T Mobile Multimedia. Sakari Luukkainen Helsinki University of Technology Telecommunications Software and Multimedia Laboratory
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1 1 T Mobile Multimedia Sakari Luukkainen Helsinki University of Technology Telecommunications Software and Multimedia Laboratory
2 2 Background Current slowdown in the mobile communications business - the development only have moved first two steps forward and now one step backward back to the realistic growth track High 3G license costs delay development Most of the success is related to GSM technologies Recent hyper price competition in the Finnish mobile voice and SMS market - GSM related mobile services have become commoditized If so fast price decline and technological maturity precedes again global development, the whole value chain would require ever increasing cost reductions if new innovations do not arise Market uncertainty is currently high related to new mobile services - many technical possibilities open up with unclear market need many failures and unexpected success
3 3 What is market uncertainty Market uncertainty relates to the inability of vendors and service providers offering new communications solutions to predict what are the latent end-users needs The uncertainty exists partly also because users do not know what they want until they see and use it When users are first introduced to new technology they tend to view it in the context of the older technology Users needs evolve hiearchically from basic features to more sophisticated ones along with the technology evolution as they become more educated about the benefits it provides A similar phenomen has happened with the Internet, nobody predicted in the early 90 s what Web is today and its impact to society Source: Gaynor, 2002
4 4 Managing market uncertainty The only way to meet uncertain markets is to experiment with several ideas and hope at least one will work When market uncertainty is high, being lucky with a correct guess about the market is likely to produce more revenue than being right in markets with low uncertainty In high uncertainty competition is feature-based and lowprice-based Source: Gaynor, 2002
5 5 Mobile market in Finland Competition has been price-based, revenue per subscriber (ARPU) has decreased significantly to about 30 e / month, roaming still significant revenue source because of scarce competition Scarce competition through differentiation Currently mobile data services (excluding SMS) create only few procents of operators revenues (disappointment in WAP, MMS, low GPRS usage etc.) Price competition settle down, more focus on customer loyalty Increasing importance of multimedia services as a new growth source
6 6 Internet/Intranet Media UMTS GSM
7 7 Mobile business Traditional mobile operators use the walled-garden business model where end-user applications are fully controlled by them Voice-based walled-garden model was then extended into data services using WAP protocol The reason of failure: small amount of relevant applications to end-users together with high prices high barriers for experimentation In walled-garden models content providers get less than 50% of the revenue compared to i-mode (semi-walledgarden) where their share is 91%
8 End users New services Mobile Intranet/Extranet Access Customised Infotainment Multimedia Messaging Service Location-Based Services Rich Voice and Simple Voice Subscriber growth Traffic growth Interconnect 8 Mobile Termination Rate (MTR) Originating/terminating inter-network calls Regulations Legacy Existing network Existing technology MVNO customers Revenue effects Investment decision Expenditure Effects Brand image Strategy Other BTAs Competition Existing competitors Industry convergence Threat of new entrants Network build Service network Transmission Core network Access network Frequency licenses Buildings Rollout Installation Site establishment Other CAPEX OPEX Marketing & Sales General & Administration Billing Helpdesk Operation and Maintenance Power Rollout & Integration Service Development Interconnect Roaming Other Source: Katajala, 2005
9 9 Mobile content economics Capacity needed Value/price to enduser Value for operator ( /MB) SMS 160 bytes 0,14 / message 875 MMS 30 kb 0,39 / message 13 Voice (fixed) 16 kb/s 0,12 / min 1 GPRS Internet access (+VoIP) kb/s 1 / MB 1 Music streaming 128 kb/s 0,5 / min 0,5 Video streaming 384 kb/s 1 / min 0,35
10 10 Videophone Skype Music TV PoC Source: UMTS Forum, 2001
11 11 Mobile videophone Videphone has been failure in the fixed network (H.261, 128 kbit/s- 2 Mbit/s), videoconferencing used widely in business communications New video compression methods (H.263/4, MPEG4, < 64 kbit/s) for low bandwidth applications which can be applied to mobile environment Parallel full-fuplex audio and video de/compression requires a lot of processing power Delays and syncronization of video and audio is also a big technical challenge First commercially launched in NTT DoCoMo s WCDMA networks FOMA service concept As technical problems has been solved commercially potential service when integrated to video sharing and mailbox service Require however critical mass creation in order to benefit from network externalities expert on call and remote monitoring applications could start market
12 12 Mobile TV Terminal manufacturers are looking for new, significant factors of differentiation Advanced (new) features with real benefits are a means to avoid terminal price decline Mobile operators are looking for new succesful applications as well Mobile TV is a new channel for content providers to resell their existing content DVB-H, MediaFLO and eg. DMB competing, DVB-H having probably the broadest industry support DMB has head-start, but DVB-H and MediaFLO have 10 times more capacity (2 vs. 20 high-quality TV ch.)
13 Mobile TV Architecture 13 DVB-H Terminal DVB-H Transmitter DVB Modulator IP / MPE Encapsulator GSM Multicast IP Network Mobile TV Management Server Mobile TV Billing & Charging Stream Encoder Stream Encoder Stream Encoder
14 Push to talk over Cellular - PoC 14 Push to talk over Cellular (PoC) introduces a new real-time direct oneto-one and one-to-many half-duplex voice communication service in the cellular network, the call connection is almost instantaneous and the receiver doesn't have to answer the call Push to talk service users are typically engaged in some other activity than a telephone call and they listen to the group traffic during their activity Part of the service offering in IP Multimedia Subsystem (IMS) Based on half-duplex VoIP technology over the GPRS network Uses mobile radio resources more efficiently than circuit-switched services thus reserving the resources only on the duration of talking Provision of better QoS classes for the transmission and enabling full duplex mobile VoIP conversation will require additional development throughout the mobile network Proprietary technology evolution: Mobile Skype
15 15 Push to talk over Cellular - PoC PoC server Member A Wireless Network Member E Member B Member D Member C
16 Mobile music 16 Mobile music Music playback over portable devices Music content delivered through mobile networks Playback from physical media Digital media playback FM radio reception Music download Ringtones download Audio/ video clips streaming Superdistribution Multimedia mobile terminal mobile music capabilities
17 17 Mobile music evolution Bearer technologies SMS, CSD GPRS (30-40kbps) EGPRS ( kbps) WLAN WCDMA (64-384kbps) HSDPA (2xWCDMA) Mobile music services Monophonic Ringtones Integrated FM Radio Receiver Polyphonic Ringtones Streaming audio Interactive FM Radio Mobile music capabilities Radio reception only Radio reception with synchronized GPRS content. - ringtone downloads - click to buy - interactive marketing Radio reception with capability to download selected tracks over wireless network min down to 1 min down to 30 sec Estimated download time for a 3MB audio file
18 18 Conclusion Convergence of telecommunications, computer and media industries provides possible but uncertain growth path for the mobile industry Price competition will settle down and open market for differentiation by mobile multimedia services Contradiction between high transmission cost and low enduser value Key question is what what are mobile related enduser needs, what are those services and what are their reasonable service pricing levels flat rate tariffs New mobile services to increase market segmentation: , information, music, PoC, videophone, TV Bundling of equipment, subscription and services could help 3G adoption rates, but it also promotes walled garden business model Key issue to promote service innovation by low usage barriers and experimentation with reasonable cost structure and openness
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