Communications

Even the best of us have difficulty with change

"It is my heart-warm and world-embracing Christmas hope and aspiration that all of us - the high, the low, the rich, the poor, the admired, the despised, the loved, the hated, the civilised, the savage  -  may eventually be gathered together in a heaven of everlasting rest and peace and bliss -- except the inventor of the telephone."         --- Mark Twain, 1890

All-you-can-eat Mobile Data in France

Rodrigo Sepúlveda is always on now, thanks to a  3G connection card from Orange.  The price: 70 euros per month.  That's fairly steep, but competition will drive down prices over time.  I have two observations.

1.  As I've written before, mobile operators' walled gardens won't last.  In competitive markets, we'll increasingly see all-you-can-eat data plans. These plans have to allow VPN access, so subscribers can access their the corporate LANs.  But allowing VPNs punches a complete hole in any walled garden.  Anyone can walk through that hole, indeed Google will help you.

2.  As much as I love WiFi, there's an enormous advantage to an always-on service. No matter what your approach to WiFi, there are too many little obstacles.  As Rodrigo says of his new service "no need to search for a Wifi hotspot anymore and try to figure out how to pay."

 

More on telecoms in Pakistan

My December 6th article Mobile phone adoption goes crazy in Pakistan has prompted a bunch of very interesting comments, some of which appear under the blog entry and some which came as emails directly to me.  And, it's made me a new set of friends!

This morning, Tariq Mufti sent me an email with more details.  Tariq was involved in developing telecom policy through the mid-90s, so he has more detail on some of what went on.  With his permission, here's what he sent me:

In an earlier life (in Pakistan), from the mid-80’s to mid-90’s, I had been involved with policy development for private sector participation in telecommunications in Pakistan. Data communications, Public payphones and mobile services were the first selected to be opened to the private sector.
 
The initial estimates we had were for an ultimate mobile potential of 300,000 subscribers, after 10 years! After initial launch in 1989 with two AMPS operators, figures were moving to these targets (I think it was 80,000 by 1991) when, in 1991, mobile services were severely impacted by their forced withdrawal from the biggest city, Karachi.
 
In 1994 these restrictions were lifted, and a third operator, on GSM, was licensed in 1995. That led to rapid increases in subscriber counts, and figures were returning to original targets (300k by 1999); in 2000, CPP was instituted, along with massive reduction in import duties on telecom equipment, lowering of the activation fees. You see the results in the doubling of the figures in 2001. Two more operators entered in 2004/5, paying $291 million each for the privilege! And you see the results again!
 
Competition, decreasing costs of ownership and use, and you have exponential growth.
 
We must also not forget the impact that the growth of the economy has had on the telecom industry. From 1988 to the year 2000, Pakistan’s economy had gone through several traumas; the two kleptocratic governments, twice each, of the two major political parties, and the sanctions imposed on Pakistan after its nuclear tests. GDP growth, which had averaged about 6% for over 30 years, fell to less than 3% during the 90’s.
 
The economy has rebounded in a dramatic way as the restructuring efforts of the new team of economic managers bore fruit. Growth has averaged over 7.5% for the last three years (it was 8.4% last fiscal).
 
Another round of liberalization of telecom last year has led to private operators laying submarine optic fiber for international connectivity, domestic long-haul fiber for IP backbones, developing wireless local loop in rural areas, and even building fiber networks for integrated telephony/DSL/video delivery in the bigger cities.
 
The best is yet to come.
 
Regards,
 
Tariq Mufti
 
TM Advisory Services
502 Del Oro Dr
Ojai CA 93023
Tel: :(805) 646 2543
Fax: (805) 669 3292
tariqmufti@tmadvisoryservices.com
 

Finding more spectrum for unlicensed use

I just stumbled on a great white paper, Reclaiming the Vast Wasteland, Why Unlicensed Use of the White Space in the TV Bands Will Not Cause Interference to DTV Viewers, by Michael J. Marcus, Paul Kolodzy and Andrew Lippman, published October 2005 by the New America Foundation.

I’ve long been an advocate of license-exempt access to wireless spectrum because of the enormous economic benefits we’ve realized from the few slivers of spectrum where license-exempt operation is currently permitted. Here rampant competition has emerged and usage has soared as WiFi, Bluetooth, pre-WiMAX and dozens of proprietary systems have taken off.  And, it’s in these bands that we see new modulation schemes, smart antennas, and mass-market products.

Unfortunately, only a few slivers of spectrum are allocated for license-exempt use, even though most licensed spectrum is unused. In particular, large swathes of TV spectrum are unused — even in a major city, most broadcast TV channels are empty.

Our waste of spectrum is not a technical problem. Wireless performance (in bps per Hz per sq. mile, for example) has been improving exponentially for over a century. But as the result of government regulation, wireless spectrum utilization is frozen on a band-by-band basis at the state-of-the-art as it stood when the band was defined 20, 40, or 60 years ago.  (In the US, broadcast TV was first authorized in 1941 and slightly updated for color broadcasting in 1953).

In the US in 2004, the FCC proposed allowing a new generation of wireless devices to make use of vacant TV channels. These are prime frequencies, as they more readily penetrate buildings, trees and other obstructions. Unfortunately, the National Association of Broadcasters and other broadcast TV industry lobbyists have strenuously objected to any use of any part of “their” bands and have raised a variety of objections.  Marcus, Kolodzy & Lippman thoroughly debunk each and every one of their points.

We have the potential to open up prime wireless spectrum for broadband access and unlimited other purposes.  It would be a pity if vested interests continued to block access to otherwise unused spectrum.

 

Mobile phone adoption goes crazy in Pakistan

Incredible things are happening in Pakistan. Mobile phone subscribers grew from 2.4M in 12/2003 to 5M in 12/2004.  That’s impressive, but going from 5M to 18M subscribers in the first 10 months of 2005 is incredible!  Since telecom has a strong positive impact on productivity (exceeding that of roads, electricity and even education), I wanted to understand what had triggered this growth.  The answer appears to be three things:  increased competition, reduced restrictions on foreign direct investment (FDI) and reduced taxes, especially on service activation.

Here’s the story.  In mid-November I stumbled on an article about the incredible growth of mobile phone service in Pakistan.  Then just a few days later a good friend, Imran Qidwai, returned to Boston after visiting his family in Pakistan, so I quizzed him about what was going on.  Imran’s account was fascinating, but based on snapshots at times he’d visited his family.  I looked up the readily available statistics and found these: Mobile_phones_in_pakistan.pdf.   I also found and printed some other articles.  Then I got busy and dropped the subject for a few weeks.  Three days ago I caught up on my reading while on the plane to Bangkok and I’ve done some more research on the web at strange hours here in my hotel.  Finally, I realized I had another possible source of information, Usman Latif, who blogs as Techuser and lives in Sialkot, Pakistan.  Sure enough, Usman filled in the missing details.

Here's Imran’s timeline as I scribbled it down a few weeks ago (apologies to Imran if I've mistaken something).  Mobile phone service was introduced in 1990, with two operators but heavily regulated and taxed.  (Usman recalls an activation fee of Rs. 20,000 as late as 1996, which I calculate as several times the average annual income at that time). What's more, service was blocked completely in some cities at some times to prevent terrorists from using cell phones.  Things gradually began to change after a new telecom act in late 1996. As a result, when Imran visited in 1998, service was back on everywhere, but his brother didn't feel any need to have a mobile phone.

By 2001 there were four operators in the market (with the PTT entering the mobile market at the beginning of the year under the brand name UFONE) and the activation tax was down to Rs. 5000 (~US $85) .  Things started to accelerate.  By the end of 2002 there were 1.2M mobile subscribers and Imran's brother was now one of them.

It appears the real changes happened in 2004.  First, in April the government granted two more licenses.  Telenor won one of those licenses, built a network and launched services in February 2005.  Warid won the other, launching services in April 2005.  Second, in June 2004 the government abolished the remaining restrictions on foreign direct investment permitting foreign investors to retain 100% equity in their investments.  And third, they dropped the activation tax to Rs. 500 (~ $ 8).  Clearly, the two new operators coming on line in early 2005 have caused a lot of market activity, but their network build out was helped by the largest annual foreign direct investment that Pakistan has ever seen.

Finally, the cost of acquiring service has fallen below a critical breakpoint, in part by the reduction in activation fees and in part by the ever declining costs for mobile phones and mobile phone infrastructure.  Usman has the best summary of where things are today:

“<a> critical factor in the rise of the mobile subscriber base in Pakistan has been the reduction in activation fees. <…>

“Also, I have noticed lots of poorer folk using used mobile handsets here. I don't have an accurate estimate of how much a barely functional used handset costs, but I believe the cost to be around Rs. 600 ($10) or less. This means a new subscriber only needs to spend a very nominal sum on a mobile connection these days, and pretty much everyone can afford to have a mobile connection.

“Another factor for the growth of the mobile subscriber base has been the rise of prepaid mobile access. The way prepaid service works is that a subscriber signs up for a mobile connection and periodically prepays for mobile service she is planning to use by buying fixed denomination scratch cards. There are no monthly connection charges in this system (although the prepaid credits, if not used, expire after a certain time) and the scratch cards are available in almost all retail locations. Additionally, the scratch cards are very affordable and start as low as low Rs. 250 (a little more than $4).”

Today, Imran’s brother’s family has four mobile phones.  Only the youngest child is without and that's about to change.  What’s more, he’s gotten prepaid phones for the cook and driver, so they’re always reachable.  As Usman concluded his email “in Pakistan one can have very basic mobile service for less than a dollar a month, and there is absolutely no reason for anyone in Pakistan to be without a mobile number.”

All and all it’s a wonderful example for the rest of the developing world.

 

Testing Blogjet

I host this blog on Typepad and find the Typepad user interface just fine, but for one thing.  It only works when I’m on-line.  So when I want to compose a post while I’m in the Maine woods or on an airplane (most airplanes, with occasional exceptions like this one), I have to compose it in some other application and then copy it into Typepad once I’m reconnected.  There are multiple ways to approach this, but everything I’ve tried ends up with more complex HTML than Typepad wants (and table spacing gets screwed up and so on…), or I give up on the links when I'm composing and add them later, when I’m finally on-line.

So following the lead of Rodrigo Sepúlveda Schulz, I’m trying Blogjet.  It appears to allow me to write posts offline, including HTML, save them locally (as .bjd files) and then post them directly once I’m reconnected.

This is a test! ...

NMS Developers Conference, Bangkok

I'm leaving this weekend for Bangkok where, among other things, I'll be participating in the NMS Developers Conference - Asia.
This is a conference for developers using or considering use of NMS technologies, so it's more like a family event. Historically, these conferences have been a great way for me to connect with a diverse set of developers and a diverse set of telecom applications. So I'm certainly looking forward to this trip!

Besides meetings with customers, prospects and our Asia team, I'll be speaking on fixed-mobile convergence (which I've written about here) and participating in a panel discussion "Making new services real."

If you're in Bangkok, for the conference or for any other reason, please say hello (Skype:  "brough"; AIM "broughturner").