Free Roaming - At what cost?

Dr. V. Sridhar  and  G Krishna Kumar. The authors are  Research fellow, Sasken communication Technologies and  ,Vice President, Symphony Teleca,  respectively.  Views are personal

Key Highlights:

• Domestic Roaming contributes to 6 to 8% of the Operators' revenue
• Multi SIM mobiles are reducing hte relevance of roaming
• Free roaming is prevalent in advanced economies
• EU has been struggling with high data roaming
• Lack of 3G roaming regulation could be a matter of opertaors' dispute
• Subscribers might end up paying more than current rate

Free roaming across the 22 service areas (aka circles) of the country is cited as one of the main policy reforms in the recent cabinet approved National Telecom Policy (NTP) 2012. What is the impact for subscribers?

Roaming is the ability of a subscriber from a particular network (referred to as Home network)  to use the mobile phone of the same or different network provider (called as Roaming network) while moving to a different service area. A roaming agreement is needed between the networks that would enable exchange of information between these networks for authentication and billing purposes.

 

Roaming can be intra-circle (i.e. within Karnataka) or inter-circle (i.e. across Delhi and Karnataka). In the former case, though the operator has license and associated spectrum in the circle, it might not have deployed the access network to enable coverage due to economic reasons and hence has an agreement with another operator who has deployed network in that area to allow roaming of its subscribers. This method in general reduces duplication of network elements and allows optimal utilization of scarce spectrum amongst the operators. Intra-circle roaming has been allowed in India since June 2008 and is seen an excellent example of competitive collaboration (aka co-opetition).   For the user, it is almost seamless as there are no additional roaming charges levied.    Though roll-out obligations exists, the quality of service norms are not stringent enough to guarantee 100 percentage subscriber coverage either through own infrastructure or via intra-circle roaming. It is time that the regulator mandates full coverage by operators especially in rural and remote parts of the country.

 

However, in case of inter-circle roaming, the operator does not have license and/or the associated spectrum to provide access services and hence has a contract with the roaming operator(s) to provide roaming services. There is often an inter-operator wholesale reciprocal roaming agreement determined between operators and based on this retail roaming charges as paid by the subscribers are fixed. In the case of voice roaming, the TRAI regulation implemented in 2007 ensured no rental or surcharges be levied by the operators. TRAI has also regulated the maximum permissible per minute charges for roaming calls, irrespective of the terminating networks, and irrespective of tariff plans. These measures and the competition level in each circle have ensured that the retail roaming charges are closely aligned to cost of roaming. Domestic roaming still contributes to about 6-8% of the operators’ revenue. There is every incentive for the operators to extract extra rents from subscribers if roaming charges are not regulated. However, innovations such as multi SIM mobiles have also reduced the relevance of roaming. The user who often roams, typically has two SIMs, one from the home operator and another from an operator in the roaming circle to reduce the roaming charges to the bare minimum. Hence free roaming across circles already exists to some extent for voice calls, though policy has just now been announced, thanks to the general rule that regulation lags behind technologies and markets. It is to be noted that advanced countries such as USA, Australia and Canada, have implemented free roaming within their countries for quite some time. In fact, EU has drawn-up a sliding rate plan to reduce voice roaming charges so as to make the difference between roaming and national tariffs to zero by year 2015.

 

Though detailed guidelines are awaited on NTP 2012, the implications of free roaming in 3G and Broadband Wireless Access (BWA) for the provisioning of data and wireless Internet services is worth exploring.  EU has been struggling with very high data roaming charges across the EU countries and has set a goal of bringing down the data roaming charges from 90 cents per MB of data by July 2012 to 50 cents by July 2014. EU has also defined ceiling charges for wholesale rates, between two operators.

 

Our handsets are smart enough to ask us whether we want to use data services while roaming across circles just to make sure that there are no bill shocks! With just two operators having pan India spectrum for 3G and Broadband Wireless Access (BWA), will free roaming have an impact on the operators and on the subscribers? What is unique about data roaming is that  usage is typically initiated by the subscriber (except in case of VoIP calls) unlike voice calls and also, the data packets are confined to roaming network and not routed through the home network.  Hence the inter-operator whole sale agreements should be much simpler wherein the roaming operator charges for all data usage of the roaming subscribers and pass it on to home operators for collections. Hence free data roaming (i.e. without additional roaming surcharge) is easily implemented compared to free roaming of voice subscribers. However, the operators’ hands are tied with respect to appropriation of reciprocal inter-carrier wholesale roaming charges. This may possibly result in operators refusing to provide roaming. Hence the vital role of the regulator to curb such practices as otherwise subscribers may wander with no network coverage. 

 

Research studies on this topic point out to the deployment of non-overlapping coverage networks and related spectrum and network sharing arrangements, if roaming charges are not regulated, as has been happening through 3G roaming pact amongst the operators and is the subject of dispute. In case of free roaming, the operators are likely to either (i) deploy networks since extra rent cannot be appropriated through roaming or (ii) increase the home usage charges to offset the wholesale roaming pacts. The former one is unlikely across circles as the operator has to purchase spectrum at high prices. Hence the latter is more likely. The subscriber will end up paying more than current rates across the board!

 

There is another possibility which is a silver lining to this whole episode. It is very likely that both the home as well as roaming operators, by themselves, or by tying up with Internet Service Providers (ISPs) provide Wi-Fi (the wireless network operating over unlicensed band) hot spot access at substantially reduced usage charges to address the requirements of roaming data users.

This should be good news for business savvy niche and nimble ISPs to take note of and improve Wi-Fi hotspots penetration in our country!

Mobile phone radiation affects you: What's the govt doing?

Rediff Business / Opinion July 11th 2012

(G Krishna Kumar, Vice President, Symphony Teleca. Views are personal)

While we laud the dramatic rise in India’s Tele-density thanks to the mobile phone penetration, it is concerning to see most subscribers, including the educated class, unaware of the possible health hazards due to radiation from mobile phones and mobile towers.

 

WHO states that mobile phone radiation can possibly cause cancer. Studies are ongoing to fully assess potential long-term effects of mobile phone use and WHO will conduct a formal risk assessment of all studied health outcomes from radio frequency field exposure by 2012.

 

A recent news report suggests that FCC, the US regulator plans to revise the radiation levels as they were set in 1990s when the mobile usage was very different. In fact, India’s National Telecom Policy (NTP- 2012) too recognizes the need for periodic review radiation standards.

 

An inter-ministerial committee recommendation approved late last year talks about some stringent measures to curb radiation.  But the big question is about effective execution. The recommendations include educating the phone users on reducing the radiation effect, reduction in acceptable radiation levels, more commonly known as SAR – Specific Absorption rate, SAR level to be displayed on Mobile phones. SAR indicates the rate at which human body absorbs electromagnetic power radiated from mobile phones.

 

While it is expected that the Mobile phones sold in India will start carrying SAR details by September 2012, what would happen to the existing phones being used? For the high end mobile users, there is some hope. There are downloadable applications that warn users when the radiation level increases.  Also, for most of the branded mobile phones, SAR info is available on the internet. What happens to the unbranded low cost phones?

 

Government should mandate all the mobile phone makers (Over 100 of them) to provide the radiation details for all phone models online and to be available all the retail outlets.  As of now there are no Government approved facilities in India for checking SAR value of a mobile phone. This is because the SAR testing equipment is expensive. Obviously, that cannot be a reason considering that we are dealing with public health and more over, India is the 2nd largest mobile market in the world. DOT should support in establishing test labs in India, maybe through a PPP model at least in all the major cities.

It is important to note that the SAR value by itself does not guarantee that the phone is safe to be used continuously for hours like most people do.  In a research report on Mobile phone radiation, Prof Girish Kumar of IIT Mumbai clarifies that a SAR value of 1.6 W/kg means that the phone can safely be used for about 18 minutes of continuous talking ( with phone held against the ear) in a day.  It is imperative that the Government and the regulator educate the subscribers on this specific aspect.

 

Now let us turn our attention towards the impact of radiation from the mobile towers. The data is even more shocking and research reports indicate that the effect of radiation due to Mobile towers is far higher as it is a 24x7 phenomenon and affects everyone residing near the tower and not limited to mobile subscribers.

As per government directive based on the Inter-ministerial report , Radiation level from Mobile towers should be brought to 10% of the existing limits  by September 2012. Reports suggest, even this reduced limit is way above international norms.  Sample this - India currently allows 9.2W/m2 ( watt per square meter), come Sep 2012, the number would be 0.92W/m2, while many countries follow anywhere between 0.025 to 0.1W/m2. Higher the power emitted by the towers, better would be coverage to the subscribers and this would cost lesser for the Telcos.

 

What is the solution? Should the towers be removed? No. Power level from the towers should be reduced and this means more towers and additional expenditure. However, the cost can be reduced through infrastructure sharing among telcos, some Government subsidy and marginal increase in tariff.

The Telcos have been mandated to provide self-certification of radiation levels from mobile towers. DOT’s TERM department is expected to conduct random test covering 10% of the towers. This may be grossly insufficient considering that there are lakhs of towers installed across the country.  There is a need for a framework that would allow periodic collection of data through designated third parties. Should the Pollution control boards in the states become a key stakeholder in monitoring radiation?

 

In most of the developed countries, Telcos have started deploying Distributed Antennae System (DAS) to overcome the coverage problems. This reduces the number of towers needed and more importantly helps in reducing radiation. Globally, examples abound on DAS implementation in Airports, Malls, Hospitals, educational institutions and resorts.

 

In fact an Instat research report predicts significant growth in DAS implementation in the APAC region by 2015. In Building Solution (IBS) and DAS have been identified as key drivers in a TRAI report and also in the NTP 2012. However, question remains if and when will it be implemented?

There is an urgent need for simple hand-held devices for measuring radiation and available at affordable prices. In fact, such devices must be mandated in educational institutes, Hospitals, Malls, public places and even residential areas.

 

Although mobile has become an integral part of our lives, there are increasing evidences indicating health hazards due to Mobile radiation from Mobile phones and towers. It is imperative that the Government persuades all the stake holders to impart awareness among the Indian subscribers. Considering that public health is most important, Government’s resolve to address the issue through stringent measures, along with a clear implementation plan holds the key! Let’s hope to see some real action from this September.

Telecom policy sets bar higher

Friday, Jun 1, 2012, 8:46 IST | Place: Mumbai, New Delhi | Agency: DNA

Beryl Menezes

Praveena Sharma

The new policy is set to take India from voice to data with emphasis on broadband penetration and making spectrum technology-agnostic, meaning the operators have been allowed to provide any service on technology and on any device.

It’s finally out. The National Telecom Policy – 2012 (NTP-12) was cleared by the government on Thursday, paving the way for free roaming, country-wide mobile number portability (MNP), liberalised spectrum, pan-India operator licences, technology-agnostic spectrum and a host of other policy announcements that are expected to take the Indian telecom sector to the next level of revolution.
The new policy is set to take India from voice to data with emphasis on broadband penetration and making spectrum technology-agnostic, meaning the operators have been allowed to provide any service on technology and on any device.
It has also increased the broadband speed to minimum of 2 megabit per second. However, it will be a while before all measures are enforced as the government has yet to work out the modalities of implementing it.
The government has also delinked licences from spectrum, which earlier came bundled. Though, most industry players and experts feel there are several grey areas that are needed to be clarified and that the objectives set by the government would be realised only on effective implementation.
“The telecom policy is in line with the tone of international telecom policies. However, it will not solve the innate problems facing the telecom sector like spectrum allocation, M&As (merger and acquisitions), consolidation, etc. It is not a particularly actionable and implementable document – just a statement of facts that’s not specific and doesn’t suggest the next step of action,” said Mahesh Uppal, director, Com First (India).
He does not expect it to impact operators in a major way. “The question to be asked is how and when these goals will be implemented,” questioned Uppal.
Rajan Matthews, director-general, COAI, speaking on behalf of the GSM players, said most of the industry demands have been included in the policy, however, it had to be seen how they were put in place.
“Now, we will work with the government, to ensure that the telecom industry which contributes significantly to the GDP is not milked like a cash cow. We support liberalisation of spectrum, but want to know how the government will proceed on it. Roam-free is very complicated – and requires careful action and protocol, in terms of issues related to pan-India numbering, roaming, network and legal enforcements, in terms of local legal procedures of individual states,” said the spokesperson for GSM operators.
He demanded that additional levies and taxes should be slashed.
Rohit Chordia, senior analyst with Kotak Securities, believes the new law on MNP and free roaming may not necessarily result in more cases of MNP, but will definitely bring in an arbitrage opportunity for subscribers by allowing them to keep switching to better tariff plans of different operators, depending on which state they are in.
“While this will no doubt impact operators, they will find a way to pass on the costs to the end-consumers. Thus, subscribers will not have to think twice before making an STD call – which could positively impact volume growth,” he said.
An important aspect of the policy is that it encourages local production of devices and will soon be coming out with electronic manufacturing policy.
“(The policy envisages to) provide preferential market access for domestically manufactured telecommunication products including mobile devices, SIM cards with enhanced features, etc. with special emphasis on Indian products for which IPRs reside in India to address strategic and security concerns of the government, consistent with international commitments,” said the statement issued by the government.
Sandeep Girotra, region head, India, Nokia Siemens Networks, said such a move will boost indigenous device manufacturing.
“As a specialist in mobile broadband, we remain committed towards working with telecom operators to further increase teledensity, enhance customer experience and empower communities,” he said.
Hemant Joshi, Partner, Deloitte Haskins & Sells said since the NTP-12 is going to make roadmap for availability of spectrum every five years, it would result in appropriate allocation of spectrum and also help operators design network and technology adoption keeping in view the availability of spectrum.
“NTP also envisages licence and technology neutral spectrum allocation, which is step in right direction considering evolving efficient technologies. In terms of abolishment of roaming charges, this would be negative in short term for operators as they would lose roaming revenue. However, in the long run as usage would increase with no roaming charges it might offset the revenue loss caused to the operators’ said Joshi. As for the single all-India licence, he said, same is likely to be beneficial for pan-India operators as they would be required to maintain one set of book and also number of compliances would reduce significantly.
In a move that will clip the Telecom Regulatory Authority of India’s (Trai) wings to some extent, the government clarified it would not have policy-making powers and would operate solely as a regulator.
G Krishna Kumar, a wireless professional based in Bangalore, warns the NTP-12 should not go the 2004 broadband policy way.
“The 2004 broadband policy envisioned 20 million broadband subscribers by 2010, but in reality less than half was achieved. We need the right infrastructure and a solid ecosystem for the goals of NTP to be achieved,” he said.
He expected the penetration of broadband to boost economic growth. “It is established that broadband contributes to increase in GDP. Every 10% increase in broadband contributes to 1.4% increase in GDP.

Addressing IT's workforce woes

G Krishna Kumar | Updated: Apr 27 2012, 02:06 IST

NSDC could play key role in driving essential skill enhancement initiatives

Over the past 15 years, the IT industry has come a long way, witnessing unprecedented ups and downs and yet remaining one of the sectors with hope. Nasscom has predicted significant growth by 2020. To meet such large growth, India needs to develop its talent pool right at the universities.
With an about 25 lakh workforce, the Indian IT sector represents about 6% of the organised sector. Nasscom predicts the IT workforce will touch 30 million by 2020. Being heavily people-dependent, the biggest challenge for the industry will be to find the right quality engineers.
A recent national employability report states that only 20% of the engineering graduates from colleges are really employable in the IT industry. If a similar study was conducted 15 years back, the percentage of employable engineering graduates in the IT industry would have been much higher, as the industry was not as mature and expectations were comparatively low.
It is not surprising to see lower employability impacting admissions into engineering colleges. Reports indicate that there are no takers for engineering seats in many colleges. Further, over the past few years, engineering graduates from core domains like mechanical or electrical are reluctant to take IT precisely due to the same reason. In fact, many private colleges lack the intellectual infrastructure--broadband connectivity to access knowledge resources on the internet, libraries, and, most of all, a qualified and knowledgeable faculty.
A recent news report suggests that there are about 3,000 engineering colleges in India. Over 10 lakh students are admitted into engineering colleges every year. Essentially, the problem of quantity is addressed, however the challenge in terms of quality of engineers remains. What could be done to improve the quality and skill of our engineers?
The Indian education system needs an environment that fosters active partnerships between industry and colleges/universities. In the advanced countries, research work is given high priority among the engineering colleges/universities. Research activities help the students to think out of the box and also are supported by the industry through grants.
As per the Dr Anil Kakodkar Committee report in 2011, India lags way behind China in terms of university research in engineering and technology. India produces 1,000 PhDs annually in technology and engineering, compared to 8,000-9,000 in the US and China. Why? Unlike India, both the US and China have large well-funded universities that encourage higher education.
The Kakodkar report also emphasises the need for rapid improvement needed in research infrastructure in India, including the IITs. China, for example, has 3 times more enrolment for master’s programmes in engineering and management. Innovation and research orientation during university education will not only encourage students to pursue specialisation, but also help them become entrepreneurs.
AICTE could upgrade the syllabus to be more attuned with industry needs, by focusing on fundamental building blocks like programming and specific domains like banking, retail, telecom, etc. Business schools like IIMs have linked their course content to the industry and have successfully created industry-ready professionals.
Should the duration of the course (say, B.Tech) be increased by a few months? This could help in accommodating a sandwich programme, popular among advanced countries, which would provide direct work experience to the engineers. There are bound to be challenges in implementing this due to the scale. Industry buy-in will be key for the success of such an effort.
Using non-engineering graduates in the IT industry has been successful in patches, primarily driven by a few large organisations. This could be replicated for scale, through tie-ups between universities and industry, with skill enhancement on focused areas. The Government of India’s National Institute of Electronics and Information Technology (NIEIT), more commonly known as DOEACC, offers courses ranging from diplomas to MTech across the country. However this has not gained popularity.
A report states that 62% of the students require training to be eligible for any job in the IT sector. The Centre for Development of Advanced Computing (C-DAC), often referred to as a finishing school, offers skill-bridging training programmes to engineering graduates on focused areas. There are also few private finishing schools providing training to enable industry-ready engineers. However, such initiatives may be grossly inadequate to address the large-scale need.
The National Skill Development Council (NSDC) could play a key role in driving skill enhancement initiatives needed in the IT industry across the country. NSDC, being a high visibility initiative of the government, and has received a R1,000 crore allocation in the recent budget. NSDC is aimed to fulfil the growing need for skilled manpower across 21 sectors, including IT, and narrow the existing gap between the demand and supply of skills. NSDC has formed Sector Skill Development Councils to approve training curriculums and deliver the right value. Nasscom has joined NSDC to lead the sector skill council for IT. The Nasscom-NSDC engagement is expected to help the IT industry scale pilot initiatives and build technology as the enabler for skill development in the country.
NSDC could lead the effort in bring Nasscom, universities and private/government establishments like C-DAC together and create a charter for providing the right platform to bridge the skill gap for the IT industry. Such a programme should also help in improving soft skills and communication skills, which are often found lacking among many engineers.
So far, NSDC has primarily focused on the unorganised sector. Such an initiative in IT can help establish NSDC as a key player in the organised sector. Innovative business models can be developed, creating a win-win situation for all the stakeholders, including the students. With the government’s focus on improving broadband reach in the country, coupled with the availability of affordable devices, innovative and cost effective training methods can be implemented.
The demand for an IT workforce in India is expected to grow multi-fold over the next few years. The current employability rate among engineering graduates is alarming. Universities could relook at the duration of the courses and upgrade syllabus to be attuned with industry needs. For innovation and research to flourish, industry-academia interaction needs to be strengthened. Importantly, NSDC could play an important role in creating the right platform for enhancing the skills of India’s next-gen engineers!

The author is vice-president, Engineering, at Symphony Teleca. Views are personal

 

Karnataka's mobile users are country's most dissatisfied

Wednesday, Mar 14, 2012, 14:57 IST | Place: Bangalore | Agency: DNA

Subir Ghosh

Suparna Goswami Bhattacharya

As of January 2012, 34 lakh consumers in Karnataka have made mobile number portability requests.

Gayatri Kumar is disenchanted and annoyed. This homemaker from Rajajinagar had fallen for ‘extra talk time’ and ‘free roaming incoming’ sops that Tata Docomo had thrown her way last July. The solemn promises that the mobile service provider made went unkept. Her bills kept soaring despite her limited usage; and to make matters worse, whenever she stepped out of town, the network would die on her.
Ganesh Shankar is equally upset, only that in his case the service provider is BSNL. When the IT professional makes his weekend trips to the interiors, the calls from his colleagues ring clear. Network disturbances, however, leave him frustrated while in metros like Mumbai and Bangalore.
Kumar and Shankar are among millions of consumers in Karnataka who were so dissatisfied with their mobile connections that they opted for another service provider in the last one year. The state has received the maximum number of mobile number portability (MNP) requests in the country, according to a recent report of the Telecom Regulatory Authority of India (TRAI).

"It is more of a person trying to show his/her anger at a particular operator. The fact remains that there is nothing much to choose between operators in terms of quality of service" G Krishna Kumar

As of January 2012, 34 lakh consumers in Karnataka have made MNP requests. Though Delhi has the highest teledensity at about 23.8 crore, the number of MNP requests registered there (about 15 lakh) is far less than Karnataka, which has a teledensity of about 9.6 crore. Andhra Pradesh comes second in MNP requests with 30 lakh, followed by Gujarat.
The MNP facility was introduced across the country in January last year

 

Dialling Progress

Financial Chronicle 27th Feb 2012, FC KNOW


By V Sridhar, G Krishna Kumar Feb 27 2012

Despite 10-12 operators in each licence service area, a lot needs to be done to improve data communication quality

Complete network outages, frequent call drops, busy networks not able to allocate capacity, and poor call receptions have become daily woes for a typical mobile subscriber, although India boasts itself of more than 850 subscribers and the second largest mobile market in the world, with 10-12 operators in each licence service area. While this is the case of voice communications, much work is needed to define and improve quality of data communication when the country is on the verge of broadband revolution and uptake.

Although different approaches have been adopted in various jurisdictions, the regulatory goal according to International Telecom­munications Union (ITU) should be to ensure: The delivery of acceptable service for the telecommunications user; and that consumers are aware of the variations in performance from various service providers thereby allowing them to make an educated choice regarding their preferred service provider.

However, ironically, the latest Trai report on Indian Telecom Services Performance Indicators (January 2012) shows that the quality of service (QoS) performance of most of the wireless service providers meets the benchmark levels and have even improved in certain areas. The network performance data for Trai’s QoS reports are provided by the operators but audited by an independent agency.

The Trai initiated QoS regulation in 2000 and revisited the measurement and metrics in 2008. It was acknowledged in Trai’s notification in 2009 that operator provided network data alone is not sufficient to measure QoS, and it was mentioned to measure customer perception on network performance, reliability and availability. However, till date the implementation of the above is scarce.

The objective assessment of QoS by auditor(s) based on network data is available for different service areas. However, we could find only one public report of the assessment conducted by an auditor in Karnataka circle in September 2011 that includes both the audited network data as well as subscriber perception. Ironically, while the network data relating to accessibility and retainability of calls of all the operators were above benchmark levels of 95 per cent (not only in this report but in all service areas), the customer perception on network performance was on the average about 73 per cent, much below the threshold level of 95 per cent. Further assessments conducted by Trai in other circles conveniently omitted customer perception data on network performance.

During the Trai consultation process in 2008, it was also mentioned by some stakeholders to specify more stringent and comprehensive set of QoS parametres to check end-to-end quality of calls and “user perceived speech quality” using techniques such as Mean Opinion Score (MOS)/ Perceptual Evaluation of Speech Quality (PESQ). A live listener test performed by unbiased listeners in a controlled end-to-end network setting as per defined ITU recommendations to arrive at MOS/ PESQ score is an effective way to benchmark the speech quality across different networks.

Looking at the wide disparity between what we as subscribers experience and what is reported by the network operators or even by the auditors, Trai should actively consider collecting customer perception of network performance. In fact, it is now time for the regulator to define “Quality of experience (QoE)” as this is what matters to end subscribers. For transparency, Trai should also mandate the mobile operators to provide dropped calls details to individual subscribers and reasons for the same as part of monthly billing statement or through SMS when a call is dropped. Subscribers should not be charged for dropped calls due to the network faults. Further, in India the QoS of emergency calls are not measured and monitored. In the wake of disasters such as train accidents and natural calamities striking us every day in some part of the country, it is time to think about mandatory implementation of mobile emergency calls and monitoring the performance of the same.

While robust metrics such as the ones mentioned above do exist for the measurement of QoS and QoE, they are weaker in data networks. Though Trai’s quality of service of Broadband Service Regulations 2006 does indicate critical network parameters such as bandwidth utilisation during peak hours, packet loss, latency, downlink and uplink speeds and the methodology of the measurement for the same, some of the parameters such as latency are not reported in the Trai’s performance reports. Further, customer perception of broadband performance is also not measured. The benchmark data is also available only for wireline and not for wireless operators.

As diverse range of services such as internet telephony, email, and video streaming are capable of being provided over broadband networks, it is time to provide a comprehensive framework along the lines suggested by the ITU by specifying QoS/ QoE parametres for different category of services. For example, Finnish Regulatory Authority provided network speed measurement software to subscribers so that they can measure objectively the speed of the data link compared to what is contracted and charged. As unrestricted internet telephony is expected to be implemented soon, challenges abound for measuring the quality of internet telephony calls as well.

Finally, the bigger question is what if the operators are found not meeting the benchmark levels. As of now the Trai just publishes the QoS report and does not levy any financial penalty on the violators. However, in Trai’s recommendations in 2009, it is mentioned that Trai will consider imposing financial penalty on the errants, much similar to what has been implemented for unsolicited commercial communications.

It is time that DoT gives up some of its power as licensor and through amendment of Trai act, gives teeth to the regulator including levying penalties on the operators found violating QoS norms.

(V Sridhar is research fellow, Sasken Communication Technologies & G Krishna Kumar is VP-delivery, Symphony Teleca Corporation, Views are personal)

Mobile handset industry: Is change the name of the game?

February 1, 2012 14:55 IST, Rediff Business - Technology

Mobile Handset Industry: Is change the name of the game?

(G Krishna Kumar is a wireless Telecom professional based in Bangalore.  Blog: http://bloggerkrishnak.blogspot.com, krishnak.krishnak@gmail.com  Views expressed are personal)

Who could have predicted the rise of newcomers Google or Apple in the mobile arena and fall of the traditional market leaders, a few years back? In fact, the Top 5 ranked Smartphone vendors have changed dramatically over the last 5 years. 

Changing Market dynamics

The Mobile industry’s structure has witnessed unprecedented and tumultuous changes over the past two decades as the trendsetters and leaders have rapidly changed. Up until a few years back, the mobile Industry was controlled by the handset manufacturers or OEMs such as Nokia, Sony Ericsson etc on one hand and the Mobile operators on the other hand.

Japan, long considered as a top technology innovator and a pioneer in the mobile Industry has suddenly seen its leadership position eroding.  Although Japan has quite a few firsts to its credit like the concept of App store and mobile money,  the Japanese mobile industry of late has been struggling to keep pace with the Apple-Google effect.

The sheer size of the mobile phone market drives every other hardware or software vendor to believe that they have a high chance of being successful. This has led to creation of many software phone platforms, by companies with deep Mobile Industry expertise and through consortium. However, a few met with limited success and rest simply vanished. Google’s Android, the open source software platform is perhaps the most successful thus far.

In general, why is the Smartphone market important for OEMs and operators? While Smartphones offer maximum margin to OEMs, it also helps in increased data revenue for Operators. Content providers also enjoy direct benefits due to higher consumption of services and applications by Smartphone users.

Apple-Google double impact

The launch of Apple’s iphone and Google’s Android has created an unprecedented double-impact on the mobile Industry - iphone is still the undisputed reference for a Smartphone and has created an “Aspirational value” among business users and consumers alike. In contrast, Google’s Android has ensured availability of hundred of phones at affordable prices.

Apple’s user experience was a game changer, considering that many OEMs over the past 15 years failed in creating a compelling touch driven user experience. Android has played a key role in drastically reducing Smartphone prices to less than Rs5000. Android has significantly reduced engineering and R&D cost, thus lowering the entry barriers in the OEM space. No wonder the Indian OEMs like Micromax, Lava etc provide tough competition to established players in the Indian market. The Semiconductor companies have also enabled this change as they seek to win market share and also be competitive in offering comprehensive solutions to OEMs. Reduction in Hardware and semiconductor costs have also helped in bringing down the phone cost.

Apple is credited for being vertically integrated - offering Applications and content to its users through the App store and the recently launched iCloud service. Google’s App store too experienced tremendous success. This has resulted in a huge disruption in the market allowing users to personalize their phones from lakhs of Applications in the App store. Earlier, users had to depend exclusively on their operator to download Apps/content and this was working nicely for the operators’ walled-garden approach. Large global operators on their part, continue to believe in providing quality apps to its subscribers, but with limited success.

Traditionally, a phone’s life-cycle from concept to realization has taken roughly 18 to 20 months. Over the past couple of years, the cycle has shrunk by more than half.  Newer models hit the market every few months. The drastic reduction in the phone creation cycle has naturally reduced the number of differentiating features among phones. Increasingly product differentiation among the various mobile phones is reducing by the day and the Mobile market is looking more like TV and other consumer electronics market.

More Challenges/ opportunities and more changes!

With most OEMs under severe margin pressure, such a hyper competitive environment is certain to witness more consolidation, allowing only the strong and truly innovative ones to survive. Traditional hardware manufacturers can certainly cause disruption, but the challenging times are here to stay in the OEM space. Operators, on the other hand may eventually have to remain contented being a data-pipe provider (aka landline broadband providers).

As the role of mobile devices becomes ever more important in people’s lives, the platform powering the devices will play a critical role. Hence, more platforms like Android will emerge, however it is unlikely that Android will be displaced in the near future. RIM (creator of Blackberry) is expected to push its platform aggressively. However, Microsoft’s mobile platform may emerge as a dark horse, especially as Nokia has been able to move faster than before.

Another challenge that has come to the fore is Patents. Patent and royalties have always been part of the mobile Industry, but only recently has the patent war been so public. In the past most patent disputes have been relatively low key affairs resolved issues behind closed doors.  In order to strengthen their position, over the last few quarters companies have made significant investment in acquiring available patents from Nortel and IBM, Google buying Motorola etc.  With the on-going cases around the Android platform, and Apple's recent successful patent lawsuit against HTC, it's clear that the patent war is not going to subside anytime soon.

It is proven beyond doubt that in such a market, Innovative companies with strong IP portfolio have a distinct edge. Interacting with the mobile through gestures or tracking eye movement may re-define the market. Will Google’s future technology – Wearable computers bring about the ultimate disruption in the market. 

Apple has tried to maintain the stickiness quotient with its customers and there-by retaining its loyal customer base, however, will Apple be able surprise its users with innovative offerings every year?  Will Apple become a network service provider (MVNO), thereby creating an even tighter vertical integration and provide everything from handsets, network access, content to storage for its users?

The current social networking wave would continue, however, the next wave could well be Mobile-money or mobile wallet. Will other countries be able to repeat Japan’s success in Mobile Money?

Summing-up, the power equation in the Mobile Industry has shifted away from Operators/ OEMs to platform providers. Android and iphone, considered outsiders from a mobile industry perspective were able to revolutionize the mobile Industry and have created immense positive network externalities. Due to the dynamic nature of this industry, anyone within or outside the mobile ecosystem now have an equal chance of changing the mobile Industry. Amidst all the changes and challenges faced by the Industry, for the average mobile phone user, the good times are here to stay!