Archive for ARPU
by Ewan Spence
November 23, 2007 at 10:47 am · Filed under Devices, Mobile Tech, Platforms, Software, ARPU, iPhone, Google, Apple, Instant Messaging, Openmoko, Communication, Convergence, Symbian
The launch of Android, and the Open Handset Alliance (primarily with Google and over 30 other partners) has prompted a huge amount of discussion around the internet, from Telecoms Analysts, Industry Watehrs, Developers and enthusiatic bloggers. That’s been reflected here on Mobile Messaging 2.0.
So what exactly is the impact of this in the mobile space? Debi Jones and I sat down to discuss that very topic in our latest podcast.
Google, Android and the Implications - MM2.0 With Debi Jones and Ewan Spence:
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by Ewan Spence
October 30, 2007 at 8:13 pm · Filed under SMS, ARPU, ATT, Twitter, Microsoft, Instant Messaging, Orange, CTIA
To me, coming from a number of European Conferences, CTIA was a bit of an eye-opener. Not because of the location (it’s hard to find fault with Moscone South in San Francisco), nor with the scheduled presentations and round tables put on by the organisers and attending companies at the event. The eye opener was the influence that the US networks have over their networks, the infrastructure, and the handsets available.
Every network, naturally, has to look out for the bottom line; but at the same time there should be a certain amount of respect for customer, developers, and handset manufacturers… basically the entire chain of the system. American networks, in my view were incredibly authoritarian – but I suspected that part of that was due to the distance I am from the US. After sitting through a number of presentations, and walking the show floor taking to every part of the chain, I have to wonder what the future of mobile messaging will be?
A quick example – the AT&T Tilt, a Windows Mobile smartphone that I’ve been spending some time with - has the usual set of applications and features onboard. But when I try to use the Instant Messaging client, I’m told that connecting via the built-in WiFi client is not allowed… why not connect over the air and use your cellphone’s data plan? You’re happy for IE to use Wifi but not the IM?
I’m sure the carriers will have a nice PR friendly answer as to why, but I’m also sure that the answer will come down to ‘we don’t want to loose a single cent from our SMS revenues.†And I think this ‘must… not… cannibalize…’ is going to be a big problem for any innovation that may occur in the space. When (not if) the next step comes along, I’m worried that it’s going to completely pass us by because it’s not going to be financially acceptable to a few companies with massive leverage on the system.
Twitter, driven by SMS, should be embraced. Where’s my option of a $5/month all you can twitter on top of a regular SMS package? Why, after being around for 18 months, and in the heavily trafficked world of widely adopted Web 2.0 services since Feb/March of this year, is this not available? I mean it does nothing to impact the network code, it’s just SMS, and it drives more traffic for the networks? It’s one isolated example, but I’m sure you can all come up with more. Maybe you can even come up with a service that has been amplified by the networks?
I think mobile messaging has a future, and I think that we will see a new form in the future. But in my opinion it will be in spite of the networks, not because of them.
by Ewan Spence
September 8, 2007 at 10:51 am · Filed under Platforms, ARPU, Carriers
This seems to be the season for web services to go down. We’re in the middle of a US Blackberry outage, the popular Web 2.0 service Twitter lost 12 hours midweek (but did humorously promise to have super strength when it returned) and it’s not been long since Skype went down for a few days. And until these events stop becoming ‘expected’ because they’re internet services, they won’t be viewed as must haves by the general public.
As messaging evolves, our services for IM, VoIP and internet connectivity are going to become more and more vital to our connected lives. Outages such as the above in our favorite services are not going to be acceptable if they gain traction in the mass market, and that’s going to be the big challenge for the companies; scaling up not just in terms of users, but in terms of 9s in reliability. One day down out of thirty might be fine for the Web 2.0 crowd, but it’s not going to be acceptable out with them.
Or to spin it around, would you sign up to a mobile network that had the same reliability as Twitter?
Designing a robust system is one that naturally is going to be a challenge, and rightly left to the end of any development and adoption cycle. There are unique problems that need to be solved, and a solid source of revenue or finance needs to be in place before it can be implemented. Making the jump from success to a commodity is one of those problems any company would like to have. Let’s see who manages to get there in the next few years before we heap too much praise on the still in beta services.
by Ewan Spence
September 4, 2007 at 11:41 am · Filed under Devices, ARPU, Nokia, NGage, Ovi
Nokia’s Go:Play launch continues to intrigue me, because even through the delightfully Finnish presentations, there’s a number of concepts and changes going on that, while having the potential to trip up Nokia, are more likely to be picked up as brave moves once we look back on this period.
The one I want to talk about today is their next move in the gaming market, and specifically the electronic distribution of the game titles. Nokia’s last foray into the gaming world with the N-gage and N-Gage QD gaming decks was for some a strange diversion with an ill-defined product that was both a phone and a games console, yet neither, at the same time. While it gained main supporters, critical acclaim was less noticeable.
At the key turning point of any console life cycle, about 18 months in, is when the games become well suited to the platform, the developers know what it can do, and the N-Gage was no exception. Yet getting a hold of titles such as Pathway to Glory, Ghost Recon or Warhammer 40,000 proved to be frustrating for the end-users. Major retailers no longer had the titles on the shelves, leaving the online retailers to pick up the slack. Not the sort of thing that impulse based purchase can cope with.
So Nokia have lifted the system out of everyone else’s hands and will be delivering all the N-Gage games through their ‘Ovi’ service. With a launch in two months time, users can expect to not only be able to purchase games over the air and download direct to their phone (or to a backup / game manger application on their PC) but to be able to download free trial version, extra levels or episodic content, or
All very Web 2.0, all very flexible, all leveraging the lack of a retail chain. Plus dropping the price to levels much more suited to impulse buying (full games are going to be between $6-$10, so expect the other options to be drastically less). About the only people not happy with this are the died-in-the-wool collectors now denied the chance to collect boxes, merchandising materials, and elusive beta/gold pressings of the titles.
If this all looks remarkably like X-Box Live, then you could well be right; just remember the 700,00 member strong Nokia Arena - which piloted many of these concepts, but not under one button on the phone - launched with the original gaming smartphones back in October 2003.
Military leaders have always known that the quickest way to loose a war is too loose control over supply lines. The comfy triumvirate of Manufacturer / Network / Customer has been a mainstay of the mobile business for a long time. From everything on show at the Go:Play event, Nokia have decided that they want full control over the entire customer path. Which is great for their business… but will they be able to wrest those customers out of the networks, while still keeping the networks on side to sell the phones?
by Ewan Spence
August 15, 2007 at 4:00 pm · Filed under Software, ARPU, Mobile Applications, Carriers
One of the most interesting challenges that the mobile application industry has is how to get their third party applications on to the phone – with only one or two third party apps shipped in the firmwares of high end devices, many rely on a shareware style demo in the box CD, but that still requires a fair bit of searching by the user. There is also the unrelated problem of the carriers wanting to somehow make more money from their subscriber base.
So if companies are already paying for the privellege, I’ve had a wild thought using game-theory. Why not throw the two together and make a market?
A market for space on the top of the deck.
For those of you not aware of the deck, the term is a holdover from the days when Wap was the mobile internet, but essentially it is the catalogue of games and applications (although it’s mostly games) that a network portal offers to their customers. Out of all the tiles that are available via search, the majority of purchases are from those which are listed in the small umber of slots (let’s say there are five) which are initially presented to the end-user. If a publisher can get their application into that batch of five, then sales are pretty much guaranteed.
With a finite resource such as this, the allocation of this space at the whim of the network is a black and muddy art. So why not lift that veil, and make some money at the same time? Every application that passes a network testing regime receives a number of credits. Now split the day up into, say 5 minute slots, and allow people to bid with these credits on each slot during the day and night. Naturally you can buy more credits from the operator, over and above the credits you might possibly earn each time your app gets purchased.
But why stop there? Let’s take it further than that, and allow people to not only trade credits between them (vital if you have twenty applications, allowing you to pull everything for your wicked version of something that’s almost, but not quite, Bejewelled), but to trade on the open market the slot times that you have earned, for the aforementioned credits.
All you need to finish this off is the facility to revert credits back to cold hard cash (go on, a fluctuating currency market) and you’ve got an entire eco system designed to make sure that the best, strongest applications rise to the top of the deck (in the handset sense and the metaphysical sense), and a completely open system that takes the hidden murkiness away from the operators.
Now… discuss!
by Ewan Spence
August 5, 2007 at 6:17 pm · Filed under ARPU, Carriers
Once upon a time, AOL charged their customers by how many minutes they kept their modems connected to the banks of AOL modems. As more and more people signed up, the banks of modems started to struggle. So they raised the cost hoping people would use the service less. The dedicated users didn’t change, and the average users started to drift away. But one day, when they decided a flat monthly rate, people felt free to use the internet, and know that there wouldn’t be any sticker shock each month.
Incidentally, AOL made more in the months after introducing flat rate than per minute billing.
While the telecoms industry can’t make obvious increases in prices, it is only in the last 12 months that flat rate data has been making an impact in Europe – and a bit longer than that in the US. Given the confidence to use a mobile phone for data, people will use it. The S60 application for Jaiku keeps the handset always connected, trickling data about location and calendar data, and the FAQ states it uses around 10mb a month – but you’re not going to know that for 4-6 weeks after that month. So it doesn’t get used.
Add in an ‘all you can eat’ SIM and data usage changes rapidly. There are no worries in checking Gmail, leaving Jaiku running, downloading mapping data on the fly, because the bill is fixed at the end of the month.
At this point, someone mentions roaming – and while it can be a horrible surprise (see the countless ‘I’ve taken my iPhone to Ireland and it was iIncredible’ blog posts) the first murmurings of a sensible data roaming policy are happening in Europe, with Vodafone offering an ‘all you can eat for 24 hours’ payments for international roaming customers for 12 Euros ($16). It’s still pricey, but it is comparable to access via a Wi-Fi hotspot.
The flat rate genie is pretty much leaking at the bottle, and the networks are very slowly moving over to flat rate. I wonder I any of them would be brave enough to step up and flat rate everything. All your data, flat rate. All your text messages, flat rate. All your voice calls, flat rate. Just pop down any sensible monthly bill per month, and just use your phone.
Anyone?
by Debi Jones
June 14, 2007 at 8:35 pm · Filed under News, ARPU, mobile data statistics
Chetan Sharma, a contributor to this blog, releases a robust quarterly report on the US Wireless Data Market that is a must read for everyone following or writing about the industry. His most recent report covers Q107, although, I’m sure he’s got a Q2 report on deck. I’ll include a few highlights from the report below to whet your appetite for the whole story found here.
US wireless data market continues to grow at a steady pace offsetting any decline in voice revenues. Growth in both enterprise and consumer segments resulted in a $5B quarter for the industry (by comparison, in 2004, the total data revenues for the year were $4.6B). Given that approximately 60% of the revenues are from non-SMS applications and the subscriber penetration of data services is still low, we remain bullish on the US data market.
- US wireless data market got over the $5B mark in service revenues in any given quarter for the first time. Revenues jumped 12% from Q406 and over 68% from Q106 to approximately $5.5B for Q107.
- Overall ARPU remained at the same levels as Q106 and Q406, which speaks to the value of data revenues in the declining voice revenue market. While voice ARPU declined 6%, data ARPU rose 46% compared to Q106. The average data ARPU in the US stands at $8.34 or almost 16% of the service revenues.
Though the overall penetration of messaging is around 40%, in terms of total number of messages in the network, US had another blockbuster quarter. Verizon with 22.75B, T-Mobile with 16B, and AT&T with 14.23B messages (SMS and Multimedia messaging) were the leaders. Notice T-Mobile’s performance with less than half the number of subscribers compared to its peers.
- US wireless carriers maintained their strong showing vis-Ã -vis their peers worldwide. Verizon, Cingular, and Sprint maintained their ranking # 4, 5, and 6 respectively, amongst the top 10 operators worldwide in terms of total wireless data revenue generated for Q107. US is the only country with 3 operators who generated $1.4B or more in data revenues in the quarter.
- For the third straight quarter- TMO US outperformed its parent TMO Germany.
If you prefer a more global view of the wireless data market, check out Chetan’s Global Wireless Data Market Update 2006. Highlights include:
- Japan led the way with almost $20B in annual mobile data revenues. US and China were next with $15.8B and $9.2B respectively.
- NTT DoCoMo became the first carrier to cross the $10B barrier for a given calendar year amassing $10.5B for 2006 in data revenues. The Japanese market was followed by China Mobile at $6.9B, KDDI at $6.6B, Verizon Wireless at $4.5B, and Cingular Wireless at $4.3B. They were followed by Sprint Nextel, SK Telecom, Softbank, O2 UK, and China Unicom to make up the top 10.
In 2006, SMS’s vice like grip on data revenues loosened a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 30-40%.
