Mobile Broadband New Applications and New Business ModelsBrough Turner1IMT-2000 Vision (for 3G) included LAN, WAN and Satellite ServicesSatelliteMacrocellMicrocellUrbanIn-BuildingPicocellGlobalSuburbanBasic Terminal PDA Terminal Audio/Visual Terminal2The Internet is the killer platform Mobile Internet access driving 3G data usage Future business models an open question Walled garden ? Advertising ? Other 2-sided business models ?3Leading Apps dont depend on 3G Voice still the largest revenue source Bar none! SMS 2nd largest mobile revenue source Voice SMS, picture mail 30% adoption in just 9 months Ringback tones today Korea: 55% adoption China: 50% adoptionAny G, 1, 2, 3 or Fixed5Japanese Music RevenuesSource: Infinity Venture Partners6Mobile TV70% of new handsets in Japan are Mobile TV enabledOnly Japan and Korea have multi-million Mobile TV subscriber basesBroadcast services independent of 3G7Mobile Social NetworkingSource: Benjamin Joffe, Plus Eight Star Ltd.50 M6 M10 M3 MMobile users:2000200420062007Mobile launch:Profit (USD): $225M$100M$35M($50M)2.5G8“3G” Services 3G-324M Video telephony Location-based services Push-to-Talk (VoIP w/o QoS) Rich presence (instant messaging) Fixed-mobile convergence (FMC) IP Multimedia Services (w/ QoS) Video sharing (conversational video on IP) Converged “All IP” networks the VisionLimited adoptionLimited adoptionLimited adoptionLimited adoptionBypassed !No tractionStill waiting 9Mobile operators miss the boat Location-based services (LBS) Required in US for 911 services Fully implemented (after multiple delays) Not made attractive for 3rd partiesResult: All US location-based services based on alternate location approaches GPS, Cell ID, Navizon, Skyhook10Mobile operators slow the boat Billing Services Mobile operators have efficient billing systems more than four and it can be rapid Many examples in mobile voice telephony from around the world 2009: Three established US 3G operators AT but with caps No unlimited open Internet access16Additional US 3G/4G Competition USA (well financed) Paid $4.2B for AWS spectrum in 2006 and committed additional $2.7B for initial rollout Currently spending almost $1B per quarter, 3G had reached 1/3rd of cell sites as of 3Q08 (build out partially financed) WiMAX on Clearwire and Sprint spectrumPotential for affordable flat rate mobile broadband in the US in 201017Subscribers Easier discovery More and more smart phones Richer browser capabilities Approaching PC browser functionality New access to device capabilities User data (contacts, logs, ), events (incoming calls) and core functionality24Uniquely Mobile Internet Phase 1 cut down web, e.g. WAP Phase 2 full web accessible on mobile Phase 3 designed-for-mobile web Optimize the mobile user experience; speed ups Phase 4 client-side mashups telephony, address book, location, camera Phase 5 apparent persistence Despite battery limitations; widgets; push; 2526Challenges Handset diversity Pace of change User interface minimum clicks; max speed Battery life “chatty” apps drain power Application concurrency Manage events over browser, native Paid for by content providers34800 numbers The original telco 2-sided play Bell system provided retail phone service to essentially all US consumers Offered “800 service” to businesses, helping them connect with their customers and prospects35Billing Service Most operators cautious about partnering Fear of “dumb pipe” slow roll out of new services DoCoMo i-mode 2G data service launched 1999 Small screens, slow (9.6 kbps) data rate But i-mode business model was wide open Free development software kits; No access restrictions DoCoMos “bill-on-behalf” with 9% commissions i-mode big success in first 24 months 55,000 applications, 30M subscribers !36DoCoMo i-Mode: 2-sided business modelSubscribers pay for data access (flat rate monthly bundles)Application providers pay DoCoMo for billing services37DoCoMos i-mode Open to any application developer Optional billing for a 9% commissionResults: Over 100K new applications in first 3 years Over 15K applications use billing service DoCoMo has highest data revenue per user, in the world, consistently for 10+ years38Operator Assets Brand, PSTN numbers Location (motion, context, ) Fine-grained billing systems User data Name, address, age, devices, Rich presence Customer relationships39Telco PlatformCustomers: Revenue Side 2Customers: Revenue Side 1DevelopersRetailersGovernmentBrand Advertisers Content OwnersTelco RetailB2B VASDistributionSource: Simon Torrance 2008, STL Partners Ltd/Telco 2.0TM Initiative Millions of CustomersThousands of Segments$40Opportunities on all frontsRich mobile applications are comingbut, business models will change, significantly41Brough TurnerAsht