely to be integrated into monthly packages, the latter is actually collected for content providers.
For a long time, telecom operators have no idea about how to deal with Yahoo! or Google search boxes at WAP portals. Unlike ringtone download, this is a service that you cannot charge users for. If the search boxes are put up by Internet players for marketing purpose, should they pay telecom operators for that?
So when the webpage you get using Google on your cell phone shows an ad, your telecom operator will share a portion from the advertising income. This cooperation model turns Internet companies into a secondary role. What else can they do since the telecom operators control the Internet access?
There are two ways to force telecom operators to recognize their status: either from the upper stream or the lower stream of the industry. One case for the former is Google's bid for wireless spectrum to assume the role of a telecom operator; and that of the latter is Apple's introduction of iPhone - bound music to reach into the pocket of consumers.
[+] Google's overall deployment
Google' s bid for FCC 700MHz wireless spectrum is far more important than its launch of Android mobile platform. Previously, Google had urged FCC to accept a yardstick that "all bidders for the spectrum should offer open access."
The request got the support of FCC. Essentially, it demands that the winner of the bid should have the ability to provide access to any terminal device connecting to networks of the spectrum. Instead of discrimination, the operators should treat all terminal devices equally.
FCC is a neutral party. Its mission is to facilitate the development and effective competition of the communication industry. To open the industry wider to more players is, obviously, in conformity with this mission. As Google stood out with the proposal, telecom operators, who had been accustomed to stand-alone business operation, were at a loss for even not knowing how to rebut it.
However, how could it be possible to allow so many different terminal devices free access to the Internet? So Google, along with the 34 founding members of Open Handset Alliance, introduced Android, a device-independent handset software development platform..
Why were the 34 companies, including heavy-weight players such as Motorola and Qualcomm, and even telecom operator T-Mobile involved from the very beginning? Had Google not announced to bid for the license and urged FCC to accept the Open Access standard, they wouldn't be there so fast!
Google made a smart move. The result of the bidding is yet to be announced, and the open handset platform would have to stand up to existing rivals such as Symbian and Windows Mobile. Nevertheless, it is a good beginning. Nobody could afford to ignore the power of Google.
[+] The license bid is critical
The next step of Google might depend on the result of the license bid. In the first place, if Google wins the bid and becomes a new telecom operator, it would be able to integrate the entire industrial chain, from the upper stream to the lower stream, with the assistance of Open Handset Alliance. The most optimistic prospect would be a performance multiplier.
Google will be able to foster the basic customers for its own handset platform, while its allies would target client groups for their handsets and services, and terminals introduce closer-knitted services with Google. With economies of scale, more investments can be made for R&D to eventually build a healthy cycle.
Of course, it will take Google a lot of money and time to learn about the trade. Telecom is a century-old industry and won't be so easy for Google to understand in a short time. Head hunting might be a good option, but conflict with Google's existing business culture would be possible.
If the learning curve is too long, Google might be mired in the new business. Telecom is a capital-intensive business that takes a lot of initial investments. Google's financial statements would not look so pretty by the time.
More troublesome, in this industry, successful business modes cannot be duplicated. Google might be able to get the wireless spectrum of the United States, but it has no way to get those of all countries in the world. Telecom is a highly localized industry, which means that Google is unlikely to duplicate or export business modes to other parts of the world.
The only viable way is M&A, or financial takeover of local telecom operators just like other transnational telecom giants have been doing. This, however, won't happen before Google's telecom business becomes profitable. How can a money-losing business sell its business mode? Where does it get the money needed?
[+] The Android platform turns out to be a headache of developers
In my view, it would be better for Google not to get the wireless spectrum license. It would be too much to raise cows just for drinking milk. Even if Google doesn't get the license, Open Handset Alliance and its Android platform would still be valuable assets.
As Open Access has been accepted by FCC as a requirement for all players, Google could use the alliance and the platform as its chips to cooperate with the telecom operators that win the license. By abandoning the quest for a telecom operator, Google would be less as a threat to other operators, which would be helpful for cooperation.
By taking the highland to show its determination for the license bid, to create a powerful pressure and facilitate the establishment of Open Handset Alliance, Google has made a really smart move, regardless of the result of the bid.
Of course, there will be challenges. For Google, the biggest is how to attract more telecom operators into the alliance and to boost the enthusiasm of handset manufacturers to develop GPhone. Its rivals will include the formidable Symbian and Windows Mobile.
Handset manufacturers and software/application developers, in the meantime, are frowning at the platform. On the open Internet, Google is undoubtedly the leader. In the field of handset development platform, however, it is just one of the options.
What the developers are concerned about is, if the Google platform is not powerful enough to take the loin's share of the handset market, it would turn out to be one more standard that the developers would have to support. For them, the existing platforms are enough to be painful about. And here comes another.
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Prev : Web 2.0 Finale (3) Finally blended in Web 1.0
Next : Great Changes in Wireless Internet Industry (2) Yahoo!'s Strategy
- Today in History
Great Changes in Wireless Internet Industry (2) Yahoo!'s Strategy - 2008/03/09
Great Changes in Wireless Internet Industry (1) Google's Strategy - 2008/03/02
Predictions on China Internet Market (2) Subscriber Number Is King - 2006/03/05
Media, Community, and Blog (1) The Beginning of the Story - 2005/03/06
Stop Internet Marketing (1) All Market; No Marketing - 2004/03/07
3G Time Comes (1) What Is 3G? - 2003/03/09
If so, telecom operators would be shut out of the mobile TV market.
[+] The past experience of cell phone manufacturers
From the tide of WAP-based Internet accessing in 2000 to the crazy bid for 3G licenses, and then to the bet on MMS for promoting sales of camera phones and music phones that enable music downloading, and finally to 3G phones with audio/video services, cell phone manufacturers have had thrilling experiences over the years.
The world cell phone market started to show signs of saturation in 2000. To maintain their growth, manufacturers had to motivate consumers to replace their phones with newer products. All of the thrilling experiences in the past 7 years seem to be a quest for what really are the selling points. Fortunately, the result so far has been satisfactory.
In summary, there are a few observations:
1)Mobile Internet is a hard-to-handle concept. The key is consumers tend to compare their expectation for mobile Internet with their PC-based Internet experience, which, in most cases, ends up in disappointment, as cell phones are not so easy to handle as PCs. Mobile Internet has been successful in Japan, only because of the low PC penetration rate there.
2)Telecom operators wish that new cell phones be bound with particular services, so that they could benefit from their sales, instead of being un-paid sales reps of the manufacturers. However, it turns out that consumers buy camera phone only because they can use it to take pictures, and anyone seldom uses MMS service.
3) There's no concern for the shortage of content accessing channels. Despite the hot sale of music phones bound with download service offered by telecom operators, most users choose to transmit music from their computers to cell phones, instead of downloading them from the WAP portal provided by telecom operators. Although it is more troublesome, but it is free.
4)3G audio/video services, including IP-based audio/video streaming and video phone, have not brought satisfactory user experience. It is a very simple concept to allow both parties of a phone call to see each other. However, due to privacy concerns, it has not been able to become a killer application.
[+] Telecom operators might be ignored
With the above experience, cell phone manufacturers finally realized that their business is to make and sell handsets. The simpler their products are the better. There's nothing simpler than the concept of mobile TV.
Consumers no longer have to bother whether the TV programs are downloaded from the Internet, nor cell phone manufacturers to care about whether their phones are bound with particular services offered by telecom operators, so long as they free themselves from the troublesome 3G audio/video experience.
In fact, a hi-tech company in mainland China has developed a sort of chip, which can be built in cell phones to receive traditional analog TV signals. In other words, with such a chip, you will be able to watch wireless channel with your cell phone, regardless of its specification or standard.
The only shortcomings are the mobility and fidelity. As analog TV signals are not intended for mobile environments, the fidelity cannot be compared with that of digital programs of mobile TV. However, it would be good for some people, if the programs are played on small-screen cell phones.
In most cases, however, people watch mobile TV on static environments, e.g., bus or subway stations, or in offices. It explains a fact that cell phone manufacturers will be able to sell their products without binding themselves with telecom operators.
The only thing that those manufacturers have to worry about is where programs would be, once new standard-based mobile TV is launched? Will telecom operators become content aggregators as we discussed in the previous section? If not, they'd better establish connections with content providers right away.
[+] Charging or not, it's a matter about the structure of the industry
The high production costs of movie/TV programs turn out to be a big obstacle for traditional value-added service providers to produce contents themselves. Imaginably, a big part of contents for mobile TV will come from traditional TV stations.
An interesting cooperation mode is that after consumers buy a mobile TV-enabling cell phone, they will get a set of passwords from TV program providers. Upon activation, the cell phone will be bound with the passwords to enable watching programs. The fee is charged each month through the phone bill from telecom operators.
That mode is designed for charging fees. If mobile TV programs are offered for free, and program providers depend on ads for their incomes, the passwords and the additional lines in the phone bills of telecom operators would be unnecessary. If so, telecom operators would be shut out of the mobile TV market.
With regard to the mobile TV services, the only way for telecom operators to gain the favor of cell phone manufacturers is to persuade content providers to charge fees, in which case, they would become the largest content aggregators and channels for charging fees. Otherwise, they would be easily abandoned in the game.
In addition to traditional TV stations, will website operators (e.g. Yahoo! and Google), which are gaining influence in the mobile Internet sector be able to get a share in the market? Those players do not have program-producing ability themselves. However, through audio/video content sharing, they will have some opportunities.
Audio/video content sharing sites, such as YouTube, has a lot of interesting programs. In spite of the low fidelity (as most programs are produced by non-professionals, after all), such programs might be good enough for cell phone-sized screens.
Currently, the mobile TV market is still a virgin land for a lot of players, including telecom operators, cell phone manufacturers, traditional TV media and emerging Internet media. The future will be interesting and full of expectations. Eventually the biggest winner will be consumers. The distribution of audio/video contents will be fast and convenient as never seen before.
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Prev : Mobile TV Market (2) the Subtle Role of Telecom Operators
- Today in History
Mobile TV Market (3) Terminal Manufacturers & Content Providers - 2007/12/02
Great Future of Wireless Broadband (4) WiMax, 3G and 4G - 2006/12/03
Internet and Books (1) Dilemma of Online Publishing - 2005/12/04
VoIP (2) Who Depends on Whom - 2004/12/05
VoIP Gives out the First Cry - 2003/12/07
"Killing time" is the core for the development of mobile TV.
[+] Consumers are spending less time watching TV day by day.
Being optimistic about the mobile TV market, chip makers, cell phone manufacturers, telecom operators, media operators and value-added content providers have been making preparations in advance. However, is mobile TV really what consumers want? An unspoken doubt is: will anyone really watch TV on the go?
First of all, a trend is crystal clear. Consumers are spending less time watching TV through TV sets. Statistics show that at least in mainland China and Taiwan, the number of people surfing Internet after 8 p.m. at night are increasing steadily, so is the time spent.
Each person has only limited hours in a day. As more and more people choose to spend their off hours in front of computer screens, the TV audience group would diminish. IPTV has not been successful, largely because it is still trying to bring people back in front of TV screens, ignoring the fact that nowadays people hardly watch TV anymore.
The correct way to attract today's TV audience is to move audio or TV programs onto the screen of computers and cell phones. However, the decrease of the time for watching TV and the increase for using computers do not mean that the hours spent on watching cell phone screens would increase.
Here we have two questions to think about: 1) Consumers' hours on the go are fixed (on their way to work/home, or weekend outdoor trips, etc.), so what are their requirements for TV programs during those hours? 2) Is it possible to stimulate the enthusiasm of consumers for mobile TV even in room?
Will consumers buy if we successfully address the user experience challenges for watching video programs on 3G cell phones, and enable press-and-play, fast and effective channel switching and easy, simple billing?
[+] "Killing time" is the core for the development of mobile TV.
Product managers of mobile TV programs might have been racking their brains for clues about consumer requirements. The fact is they don't have to. What consumers want is just to kill time. It would be so boring at bus or subway stations that consumers would like to have something to watch; they may just want to snatch a little rest during busy office hours to steal a look at the cell phone, or they want to take a look at some important news.
Killing time, by all means, is the most critical application of mobile TV. There's no need for complicated interaction programs. Previously, 3G cell phone-base audio/video programs were so troublesome to operate that the "interaction" eventually turned "killing time" into "killed by time".
"Killing time" is also the key to mobile TV billing. One simple question: how much are you willing to pay for killing time? Currently in Taiwan, cable TV bills are about NTD 600 per month. How much, then, is reasonable for mobile TV? 200? Or 100?
DVB-H-based mobile TV offers one-way broadcasted digital programs, which, in theory, don't have to be received only with cell phones. Special terminal devices would be developed in the future for receiving such wireless digital programs. And there might be USB terminals for computers, too.
If digital TV itself is offered for free, there's no need to bother with which terminal device to use (ideally, of course, it's more convenient to be built in cell phones). In view of the current situation, however, monthly billing modes such as those adopted by the cable TV sector will be considered by operators. Therefore, integrating the fee into cell phone bills seems to be a natural choice.
If so, telecom operators would be put into a very subtle position. They might have nothing to do with mobile TV program provider, or become just a billing solution provider for the later, or even play a role similar to cable TV system operators.
[+] The subtle position of telecom operators in the mobile TV industry
In the first case, where telecom operators have nothing to do with digital TV content providers. TV-enabling cell phones bought by consumers (or other terminal devices) will be able to receive TV programs by design. If the programs need charges, consumers can make payment to TV program provider directly to get user IDs.
To get a simpler picture, just imagine binding a cell phone with a digital TV terminal. Each device functions independently without the interference of the other. If TV program providers want to charge the users, they could choose a number of channels, but would have to print and send the bills themselves.
Program providers can also choose to cooperate with telecom operators, if they do not want such troubles. That leads us to the second case: fee collection through cell phone bills. A more deep cooperation model could make interactive programs together with mobile operators and enable real-time program balloting through GPRS.
Trouble, however, is at door. There would be numerous program providers and TV channels. Say, there might be 5, and a consumer could choose to pay one for the program he watches, but he would not be able to afford all 5 if he wants to watch them all.
Generally speaking, that is not good news to the mobile TV sector. The real solution to maximize the interest of program providers is to build a single platform to enable free switching of channels. Yes, there are always competitions. However, if competitions lead to obstacles for consumers, that's no good to anyone.
More over, consumers have been accustomed to the monthly billing mode of one package for watching over 100 channels, which will not change in a short time. Therefore, a player capable of integrating all programs, which is similar to a cable TV system operator, is highly expected. Who will assume this role? It seems to be telecom operators.
That turns out to be the third case. However, everybody wants to dominate. The TV industry does not want their channels to be controlled by others, while the telecom industry will not give up the opportunity of entering the media market. Ironically, the fate of this scenario depends on whether mobile TV is fee-based or not.
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Prev : Mobile TV Market (1) Cell Phone plus TV, the Dream of Everybody Next : Mobile TV Market (3) Terminal Manufacturers & Content Providers
- Today in History
Mobile TV Market (2) the Subtle Role of Telecom Operators - 2007/11/25
Great Future of Wireless Broadband (3) Scarce Resources - 2006/11/26
Google's Choice (2) Lessons for the Software Giant - 2005/11/20
VoIP (1) It's a Fool Not to Make Telecom Money - 2004/11/28
WiMax will eventually engage with 3G in the field of voice communication.
[+] The declining communication revenue
Imagine this: you will be able to make mobile phone calls for unlimited minutes so long as you pay a fixed amount of money each month; if you want to watch a movie or download music or use other value-added services, you pay additional charges, but there's no such costs as communication fee or transmission fee any more.
For telecom operators, this is a nightmare. No more are the good days of waiting for subscribers to make phone calls and printing phone bills calculated on talking minutes. They now have to earn their meals by providing sufficient contents. But that is too troublesome and not the specialty for operators. Worst of all, they will have to share money with content providers.
This is what's happening to your phone line at home. For an ADSL line, the telecom operator is able to charge only two types of fee: the lease for the line (including voice and data services) and the Internet access fee. Both are almost fixed each month.
If, instead of dialing traditional phone calls, you use the line only to dial Skype VoIP calls, you will be able to use both the Internet and the voice services with that amount of monthly payment. Eventually, telecom operators will have to sell IPTV to you to look forward to earning more through contents.
Yes, wireless bandwidth resources are limited and incomparable with the cable broadband. But who can say that some kind of a novel technology will not appear in the future to change all this? After all, consumer demands are always there and the amount of bandwidth that a consumer can buy with each dollar has been on the rise over the past years.
[+] The unpredictable future of WiMax
In the field of 4G, a concept which is not even clearly defined so far, players are already fighting for the ability to set the standards. Thanks to the promotion of Intel, WiMax has got the support of many telecom equipment suppliers and handset manufacturers, and is now the hottest bidder for the 4G technology.
Intel is going to embed WiMax into its notebook computers, in a hope to get the popularity that WiFi once had. Despite the slower-than-expectation progress, the ambition of the giant should never be ignored. In addition, Nokia has also got into the line of supporters, announcing its plan of introducing WiMax handsets.
However, in view of the current status of 3G services around the world, WiMax, which claims to be 10 times faster than 3G, is really in an awkward position. As 3G has been in commercial use for only a few years, mobile operators who are yet to retrieve the return of their investments are really hesitating about making additional investments in WiMax.
A more possible solution is to issue licenses to fixed-line telecom operators or emerging mobile operators and allow them to build WiMax APs. As a matter of fact, struggling to stem the multi-year decline in revenue, fixed-line operators have been longing for accessing the mobile market for many years. For them, WiMax could be an opportunity.
When mobile operators have little interest in WiMax, a fallacy has appeared in the market, holding that WiMax is a complementary service, instead of substitute of 3G. This has rendered wider imagination for WiMax, particularly in the China market, where 3G has not been launched yet.
[+] 3G and WiMax: foes, not friends
The two services are considered by some to be complementary because the priority of 3G is the mobile voice communication, while WiMax, with its advantages in data transmission, can provide notebooks with the Internet access. In this regard, mobile operators could build two types of network to separate the services: "3G serves people on feet, and WiMax serves people on seats."
In Korea, dual-mode handsets supporting both 3G and WiMax are already available in the market. It seems possible for both to co-exist peacefully? However, we see now that the two technologies are born to fight each other to death and there could never be such a thing as complementation for each other in the real market.
First of all, if fixed-line operators get the WiMax license, they will use the data transmission capability of WiMax to provide wireless VoIP services, which is bound to dig a portion of subscribers away from mobile operators. With so many world-leading suppliers involved in the development of WiMax handsets, the supply of terminal devices will not be a problem sooner or later.
It is reported that the data transmission cost of WiMax is only one tenth of that of 3G. Maybe the WiMax community led by Intel is too optimistic. But if it were true, the fee rate of WiMax-based VioP could be as low as one tenth of that of 3G too.
If the operators that have got the license forget the fact that the number of mobile phone subscribers is far larger than that of notebook users, and only plan to provide Internet services to notebook or PDA users with WiMax, then they must be crazy. WiMax will definitely engage with 3G in the field of the voice communication.
[+] Mobile phone flat rate with unlimited minutes
Were WiMax to appear a little bit later, the follow-on versions of 3G might have the chance to provide larger bandwidth and a more comprehensive IP environment; or, in plain words, a 4G network environment upgraded from 3G might be able to provide the VoIP service, thus render WiMax unnecessary?
Could VoIP all-you-can-eat monthly flat rate become a reality in the 4G time? It will have to depend on how low the transmission cost is. Even if it is low enough, the 4G-based VoIP service might still be charged by minutes in the initial stage. Operators will not withdraw to the bottom line of monthly flat rate at once, so long as the fee rate is acceptable to consumers.
Yet for 4G Internet accessing for notebooks, which does not go through a phone number, operators might consider to offer monthly flat rate. Although 4G is a comprehensive IP environment, operators might still want to separate the Internet access from the voice communication after taking into consideration the reality in the marketplace.
However, there's one thing uncertain here. Today, WiFi handsets with embedded Yahoo! Messenger or Skype are already available. Such handsets will be supported in the 4G wireless network too. With such handset and access to the 4G network of an operator, consumers would be able to make phone calls free by only paying the monthly fee.
Such handset might not have their own phone numbers, or would have to go through troublesome procedures (e.g. SkypeIn) for the numbers, or might encounter the containment from telecom operators. But anyhow, the competition is there and operators have no way to pass it by. It will eventually drive 4G VoIP toward the destiny of monthly flat rate.
The trick is that if 4G really offers monthly flat rate, it will deprive Skype of its room of survival on the mobile terminal. How could Skype, a service that depends on consumers' hunger for lower fee rates, expect to survive any longer once the mobile phone service is as cheap as what monthly flat rate offer?
To be able to make free phone calls has been the dream of mankind, and unintentionally become the driver for the evolvement of the communication technology. Telecom operators who depend solely on the switching of phone calls or transmission of data for their income would face severe challenges sooner or later. They will have to transform into service providers with diversified abilities.
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Prev : Great Future of Wireless Broadband (3) Scarce Resources Next : The Fourth Generation of Internet Marketing (1) RSS Marketing
- Today in History
Great Future of Wireless Broadband (4) WiMax, 3G and 4G - 2006/12/03
Internet and Books (1) Dilemma of Online Publishing - 2005/12/04
VoIP (2) Who Depends on Whom - 2004/12/05
VoIP Gives out the First Cry - 2003/12/07
What will not change in the wireless world is the spectrum scarcity.
[+] Bandwidth that can be increased
In the wired world, when a telecom operator lays a cable into your home for broadband Internet access, it exclusively belongs to you and your bandwidth is guaranteed. If you are not content with the existing bandwidth, you can simply pay a little more to get it increased, so long as it is technically practical; or you can just apply for another line.
For the part of telecom operators, they receive all user data traffic into their servers, and switch or transmit them out. When the user number or the bandwidth of each user increases, they can deploy more equipment or increase the bandwidth to outside by laying more cables.
In the wired world, the shortage of bandwidth can always be solved with additional cables, if the operational costs of telecom operators are let alone. Both the bandwidth of end users and that of telecom operators can be expanded.
Wireless Internet has similar situations. The base stations deployed by telecom operators have user number and bandwidth limits too. That is, the number of concurrent user cannot exceed a limit. The bandwidth of a base station is shared by all concurrent users at any specific point of time. Of course, the more people online, the slower the connecting speed for each one.
In other words, if users are always having trouble accessing the Internet, or are suffering from slow speed, it is time to increase the number of base stations. Let alone the issue of operating costs of telecom operators, they could always increase the bandwidth by deploying additional base stations.
[+] Bandwidth that cannot be increased
For wireless bands, however, there is a lethal vulnerability. Due to its inherent spectrum limit, the volume of data that a wireless band is capable of transmitting is always fixed. When an operator is allotted a wireless band for its services, the total capacity of its bandwidth is almost nailed down.
This is the spectrum scarcity. In other words, wireless operators must decide how to distribute the fixed bandwidth resources available. If there are too many users, the part allocated to each would be too small to satisfy his/her needs.
Technological advances might be able to solve part of the problem. For example, better wireless modulating technologies or compressing abilities might help to squeeze more data volumes into a wireless band, and therefore increase the total bandwidth of the operator. An example is the evolution of the technology from 2G to 3G, and then to the current 3.5G, and to 4G in the future.
Unlike the wired world, however, this increment is still limited. This is why the 3G wireless Internet monthly tariffs of most mobile operators are very expensive. With so many people bidding for limited bandwidth resources, those who afford the high prices can get the service.
In addition, both 2G and 3G systems of most operators are intended for voice communication services. When a number of users are fighting for the bandwidth of a mobile base station, the operator will give voice service subscribers higher priority, in which case, Internet users might be unable to get connected. All these have rendered the prices and experience of the wireless Internet service less appealing.
[+] 3.5G is shining over the horizon.
Generally, there are two solutions to the above limits. One is to introduce new technologies, for example the upgrade from 2G to 4G as mentioned above to squeeze out more bandwidth for operators. The other is to provide separate routes for voice and Internet services to avoid the conflict for base station resources.
When will the monthly fees for the wireless Internet service drop down? Currently in Taiwan, the fee rates of most WCDMA 3G operators range between NTD750 to 850, while, in theory, the data rate is 384K.
Compared with ADSL, it is cheaper, but the speed is much slower, although it already has the "bandwidth sufficient for mobile services". Compared with WiFi, it also has its own advantages: signals are available everywhere and users don't have to search for hotspots. This explains the continued hot sale of 3G wireless network cards since their introduction.
As I explained in previous sections, the wireless Internet service should be able to substitute ADSL if it were ever to see a substantial increase in its user number. Currently, this is still beyond the ability of 3G. If there could be a wireless Internet service that can be used both at home and out on the road and has about the same data rate of ADSL, isn't that great?
3.5G is here. The HSDPA-based wireless Internet model could offer a download data rate up to 14.4M in theory, and 3.6M in practice. It was first introduced in Taipei in October 2006 at the same monthly package fee rate as the 3G wireless Internet service.
[+] The cost for serving household users will increase drastically.
With this price and proven data rate, the service, which is capable of substituting ADSL, has attracted the eyeballs of many computer addicts and business people ever since it was introduced. Yet on the other hand, operators who have vowed to develop the WiFi service in Taipei are caught in a dilemma.
Currently, 3.5G wireless network cards are still a little bit too expensive—about NTD10,000. In the meantime, notebooks with built-in 3.5G chips are already available in the market, sold at about NTD 80,000. Price cuts can be expected so long as operators have the momentum for promoting the service.
For operators, however, this is a mixed feeling, as HSDPA has not fundamentally increased the number of concurrent users. A 3.5G base station can still accommodate only 16 people online at the same time. When the situation of "substitution of ADSL" does occur, the base station will be short of resources.
In the case of the mobile voice service, a normal phone call will last for minutes and will not occupy the base station for long. However, for the wireless Internet service, it is a different case. A user could stay online overnight to download files. To address the needs of household users, the number of base stations will have to increase too.
Consequently, there could be implicit increases for monthly fee rates or restrictions to the bandwidth assigned to each user. The scarcity of resources will never change in the wireless world, unless there is a better technology to provide larger bandwidth. Will 4G be the new technology expected?
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Prev : Great Future of Wireless Broadband (2) Public WiFi is Not Enough Next : Great Future of Wireless Broadband (4) WiMax, 3G and 4G
- Today in History
Great Future of Wireless Broadband (3) Scarce Resources - 2006/11/26
Google's Choice (2) Lessons for the Software Giant - 2005/11/20
VoIP (1) It's a Fool Not to Make Telecom Money - 2004/11/28
Many round-about business models have appeared as a result of the technical bottleneck. Unfortunately, none is the ultimate solution.
[+] "Killer application" does not exist at all.
What is the "killer application" that attracts consumers to apply for ADSL? Or, in other words, if you want to apply for ADSL, what is the application behind your decision?
Is the reason for a larger mailbox, or the Internet TV, or the ability to download larger files, or the video phone? You can hardly tell what it is exactly. Anyone who applies for ADSL is aiming at "all of the services available on the Internet", instead of any particular one.
In other words, the killer application is the entire Internet itself, which is a fact ignored by most people even though the Internet has been developed for more than a decade now. Whenever a new transmission technology runs into a bottleneck in the market, the first reaction of those involved is to find a killer application, although they have never succeeded to find one at all.
This is the paradox of Taipei, the largest WiFi city in the world, which has merely 40,000 WiFi subscribers. Both the city government and its contractors believe that Voice Over WiFi could substantially stimulate the growth of the subscriber number.
I don't know if you ever have the experience of making phone calls through WiFi. I myself once dialed a call with the Skype phone of a leading supplier over WiFi (without connecting to a computer). Frankly, the communication quality depends on your luck. After all, WiFi is not designed for voice communication.
[+] Price cut is not the solution.
If we look back at the process that we upgrade all the way from the dial-up access to the 512K ADSL, and then to 1M, 2M, 8M and 12M, we can see that there is only one fundamental driver behind: the price. Following each price cut, a large number of users switch to services of higher bandwidth.
Currently, the monthly fee for the public WiFi service in Taipei is about NTD400. Will the number of subscribers rise drastically if the fee rate is cut down to NTD200? Frankly speaking, with my own experience of using the service, I dare not say yes. Yet for service providers, such a fee rate is too little.
From the viewpoint of consumers, a flawed product (at least with many restrictions to its functions) has little appeal however cheap it is. From the standpoint of service providers, those who could bear the flaws and functional restrictions are the ones with real demands, and therefore, a price cut is the least thing they should do.
The question is how large is this group? When we get the answer, we will see that the target group of the public WiFi is really a small one. They must be notebook owners who are often out of their office and have Internet access demands. What's more, their range of activities must be around streets, where good signals are available.
Typically, such people are either computer addicts or salespersons. In this sense, it is safe to say that we are lucky to have so many public WiFi subscribers. Then how come we have built so many WiFi APs - enough to cover 90% of our population - for such small group of people?!
[+] Households are the only hope for the increase of the subscriber number.
With the earnings pressure, public WiFi service providers are beginning to shift their eyesight to corporate users. This is a right business decision, as they will be able to secure a large user base rapidly by introducing service packages or price cuts in the corporate market, not mention corporate users are the very target of the public WiFi.
Nevertheless, it is by no means a smart investment to spend so much money in building so many APs to only serve business people who own notebooks in Taipei. If the subscriber number is what counts, the target market of the public WiFi service should be households. In other words, it should try to substitute ADSL.
Notebooks have become the mainstream in the computer market over the past years. With their mobility, notebooks can be used in your study, sitting room, bedroom, or on the road. Once regarded as a subsidiary product to the desktop computer, the notebook is now in the mainstream and the primary choice for many people.
The problem is, when you use your notebook at home, the ADSL cable does not follow you everywhere. Yes, you can use a WLAN at home, but not everyone is good at constructing a WLAN AP. Maybe WWAN like 3G could provide a solution to such problems.
Theoretically, 90% of the citizens in Taipei will be able to surf the Internet with their notebooks at their sitting rooms, kitchens and bedrooms without the restriction of the ADSL cable, so long as they pay NTD 400 each month to subscribe for the public WiFi service. The reality, however, is not that simple.
[+] Technical restriction is the root.
"To compete with ADSL in the same market" is a viable direction. However, with the bottleneck of the WiFi technology in the WAN field, the commercial public WiFi service has been unable to grow big. With such a large coverage, the APs have not been able to enter the largest household market, and suppliers engaged in the niche market are still struggling to sustain themselves.
How about offering the AP in households free of charge to the public, instead of having all APs run by a single operator? This is the idea of FON, which was founded in Spain in November 2005. By purchasing a USD5 FON router, consumers could share the broadband at their homes with anyone else.
Of course, you can use the FON wireless broadband of others when you are out of your home. The WiFi service provider, which entered the Taiwan market in November, has secured 80,000 subscribers all over the world within only a half year after the introduction of the service. What's more, its subscriber base is growing by 10,000 each month.
However, the deployment of APs is a highly sophisticated technological work, and requires optimization for satisfactory quality. It is beyond the ability of this grass-root model. Can this service cover 90% of the population? Or even if it can, would the problem that it will face be any different from the existing public WiFi network in Taipei?
Few people would be willing to install an AP at their homes, fewer to share them with others. Considering the world population, the subscriber number of FON is nowhere near large at all.
The root is the technical bottleneck, which has led to the appearance of a lot of round-about business models, in wireless broadband market, like public WiFi in Taipei or FON. Unfortunately, none is the ultimate solution, for what consumers need is the ubiquitous access, which only WWAN, for example, 3G or WiMax can provide.
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Prev : Great Future of Wireless Broadband (1) Living in the WiFi City Next : Great Future of Wireless Broadband (3) Scarce Resources
- Today in History
Great Future of Wireless Broadband (2) Public WiFi is Not Enough - 2006/11/19
Great Future of Wireless Broadband (1) Living in the WiFi City - 2006/11/12
Google's Choice (1) Lessons for Portals - 2005/11/13
A Word of Advice for Small Online Stores - 2004/11/14
Ubiquitous Access is what people really want.
[+] Living in the largest wireless broadband city in the world
Imagine this: you are living in a city where you can access the Internet through WiFi from 90% of the city area, where you can receive signals from access points whenever you turn on your notebook. Doesn't it sound great?
In early June of 2006, Taipei was awarded "Intelligent Community of the Year" by the Intelligent Community Forum (ICF) of the World Teleport Association (WTA). In the meantime, the world's WiFi hotspot authority JiWire announced that Taipei's city WiFi network was the largest in the world.
While most other cities around the world are just beginning to build their city WiFi networks, the wireless access points in Taipei has already covered 90% of the city's population. It will take other cities at least one and a half to two years to keep up with the pace of Taipei.
Taipei city government does not pay a cent for the project. All the wireless access points in the city are built by outsource contractors, who are allowed to retrieve the return of their investments from follow-on service charges. Most other cities in the world also follow this model in designing their wireless city blueprints.
I bought my first notebook computer in September and was excited when I read the news. Thank God I am a citizen of this great city. I immediately applied for a NTD 400/month package, dreaming about the freedom of accessing the Internet anywhere, anytime.
[+] Real life and experience about the wireless city
The first problem I encountered was no signal available in my office, which was on the 8th floor (surprisingly, the office of the outsource contractor responsible for the access points deployment was at the 9th floor of the same building). Among the so many access points, which allegedly covered 90% of the population, none was detectable. Carrying my notebook, I walked down the stairs and finally got signals on the 4th floor.
Later, I learnt that, as the access points were installed on lamp posts, trees, and telegraph poles, it was natural that the signals were unavailable at high floors. Yet while I was able to access the Internet at the side facing the street on the 4th floor, the signals vanished again when I moved to the farther side of the same floor.
Already accustomed to the ubiquitous availability of mobile phone signals, I was surprised. As a consumer who spent NTD 400 each month on the service, I didn't feel it was normal that I should "cooperate" with the technical problems of contractors, and find a way to access the Internet myself.
Later I figure out that it'd better to use wireless networks precisely according to the instructions in the user manual offered by service providers: sitting right at Starbucks outlets below the second floor, beyond which, there's no guarantee for signal availability.
Many people would argue that nobody really carries a notebook computer and walk around, and being able to access the Internet from a cafe is good enough to meet most people's needs. They do not understand for sure that what consumers need is the freedom for ubiquitous access.
[+] Wide area wireless network is the future
Having experienced the setbacks of the public WiFi, I realize that the Wireless Wde Area Network (WWAN) is what consumers really desired. Trying to use WiFi, a technology designed for local areas originally, in wide areas and making patches here and there are just like to have a mall kid behind the steering wheel of a big car.
Please note the word I used: desire. Now that the Internet is already an integral part of people's life, they will not tolerate such a defective wireless Internet service, on which they spend money.
I also think about applying for the 3G wireless Internet service, which has been available in Taiwan for many years. Plug a 3G wireless PC card, which you can get from any telecom operator at an affordable price into your notebook and you will be able to surf the Internet. What holds me back is that the cost for the monthly package is twice as much as the amount of a public WiFi package.
For 3G telecom operators, that is a right pricing strategy. Although in theory, the speed of the WCDMA technology is only 384k, far slower than that of WiFi, the signals are ubiquitously available. I once tried the 3G link on a highway and did not encounter any single disconnection for two hours.
Due to the wide signal coverage, the service with a much slower data rate can be sold at a higher price. I finally realize that the ubiquitous access is what people really wanted. Consumers are willing to pay for additional freedom, but the public WiFi is facing severe challenges from other WWAN technologies.
[+] Too few subscribers
Despite the alleged 90% population coverage, Taipei, the so called "the largest WiFi city in the world", has as few as 40,000 subscribers for its WiFi service. For contractors who have spent so much time and money on the construction of wireless access points, the miserable income is pushing the day of profitability even farther beyond the horizon.
Many discussions are focused on the high service fee, which has diminished the infiltration rate of the service. However, compared with the fee rate of local ADSL, WiFi is not really expensive. There are also arguments that, due to the scarcity of wireless applications, consumers have little interest in it.
Both arguments, however, only touch the surface of the problem. The real problem is not the slow increase in the number of WiFi subscribers, but our over high expectation, which has led to the wrong market positioning, and all those follow-on problems.
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Prev : The Web 2.0 Revolution (10) the Big Future of Web 3.0 Next : Great Future of Wireless Broadband (2) Public WiFi is Not Enough
- Today in History
Great Future of Wireless Broadband (2) Public WiFi is Not Enough - 2006/11/19
Great Future of Wireless Broadband (1) Living in the WiFi City - 2006/11/12
Google's Choice (1) Lessons for Portals - 2005/11/13
A Word of Advice for Small Online Stores - 2004/11/14
