Friday, September 30, 2011

Greetings From 4G Americas

Included are some to the finding at 4G Americas, a show of GSM/HSPA/LTE service providers, device manufacturers, and infrastructure providers. Some of these finding we already know as one off results, others hit you in the face and say wow! that is impactful.

Spectrum continues to be a main issue:

The US has 1.5 MHz per subscriber. This ranges from 3 to 6 times less than many other countries. Yet data traffic in the US is growing very fast. We will need additional spectrum to keep up with data demand. The growth of data traffic is growing 10 times faster than voice traffic today. The 2010 total global mobile data traffic is 3 times the size of all global Internet traffic in 2000.

At T-Mobile: 4G (HSPA+) users average over a 1 GB/Month, compared with about 300 MB/Month with 3G. Video represents about 45% of data traffic on phones, Audio another 15%. This traffic pattern shift is causing the increased data usage.

Wi-Fi is becoming more important as a way to off load traffic:

It is not perfect especially in very crowded venues, but it allows customers to enjoy broadband data services without cost overruns on tiered data plans. In some younger demographic groups Wi-Fi data usage is over 50% of total data usage on a smartphone.

NFC is starting to solidify its position:

Part of the dilemma of NFC is getting NFC chips and the secure element into the phone. Carriers are committed through ISIS to provide the secure element, and charging a rent for it.

Connected devices are growing and future proofing is a key consideration:

The connected device market is growing quickly. AT&T has added 10 million connected devices in the past three years. Users of connected devices want to future proof their devices to avoid obsolesce or upgrade if a faster speed is needed. HSPA+ modems are only about $5 to $7 more expensive than 2G type modules.

Different spectrum frequencies for LTE prevent near term global roaming on LTE

The frequencies on which LTE runs in different countries span so many ranges that it will be hard to harmonize for LTE; HSPA+ will continue to be the global roaming standard for the foreseeable future.

Backhaul remains essential

Backhaul continues to be a large cost and bandwidth consideration. Many operators are moving over to fiber backhaul to keep up with the bandwidth requirements. Much of the data rush has taken operators in Latin America by surprise.

Latin American continues to offer opportunity especially for wireless data

Latin America has almost twice the number of subscribers as the US, but ARPU is less than a third of the US wireless spending. Data is growing quickly in Latin America, and Blackberries are still very popular. Spectrum is a key consideration for growth of data services. Many countries have not allocated spectrum for LTE.

Tuesday, September 20, 2011

Another Example of Our Move to a Cashless Society

We are living in an almost cashless society. We saw a lot of news and hype around this week around the Goggle Wallet, which is a good start but far too limiting in the amount of phones that can offer this service. The Google Wallet service also needs more merchant and brand support to make a mainstream impact.

How does functionality get imbedded into mainstream phones?

It has traditionally been with attachments like a camera or a QWERTY keypad hooked into a phone. These capabilities get popular and are then embedded in the phone to increase the phone attractiveness. Well, there is another example of an attachment that is gaining popularity, the Square mobile payment attachment which is on sale at Best Buy for $9.99. It has risen in popularity among college students who primarily use credit or debit cards. They use it when they want to transfer money to share costs. They do not carry cash so they split the bill using a credit or debit card. This functionality adds value because it ensures the college student gets paid, which is very important when money is tight. Having this capability imbedded in a phone will make phones more popular among the teenagers and 20’s age group. These are a primary group of smartphone purchasers.

If it is valuable enough for one group and there is a low barrier to using the service, other groups will find a way to adopt it if there is value, like Facebook. Peer to peer transactional changes are occurring because we are moving to a cashless society, and the phone can make these transactions easier. My grocery store clerk tells me 90% of all of her grocery transactions are with a credit or debit card. The phone will win out as the primary payment device because of its flexibility in making and receiving payments, ability to record transactions and control payments, and the capability to incentivize shoppers via personalized coupons.