Tells you what's happening in Telecommunications around the world

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People see the gadgets of the information society. They see the devices — smartphones, media tablets, laptops, desktops, netbooks or dongles — that are the keys to the Internet. These devices provide the intelligence for bent-pipe packet-switched networks. And it is really these end-user devices that offer the online experience.

Faster networks have given rise to powerful new devices in many forms, ranging from smartphones such as Apple’s iPhone and the Google-powered Android phones, to portable computing devices such as netbooks and smartbooks, to tablet devices such as Apple’s iPad or Samsung’s Galaxy, to single purpose devices such Amazon’s Kindle. Advances in chip design, manufacturing and cost-reduction have enabled a variety of devices that bring computing to many more people.

Gartner, Inc., a global information technology research and advisory company, puts overall global smartphone unit sales in 2010 at 296.6 million. The industry as a whole still found its biggest audience in developed regions of the world with faster networks and more disposable income, says Gartner. Western Europe and North America accounted for 52.3 per cent of global smartphone sales in the fourth quarter of 2010 alone, with smartphones accounting for close to half of all handsets sold in these regions. Looking at the entire mobile phone market — not just the smartphone segment — unit sales reached around 1.6 billion in 2010 (see table).

Worldwide mobile device sales to end users in 2010 (in thousands of units)

Source: Gartner (February 2011).

Front runners in the smartphone operating system (OS) market include: Nokia’s Symbian, Google’s Android, Apple’s iOS and RIM’s BlackBerry OS. Android sales in the fourth quarter of 2010 continued to be driven by broad availability of many high-end products from HTC (Desire range, Incredible and EVO), Samsung (Galaxy S) and Motorola (Droid X, Droid 2).

In February 2011, Nokia and Microsoft announced plans to form “a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem”. Under the proposed partnership, Nokia would adopt Windows Phone as its main smartphone strategy, innovating on top of the platform in areas such as imaging.

Smartphones are driving demand

Smartphones and netbooks are driving demand for mobile broadband and Wi-Fi networks, as these devices become the primary means for people to get online. Consumers are using wireless broadband to connect to the Internet. This trend holds promise for developing countries, where many consumers cannot afford a laptop or personal computer, or have no access to fixedline broadband services. Smartphones operating on a mobile broadband network can provide access to the Internet at a low cost, particularly if operators provide handset subsidies to “seed” the growing broadband wireless market.

Wireless technology can be the Internet on-ramp for billions around the world, particularly because more people are already using mobile phones as their primary or sole voice communication device.

Device convergence

In the wake of the digital revolution, the most substitutable part of the communications value chain may well be the device used to generate the digital transmission. In 2005, the Republic of Korea became the first country in the world where mobile phones could receive digital television signals. Koreans had bought 20 million handsets by the second quarter of 2009 — double the number from the first quarter of 2008 and 11 times the number of handsets sold when mobile television was first launched.

Free-to-air mobile television in the Republic of Korea is a five-year-old fact of life. According to the country’s broadcasters, 27 million people — 56 per cent of the population — watch regularly. While Koreans are the world leaders in mobile television viewing, the technology is also catching on in China, Southeast Asia, India, Africa, and Latin America.

In the United States, broadcasters are starting to trial free mobile television programming, supported by advertisements. Paid premium content is expected in the future.

There’s an app for that

Do you want to use your phone as a compass or a personal fireplace? There’s an “app” for that: a software application that usually can be downloaded in minutes, purchased and paid for online, and stored (or not) on the mobile device for future use.

The rapid growth of smartphones and “app stores” has brought a wide range of mobile applications to the market, driving customers’ fascination with their new, high-tech handsets. Many of these apps make use of smartphone cameras, Global Positioning System (GPS) location capability and Internet access, resulting in new features that many consumers find useful. Other apps, while seemingly irresistible, rank a bit lower on the usefulness scale.

Many apps could best be described as niche applications. For example, star navigation map apps allow would-be astronomers to simply point their phones to the night sky and see on their mobile screens the names of the constellations they are viewing. Augmentedreality apps, meanwhile, allow users to see “overlay” information relating to restaurants, cinemas and other public places caught in the smart phone’s camera view. Only time will tell which apps are true trailblazers.

The smartphone and its accompanying app-store showcases the power and flexibility that advanced handsets can offer in tandem with high-speed mobile data networks. As of June 2010, with more than 2 billion downloads and 225 000 applications in its App Store, Apple still led the way. But Google, with its Android smart phone operating system and competing Android Market for compatible applications, was posting dramatic growth. Google’s Android Market has sold more than 250 million downloads, and more than 65 000 apps are available. Other app stores are being developed by manufacturers and operators, increasing the features accessible to smart phone users.

It knows where you are

According to Skyhook, there are now more than 6000 location-based iPhone apps, 900 Android apps, and 300 BlackBerry apps, and it is still early days. These location-based applications range from social networking (such as Twitter, Foursquare, or Google Buzz), to child tracking, to gaming, to targeted location-based advertising. Augmented reality applications are also generating excitement.

Privacy concerns are one of the growing social harms associated with these applications. According to an Australian survey, the greatest fears associated with using location-based apps are revealing where your home is, and facilitating stalking. A study by the United States Carnegie Mellon University revealed that people are also worried about being tracked by the government and do not want to be annoyed by receiving ads based on their exact locations. One website, dubbed “Please Rob Me,” highlighted the potential risks of sharing location-based data.

Push and pull apps

Some mobile apps push information from a server to a mobile device. Others are initiated by the mobile device (by user interaction or automated scheduler) and pull information to it from the web. Smart phones take advantage of both types of applications. Push apps require little user intervention, but they may be viewed as more invasive because the user does not control the receipt of updates. To the user, however, there is little difference between the two types of updates.

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Tariff trends

All the underlying parts of the information society are falling into place: the high-speed, large-capacity backbones; the wireline and wireless broadband access networks, gadgets and gizmos; the features and applications to make them sing; and advanced services such as mobile television to provide content. Just how are we going to pay for all this? What pricing and metering mechanisms make the most sense?

In many areas, the easiest and simplest way to promote take-up of service has been to offer non-usagesensitive, flat-rated pricing. Customers (sometimes) pay a service-initiation fee, then enjoy unlimited usage on a monthly payment basis. But this can lead to massive imbalances in data downloads by a few customers, straining the capacity of even a broadband network.

According to the United States operator AT&T, about 3 per cent of smart phone users are consuming about 40 per cent of its network capacity. As a result, the United States mobile service market has begun to see tiered wireless data plans. For example, AT&T’s DataPlus service provides 200 Mbit/s for USD 15 per month, and its DataPro offering provides 2Gbit/s for USD 25. In the first quarter of 2010, Nielsen Corp analysed 60 000 mobile bills in the United States and discovered that the average smart phone mobile data user consumed around 300 Mbit/s per month.

Metered data pricing that offers lower price points may be fairer to consumers. UK telecom operator O2 has also moved away from unlimited data plans. Another potential driver for metered data pricing is to provide less-expensive options to entice mobile customers to purchase a data plan. Wireless operators in Sweden, however, are going the other way, moving from tiered plans to unlimited usage plans. Both 3 Sweden and Tele2 have removed the data caps on their most expensive plans.

On the fixed-line side, United States cable operator Comcast has been experimenting with metering data usage since 2008. It has instituted a 250 G/bits combined upstream/downstream cap per month. The median Comcast customer averages 2 to 4 Gbit/s per month and fewer than 1 per cent come close to the 250 Gbit/s cap, according to Comcast. Internationally, fixed-line operators have been more comfortable instituting bandwidth caps and have not faced consumer backlash for their actions. Some critics argue, however, that fixed-line network operators are eager to impose caps to ensure that their own proprietary video offerings will not be affected by customers switching to Internet-delivered video.

Smartphone users consume five times the amount of data capacity that standard mobile phone users do. As more users buy and use smartphones, operators in the United States are struggling to keep up with the huge demand for data capacity.

One approach is to address network capabilities. Operators are upgrading copper backhaul connections to fibre, splitting cell sites, and adding newer towers in densely populated areas. They are also using additional spectrum resources to offer greater capacity, investing in Wi-finetworks, and encouraging users to purchase femtocell devices to off-load traffic from the operator’s network onto the consumers’ facilities.

Meanwhile, operators have worked with hardware and software manufacturers to optimize how devices such as the iPhone and bandwidth-intensive apps such as Internet television and radio streaming use the network. Operators have also introduced different tariff structures, charging higher prices to customers with high data-rate plans or penalizing customers who exceed certain data allotments. Operators are also looking for more spectrum allocations.