Telstra: Non-SMS data in the fast lane

Telstra claims to have broken out of the ‘SMS data trap’ with the announcement from its CEO, Sol Trujillo, that over 50 per cent of its data revenue now comes from non-SMS data.

“This is a significant breakthrough caused by a mixture of new data services,” says Trujillo. “This new revenue stream has demonstrated a near 80 per cent growth rate – twice as fast as that experienced by European mobile operators. Overall, our data revenue as a percentage of total ARPU is now 30 per cent, up over 12 per cent compared to last year.”

While painting a picture of fast technological transformation within Telstra – nationwide coverage of HSDPA at 14.4Mbps, with 40Mpbs planned for by 2009 – Trujillo cautioned that there was more to making a company successful than technology. “Any change to the business model must be based around the need to make money, and this is largely about improving the customer experience. Our ‘Single Click’ programme (where a service is accessed by a one-button press) has been vital, and we believe it has encouraged consumers to spend more on services.”

Mobile payment trials gain momentum

Mobile operators around the world are preparing to launch trials of contactless mobile payment services over the next few months. Forming part of the GSMA’s Pay-Buy-Mobile initiative, the 12 operators involved with the trials will provide consumers with handsets to securely purchase goods and services in shops, restaurants and train stations.

The Korean operator, KTF, has already set the pace by providing its executives with NFC-enabled handsets that have been used to buy items at stores in Korea, Taiwan and the US in a trial involving real transactions with the help of Mastercard.

This ambitious move comes just nine months after the GSMA launched its Pay-Buy-Mobile programme. “We’re seeing the first pioneering operators preparing for the rollout of commercial services that have the potential to become the foundation of a global, interoperable mobile payment service,” says Rob Conway, CEO of the GSMA. “This will enable transactions to be completed faster in many locations, and will make it easier for retailers to offer their buyers precisely targeted discounts and promotional offers.”

Market research conducted by Serrula on behalf of the GSMA indicates that both consumers and merchants see significant benefits from using their handsets as a method of payment. Two-thirds of the 2,500 consumers surveyed in 17 countries said they expected to be using their mobile phones to pay at point of sale within two years of such services becoming available, while 50 per cent of the retailers polled from 10 countries saw promotional opportunities from mobile payment services.

Another operator undergoing trials is Maxis in Malaysia. According to Nikolai Dobberstein, Head of Products and New Business at Maxis Communications, the Pay-Buy-Mobile trial is a significant milestone in the company’s overall strategy. “We are currently the only Malaysian operator participating, and have already deployed a number of payment services, including mobile international remittances.”

LTE gets green light

The Board of the GSMA – which includes 23 operator representatives and twelve of the world’s largest operator groups – threw its weight behind LTE (Long-Term Evolution) as the evolutionary path for the GSM family of technologies during its meeting on Sunday. The GSMA also signalled its intent to actively embrace other mobile players developing LTE technology and will start working with the NGMN (Next Generation Mobile Networks) initiative.

LTE is an all-IP next-generation mobile standard regarded as the step on from HSPA technology. LTE is currently in the 3GPP’s standards development process, with a first version slated for publication in the next few months. LTE is intended to enable data rates many times faster than the high-speed mobile broadband connectivity already offered by today’s HSPA networks.

“As demand for mobile broadband grows ever stronger, LTE offers higher speed and greater capacity once spectrum becomes available,” Telefonica O2 Europe’s CTO Dave Williams told the Show Daily. “LTE builds on the success of HSPA and ensures the GSM community will stay ahead of the demand curve.”

The GSMA Board’s approval of LTE follows the successful delivery of the first in a series of wider industry test results aimed at proving its potential. The LTE/SAE Trial Initiative (LSTI) last week said its LTE tests have met goals for physical-layer throughput to mobile users. The initiative was founded by Alcatel-Lucent, Ericsson, France Telecom/Orange, Nokia, Nokia Siemens Networks, Nortel, T-Mobile and Vodafone, and was recently expanded with China Mobile, Huawei, LG Electronics, NTT DoCoMo, Samsung, Signalion, Telecom Italia and ZTE joining as new members. The joint activities are scheduled to run for up to two years and will include radio performance tests, early interoperability tests, and customer field trials.

“Commercial deployments of this technology are expected in the 2010 timeframe, with trial systems deployed even earlier,” said Matthias Reiss, Head of LTE Radio at Nokia Siemens Networks, in an interview with the Show Daily. “LTE is becoming real. LTE/SAE fulfils performance requirements specified by 3GPP. This successful demonstration is an important milestone for ensuring LTE becomes reality in time.”

Mobile Asia Congress Heralds Broadband Revolution

The GSMA Mobile Asia Congress opens its doors today at its new home in Macau, with leading operator CEOs from throughout the Asia Pacific region set to usher in the mobile broadband revolution.

The move to The Venetian resort in Macau, driven by GSMA CEO Rob Conway and Chairman Craig Ehrlich, reflects the rapidly changing dynamics of the mobile industry in Asia, and, in particular, the importance of being closer to the influential regions of China, Korea and Japan. Asia Pacific is adding 20 million new mobile connections every month, more than four times the growth rate of any other region.

The Congress is set to highlight the opportunities and challenges associated with the introduction of high-speed mobile broadband connectivity.

This morning’s keynote session – ‘Operators for the Future’ – will discuss the issues necessary to run and continue to grow a successful mobile business in the new era of mobile and define new approaches to the mobile business. Industry leaders Wang Jianzhou (Chairman and CEO, China Mobile), Masao Nakamura (President and CEO, NTT DoCoMo) and Manoj Kohli (President and CEO, Bharti Airtel) will draw on their experience of pioneering market-changing activities as they look to help drive the operator agenda.

This afternoon’s keynote session – ‘Building a Mobile Broadband Business’ – includes representatives from all sections of the new mobile value chain, including Warner Music Group (Edgar Bronfman Jnr, Chairman and CEO), Telstra (Sol Trujillo, CEO), Softbank (Masayoshi Son, President and CEO), Ericsson (Carl-Henric Svanberg, CEO) and Yahoo! (Steve Boom, SVP Mobile). Mr Bronfman’s participation follows his presentation at a Board meeting of the GSMA last Sunday.

Further keynote speakers later this week include Dr. Li Zhengmao (Vice President, China Unicom), Alexander Izosimov (CEO, VimpelCom), Arve Johansen (Deputy CEO & Head of Asia, Telenor) and Dr. Hans Wijayasuriya (CEO, Dialog Telekom).

The exhibition floor features over 160 exhibitors – more than double last year’s total – from all sectors of the new mobile value chain, including first time showfloor appearances at the Mobile Asia Congress from China Mobile, China Unicom, NEC, LG Electronics, Orange, TDIA and Yahoo!

With over 8,000 attendees already registered, the Mobile Asia Congress is the fastest growing communications event in the region.

Omnifone Eyes Asia, Targets Milestone

Mobile music provider Omnifone has set itself the ambitious challenge of getting its service onto 100 million handsets by the middle of 2008 as it expands its presence in Asia and across the world.

The company, whose customers include Hutchison Telecommunications’ 3 unit in Hong Kong, South Africa’s Vodacom, Vodafone UK and Telenor (Norway), provides an ‘all you can eat’ music download subscription service called MusicStation. For a small weekly fee, customers are given access to over one million tracks from Universal, Sony BMG, EMI and Warner Music, as well as independent labels. The catch is that users do not own any of the tracks listened to.

“Apart from rolling out the service across the region, we’ve given ourselves the target of being on 100 million handsets by the middle of 2008,” David Loiterton, Managing Director, Asia Pacific, Omnifone, told the Show Daily. “Asia is clearly going to make up a significant portion of that number. It’s a challenging target but we believe we will meet it.

“Asia Pacific is the market everyone is following,” he added. “It’s a tier one market for mobile music and the fastest growing digital market in the world. If you’re going to be successful in mobile music you have to have a presence in the region.”

To achieve serious traction in the region, Loiterton believes Omnifone will have to overcome two hurdles. “The biggest challenge everyone working here has to deal with is localisation. It’s a fragmented and local market. What works in Europe and the US doesn’t tend to work in Asia Pacific. You have to provide music services tailored to each market.”

Loiterton also cites privacy in the region as a challenge. “Traditionally, there have been high levels of piracy in Asia. In this respect, the digital world is no different from the physical world. The music business in Asia – excluding Japan and Australia – is roughly a third of the size that it was in the 1990s and that is largely due to piracy.”

Including the four operators that have already launched commercial MusicStation services, Omnifone claims to have more than 30 partner operators around the world. “We will be announcing some deals soon,” promised Loiterton.

Yahoo! preps for mobile Internet boom

The penetration of the mobile Internet will likely overtake fixed usage within the next decade, a senior Yahoo! executive told the Show Daily.

The driving force behind this growth, claims Steve Boom, Yahoo!’s VP of Broadband Access & Bundled Services, will be the pace of innovation that is already underway within the mobile arena.

Key to this rapid uptake will be the adoption by consumers of mobile services that have proven to be successful within the fixed environment but can easily transfer to the mobile world. Boom points to the success in the enterprise space of mobile email applications such as seen with the Blackberry. “It will only take one or two services that the consumer finds essential to trigger explosive growth in the mobile Internet. The impact of the Blackberry in the corporate world is an indication of what can happen – the growth of this company has been a classic ‘hockey stick’.”

Boom claims that the mobile Internet today could be likened to the maturity of the fixed Internet around a decade ago. “What this means is that the basic access experience reminds the mobile consumer of the long-forgotten days of dial-up. However, the big difference between the PC and the mobile platform is that the handset-based Internet will evolve much more rapidly than the fixed Internet.”

Given this, Boom does not expect the evolution of the mobile Internet to take anywhere near as long as it has taken the PC to become a widely used service. “It’s very likely that in 10 years time the mobile Internet will have overtaken the fixed service.”

While Yahoo! expects the uptake of mobile Internet services to vary across regions, it believes that the basic communication needs of the consumer to find and organise information quickly will be a driving force. “These are universal needs, albeit the services providing them might be different. But there are some core needs emerging across all regions,” adds Boom.

Microsoft advocates ‘three-screen’ strategy

As the world of telecoms services becomes more complex, Microsoft is adopting an inhouse development strategy that will see all new services run on three screens – the TV, PC and mobile.

Making the case for this move is Steve Zimba, Managing Director, telecom business for Microsoft, who presented an in-depth review of the company’s progress with its Telco 2.0 programme at yesterday’s Mobile Innovation Summit.

According to Zimba, the telecoms services market is in a state of disruption as new entrants, such as Google, Facebook and YouTube, enter the arena. “These companies are riding on the back of operators’ networks and making difficult any ROI on broadband investments. We plan to reverse this situation by stepping into the telecoms services market and using our partnership methods that we have developed over many years with our PC hardware providers.”

Microsoft’s Telco 2.0 initiative calls for the company to work very closely with the telecoms operators and the developer community to create a portfolio of software and services specifically for the mobile environment. “We have to embrace telcos in the same successful manner we have adopted for our PC partners.”

One particular area of success, claims Zimba, is Microsoft’s Connection Services Sandbox. “This is a proving ground for Microsoft, telcos, ISVs and developers to work together on new services. We’ve made some mistakes, of course, but also some significant progress with establishing relationships between these communities.”

Bill Gajda, Chief Commercial Officer and Chief Marketing Officer for the GSMA, reinforced this viewpoint at the Summit – which attracted a 50 per cent increase in delegates over the 2006 Summit – by stating that the GSMA’s Mobile Innovation Programme will be expanded and benefit from better promotion to operators and the investment community.