Many traditional operators remain in denial of the reality of mobile VoIP, preferring to to pretend it doesn't exist and then rubbishing the few companies that have tried to made such a service available - They are going to have to accept the new reality now !
3 rattles other mobile operators with its Skypephone
29/10/2007
by Martyn Warwick, Telecom TV
This morning, the mobile operator 3 has launched a new handset that will allow users to make free calls over the Internet via Skype.
In a press release, 3 says the new 3 Skypephone "lets you make free Skype to Skype calls and send free Skype instant messages from your mobile phone to other Skype users no matter where they are."
The blurb continues with the revelation that the new handset is also a "fully-featured 3G Internet phone with Skype built-in" so that "in addition to Skype calls the phone makes conventional calls and can be used to access 3’s broad range of other internet services."
This morning's announcement is important because it is the first time time an operator has offered a mass market phone specifically enabled to make VoIP calls from a mobile handset.
Commenting on the move, Michael van Swaaij, Skype's acting CEO, said, “Skype is now truly mobile. This new handset is incredibly easy to use and lets you make free mobile Skype calls when you are on the move to other Skype users all over the world no matter where they are. It couldn’t be simpler – put Skype in your pocket and make free Skype mobile calls and send free Skype instant messages at the touch of a single Skype button.”
He added, “Skype began by offering free PC to PC calling and now we’re doing the same with mobile calls with 3. Thanks to 3, Skype has now taken a giant step forward in the mobile arena. It takes an innovative operator like 3 to challenge traditional thinking and offer the kind of product other operators are still shying away from.”
PR overkill accepted and excepted, Mr. van Swaaij has a real point here. Many traditional operators remain in denial of the reality of mobile VoIP, preferring to to pretend it doesn't exist and then rubbishing the (hitherto) few companies that have tried to made such a service available.
They are going to have to accept the new reality now.
Meanwhile, Kevin Russell,the CEO of 3 UK, said, “3 wants to make the mobile Internet available to everyone. To do this, we believe that services need to be simple to access and affordable. Communication is the prime function of the mobile today. Skype is the leader in Internet communications. To enable Skype to go mobile in this way brings free Internet calls together with an affordable 3G handset. Mobile has the potential to massively increase access to Internet calling.”
The new handset was developed by Skype and 3 in partnership with Qualcomm, using the San Diego, California, company's BREW platform to enable Skype to work with core handset features such as address book and messaging. The handset itself is manufactured in China. It will be available year in Australia, Austria, Denmark, Hong Kong, Italy, Ireland, Macau and Sweden and debuts in the UK this Friday, November 2.
3 says, "Skype to Skype calls will always be free from your 3 Skypephone as long as you are on contract or your PAYG 3 credit is topped up monthly. In the UK, the 3 Skypephone is £49.99 on a PAYG tariff or free on a contract."
One downside to what, overall, is a to-be-welcomed and much-needed kick-in-the-pants for some smug mobile operators, is that Skype customers used to using the service on the PCs to make cheap global calls to any number will not be able to avail themselves of the same facility with the 3 Skypephone.
That niggle apart, this could be a winner.
Wednesday, October 31, 2007
CFO goes as Alcatel Lucent reports another loss and more job cuts
Yet more trouble for Alcatel-Lucent. Portends ominously for the entire telecoms infrastructure industry.
CFO goes as Alcatel Lucent reports another loss and more job cuts
31/10/2007
by Martyn Warwick, Telecom TV
Heads are starting to roll at Alcatel Lucent as the troubled "marriage of equals" continues to head for the rocks, This morning the company has released its Q3 figures and dismal reading they make. Alcatel-Lucent posted a net loss of €258 million during the period compared to the €532 million profit posted for the same quarter in 2006.
Turnover fell by 11 per cent to €4.35 billion, due, the company claims, "to lower investment in the mobile phone sector".
Beleaguered CEO, Patricia Russo, says "market conditions remained difficult, with contined pressure on revenues and margins due to intensified competition and some slowdown of spending in North America."
Just how long Ms. Russo can remain at the helm of this drifting ship has been the subject of much industry speculation for months past, but she remains in post today even as the CFO, Jean-Pascal Beaufret falls on his sword and leaves the company to, as the hoary old chestnut has it, "pursue other opportunities".
M. Beaufret was one of the old guard and was CFO of Alcatel before the ill-fated merger. His replacement is Hubert de Pesquidoux who, until this morning headed-up Alcatel Lucent's enterprise division.
Despite the abysmal numbers, Ms. Russo remains remarkably upbeat and claims that the company will see an increase in overall revenues over the course of the full financial year.
Simultaneously with the departure of the CFO the company also announced a further five per cent cut to be imposed on its work force.
An extra 4,000 jobs are to go. It is claimed that these redundancies will eventually save Alcatel Lucent some €400 million a year. In earlier axe-swinging exercises the company lopped 12,500 from the payroll.
Patricia Russo says that with the re-organisation plan in place the company is to target gross margins in the high 30 per cent range and that in the "post-integration phase" (that has been one hell of a time coming and will not kick in until 2010) is looking to achieve operating margins of 10 per cent and above. Whether the CEO will be around to witness that happy day must remain a moot point.
In an effort to fashion a trendy a silk purse out of what is currently very much a sow's ear, Alcatel Lucent has streamlined its regional structure whilst Ms. Russo has set up a seven-man management committee to oversee the execution of the company's strategy and to create the "more focused and efficient operating model" that Alcatel Lucent so desperately needs.
Only a few weeks ago, the board of Alcatel Lucent, in an effort to quash speculation about Ms. Russo's future pledged their full support to her. The months ahead will probably test that resolve to its limits.
CFO goes as Alcatel Lucent reports another loss and more job cuts
31/10/2007
by Martyn Warwick, Telecom TV
Heads are starting to roll at Alcatel Lucent as the troubled "marriage of equals" continues to head for the rocks, This morning the company has released its Q3 figures and dismal reading they make. Alcatel-Lucent posted a net loss of €258 million during the period compared to the €532 million profit posted for the same quarter in 2006.
Turnover fell by 11 per cent to €4.35 billion, due, the company claims, "to lower investment in the mobile phone sector".
Beleaguered CEO, Patricia Russo, says "market conditions remained difficult, with contined pressure on revenues and margins due to intensified competition and some slowdown of spending in North America."
Just how long Ms. Russo can remain at the helm of this drifting ship has been the subject of much industry speculation for months past, but she remains in post today even as the CFO, Jean-Pascal Beaufret falls on his sword and leaves the company to, as the hoary old chestnut has it, "pursue other opportunities".
M. Beaufret was one of the old guard and was CFO of Alcatel before the ill-fated merger. His replacement is Hubert de Pesquidoux who, until this morning headed-up Alcatel Lucent's enterprise division.
Despite the abysmal numbers, Ms. Russo remains remarkably upbeat and claims that the company will see an increase in overall revenues over the course of the full financial year.
Simultaneously with the departure of the CFO the company also announced a further five per cent cut to be imposed on its work force.
An extra 4,000 jobs are to go. It is claimed that these redundancies will eventually save Alcatel Lucent some €400 million a year. In earlier axe-swinging exercises the company lopped 12,500 from the payroll.
Patricia Russo says that with the re-organisation plan in place the company is to target gross margins in the high 30 per cent range and that in the "post-integration phase" (that has been one hell of a time coming and will not kick in until 2010) is looking to achieve operating margins of 10 per cent and above. Whether the CEO will be around to witness that happy day must remain a moot point.
In an effort to fashion a trendy a silk purse out of what is currently very much a sow's ear, Alcatel Lucent has streamlined its regional structure whilst Ms. Russo has set up a seven-man management committee to oversee the execution of the company's strategy and to create the "more focused and efficient operating model" that Alcatel Lucent so desperately needs.
Only a few weeks ago, the board of Alcatel Lucent, in an effort to quash speculation about Ms. Russo's future pledged their full support to her. The months ahead will probably test that resolve to its limits.
Thursday, October 25, 2007
Verizon offers 20Mbps upload over fibre
20 Mbps and that too symmetrical bandwidth is super ! Passive Optical Networks are definitely bound to revolution the consumer broadband market and have already found traction in the US, Japan and Korea.
Verizon offers 20Mbps upload over fibre
24 October 2007, Telecoms.com
Verizon offers 20Mbps upload over fibre
US carrier Verizon shook up the broadband market with the launch of a 20Mbps symmetrical fibre offering this week.
The FiOS 20/20 service gives subscribers an upload and download speed of up to 20Mbps over Verizon's all fibre network.
This week is has been made available in parts of New York, New Jersey and Connecticut. Verizon plans to offer similar symmetrical services in the 13 other states where it offers FiOS soon, coupled with a similar small business offer.
"For more than a decade, the internet has been defined by how quickly you can download content," said Susan Retta, vice president of Broadband Solutions for Verizon. "Our 20/20 FiOS service changes everything by creating an entirely new category of US broadband where 'fast' means fast in both directions."
Vince Vittore, senior analyst with the Yankee Group said he believes, "that as user-generated content continues to expand and telecommuting increases in popularity, upstream speed will become just as important as downstream for all users."
The FiOS service is available in New York, New Jersey and Connecticut starting at $64.99 a month.
BlackBerry gets Facebooked
Social networking seems to be gravitating towards the center of the communications and internet businesses. What can be more evidence than the fact that Facebook is currently valued at an astronomical $15 billion or $500 per registered user !
Facebook has on its side that it is a very sticky site - 50% of registered users come back to the site every day. Facebook is generating more than 40 billion page views per month, from over 30 million "active" users (people who log in atleast once a month) - ~ 50 pages per user every day, which is very very high.
In comparative terms, Facebook is now the 6th most trafficked site in the U.S. and gets more page views than eBay.
Surprised we haven't seen more action from Yahoo or Microsoft in this segment.
BlackBerry gets Facebooked
25 October 2007, Telecoms.com
Canadian vendor Research In Motion (RIM), joined the social networking revolution this week, making Facebook available to BlackBerry users.
Mike Lazaridis, founder of RIM and Dustin Moskovitz, co-founder of Facebook, unveiled the application at the CTIA Wireless IT & Entertainment show in San Francisco on Wednesday.
T-Mobile USA has been selected to be the first carrier to provide the software to its customers.
Facebook users can now wirelessly send and view messages, photos, pokes and Wall posts from their BlackBerries, with the platform automatically pushing notifications to the user's phone.
"Facebook is one of the fastest growing web destinations among BlackBerry smartphone users and it has become an important element in the evolving fabric of personal communications," said Lazaridis.
RIM also dropped in some research from the Yankee Group, which found that even at this nascent stage of the market, 19 per cent of adult consumers who access social networks on their PCs also regularly access these same sites on their mobile phones.
As if more evidence were needed that social networking is a hot topic at the moment, Facebook has just been valued at $15bn, after Microsoft paid out $240m for a 1.6 per cent stake in the company.
Facebook has on its side that it is a very sticky site - 50% of registered users come back to the site every day. Facebook is generating more than 40 billion page views per month, from over 30 million "active" users (people who log in atleast once a month) - ~ 50 pages per user every day, which is very very high.
In comparative terms, Facebook is now the 6th most trafficked site in the U.S. and gets more page views than eBay.
Surprised we haven't seen more action from Yahoo or Microsoft in this segment.
BlackBerry gets Facebooked
25 October 2007, Telecoms.com
Canadian vendor Research In Motion (RIM), joined the social networking revolution this week, making Facebook available to BlackBerry users.
Mike Lazaridis, founder of RIM and Dustin Moskovitz, co-founder of Facebook, unveiled the application at the CTIA Wireless IT & Entertainment show in San Francisco on Wednesday.
T-Mobile USA has been selected to be the first carrier to provide the software to its customers.
Facebook users can now wirelessly send and view messages, photos, pokes and Wall posts from their BlackBerries, with the platform automatically pushing notifications to the user's phone.
"Facebook is one of the fastest growing web destinations among BlackBerry smartphone users and it has become an important element in the evolving fabric of personal communications," said Lazaridis.
RIM also dropped in some research from the Yankee Group, which found that even at this nascent stage of the market, 19 per cent of adult consumers who access social networks on their PCs also regularly access these same sites on their mobile phones.
As if more evidence were needed that social networking is a hot topic at the moment, Facebook has just been valued at $15bn, after Microsoft paid out $240m for a 1.6 per cent stake in the company.
AT&T gets tunes from Napster
The mobile music space definitely seems to be hotting up. I am sure we are going to see a lot of initiatives in this space over the next 12 months.
AT&T gets tunes from Napster
23 October 2007, Telecoms.com
AT&T gets tunes from Napster
From mid November, US operator AT&T will make more than 5 million music tracks available to its subscribers via the Napster Mobile service.
AT&T wireless will be able to search the music catalogue, preview samples of each song and purchase and download the music from their wireless handsets in less than a minute.
Customers will have the ability to download five tracks a month with the Napster Mobile Five-Track Pack option at $7.49 or purchase songs a la carte for $1.99.
Napster Mobile will also feature joint delivery, sending a track to the user's wireless handset while making a duplicate copy available for download to the user's PC at no additional charge.
In addition to Napster Mobile, AT&T also announced two other music applications, MobiVJ, a streaming video service, and VIP Access, a mobile fan club and discovery service.
MobiVJ users will be able to stream MobiTV music video channels, from up to eight genres, directly to their handsets for $6.99 a month. With VIP Access, customers will be able to search artist biographies and discographies, sample new music, participate in polls and receive breaking alerts via text messaging services for $2.99 a month.
AT&T gets tunes from Napster
23 October 2007, Telecoms.com
AT&T gets tunes from Napster
From mid November, US operator AT&T will make more than 5 million music tracks available to its subscribers via the Napster Mobile service.
AT&T wireless will be able to search the music catalogue, preview samples of each song and purchase and download the music from their wireless handsets in less than a minute.
Customers will have the ability to download five tracks a month with the Napster Mobile Five-Track Pack option at $7.49 or purchase songs a la carte for $1.99.
Napster Mobile will also feature joint delivery, sending a track to the user's wireless handset while making a duplicate copy available for download to the user's PC at no additional charge.
In addition to Napster Mobile, AT&T also announced two other music applications, MobiVJ, a streaming video service, and VIP Access, a mobile fan club and discovery service.
MobiVJ users will be able to stream MobiTV music video channels, from up to eight genres, directly to their handsets for $6.99 a month. With VIP Access, customers will be able to search artist biographies and discographies, sample new music, participate in polls and receive breaking alerts via text messaging services for $2.99 a month.
Wednesday, October 24, 2007
Cisco Buys Navini for $330M
Finally. Always wondered why Cisco was sitting on the fence with respect to WiMax.
It also marks the debut of Cisco in the outdoor radio networking environment.
Cisco Buys Navini for $330M
October 23, 2007, Unstrung
Cisco Systems Inc. announced today an agreement to acquire WiMax vendor Navini Networks Inc. for $330 million in cash and assumed options.
The acquisition of Navini instantly makes Cisco a player in the WiMax market.
Cisco has been scoping out WiMax vendors for a possible acquisition and the shortlist included Airspan Networks Inc., Alvarion Ltd., Navini, and Redline Communications Inc. .
Navini's technical strengths are its patented "smart beamforming" technology and multiple input/multiple output (MIMO) capabilities, both of which increase WiMax data transfer speeds.
The companies products are based on the 802.16e mobile WiMax standard.
Also, Navini's base stations operate in many different spectrum bands, including 2.3 GHz, 2.4 GHz, 2.5-2.6 GHz, and 3.4 -3.6 GHz. The support for different frequencies means Navini's equipment can be deployed around the globe.
Navini has more than 75 customers worldwide and its equipment is already used by operators in the U.S., Europe, and Africa.
Navini's product portfolio also includes customer premises equipment, WiMax modems, and PC cards.
Heavy Reading senior analyst Patrick Donegan says Cisco may at first encounter a steep learning curve as it enters the world of WiMax.
"This marks a departure for Cisco into the outdoor radio networking environment," says Donegan. "In the initial stages, the company is likely to find it tough going against the likes of Motorola and Nortel that have been players in outdoor radio networking going back twenty years or more."
"RF in outdoor environments is a black art," says Donegan. "Navini gives them some of skill sets needed to become practitioners in that black art but they will need a lot more."
Cisco says it plans to integrate Navini into its wireless networking business unit in the Ethernet and wireless technology group. The acquisition is expected to close in the second quarter of Cisco's 2008 fiscal year.
It also marks the debut of Cisco in the outdoor radio networking environment.
Cisco Buys Navini for $330M
October 23, 2007, Unstrung
Cisco Systems Inc. announced today an agreement to acquire WiMax vendor Navini Networks Inc. for $330 million in cash and assumed options.
The acquisition of Navini instantly makes Cisco a player in the WiMax market.
Cisco has been scoping out WiMax vendors for a possible acquisition and the shortlist included Airspan Networks Inc., Alvarion Ltd., Navini, and Redline Communications Inc. .
Navini's technical strengths are its patented "smart beamforming" technology and multiple input/multiple output (MIMO) capabilities, both of which increase WiMax data transfer speeds.
The companies products are based on the 802.16e mobile WiMax standard.
Also, Navini's base stations operate in many different spectrum bands, including 2.3 GHz, 2.4 GHz, 2.5-2.6 GHz, and 3.4 -3.6 GHz. The support for different frequencies means Navini's equipment can be deployed around the globe.
Navini has more than 75 customers worldwide and its equipment is already used by operators in the U.S., Europe, and Africa.
Navini's product portfolio also includes customer premises equipment, WiMax modems, and PC cards.
Heavy Reading senior analyst Patrick Donegan says Cisco may at first encounter a steep learning curve as it enters the world of WiMax.
"This marks a departure for Cisco into the outdoor radio networking environment," says Donegan. "In the initial stages, the company is likely to find it tough going against the likes of Motorola and Nortel that have been players in outdoor radio networking going back twenty years or more."
"RF in outdoor environments is a black art," says Donegan. "Navini gives them some of skill sets needed to become practitioners in that black art but they will need a lot more."
Cisco says it plans to integrate Navini into its wireless networking business unit in the Ethernet and wireless technology group. The acquisition is expected to close in the second quarter of Cisco's 2008 fiscal year.
Tuesday, October 23, 2007
Blyk's Ad-Funded Service Hits UK
Very interesting concept and I have referred to this earlier also in the blog. What Blyk is trying to create is a kind of an ad funded mobile social network.
I personally feel that these services also have tremendous potential in cost concious emerging markets like India wherein advertising is not necessarily viewed as an invasion of privacy and where subscribers to lower their monthly mobile bills will be more than willing to receive advertising message.
Surprised though as to why Blyk has not clubbed in location based advertising services.
Blyk's Ad-Funded Service Hits UK
September 24, 2007, Unstrung
Blyk launched its advertising-funded mobile service for young people in the U.K. today, with plans to launch in other European markets next year.
Blyk, which is an invitation-only MVNO service, is seeking to create a kind of mobile social network. Subscribers, which Blyk calls "members," have to be invited either by Blyk directly or by other members. And membership is strictly limited to young people aged between 16 and 24, which Blyk says is a target market of 14 million people in the U.K. So, if you're 25, or 45, you can forget about joining Blyk.
In exchange for receiving six MMS advertisement messages per day, Blyk members get 217 free texts and 43 free voice minutes per month, excluding international calls. When the free monthly allowance for texts and voice minutes runs out, members can top-up their Blyk accounts and will be charged 10 pence ($0.20) per text message and 15 pence ($0.30) per minute for calls to any fixed or mobile network in the U.K.
Blyk will also charge members 99 pence ($2.00) per Mbyte for mobile data use. But Jonathan Macdonald, Blyk's U.K. advertising sales director, explains that "a vast amount" of members' data usage will be free because there is no data charge when users click through to a Website from an ad.
According to M:Metrics Inc. , text-based advertising is nearly ubiquitous in Europe, with three out of four mobile subscribers receiving ads via SMS in the month of July 2007. Blyk says it chose message-based advertising because messaging is the No. 1 feature that 16-to-24 year olds use on their phones.
Blyk's founder and CEO Pekka Ala-Pietilä, also a former president of Nokia Corp., reckons that six ads per day is just the right number to make the advertising-based model work for this age group.
"Over that number is too much, and under that is too little to create an experience [for the user]," says Ala-Pietilä.
Blyk has 45 advertising partners, including brands like Coke, L'Oreal, McDonalds, MasterCard, British Sky Broadcasting Group plc , Sony Ericsson Mobile Communications , and Microsoft Corp.
Before new members can receive their SIM cards from Blyk, they have to fill out personal profiles with basic demographic information and areas of interest. This profile information is important for advertisers to send relevant messages to the right people.
Blyk charges advertisers 20 pence ($0.40) to send an MMS to a member, 5 pence ($0.10) to send a text message, 2 pence ($0.04) for a text tag (where ads are inserted into text messages from other people), and 5 pence ($0.10) for the reply from members.
"This is absolutely the channel [advertisers] have been wishing for and missing," says Ala-Pietilä. "No other medium can combine these things: knowledge, interaction, and feedback."
According to Ala-Pietilä, Blyk has three revenue streams: the charges to advertisers, the members' top-up fees, and the termination fees other operators pay them to interconnect.
"We need good growth on the advertiser side and on membership," he says.
Apparently, getting ads via MMS six times a day is not annoying to this age group. One Blyk trial user -- Cleo, 21 – said, "It's like they know you personally and are giving you really good stuff?"
Blyk outsourced network management to Nokia Siemens Networks , and its U.K. MVNO partner is Orange UK . First Hop Ltd. provides the messaging software in Blyk's advertising platform. TietoEnator Corp. provides the customer relationship management (CRM) system and business support system (BSS).
And Blyk wants to repeat this model across Europe next year. The service provider is in negotiations with 12 operators in Europe, which doesn't mean it will launch or have MVNO partners in 12 different countries. The service provider is talking to multiple operators in each market. Timo Ahopelto, Blyk's strategy and business development director, says that the key European markets Blyk is looking at are France, Germany, Spain, Italy, Belgium, and the Netherlands.
I personally feel that these services also have tremendous potential in cost concious emerging markets like India wherein advertising is not necessarily viewed as an invasion of privacy and where subscribers to lower their monthly mobile bills will be more than willing to receive advertising message.
Surprised though as to why Blyk has not clubbed in location based advertising services.
Blyk's Ad-Funded Service Hits UK
September 24, 2007, Unstrung
Blyk launched its advertising-funded mobile service for young people in the U.K. today, with plans to launch in other European markets next year.
Blyk, which is an invitation-only MVNO service, is seeking to create a kind of mobile social network. Subscribers, which Blyk calls "members," have to be invited either by Blyk directly or by other members. And membership is strictly limited to young people aged between 16 and 24, which Blyk says is a target market of 14 million people in the U.K. So, if you're 25, or 45, you can forget about joining Blyk.
In exchange for receiving six MMS advertisement messages per day, Blyk members get 217 free texts and 43 free voice minutes per month, excluding international calls. When the free monthly allowance for texts and voice minutes runs out, members can top-up their Blyk accounts and will be charged 10 pence ($0.20) per text message and 15 pence ($0.30) per minute for calls to any fixed or mobile network in the U.K.
Blyk will also charge members 99 pence ($2.00) per Mbyte for mobile data use. But Jonathan Macdonald, Blyk's U.K. advertising sales director, explains that "a vast amount" of members' data usage will be free because there is no data charge when users click through to a Website from an ad.
According to M:Metrics Inc. , text-based advertising is nearly ubiquitous in Europe, with three out of four mobile subscribers receiving ads via SMS in the month of July 2007. Blyk says it chose message-based advertising because messaging is the No. 1 feature that 16-to-24 year olds use on their phones.
Blyk's founder and CEO Pekka Ala-Pietilä, also a former president of Nokia Corp., reckons that six ads per day is just the right number to make the advertising-based model work for this age group.
"Over that number is too much, and under that is too little to create an experience [for the user]," says Ala-Pietilä.
Blyk has 45 advertising partners, including brands like Coke, L'Oreal, McDonalds, MasterCard, British Sky Broadcasting Group plc , Sony Ericsson Mobile Communications , and Microsoft Corp.
Before new members can receive their SIM cards from Blyk, they have to fill out personal profiles with basic demographic information and areas of interest. This profile information is important for advertisers to send relevant messages to the right people.
Blyk charges advertisers 20 pence ($0.40) to send an MMS to a member, 5 pence ($0.10) to send a text message, 2 pence ($0.04) for a text tag (where ads are inserted into text messages from other people), and 5 pence ($0.10) for the reply from members.
"This is absolutely the channel [advertisers] have been wishing for and missing," says Ala-Pietilä. "No other medium can combine these things: knowledge, interaction, and feedback."
According to Ala-Pietilä, Blyk has three revenue streams: the charges to advertisers, the members' top-up fees, and the termination fees other operators pay them to interconnect.
"We need good growth on the advertiser side and on membership," he says.
Apparently, getting ads via MMS six times a day is not annoying to this age group. One Blyk trial user -- Cleo, 21 – said, "It's like they know you personally and are giving you really good stuff?"
Blyk outsourced network management to Nokia Siemens Networks , and its U.K. MVNO partner is Orange UK . First Hop Ltd. provides the messaging software in Blyk's advertising platform. TietoEnator Corp. provides the customer relationship management (CRM) system and business support system (BSS).
And Blyk wants to repeat this model across Europe next year. The service provider is in negotiations with 12 operators in Europe, which doesn't mean it will launch or have MVNO partners in 12 different countries. The service provider is talking to multiple operators in each market. Timo Ahopelto, Blyk's strategy and business development director, says that the key European markets Blyk is looking at are France, Germany, Spain, Italy, Belgium, and the Netherlands.
What's in Nokia's (en)Pocket?
Advertising is definitely the vital thread for monetising internet services and with media increasingly going mobile, its definitely a big focus area for service providers, advertisers and advertising intermediaries.
What's in Nokia's (en)Pocket?
September 18, 2007, Unstrung
Nokia Corp.'s acquisition of mobile advertising specialist Enpocket shows that the Finnish handset maker is serious about being a contender in Internet services with heavyweights like Google and Yahoo Inc.. But one analyst says the mobile handset maker is not yet at the level of those Internet giants.
Nokia wants to be more than just a device maker and launched its own brand of Internet services called Ovi last month, some of which will be integrated into its high-end smartphones. The acquisition of Enpocket blends advertising into Nokia's services mix.
"Nokia is not in the same league as Yahoo and Google, but that's where it would like to go," says Ovum Ltd. principal analyst Eden Zoller. "Enpocket gives Nokia more credibility in the mobile advertising space."
Zoller explains that with Enpocket, Nokia gains a strong international operator customer base as well as big-name advertisers. Enpocket's customers include Vodafone Group plc, Telefónica SA, Sprint Nextel Corp., and Bharti Airtel Ltd.. Its advertisers include Pepsi, Expedia, Samsung Corp. , and William Hill.
Enpocket's mobile advertising platform delivers ads over different formats including SMS, MMS, mobile Internet advertising, and video.
Nokia says it will continue Enpocket's business of providing the mobile advertising platform to operators. But the device maker also wants to incorporate ads into Ovi, which would augment that service's revenue possibilities.
"If we're enabling operators to offer advertising, then our share [of advertising revenue] is smaller," says a Nokia spokesman. "But if we're offering ads in our own services, then our share would be higher."
The acquisition will add to two mobile advertising services that Nokia launched in March this year, which Zoller describes as "not a clear proposition."
Enpocket is the latest mobile advertising firm to be snapped up in a spate of acquisitions this year.
* Medio Systems Inc. acquired Suhari in August
* Aegis Group bought Marvellous Mobile in June.
* AOL LLC acquired Third Screen Media in May
* Microsoft Corp. acquired ScreenTonic SA in May
* Buongiorno SpA bought Flytxt in May
* Mobixell Networks Inc. acquired Adamind 's assets in February
What's in Nokia's (en)Pocket?
September 18, 2007, Unstrung
Nokia Corp.'s acquisition of mobile advertising specialist Enpocket shows that the Finnish handset maker is serious about being a contender in Internet services with heavyweights like Google and Yahoo Inc.. But one analyst says the mobile handset maker is not yet at the level of those Internet giants.
Nokia wants to be more than just a device maker and launched its own brand of Internet services called Ovi last month, some of which will be integrated into its high-end smartphones. The acquisition of Enpocket blends advertising into Nokia's services mix.
"Nokia is not in the same league as Yahoo and Google, but that's where it would like to go," says Ovum Ltd. principal analyst Eden Zoller. "Enpocket gives Nokia more credibility in the mobile advertising space."
Zoller explains that with Enpocket, Nokia gains a strong international operator customer base as well as big-name advertisers. Enpocket's customers include Vodafone Group plc, Telefónica SA, Sprint Nextel Corp., and Bharti Airtel Ltd.. Its advertisers include Pepsi, Expedia, Samsung Corp. , and William Hill.
Enpocket's mobile advertising platform delivers ads over different formats including SMS, MMS, mobile Internet advertising, and video.
Nokia says it will continue Enpocket's business of providing the mobile advertising platform to operators. But the device maker also wants to incorporate ads into Ovi, which would augment that service's revenue possibilities.
"If we're enabling operators to offer advertising, then our share [of advertising revenue] is smaller," says a Nokia spokesman. "But if we're offering ads in our own services, then our share would be higher."
The acquisition will add to two mobile advertising services that Nokia launched in March this year, which Zoller describes as "not a clear proposition."
Enpocket is the latest mobile advertising firm to be snapped up in a spate of acquisitions this year.
* Medio Systems Inc. acquired Suhari in August
* Aegis Group bought Marvellous Mobile in June.
* AOL LLC acquired Third Screen Media in May
* Microsoft Corp. acquired ScreenTonic SA in May
* Buongiorno SpA bought Flytxt in May
* Mobixell Networks Inc. acquired Adamind 's assets in February
MusicStation Goes to Asia
I think this is a prudent move, though for emerging markets in Asia such as India and China, the prices might need to be pruned further keeping in mind both the rampant piracy and the fact that even legal music CDs are available today for as little as US$3.
MusicStation Goes to Asia
October 22, 2007, Unstrung
Hutchison 3G HK Ltd. in Hong Kong will be the first Asian mobile operator to offer Omnifone Ltd. 's MusicStation over-the-air music download service, but at a far lower price than European operators.
The Hong Kong launch marks Omnifone's first mobile operator partnership in Asia and the third operator partnership after Vodafone UK in the U.K. and Telenor ASA in Sweden.
And, as Omnifone likes to point out, MusicStation is a step ahead of Apple Inc. in the Asia/Pacific region, which plans an iPhone launch some time next year in this region.
"We have been positioned as the mobile industry's answer to the iPhone," says an Omnifone spokesman. "The iPhone disintermediates [sic] operators from music download revenues. MusicStation uses mobile operators' data networks and incrementally increases revenue from existing pay-per-track services."
For the launch in the Asia/Pacific region, Omnifone has dramatically lowered the price of the service to counter piracy and entice users to pay for music downloads. Compared to paying £1.99 ($4) per week for unlimited MusicStation downloads in the U.K., and €2.99 ($4) per week in Europe, subscribers in Hong Kong will pay HK$12 ($1.55) per week for unlimited music downloads.
"You're competing with free in this region," says the Omnifone spokesman. "We created a new price point for this region to combat high levels of piracy and encourage legal consumption of music in Asia."
MusicStation has a library of more than a million tracks from independent labels, Universal Music Group, Sony BMG Music Entertainment, EMI Music, and Warner Music Group. The service comes preloaded onto certain 3G phones, or it can be downloaded from a mobile operator's portal.
Tracks are downloaded over-the-air to subscribers' phones. Subscribers are billed for their weekly subscription on their mobile phone bills and no extra data charges are incurred.
In Hong Kong, the service is available on 14 different 3G handsets, including Nokia Corp.'s 6120 and N95, and Sony Ericsson Mobile Communications 's W910i.
In the U.K., Vodafone plans to launch MusicStation next month. The service has been commercially available in Sweden from Telenor since June, but Omnifone did not provide subscriber data.
MusicStation Goes to Asia
October 22, 2007, Unstrung
Hutchison 3G HK Ltd. in Hong Kong will be the first Asian mobile operator to offer Omnifone Ltd. 's MusicStation over-the-air music download service, but at a far lower price than European operators.
The Hong Kong launch marks Omnifone's first mobile operator partnership in Asia and the third operator partnership after Vodafone UK in the U.K. and Telenor ASA in Sweden.
And, as Omnifone likes to point out, MusicStation is a step ahead of Apple Inc. in the Asia/Pacific region, which plans an iPhone launch some time next year in this region.
"We have been positioned as the mobile industry's answer to the iPhone," says an Omnifone spokesman. "The iPhone disintermediates [sic] operators from music download revenues. MusicStation uses mobile operators' data networks and incrementally increases revenue from existing pay-per-track services."
For the launch in the Asia/Pacific region, Omnifone has dramatically lowered the price of the service to counter piracy and entice users to pay for music downloads. Compared to paying £1.99 ($4) per week for unlimited MusicStation downloads in the U.K., and €2.99 ($4) per week in Europe, subscribers in Hong Kong will pay HK$12 ($1.55) per week for unlimited music downloads.
"You're competing with free in this region," says the Omnifone spokesman. "We created a new price point for this region to combat high levels of piracy and encourage legal consumption of music in Asia."
MusicStation has a library of more than a million tracks from independent labels, Universal Music Group, Sony BMG Music Entertainment, EMI Music, and Warner Music Group. The service comes preloaded onto certain 3G phones, or it can be downloaded from a mobile operator's portal.
Tracks are downloaded over-the-air to subscribers' phones. Subscribers are billed for their weekly subscription on their mobile phone bills and no extra data charges are incurred.
In Hong Kong, the service is available on 14 different 3G handsets, including Nokia Corp.'s 6120 and N95, and Sony Ericsson Mobile Communications 's W910i.
In the U.K., Vodafone plans to launch MusicStation next month. The service has been commercially available in Sweden from Telenor since June, but Omnifone did not provide subscriber data.
Monday, October 22, 2007
Skype gets a new friend in MySpace
Rich messaging with presence and context juxtaposed is definitely a must now for social networking sites. I am still wondering though, as I have been for the last few months since the EBay acquisition, as to what the business model is for Skype !
Skype gets a new friend in MySpace
17 October 2007, Telecoms.com
Skype gets a new friend in MySpace
eBay owned internet telephony player Skype has joined forces with social networking phenomenon MySpace, to integrate VoIP technology into the popular site.
From the end of November, MySpacers will be able to place calls to their friends both in the MySpace and Skype communities through a widget available on the site. Users will not have to download and install the Skype software if they do not already have it.
SkypeOut functionality will also be included, allowing users to place calls to landlines and mobile phones.
MySpace has around 110 million users, while Skype has 220 million.
Ovum analyst John Delaney, said, "It seems pretty clear what MySpace gets out of this deal: a competitive differentiator. MySpace is big, with 110m users, and still fast-growing; but it has been feeling heat from the more rapid audience growth seen by rival Facebook in recent months. Facebook's surge has largely been attributed to its introduction of Widgets, whereby developers can make applications available free of charge for Facebook users to incorporate into their profile pages."
So incorporating Skype into its profile pages could give MySpace a way of regaining the initiative.
"It's less clear to us what Skype gets out of this," said Delaney, who has heard that Skype will not be getting a share of MySpace's advertising revenues. "It's likely, then, that the main benefit that Skype will get from this deal is not money, but brand exposure. Most of MySpace's users are in the US, and Skype's brand has not been as strong in that market as it is in Europe."
Skype gets a new friend in MySpace
17 October 2007, Telecoms.com
Skype gets a new friend in MySpace
eBay owned internet telephony player Skype has joined forces with social networking phenomenon MySpace, to integrate VoIP technology into the popular site.
From the end of November, MySpacers will be able to place calls to their friends both in the MySpace and Skype communities through a widget available on the site. Users will not have to download and install the Skype software if they do not already have it.
SkypeOut functionality will also be included, allowing users to place calls to landlines and mobile phones.
MySpace has around 110 million users, while Skype has 220 million.
Ovum analyst John Delaney, said, "It seems pretty clear what MySpace gets out of this deal: a competitive differentiator. MySpace is big, with 110m users, and still fast-growing; but it has been feeling heat from the more rapid audience growth seen by rival Facebook in recent months. Facebook's surge has largely been attributed to its introduction of Widgets, whereby developers can make applications available free of charge for Facebook users to incorporate into their profile pages."
So incorporating Skype into its profile pages could give MySpace a way of regaining the initiative.
"It's less clear to us what Skype gets out of this," said Delaney, who has heard that Skype will not be getting a share of MySpace's advertising revenues. "It's likely, then, that the main benefit that Skype will get from this deal is not money, but brand exposure. Most of MySpace's users are in the US, and Skype's brand has not been as strong in that market as it is in Europe."
WiMax Wins ITU Approval
While ITU certification is not mandatory for WiMax deployment, this definitely is a boost for the WiMax camp. Now that WiMax is officially a member of the IMT-2000 family of 3G standards, it makes it easier for operators to deploy networks in markets where spectrum is allocated specifically to IMT technologies.
The catch however is that the ITU has identified WiMax as a Time Division Duplex (TDD) technology, and not approved its use in the Frequency Division Duplex (FDD) bands that account for upwards of 80 percent of the world's licensed spectrum.
WiMax Wins ITU Approval
October 19, 2007, Unstrung
WiMax has been approved as an official International Telecommunication Union (ITU) mobile wireless standard, according to an email posted on the Institute of Electrical and Electronics Engineers Inc. (IEEE) 802.16e Working Group reflector last night.
News that WiMax is now officially a member of the IMT-2000 family of 3G standards should make it easier for operators to deploy networks in markets where spectrum is allocated specifically to IMT technologies.
Initially this ruling will affect the so-called "UMTS Extension Bands" -- frequencies at 2.5 GHz to 2.6 GHz. European regulators are due to start allocating this spectrum from January 2008.
The band is also the key focus for WiMax vendors and operators. "We've already built a profile for 2.5 GHz and 2.6 GHz," says Paul Senior, CTO of Airspan Networks Inc. and a WiMAX Forum board member, commenting on the ITU decision to Unstrung. "That's the flagship mobile WiMax profile."
Another benefit of the decision is that it positions WiMax to take a fuller role in the ITU Advanced 4G program, and smoothes the way for WiMax supporters to participate on a more equal footing in the upcoming World Radio Congress 2007 that begins later this month in Switzerland.
While undoubtedly good news for WiMax, the ITU decision should be kept in context. IMT-2000 is not binding on national regulators, and some markets, such as the U.S. and the U.K., already lean towards technology-neutral spectrum allocation. So even without IMT status, WiMax could have been deployed if market conditions warranted it.
The other catch is that the ITU, under heavy lobbying pressure, has identified WiMax as a Time Division Duplex (TDD) technology, and not approved its use in the Frequency Division Duplex (FDD) bands that account for upwards of 80 percent of the world's licensed spectrum.
But WiMax's supporters say this isn't such a big deal in the short term. "TDD is all we're doing right now on mobile WiMax," notes Airspan's Senior. "There is a move to do an FDD profile, but it's still a work in progress."
The catch however is that the ITU has identified WiMax as a Time Division Duplex (TDD) technology, and not approved its use in the Frequency Division Duplex (FDD) bands that account for upwards of 80 percent of the world's licensed spectrum.
WiMax Wins ITU Approval
October 19, 2007, Unstrung
WiMax has been approved as an official International Telecommunication Union (ITU) mobile wireless standard, according to an email posted on the Institute of Electrical and Electronics Engineers Inc. (IEEE) 802.16e Working Group reflector last night.
News that WiMax is now officially a member of the IMT-2000 family of 3G standards should make it easier for operators to deploy networks in markets where spectrum is allocated specifically to IMT technologies.
Initially this ruling will affect the so-called "UMTS Extension Bands" -- frequencies at 2.5 GHz to 2.6 GHz. European regulators are due to start allocating this spectrum from January 2008.
The band is also the key focus for WiMax vendors and operators. "We've already built a profile for 2.5 GHz and 2.6 GHz," says Paul Senior, CTO of Airspan Networks Inc. and a WiMAX Forum board member, commenting on the ITU decision to Unstrung. "That's the flagship mobile WiMax profile."
Another benefit of the decision is that it positions WiMax to take a fuller role in the ITU Advanced 4G program, and smoothes the way for WiMax supporters to participate on a more equal footing in the upcoming World Radio Congress 2007 that begins later this month in Switzerland.
While undoubtedly good news for WiMax, the ITU decision should be kept in context. IMT-2000 is not binding on national regulators, and some markets, such as the U.S. and the U.K., already lean towards technology-neutral spectrum allocation. So even without IMT status, WiMax could have been deployed if market conditions warranted it.
The other catch is that the ITU, under heavy lobbying pressure, has identified WiMax as a Time Division Duplex (TDD) technology, and not approved its use in the Frequency Division Duplex (FDD) bands that account for upwards of 80 percent of the world's licensed spectrum.
But WiMax's supporters say this isn't such a big deal in the short term. "TDD is all we're doing right now on mobile WiMax," notes Airspan's Senior. "There is a move to do an FDD profile, but it's still a work in progress."
India Telecoms Update @ Sep07
India Telecoms Update @ Sep07
- Target of 250 million telephony subs by Dec07 met 8 weeks in advance
- 7.8 million wireless sub adds (8.3 million in Aug07)
- Total wireless subscriber base at 209 million
- Wireline subscriber base declined to 39.6 million
- Total telephony base at 248.7 million pegging overall teledensity at 21.9%
- Broadband subscriber base up marginally by 0.11 million to 2.7 million
An $8 Billion Revenue Opportunity for the Mobile Money Transfer Market
Mobile money transfer and payments are definitely a huge opportunity going forward with the rapid proliferation of mobile devices and the mobile terminal becoming the center of our universe.
However, I feel a lot of education would be required particularly in the emerging markets to convert folks to the mobile platform to make payments and transfers.
An $8 Billion Revenue Opportunity for the Mobile Money Transfer Market
Cellular News, October 19, 2007
Transferring funds safely and securely using mobile phones has the potential to revolutionize the way people around the world utilize their money, and it holds the promise of driving great social benefits in the developing world. But perhaps its most important attribute lies in the short term: mobile operators have a significant opportunity to draw further revenue from existing network investments.
According to a recent study by ABI Research, the mobile fund transfer market will see a near US$8 billion revenue opportunity for mobile operators by 2012 - from just over US$10 million in 2006.
Several carriers lead the way with national and international services, most notably in the Philippines, but the largely third-party offerings in the United States remain small and niche. This past summer, however, it began to change when Obopay snared separate partnerships with financial-services giant Citibank as well as US operator Verizon Wireless. In addition, Web companies PayPal, Amazon, and Google have focused attention on offering mobile payments.
"Early US and European mobile fund transfer services have focused on limited demographics - primarily students and their family benefactors - but there remains enormous potential for developing a user base through key partnerships, combining mobile operators and financial services companies," says Jonathan Collins, ABI Research principal analyst.
The ability to transfer funds between accounts, customers, and retailers in a simple manner - using mobile handsets and the wireless network - represents a significant prospective market for mobile operators, financial services organizations, governments, retailers, and end users.
End users understandably are cautious about who they trust to handle their money, so established banks and mobile operators will help to provide much of the security that new users look for in mobile transfers. "This places mobile operators who are willing to deliver money transfer applications at the forefront of a lucrative range of applications," adds Collins.
"Mobile fund transfers provide a primary driver to establish partnerships between operators and financial services companies that can prove the bedrock for other applications, which require additional investment, such as contactless payments from handsets using NFC."
However, I feel a lot of education would be required particularly in the emerging markets to convert folks to the mobile platform to make payments and transfers.
An $8 Billion Revenue Opportunity for the Mobile Money Transfer Market
Cellular News, October 19, 2007
Transferring funds safely and securely using mobile phones has the potential to revolutionize the way people around the world utilize their money, and it holds the promise of driving great social benefits in the developing world. But perhaps its most important attribute lies in the short term: mobile operators have a significant opportunity to draw further revenue from existing network investments.
According to a recent study by ABI Research, the mobile fund transfer market will see a near US$8 billion revenue opportunity for mobile operators by 2012 - from just over US$10 million in 2006.
Several carriers lead the way with national and international services, most notably in the Philippines, but the largely third-party offerings in the United States remain small and niche. This past summer, however, it began to change when Obopay snared separate partnerships with financial-services giant Citibank as well as US operator Verizon Wireless. In addition, Web companies PayPal, Amazon, and Google have focused attention on offering mobile payments.
"Early US and European mobile fund transfer services have focused on limited demographics - primarily students and their family benefactors - but there remains enormous potential for developing a user base through key partnerships, combining mobile operators and financial services companies," says Jonathan Collins, ABI Research principal analyst.
The ability to transfer funds between accounts, customers, and retailers in a simple manner - using mobile handsets and the wireless network - represents a significant prospective market for mobile operators, financial services organizations, governments, retailers, and end users.
End users understandably are cautious about who they trust to handle their money, so established banks and mobile operators will help to provide much of the security that new users look for in mobile transfers. "This places mobile operators who are willing to deliver money transfer applications at the forefront of a lucrative range of applications," adds Collins.
"Mobile fund transfers provide a primary driver to establish partnerships between operators and financial services companies that can prove the bedrock for other applications, which require additional investment, such as contactless payments from handsets using NFC."
Friday, October 19, 2007
Universal plans iTunes attack
Interesting times in the music industry. Not only is content going digital and mobile but also turning "free" ! The Apple-Universal epic continues and is likely to decide the future of this industry.
Universal plans iTunes attack
17/10/2007 10:30:00 - by CommsDay
Universal Music Group plans a direct attack on iTunes in a bid to wrest control of the Internet music market away from an independent broker and restore big labels’ traditional gatekeeper monopoly.
Insiders claim CEO Doug Morris is in talks with Warner Music Group and has already corralled Sony BMG into crafting a rival platform that would make music essentially free for end users by transferring the cost to hardware manufacturers such as Microsoft and ... Apple?
Such a move would be a vindictive coup for Universal, which recently refused to renew its iTunes licensing agreement but currently allow downloads of its back catalog to continue through the world’s dominant legal download site.
Dubbed Total Music, the new platform would allow free downloads to subscribers by making the suppliers of their digital media players shoulder an estimated US$5 monthly subscription. The ploy would address a seemingly insurmountable hurdle – consumers refuse to pay much more than $1 per track but labels are increasingly unwilling to settle for that sum. Labels believe they can spur even greater uptake if tracks are “free” while critics hint that smashing iTunes could merely pave the way for a monopoly grab a few years down the line with much heftier fees.
Universal faces an uphill battle. There are no indications hardware firms would be willing to agree to what essentially amounts to a music tariff reminiscent of the “copyright tax” applied to blank media in the US. And while Universal Music parent Vivendi Universal CEO Jean-Bernard Livy famously dubbed iTunes’ pricing “indecent” no viable alternative has been presented.
Rival media platforms have plodded along at best and imploded at worst while last week’s victorious online sale of the new Radiohead record suggests established acts can now target fans online and reap 100 per cent of the rewards without handing a slice of the pie to a label.
Universal plans iTunes attack
17/10/2007 10:30:00 - by CommsDay
Universal Music Group plans a direct attack on iTunes in a bid to wrest control of the Internet music market away from an independent broker and restore big labels’ traditional gatekeeper monopoly.
Insiders claim CEO Doug Morris is in talks with Warner Music Group and has already corralled Sony BMG into crafting a rival platform that would make music essentially free for end users by transferring the cost to hardware manufacturers such as Microsoft and ... Apple?
Such a move would be a vindictive coup for Universal, which recently refused to renew its iTunes licensing agreement but currently allow downloads of its back catalog to continue through the world’s dominant legal download site.
Dubbed Total Music, the new platform would allow free downloads to subscribers by making the suppliers of their digital media players shoulder an estimated US$5 monthly subscription. The ploy would address a seemingly insurmountable hurdle – consumers refuse to pay much more than $1 per track but labels are increasingly unwilling to settle for that sum. Labels believe they can spur even greater uptake if tracks are “free” while critics hint that smashing iTunes could merely pave the way for a monopoly grab a few years down the line with much heftier fees.
Universal faces an uphill battle. There are no indications hardware firms would be willing to agree to what essentially amounts to a music tariff reminiscent of the “copyright tax” applied to blank media in the US. And while Universal Music parent Vivendi Universal CEO Jean-Bernard Livy famously dubbed iTunes’ pricing “indecent” no viable alternative has been presented.
Rival media platforms have plodded along at best and imploded at worst while last week’s victorious online sale of the new Radiohead record suggests established acts can now target fans online and reap 100 per cent of the rewards without handing a slice of the pie to a label.
Securing India’s place in the global economy
Securing India’s place in the global economy
GDP growth is soaring, and India’s economic reforms are bearing fruit. But there’s much left to do.
Adil S. Zainulbhai, McKinsey & Co.
Web exclusive, October 2007
India is moving quickly to capture its place on the world stage. Just 16 years after embarking on the path of economic reform, the country has freed itself from the slow growth that plagued it during the decades after independence; in the past fiscal year1 GDP growth reached a robust 9.4 percent. India’s best companies are targeting global markets, as Tata Steel’s $11 billion takeover of its Anglo-Dutch rival Corus shows, and the Indian consumer is attracting worldwide attention. But to sustain these advances, the country cannot rest. Its leaders must focus on building infrastructure and developing a thriving labor market.
The economic reforms that began in 1991 marked a turning point in India’s economic history. Under the program, the country successfully laid the foundation for robust economic growth by transforming itself from an agrarian, underdeveloped, and closed economy into an open and progressive one that encourages more foreign investment and draws more wealth from services and industry. Real GDP growth averaged 8.6 percent over the past four years, and the country’s economic planners expect it to grow by an average of 9 percent a year through 2012. India boasts companies with world-class capabilities in sectors such as automotive, information technology, manufacturing, and pharmaceuticals. Net capital inflows2 topped $46 billion in fiscal 2006–07, compared with only some $24 billion a year earlier.
Most important, the benefits of reform have reached a broad constituency. Since 1985 India has lifted more than 100 million people out of desperate poverty in urban centers and the hinterland alike, according to research by the McKinsey Global Institute (MGI).3 India’s population grew by 352 million during this period, and 431 million fewer people live in desperate poverty today than would have if it had remained at the 1985 level. Looking forward, MGI estimates that if GDP grows by a modest 7.3 percent a year over the next two decades, the country’s poorest people will continue to gain ground, so that the deprived segment—those making less than 90,000 rupees annually, about a dollar per person a day—will drop from 54 percent of the population in 2005 to 22 percent by 2025.
Yet India can’t afford to rest on its laurels. Sustaining inclusive economic growth will require the country to focus on improving its infrastructure, both hard and soft, and on creating a thriving labor market. To accomplish these goals, a series of economic and social reforms will be needed.
The hard and soft infrastructure challenge
India’s need for a better infrastructure is evident. The inadequacy of the present hard infrastructure is manifested in the country’s poor and insufficient roads, its crippling electric-power deficit, the shortage of rail freight corridors, the poor ports, the bursting cities, and the overcrowded and stiflingly hot airports. As for the soft infrastructure, such as schools and hospitals, discouraging infant mortality rates and alarming levels of illiteracy are just two symptoms of its gross shortfalls. The hard and soft infrastructure alike must improve at an even faster pace than they are today.
Cement and steel
India’s hard infrastructure hasn’t kept pace with economic developments. From 1998 to 2005, annual investments in it averaged 4 percent of real GDP, compared with 8.2 percent in China, which invested early and heavily to build a world-class infrastructure that can attract foreign money and spur economic growth. In contrast, India’s infrastructure investments have taken off only recently, reaching about 4.7 percent of GDP, or $34 billion, in fiscal 2005–06. Current plans call for an additional $475 billion4 in infrastructure investments over the next five years, with a significant share privately funded.
The government should be applauded for its greater pragmatism about public-private partnerships and its willingness to take on ambitious efforts, such as Bharat Nirman (a rural-development program) and the privatization of the Mumbai and New Delhi airports. Infrastructure deficits in urban areas, roads, ports, and power are being addressed as well. Yet these measures, taken as a whole, hardly suffice.
To improve the infrastructure significantly on a nationwide scale, the government will also have to undertake systemic reforms. Immediate action is needed in a number of areas: land market barriers (unclear land titles and insufficient databases, for instance); inadequate long-term financial instruments to meet the equity and debt needs of large infrastructure projects; weak policies and regulations, stemming from coalition politics, that are subject to frequent change; and unrelenting red tape at the lower levels of central and state governments and other authorities.
Further, among other things, state governments must repeal the Urban Land Ceiling Act (which restricts the amount of land available for housing), resolve unclear land titles by creating fast-track courts, computerize land records, raise property taxes, and change the tenancy laws. To improve India’s crippling electric-power deficit and reverse its adverse impact on business, the government will have to secure payment guarantees for private power generators, establish a power exchange, and push for the partial or complete privatization of power distribution.
Minds and bodies
India is expected to become the world’s most populous country by 2035. It’s already the youngest: one-fifth of the world’s population under 24 years of age lives there. While this kind of population growth represents a huge opportunity, it also highlights the need to invest substantially in human-resources development, particularly in education and health care, and to create adequate employment opportunities.
Building the institutional ability to ensure the timely and equitable delivery of such services will be vital for equitable growth. What’s more, the huge and pressing demand for soft infrastructure can’t be addressed by the government, private enterprise, or the community acting alone. Only when all parties work together can these needs be satisfied.
Education
India has the world’s largest school-age population. If these children had access to a quality education, they could drive the innovation, productivity, and development needed to ensure India’s continued growth. Unfortunately, however, India’s educational attainment remains poor compared with that of other nations, including China: only 60 percent of Indians are literate, compared with 90 percent of Chinese. Reforms designed to improve literacy rates must begin at the elementary-school level. Experience around the world suggests that a good primary education in rural areas is critical. By and large, India’s state governments have failed to provide quality education to these students.
Another key issue plaguing India’s educational system is a dearth of qualified teachers, since research suggests that they are crucial for improving results. The country’s average student-teacher ratio is estimated at 37, potentially in line with the World Bank’s recommended norms. But more than a third of the children attend schools with significantly worse ratios, and more than half of the schoolteachers haven’t completed secondary school.
In higher education, India must increase the number of openings substantially and improve the quality of instruction. To stimulate private-sector investment in colleges and universities, the government might create pilot focused-education zones, where educational institutes could be set up with complete autonomy in admissions, fees, course offerings, faculty recruitment, and delivery and evaluation methodologies. The zones could be open to foreign universities and to for-profit entities that would offer regular degree courses, with the entry and exit of players determined by market forces.
India must produce more graduates with the skills needed for employment in the global economy. Lifting literacy rates will be vital to shift a growing populace from agriculture to high-value economic activity not only in high-tech services but also in manufacturing. Even in the former, where India is often thought to have abundant talent, our research suggests that there may be a shortfall of about 500,000 qualified candidates by 2010. Part of the solution for generating a greater volume of qualified jobseekers must be public-private partnerships that strengthen industrial-training institutes and more vocational programs tailored to the needs of various industries.
Health care
Altogether, India produces roughly 400 public-health professionals a year, about as many as a couple of public-health schools in the United States might. Yet two million to three million Indians are infected with HIV/AIDS—accounting for the world’s third-largest infected population. The country’s infant-mortality rate is more than twice that of China, which also boasts a substantially longer life expectancy. Clean water and sanitation remain out of reach for many people in India; the emergence of lifestyle diseases (such as obesity and diabetes) and the increased level of systemic health burdens are worrisome too. Yet public spending on health care is less than 1 percent of GDP. This situation must change quickly, and the central government plans to increase spending to 2 to 3 percent of GDP by 2012.
McKinsey research suggests that during the next ten years India will need more than 10,000 public-health professionals to supply preventive health services. These experts will also be needed to train 500,000 volunteers, whom the government intends to place in villages throughout India as part of the National Rural Health Mission, and to shape the response to myriad public-health policy issues through meaningful research and advocacy.
What’s more, to have a strong and healthy workforce, India must act urgently to increase the number and reach of its effective public-health services. The Public Health Foundation of India, a public-private partnership established to produce 10,000 qualified public-health workers over the next few years, is one effort to bridge the gap between the need for and the supply of skilled service providers.
Developing a thriving labor market
India’s huge and growing population—of somewhat more than a billion—could be considered one of the country’s biggest assets, representing an almost limitless labor supply and consumer demand. Yet this mass of people could become one of the greatest forces against reform if they can’t find jobs; in 2003, for instance, the labor force grew by 12 million, but employment in the organized private sector fell by 200,000. India absolutely must create a thriving labor market not only to shift workers from agriculture to higher-value-added activities but also to absorb a growing workforce and sustain social equilibrium.
A critical step would be the systematic deregulation of sectors such as retailing, defense, the news media, and banking, which remain crippled by archaic policies. With deregulation and the opening of markets, vital foreign direct investments of capital and skills could flow more readily into India, making its industry more effective. Coupled with low interest rates, such an influx of foreign capital would help sustain the economy’s buoyancy.
In addition, reforms are needed in the coal, power, and natural-resources industries to increase competitiveness, foster the creation of higher-value jobs, and support economic growth. Continued privatization of state-owned enterprises must also remain a focus for the government.
Beyond general deregulation and liberalization, India must repeal its complex and rigid labor laws, which discourage the creation of jobs by offering excessively stringent protections for people who work in the organized part of the economy. According to the World Bank, India’s level of private-sector nonagricultural employment has stagnated at below 9 million for the past 20 years, though the labor force expanded to more than 400 million people during that period. Removing the rigidities will allow India to harness the potential of its growing workforce. That is especially critical for the manufacturing sector and for creating opportunities in rural areas.
Augmenting manufacturing growth
India can no longer expect to outperform its competitors unless manufacturing grows substantially. Its high-tech industry has rightly won fame, and it can look forward to tens of thousands of new jobs emerging if, as expected, revenues from the business-process-outsourcing and IT industries triple by 2010, to at least $60 billion. However, these sectors will never provide the number of jobs needed for all of the tens of millions of Indians seeking opportunities.
If India were to leverage its inherent strengths in skill-intensive manufacturing, exports could surge to about $300 billion, creating 25 million to 30 million jobs by 2015. Emphasizing apparel, auto components, electrical and electronic products, and specialty chemicals could help "Made in India" to become the next big manufacturing-exports story. But achieving this goal will require action on a number of fronts.
The first step will be to ignite domestic demand, which would help attract multinational manufacturers and provide the scale needed to be globally competitive. To this end, the government should move rapidly to create a uniform general sales tax across all products and states. More important, the total taxes on manufactured goods should fall to 15 percent of retail prices (the current level in China) over the next three years. Our study of a variety of product categories in India and China shows that for every drop in prices of 25 percentage points, consumption increases three- to fivefold. Also, the government should reform indirect taxes such as excise duties levied by individual states and lower import duties to 10 percent to boost domestic demand and support manufacturing growth.
In addition, innovations such as special economic zones must remain under consideration, despite recent controversies about them. To accelerate manufacturing growth, these zones should have governance structures insulating them from political changes and pressures and offer simple administrative procedures, as well as a world-class infrastructure, physically attractive environments, and anchor tenants that plan to reach significant operating scale through substantial capital investment. These manufacturers should also have access to domestic markets using a dual-bookkeeping system similar to that in China, where products sold locally are subject to local taxes and duties on materials imported for their manufacture, while products exported are not.
Economic engines in rural India
To ensure that India’s economic growth reaches the whole country, the government must supplement the Bharat Nirman program with job creation plans in the farm and rural nonfarm sectors. Such initiatives, focusing on skills and assets already in place, could create 30 million to 40 million jobs in rural areas and increase rural incomes by 1 percent annually over the next five years. For such plans to succeed, India must launch a second Green Revolution,5 reform the food industry, and create a thriving service sector in rural areas.
A second Green Revolution should embrace three features. First, the country’s prime farmland should be expanded beyond the states of Haryana and Punjab, into Bihar, Madhya Pradesh, and Uttar Pradesh. This prime area would focus on growing grains such as corn and barley. Some farms should be encouraged to replace grains with fruits and vegetables, as well as livestock; historically, demand for these higher-value products increases as economies develop and incomes rise. Finally, wastelands—vast tracts that have low water tables and infertile soil—should be cultivated with crops such as eucalyptus trees and jatropha, which have global markets and can be grown economically on relatively unproductive land.
Reforming the food industry is also important. Key measures include amending laws such as the Agriculture Produce Marketing Committee (APMC) Act (which restricts the retailers’ access to produce), creating a legal framework for contract farming,6 and liberalizing the interstate movement of produce. Over time, the government should shift its role from market participant to facilitator. The systematic development of the food-processing industry is also necessary to make better use of India’s resources, since supply chain problems prevent large quantities of produce from ever getting to market.
Finally, creating a vibrant service economy in rural India by focusing on labor-intensive sectors such as tourism could be enormously beneficial. Special tourism zones with tax benefits—an arrangement similar to special economic zones for manufacturing but without any need for the large-scale acquisition of land—could generate as many as 25 million jobs over the next five years. These zones could attract an additional 20 million foreign tourists annually, as well as 400 million domestic ones. Retail banking, health care, and education are other service sectors that could grow significantly in rural India as incomes and aspirations continue to rise.
India is on the verge of one of economic history’s great achievements, which could lift hundreds of millions more of its people out of desperate poverty and create a huge and thriving middle class. But that won’t happen without a strong political commitment and concerted action from all stakeholders—the government, the private sector, and society at large.
GDP growth is soaring, and India’s economic reforms are bearing fruit. But there’s much left to do.
Adil S. Zainulbhai, McKinsey & Co.
Web exclusive, October 2007
India is moving quickly to capture its place on the world stage. Just 16 years after embarking on the path of economic reform, the country has freed itself from the slow growth that plagued it during the decades after independence; in the past fiscal year1 GDP growth reached a robust 9.4 percent. India’s best companies are targeting global markets, as Tata Steel’s $11 billion takeover of its Anglo-Dutch rival Corus shows, and the Indian consumer is attracting worldwide attention. But to sustain these advances, the country cannot rest. Its leaders must focus on building infrastructure and developing a thriving labor market.
The economic reforms that began in 1991 marked a turning point in India’s economic history. Under the program, the country successfully laid the foundation for robust economic growth by transforming itself from an agrarian, underdeveloped, and closed economy into an open and progressive one that encourages more foreign investment and draws more wealth from services and industry. Real GDP growth averaged 8.6 percent over the past four years, and the country’s economic planners expect it to grow by an average of 9 percent a year through 2012. India boasts companies with world-class capabilities in sectors such as automotive, information technology, manufacturing, and pharmaceuticals. Net capital inflows2 topped $46 billion in fiscal 2006–07, compared with only some $24 billion a year earlier.
Most important, the benefits of reform have reached a broad constituency. Since 1985 India has lifted more than 100 million people out of desperate poverty in urban centers and the hinterland alike, according to research by the McKinsey Global Institute (MGI).3 India’s population grew by 352 million during this period, and 431 million fewer people live in desperate poverty today than would have if it had remained at the 1985 level. Looking forward, MGI estimates that if GDP grows by a modest 7.3 percent a year over the next two decades, the country’s poorest people will continue to gain ground, so that the deprived segment—those making less than 90,000 rupees annually, about a dollar per person a day—will drop from 54 percent of the population in 2005 to 22 percent by 2025.
Yet India can’t afford to rest on its laurels. Sustaining inclusive economic growth will require the country to focus on improving its infrastructure, both hard and soft, and on creating a thriving labor market. To accomplish these goals, a series of economic and social reforms will be needed.
The hard and soft infrastructure challenge
India’s need for a better infrastructure is evident. The inadequacy of the present hard infrastructure is manifested in the country’s poor and insufficient roads, its crippling electric-power deficit, the shortage of rail freight corridors, the poor ports, the bursting cities, and the overcrowded and stiflingly hot airports. As for the soft infrastructure, such as schools and hospitals, discouraging infant mortality rates and alarming levels of illiteracy are just two symptoms of its gross shortfalls. The hard and soft infrastructure alike must improve at an even faster pace than they are today.
Cement and steel
India’s hard infrastructure hasn’t kept pace with economic developments. From 1998 to 2005, annual investments in it averaged 4 percent of real GDP, compared with 8.2 percent in China, which invested early and heavily to build a world-class infrastructure that can attract foreign money and spur economic growth. In contrast, India’s infrastructure investments have taken off only recently, reaching about 4.7 percent of GDP, or $34 billion, in fiscal 2005–06. Current plans call for an additional $475 billion4 in infrastructure investments over the next five years, with a significant share privately funded.
The government should be applauded for its greater pragmatism about public-private partnerships and its willingness to take on ambitious efforts, such as Bharat Nirman (a rural-development program) and the privatization of the Mumbai and New Delhi airports. Infrastructure deficits in urban areas, roads, ports, and power are being addressed as well. Yet these measures, taken as a whole, hardly suffice.
To improve the infrastructure significantly on a nationwide scale, the government will also have to undertake systemic reforms. Immediate action is needed in a number of areas: land market barriers (unclear land titles and insufficient databases, for instance); inadequate long-term financial instruments to meet the equity and debt needs of large infrastructure projects; weak policies and regulations, stemming from coalition politics, that are subject to frequent change; and unrelenting red tape at the lower levels of central and state governments and other authorities.
Further, among other things, state governments must repeal the Urban Land Ceiling Act (which restricts the amount of land available for housing), resolve unclear land titles by creating fast-track courts, computerize land records, raise property taxes, and change the tenancy laws. To improve India’s crippling electric-power deficit and reverse its adverse impact on business, the government will have to secure payment guarantees for private power generators, establish a power exchange, and push for the partial or complete privatization of power distribution.
Minds and bodies
India is expected to become the world’s most populous country by 2035. It’s already the youngest: one-fifth of the world’s population under 24 years of age lives there. While this kind of population growth represents a huge opportunity, it also highlights the need to invest substantially in human-resources development, particularly in education and health care, and to create adequate employment opportunities.
Building the institutional ability to ensure the timely and equitable delivery of such services will be vital for equitable growth. What’s more, the huge and pressing demand for soft infrastructure can’t be addressed by the government, private enterprise, or the community acting alone. Only when all parties work together can these needs be satisfied.
Education
India has the world’s largest school-age population. If these children had access to a quality education, they could drive the innovation, productivity, and development needed to ensure India’s continued growth. Unfortunately, however, India’s educational attainment remains poor compared with that of other nations, including China: only 60 percent of Indians are literate, compared with 90 percent of Chinese. Reforms designed to improve literacy rates must begin at the elementary-school level. Experience around the world suggests that a good primary education in rural areas is critical. By and large, India’s state governments have failed to provide quality education to these students.
Another key issue plaguing India’s educational system is a dearth of qualified teachers, since research suggests that they are crucial for improving results. The country’s average student-teacher ratio is estimated at 37, potentially in line with the World Bank’s recommended norms. But more than a third of the children attend schools with significantly worse ratios, and more than half of the schoolteachers haven’t completed secondary school.
In higher education, India must increase the number of openings substantially and improve the quality of instruction. To stimulate private-sector investment in colleges and universities, the government might create pilot focused-education zones, where educational institutes could be set up with complete autonomy in admissions, fees, course offerings, faculty recruitment, and delivery and evaluation methodologies. The zones could be open to foreign universities and to for-profit entities that would offer regular degree courses, with the entry and exit of players determined by market forces.
India must produce more graduates with the skills needed for employment in the global economy. Lifting literacy rates will be vital to shift a growing populace from agriculture to high-value economic activity not only in high-tech services but also in manufacturing. Even in the former, where India is often thought to have abundant talent, our research suggests that there may be a shortfall of about 500,000 qualified candidates by 2010. Part of the solution for generating a greater volume of qualified jobseekers must be public-private partnerships that strengthen industrial-training institutes and more vocational programs tailored to the needs of various industries.
Health care
Altogether, India produces roughly 400 public-health professionals a year, about as many as a couple of public-health schools in the United States might. Yet two million to three million Indians are infected with HIV/AIDS—accounting for the world’s third-largest infected population. The country’s infant-mortality rate is more than twice that of China, which also boasts a substantially longer life expectancy. Clean water and sanitation remain out of reach for many people in India; the emergence of lifestyle diseases (such as obesity and diabetes) and the increased level of systemic health burdens are worrisome too. Yet public spending on health care is less than 1 percent of GDP. This situation must change quickly, and the central government plans to increase spending to 2 to 3 percent of GDP by 2012.
McKinsey research suggests that during the next ten years India will need more than 10,000 public-health professionals to supply preventive health services. These experts will also be needed to train 500,000 volunteers, whom the government intends to place in villages throughout India as part of the National Rural Health Mission, and to shape the response to myriad public-health policy issues through meaningful research and advocacy.
What’s more, to have a strong and healthy workforce, India must act urgently to increase the number and reach of its effective public-health services. The Public Health Foundation of India, a public-private partnership established to produce 10,000 qualified public-health workers over the next few years, is one effort to bridge the gap between the need for and the supply of skilled service providers.
Developing a thriving labor market
India’s huge and growing population—of somewhat more than a billion—could be considered one of the country’s biggest assets, representing an almost limitless labor supply and consumer demand. Yet this mass of people could become one of the greatest forces against reform if they can’t find jobs; in 2003, for instance, the labor force grew by 12 million, but employment in the organized private sector fell by 200,000. India absolutely must create a thriving labor market not only to shift workers from agriculture to higher-value-added activities but also to absorb a growing workforce and sustain social equilibrium.
A critical step would be the systematic deregulation of sectors such as retailing, defense, the news media, and banking, which remain crippled by archaic policies. With deregulation and the opening of markets, vital foreign direct investments of capital and skills could flow more readily into India, making its industry more effective. Coupled with low interest rates, such an influx of foreign capital would help sustain the economy’s buoyancy.
In addition, reforms are needed in the coal, power, and natural-resources industries to increase competitiveness, foster the creation of higher-value jobs, and support economic growth. Continued privatization of state-owned enterprises must also remain a focus for the government.
Beyond general deregulation and liberalization, India must repeal its complex and rigid labor laws, which discourage the creation of jobs by offering excessively stringent protections for people who work in the organized part of the economy. According to the World Bank, India’s level of private-sector nonagricultural employment has stagnated at below 9 million for the past 20 years, though the labor force expanded to more than 400 million people during that period. Removing the rigidities will allow India to harness the potential of its growing workforce. That is especially critical for the manufacturing sector and for creating opportunities in rural areas.
Augmenting manufacturing growth
India can no longer expect to outperform its competitors unless manufacturing grows substantially. Its high-tech industry has rightly won fame, and it can look forward to tens of thousands of new jobs emerging if, as expected, revenues from the business-process-outsourcing and IT industries triple by 2010, to at least $60 billion. However, these sectors will never provide the number of jobs needed for all of the tens of millions of Indians seeking opportunities.
If India were to leverage its inherent strengths in skill-intensive manufacturing, exports could surge to about $300 billion, creating 25 million to 30 million jobs by 2015. Emphasizing apparel, auto components, electrical and electronic products, and specialty chemicals could help "Made in India" to become the next big manufacturing-exports story. But achieving this goal will require action on a number of fronts.
The first step will be to ignite domestic demand, which would help attract multinational manufacturers and provide the scale needed to be globally competitive. To this end, the government should move rapidly to create a uniform general sales tax across all products and states. More important, the total taxes on manufactured goods should fall to 15 percent of retail prices (the current level in China) over the next three years. Our study of a variety of product categories in India and China shows that for every drop in prices of 25 percentage points, consumption increases three- to fivefold. Also, the government should reform indirect taxes such as excise duties levied by individual states and lower import duties to 10 percent to boost domestic demand and support manufacturing growth.
In addition, innovations such as special economic zones must remain under consideration, despite recent controversies about them. To accelerate manufacturing growth, these zones should have governance structures insulating them from political changes and pressures and offer simple administrative procedures, as well as a world-class infrastructure, physically attractive environments, and anchor tenants that plan to reach significant operating scale through substantial capital investment. These manufacturers should also have access to domestic markets using a dual-bookkeeping system similar to that in China, where products sold locally are subject to local taxes and duties on materials imported for their manufacture, while products exported are not.
Economic engines in rural India
To ensure that India’s economic growth reaches the whole country, the government must supplement the Bharat Nirman program with job creation plans in the farm and rural nonfarm sectors. Such initiatives, focusing on skills and assets already in place, could create 30 million to 40 million jobs in rural areas and increase rural incomes by 1 percent annually over the next five years. For such plans to succeed, India must launch a second Green Revolution,5 reform the food industry, and create a thriving service sector in rural areas.
A second Green Revolution should embrace three features. First, the country’s prime farmland should be expanded beyond the states of Haryana and Punjab, into Bihar, Madhya Pradesh, and Uttar Pradesh. This prime area would focus on growing grains such as corn and barley. Some farms should be encouraged to replace grains with fruits and vegetables, as well as livestock; historically, demand for these higher-value products increases as economies develop and incomes rise. Finally, wastelands—vast tracts that have low water tables and infertile soil—should be cultivated with crops such as eucalyptus trees and jatropha, which have global markets and can be grown economically on relatively unproductive land.
Reforming the food industry is also important. Key measures include amending laws such as the Agriculture Produce Marketing Committee (APMC) Act (which restricts the retailers’ access to produce), creating a legal framework for contract farming,6 and liberalizing the interstate movement of produce. Over time, the government should shift its role from market participant to facilitator. The systematic development of the food-processing industry is also necessary to make better use of India’s resources, since supply chain problems prevent large quantities of produce from ever getting to market.
Finally, creating a vibrant service economy in rural India by focusing on labor-intensive sectors such as tourism could be enormously beneficial. Special tourism zones with tax benefits—an arrangement similar to special economic zones for manufacturing but without any need for the large-scale acquisition of land—could generate as many as 25 million jobs over the next five years. These zones could attract an additional 20 million foreign tourists annually, as well as 400 million domestic ones. Retail banking, health care, and education are other service sectors that could grow significantly in rural India as incomes and aspirations continue to rise.
India is on the verge of one of economic history’s great achievements, which could lift hundreds of millions more of its people out of desperate poverty and create a huge and thriving middle class. But that won’t happen without a strong political commitment and concerted action from all stakeholders—the government, the private sector, and society at large.
Microsoft brings unified communications to enterprise
In my opinion, unified communications will transform business communications just as email did in the 1990s
Microsoft brings unified communications to enterprise
17 October 2007, telecoms.com
Microsoft brings unified communications to enterprise
Software giant Microsoft unleashed its unified communications suite, of which VoIP is the central core, upon the industry on Tuesday evening.
At an event in the US, Bill Gates, chairman, and Jeff Raikes, president of the Business Division, announced the worldwide availability of Microsoft's unified communications software.
The suite includes Office Communications Server 2007, which delivers VoIP, video, instant messaging, conferencing and presence within existing applications such as Microsoft Office; Office Communicator 2007, which is client software for phone, instant messaging and video communications that works across the PC, mobile phone and web browser; Live Meeting, an advanced conferencing service that enables workers to conduct meetings, share documents, utilise video and record discussions from any computer; and RoundTable, a conferencing phone with a 360-degree camera that captures a panoramic view of meeting participants, tracks the speaker and can record meetings.
Essentially, a user could start a whole conference or just a one on one conversation right out of a Word document, even with a remote worker. The whole phone experience would be linked to a specific user identity, with inbuilt presence indicators capable of being integrated with third party applications.
"Unified communications software will transform business communications as fundamentally as email did in the 1990s," said Raikes. "Today, Microsoft is in the VoIP game, and our customers and partners are already winning with better economics and new business opportunities."
Nortel has been one of Microsoft's most high profile partners in this venture, creating an alliance to create a business service that combines communications technologies in an effort to simplify how workers communicate. The technology giants pledged a four-year agreement that will allow, for the first time, cross-licensing of intellectual property.
On Tuesday, Nortel said it expects to be first in the industry to offer customers software-based "native" interoperability between its IP-PBX portfolio and Office Communications Server 2007. The platform is planned for availability in first quarter of 2008.
Wednesday, October 17, 2007
UIQ now a 50:50 joint venture by Sony Ericsson and Motorola
This does not seem to bode well for the likes of Linux and Windows Mobile. The only vendors not married to a OS are now the Chinese, Taiwanese and the Koreans.
UIQ now a 50:50 joint venture by Sony Ericsson and Motorola
16/10/2007 12:25:00 - by Leila Makki
US mobile handset manufacturer Motorola has purchased a 50 per cent stake in mobile software developer UIQ Technology owned by the Swedish-Japanese joint venture, Sony Ericsson.
London-headquartered Sony Ericsson purchased the Swedish software firm that licenses the UIQ open user interface and development platform to mobile phone vendors, from Symbian for an undisclosed sum last February.
Under the agreement, Sony Ericsson and Motorola will work together and jointly invest in the development of the UIQ open user interface platform.
The pair has agreed that UIQ will be vendor and chipset independent and will be licensed equally terms to all mobile device vendors. Furthermore, the new joint ownership is committed to expanding the shareholder base of UIQ to include other handset vendors and licensees.
President and chief executive of Sony Ericsson Miles Flint, who is due to step down from his post next month, said the deal "demonstrates the increasing importance of open operating systems for all handset vendors."
"By working together in a strong, mutually beneficial partnership, handset vendors can reduce development costs and help operators launch more consistent services with greater efficiency," he added.
Flint commented that a chairman will be recruited for UIQ soon and that executives from both Sony Ericsson and Motorola will govern the board.
Both companies have been UIQ licensees for numerous years and the Sony Ericsson P1 smartphone, the W960 Walkman phone and the Motorola MOTO Z8 all use UIQ technology.
Financial terms of the deal have not yet been released.
UIQ now a 50:50 joint venture by Sony Ericsson and Motorola
16/10/2007 12:25:00 - by Leila Makki
US mobile handset manufacturer Motorola has purchased a 50 per cent stake in mobile software developer UIQ Technology owned by the Swedish-Japanese joint venture, Sony Ericsson.
London-headquartered Sony Ericsson purchased the Swedish software firm that licenses the UIQ open user interface and development platform to mobile phone vendors, from Symbian for an undisclosed sum last February.
Under the agreement, Sony Ericsson and Motorola will work together and jointly invest in the development of the UIQ open user interface platform.
The pair has agreed that UIQ will be vendor and chipset independent and will be licensed equally terms to all mobile device vendors. Furthermore, the new joint ownership is committed to expanding the shareholder base of UIQ to include other handset vendors and licensees.
President and chief executive of Sony Ericsson Miles Flint, who is due to step down from his post next month, said the deal "demonstrates the increasing importance of open operating systems for all handset vendors."
"By working together in a strong, mutually beneficial partnership, handset vendors can reduce development costs and help operators launch more consistent services with greater efficiency," he added.
Flint commented that a chairman will be recruited for UIQ soon and that executives from both Sony Ericsson and Motorola will govern the board.
Both companies have been UIQ licensees for numerous years and the Sony Ericsson P1 smartphone, the W960 Walkman phone and the Motorola MOTO Z8 all use UIQ technology.
Financial terms of the deal have not yet been released.
Google releases BETA copyright protection software for YouTube
Definitely a big step forward in tackling copyright protection the biggest nagging issue with User Generated Content (UGC).
Google releases BETA copyright protection software for YouTube
16/10/2007 11:03:00 - by Andrew Beutmueller
When Google acquired YouTube back in October 2006 everyone agreed it was a smart move but at the same time it also meant inheriting some huge legal headaches, almost as expensive as the US$1.65 billion sticker price. Google is of course not one to shy away from a challenge, especially if it involves either cash or coding, or in this case both.
In an attempt to silence big content providers’ legal war drums and assuage their increasing ire at YouTube’s copyright crunching business model, Google this past summer implemented audio fingerprinting technology as well as promising to develop its own copyright identification software designed to help copyright owners police the ubiquitous web 2.0 video site.
Monday it was announced by YouTube Product Manager David King in his blog that the software, called “YouTube Video Identification” is indeed now available for download in beta form.
“Video Identification is the next step in a long list of content policies and tools that we have provided copyright owners so that they can more easily identify their content and manage how it is made available on YouTube,” commented David King.
The software apparently makes it easier for copyright holders to identify their works on YouTube, and choose a course of action including tools to block content, or rather promote it, and even license their content to the site in an attempt to monetize it.
“We require a 10-minute limit on the length of content uploaded to the site,” according to David King. We provide content owners with an electronic notification and takedown tool, to help them more easily identify their material and notify us to take it down with the click of a mouse.”
Google also claims that the new software enforces its policy “committed to supporting new forms of original creativity, protecting fair use, and providing a seamless user experience—all while we help rights owners easily manage their content.”
Evidently not everyone sees it that way.
On the content provider side, Viacom and other litigious content providers will continue to try and Napsterize Google despite this new software until there is either an official content deal in place, or the material is off the website completely.
And as far as the digital rights people are concerned, and they are an especially screechy bunch, Google has betrayed them by caving in to the entertainment industry suits, who for some odd reason want to protect their often multimillion dollar investments in private property.
Public Knowledge President Gigi B. Sohn said in a statement on Monday that “…this is a sad development. It’s a shame that Google was pressured by the entertainment industry into devoting resources to a limited system that could restrict the free flow of information while increasing the control content companies have over otherwise lawful uses of material.”
Google releases BETA copyright protection software for YouTube
16/10/2007 11:03:00 - by Andrew Beutmueller
When Google acquired YouTube back in October 2006 everyone agreed it was a smart move but at the same time it also meant inheriting some huge legal headaches, almost as expensive as the US$1.65 billion sticker price. Google is of course not one to shy away from a challenge, especially if it involves either cash or coding, or in this case both.
In an attempt to silence big content providers’ legal war drums and assuage their increasing ire at YouTube’s copyright crunching business model, Google this past summer implemented audio fingerprinting technology as well as promising to develop its own copyright identification software designed to help copyright owners police the ubiquitous web 2.0 video site.
Monday it was announced by YouTube Product Manager David King in his blog that the software, called “YouTube Video Identification” is indeed now available for download in beta form.
“Video Identification is the next step in a long list of content policies and tools that we have provided copyright owners so that they can more easily identify their content and manage how it is made available on YouTube,” commented David King.
The software apparently makes it easier for copyright holders to identify their works on YouTube, and choose a course of action including tools to block content, or rather promote it, and even license their content to the site in an attempt to monetize it.
“We require a 10-minute limit on the length of content uploaded to the site,” according to David King. We provide content owners with an electronic notification and takedown tool, to help them more easily identify their material and notify us to take it down with the click of a mouse.”
Google also claims that the new software enforces its policy “committed to supporting new forms of original creativity, protecting fair use, and providing a seamless user experience—all while we help rights owners easily manage their content.”
Evidently not everyone sees it that way.
On the content provider side, Viacom and other litigious content providers will continue to try and Napsterize Google despite this new software until there is either an official content deal in place, or the material is off the website completely.
And as far as the digital rights people are concerned, and they are an especially screechy bunch, Google has betrayed them by caving in to the entertainment industry suits, who for some odd reason want to protect their often multimillion dollar investments in private property.
Public Knowledge President Gigi B. Sohn said in a statement on Monday that “…this is a sad development. It’s a shame that Google was pressured by the entertainment industry into devoting resources to a limited system that could restrict the free flow of information while increasing the control content companies have over otherwise lawful uses of material.”
Ericsson shocks with profit warning 16 October 2007E
Another telecoms infrastructure vendor facing rough weather. The list is rapidly broadening.
Ericsson shocks with profit warning 16 October 2007
Ericsson shocks with profit warning
Swedish infrastructure vendor Ericsson sent shockwaves through the market Tuesday morning after it cut its third quarter forecasts.
Shares in the kit vendor took a dive, losing nearly a quarter of their value, as president and CEO, Carl-Henric Svanberg, warned of a shortfall in mobile network sales and upgrades.
Net sales are now only expected to grow 6 per cent year on year to SEK43.5bn (Eur4.75bn), while operating income is forecast to drop 36 per cent to SEK5.6bn.
"The unexpected development in the quarter is mainly due to a shortfall in sales in mobile network upgrades and expansions which resulted in an unfavorable business mix that also negatively affected Group margins," said Svanberg. "The effect of market dynamics is always a matter of judgment. This quarter we have underestimated the effects."
Third quarter sales for the networks unit are expected to be down 2 per cent to SEK28.5bn, in strong contrast to professional services sales, which are up 26 per cent to SEK11bn and multimedia sales, which are up 31 per cent to SEK4bn.
"The present market dynamics are however working to our disadvantage from a short-term financial perspective," Svanberg said. "Now that we have reestablished our scale advantage from the pre-industry consolidation we will shift our focus slightly and capitalize on our market share gains."
Ericsson shocks with profit warning 16 October 2007
Ericsson shocks with profit warning
Swedish infrastructure vendor Ericsson sent shockwaves through the market Tuesday morning after it cut its third quarter forecasts.
Shares in the kit vendor took a dive, losing nearly a quarter of their value, as president and CEO, Carl-Henric Svanberg, warned of a shortfall in mobile network sales and upgrades.
Net sales are now only expected to grow 6 per cent year on year to SEK43.5bn (Eur4.75bn), while operating income is forecast to drop 36 per cent to SEK5.6bn.
"The unexpected development in the quarter is mainly due to a shortfall in sales in mobile network upgrades and expansions which resulted in an unfavorable business mix that also negatively affected Group margins," said Svanberg. "The effect of market dynamics is always a matter of judgment. This quarter we have underestimated the effects."
Third quarter sales for the networks unit are expected to be down 2 per cent to SEK28.5bn, in strong contrast to professional services sales, which are up 26 per cent to SEK11bn and multimedia sales, which are up 31 per cent to SEK4bn.
"The present market dynamics are however working to our disadvantage from a short-term financial perspective," Svanberg said. "Now that we have reestablished our scale advantage from the pre-industry consolidation we will shift our focus slightly and capitalize on our market share gains."
Monday, October 15, 2007
DVB-H May Not Be Dead Yet in the US
Definitely a boost for DVB-H. I see a lot of sense in AT&T, with its GSM/WCDMA deployment, pursuing the DVB-H path. I guess the AT&T MediaFLO announcement was more of a tactical move in view of a similar announcement by Verizon.
DVB-H May Not Be Dead Yet in the US
Yesterday's announcement that AT&T had agreed to purchase $2.5 billion in 700 MHz spectrum from privately-held Aloha Partners, parent firm of DVB-H proponent Hiwire, seemed to signal the end of DVB-H in the United States. Hiwire was the only remaining U.S. DVB-H player after Crown Castle International announced earlier this year that it was planning to spin off its Modeo business and exit the market. Hiwire was planning to use that 700 MHz spectrum to deploy a nationwide mobile TV network and this summer it launched a DVB-H trial in Las Vegas with partner T-Mobile USA.
But AT&T didn't just buy the 700 MHz spectrum from Aloha, it also purchased the Hiwire assets. I spoke with Scott Wills, president and COO of Hiwire, this morning and he said that those assets include the tower sites and the infrastructure equipment as well as access to the entire DVB-H ecosystem. He added that the current DVB-H trial in Las Vegas with T-Mobile USA will continue through the end of the year.
Wills wouldn't comment on the implications of this deal and AT&T has said that it's not sure how it will use the spectrum. But I think it's entirely possible that the operator will use that spectrum to deploy a DVB-H network and launch its own mobile TV service.
I know that AT&T is currently working with Qualcomm's MediaFLO subsidiary to launch a mobile broadcast TV service this year, but I've always felt that the alliance between those two parties was made because AT&T felt pressure from Verizon's broadcast TV offering (using MediaFLO) and the company felt the existing DVB-H players (Medio and Hiwire) were not progressing as quickly as AT&T desired.
But there's nothing stopping AT&T from using MediaFLO technology as a stopgap measure until the company can deploy its own DVB-H network using the spectrum it just purchased from Aloha.
I think there are some very compelling reasons for this strategy. AT&T could deploy a DVB-H network, offer more channels of programming than Verizon (Hiwire can offer 24 channels of programming while MediaFLO can offer just eight) and negotiate some interesting content deals that provide customers with programming whether it's over AT&T's U-Verse IPTV system, over AT&T's broadband network or over its DVB-H network. Doesn't this scenario fit with AT&T's three-screen philosophy? I think it does.
DVB-H May Not Be Dead Yet in the US
Yesterday's announcement that AT&T had agreed to purchase $2.5 billion in 700 MHz spectrum from privately-held Aloha Partners, parent firm of DVB-H proponent Hiwire, seemed to signal the end of DVB-H in the United States. Hiwire was the only remaining U.S. DVB-H player after Crown Castle International announced earlier this year that it was planning to spin off its Modeo business and exit the market. Hiwire was planning to use that 700 MHz spectrum to deploy a nationwide mobile TV network and this summer it launched a DVB-H trial in Las Vegas with partner T-Mobile USA.
But AT&T didn't just buy the 700 MHz spectrum from Aloha, it also purchased the Hiwire assets. I spoke with Scott Wills, president and COO of Hiwire, this morning and he said that those assets include the tower sites and the infrastructure equipment as well as access to the entire DVB-H ecosystem. He added that the current DVB-H trial in Las Vegas with T-Mobile USA will continue through the end of the year.
Wills wouldn't comment on the implications of this deal and AT&T has said that it's not sure how it will use the spectrum. But I think it's entirely possible that the operator will use that spectrum to deploy a DVB-H network and launch its own mobile TV service.
I know that AT&T is currently working with Qualcomm's MediaFLO subsidiary to launch a mobile broadcast TV service this year, but I've always felt that the alliance between those two parties was made because AT&T felt pressure from Verizon's broadcast TV offering (using MediaFLO) and the company felt the existing DVB-H players (Medio and Hiwire) were not progressing as quickly as AT&T desired.
But there's nothing stopping AT&T from using MediaFLO technology as a stopgap measure until the company can deploy its own DVB-H network using the spectrum it just purchased from Aloha.
I think there are some very compelling reasons for this strategy. AT&T could deploy a DVB-H network, offer more channels of programming than Verizon (Hiwire can offer 24 channels of programming while MediaFLO can offer just eight) and negotiate some interesting content deals that provide customers with programming whether it's over AT&T's U-Verse IPTV system, over AT&T's broadband network or over its DVB-H network. Doesn't this scenario fit with AT&T's three-screen philosophy? I think it does.
Sunday, October 14, 2007
Who are the Fastest Growing Operators in Asia-Pacific?
Great to see 5 Indian MNOs amongst the top 10. Bharti Airtel will probably break into the top 10 (in terms of cumulative subscriber base) by end 2007.
Who are the Fastest Growing Operators in Asia-Pacific?
No fewer than 16 companies added more than 5 million customers over the course of the twelve months ended June 07. China Mobile heads the list with a massive 58.6 million customers - as many as the next three operators put together, and then some. As we have suggested before, it would take a genuinely radical restructuring of China's communications industry to threaten the company's world leading position and that seems unlikely.
In aggregate, just over 75 million new customers were connected in China over the last year, with the balance of 16.55 million coming from Unicom. That number wasn't enough to give the Chinese number two the regional number two spot, which goes to Bharti of India. Over the same period, India's number one added just under 20 million new connections - 19.63 million to be precise. That equates to 28% of the Indian market's growth and it is little surprise to see that a further four Indian companies come into the regional top ten.
However, India is not the only growth market in the region and in fact, fourth place goes to a company that is based rather further east. Although its place in the rankings is under threat from Bharti, amongst others, Telkomsel of Indonesia was the fourth largest operator in the region at the end of June (and the tenth largest in the world), having added over 13 million new connections in the twelve month period.
The four other Indian companies take fifth, sixth, seventh and ninth places, while two operators from Pakistan fill the other slots.
Vodafone India is experiencing the same kind of resurgence that was experienced by Telsim in Turkey, following its acquisition by the UK global leader. Hutchison undoubtedly did a good job building up this business, but equally, there can be little doubt that Vodafone can take the company one stage further. The need to invest in its troublesome European 3G assets rather constrained Hutchison's ability to invest here; Vodafone, now that the proposal from Efficient Capital Structures has been laughed out of court, suffers no such problem.
There can be little doubt that the ultimate aim is to achieve market leadership in India, overtaking Reliance and Bharti. The first part of this has probably already been achieved, the second may take a little longer.
BSNL, Reliance and IDEA are the other three Indian names in the top ten. They may have something to say about this ambition, but none has the financial firepower to match Vodafone if it is genuinely determined. BSNL took sixth place in the ranking of the fastest growing companies in the year with just under 10 million new connections.
Reliance would have beaten BSNL had it not been for the SIM registration effect, but in the long term, it may be hampered by its initial choice of CDMA technology. "Choice" is perhaps slightly unfair as Reliance's licence were initially for wireless local loop operations which subsequently became mobile, but one way or another, it could be a problem.
As experienced by Vivo in Brazil, converting to GSM (if that is Reliance's intention - and it already has some operations operating this technology) is neither cheap nor easy. Finally in India, IDEA has recently raised additional capital in an IPO and this is helping fuel its growth. It connected 7.59 million customers over the year.
Pakistan's population is less than one sixth the size of India's but it takes the two other places through Pakistan Mobile (+9.33 million) and Telenor Pakistan (+7.5 million). In fact, both Pakistan Telecom and Warid Telecom Pakistan also managed to add more than 5 million customers, with net additions of 6.5 million and 5.8 million respectively. The chart shows all 16 of the 5 million+ club.
Pakistan's population is less than one sixth the size of India's but it takes the two other places through Pakistan Mobile (+9.33 million) and Telenor Pakistan (+7.5 million). In fact, both Pakistan Telecom and Warid Telecom Pakistan also managed to add more than 5 million customers, with net additions of 6.5 million and 5.8 million respectively. The chart shows all 16 of the 5 million+ club.
Cisco Wooing WiMax Vendors?
Finally Cisco has a change of heart about WiMax ! Its rather odd that an IP focused company like Cisco which has all along been a strong proponent of WiFi and which has in the past also shown tremendous interests in other wireless access technologies would not be interested in WiMax.
I guess the bigger play for Cisco, with its Lynksys dvision, is WiMax Customer Premises Equipment rather than the infrastructure.
Cisco Wooing WiMax Vendors?
September 27, 2007, Unstrung
Cisco Systems Inc. is close to buying a WiMax base-station company in its first real dalliance with the wireless broadband technology, two industry sources tell Unstrung.
The networking giant could buy within a matter of weeks, according to one source. "It's in legals now," the source says.
Both sources agree that Cisco has narrowed it down to a shortlist of potential targets. The names in the frame are said to be Alvarion Ltd., Aperto Networks Inc., Navini Networks Inc., and Redline Communications Inc.
Alvarion and Redline appear to be the favorites on list. Cisco has already had some involvement with Redline in deploying a WiMax network in Paraguay.
Alvarion's sheer size, location in Israel, and legacy portfolio may count against it; the company is considered as potentially more difficult to integrate into the Cisco organization. Despite this, Cisco is said to find Alavarion's reach into emerging markets appealing.
Any WiMax acquisition would likely see Cisco spending more than it has on recent wireless acquisitions. Alavarion, in particular, is an established public company with a market cap of $867.50 million.
Nonetheless, Cisco is clearly more interested in the prospects of WiMax than it once was. Management identified WiMax as one of the "growth markets" for the company at an analyst day earlier this month, according to Lehman Brothers.
It was not always that way. Charlie Giancarlo, EVP and chief development officer at Cisco, infamously said in 2004 that Cisco was "not interested in WiMax." The company still has a white paper on its site explaining why it has "no current plans" to build WiMax base stations.
Nonetheless, our sources say base stations may be just the start of Cisco's WiMax plans and that it could be planning two or three more buys to round out an infrastructure portfolio. Larry Lang, VP and GM of the mobile wireless group, is said to be particularly interested in bringing WiMax under his wing.
The speculation is that a suitable femtocell maker and a WiMax Access Services Network (ASN) Gateway vendor could also be on the menu for Cisco. Sources have already said Cisco is working on suitable femtocell technology.
Cisco, Alvarion, and Redline haven't returned calls about any acquisition talks.
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