Bill shock may be the scourge of every telco marketing department that has to battle with the headlines that always follow, but the prize for ‘unbounded gall’ must got to my bank’s fraud department that has a passion for alienating customers at will. Not just one or two, but I’m guessing tens of thousands. It’s either a case of extreme paranoia or a firm belief that everyone in the world, including friends, family, bosses and even customers, are all potential fraudsters and should be treated as such.

Not long back I had a one-man vendetta against my UK bank that I was convinced had been taken over by the fraud department because it was single-handedly making decisions aimed at getting rid of customers, rather than protecting them. At that time, after month’s of phone calls and emails and the matter was finally addressed after I Tweeted the world about the problem. Almost two month’s of ‘fraud free’ transactions seemed like heaven but it didn’t last.

My latest correspondence says it all:

“I thought it was too good to be true. Today, my wife tried to use her card to withdraw funds from an ATM in the town we live in and it was rejected. I received an automated call soon after, the ridiculous one that rambles off one phone number after another and expects you to be waiting pen in hand to write them down. Needless to say, I had to call your fraud department in the UK, this time from Singapore, to find out what the problem was.

It seems that on January 5, an unknown retailer informed your crack fraud team of a breach of their security and that my wife's card number may have been compromised. However, that very same brilliant customer-oriented team didn't think it was worth telling my wife or myself, as primary card holder, of the problem. Her card was simply put on the 'list' that rejects transactions in the hope that we will spend our hard-earned money to call you and find out what was wrong. You can imagine how impressed I was when told that the only option was to cancel her card and send out another. Not a problem for those living close to your card dispatch centre but for those of us that live abroad, this could take weeks to get to us.

Regardless, why in this day and age of brilliant communications, is it not possible for a real person to CALL US for a change and let us know of such a serious issue when it happens. Even an email, an SMS, a carrier pigeon, whatever, would the very least you could do to INFORM your customer, firstly of the security breach, and then immediately arrange for a replacement card to be sent out. What sort of customer experience do you call this? I repeat my earlier concerns that your fraud department is single-handedly your best 'customer prevention office' wasting millions of your marketing dollars by doing their very best to get rid of customers by aggravating them to the point of derangement.”

To which an automated reply came: “Thank you for contacting the xxxxx Banking Group. Your email message has been received by Customer Relations and you will receive a response or formal acknowledgement within 5 working days of this message.”

Five days!! How do they get away with it? Can you imagine the bad press any CSP in the world would get if they replied like this. Please tell me we don’t treat customers this badly, please! If both the communications and financial industries are serious that customer experience will be their main differentiator then it seems that at least one of the two has a long way to go.

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

And so it goes with social networking. Lured like lemmings to the cliff edge we all embraced Facebook in its simplest form as a great way to communicate with friends and family, keep up to date with our circle of friends and even extend that circle to our friend’s circles, and so on. What a romantic notion that something that would radically change our lives and take up so much of our spare time would always be free.

Whilst Mr Zuckerberg may have started with the same altruistic notion, the moment his ‘baby’ grew up and had to morph into a public corporation with all the pressures of sustainability, making money and distributing profits to shareholders, the whole game changed. The objective now is to use every possible opportunity to confront all those freeloading ‘faces’ with advertisements, offers and add-ons that have to paid for in order to fill the Facebook coffers.

To be fair, this is not a dilemma unique to Facebook. Almost every other ‘free’ online social scene-setter aims to get numbers up first by being free, then attracting investment against those numbers to allow even more expansion. Once it achieves enough momentum, and a viable number of subscribers, the founders and early investors push for an IPO or exit by sale and the whole thing emerges, hopefully, as a moneymaker.

However, unlike the successful case studies taught in business school, not all can make the transition successfully, and like their ‘dotcom bust’ predecessors, many will disappear without a trace. Tumblr, the six-year-old blog network that months ago began letting advertisers pay for prominent placement, expects to make its first annual profit this year after extending the feature to smartphones. Tumblr even tells advertisers to come up with campaigns that will spread through the network like its other content.

Teenagers are a good measure of what's "cool." Observing which apps they use and how they interact with technology can help the rest of us spot budding trends and lately it seems teens have grown tired of Facebook. MSN says that recent trend reports indicate that teens and tweens are now ‘kinda bored’ with Mark Zuckerberg's social network, flocking instead to fresher services like the photo-sharing and filtering service Instagram and Snapchat.

Part of the appeal is that parents are less clued-in to these newer tools, so they can be enjoyed more furtively. Facebook actually warned investors of its declining cool factor recently, noting, "Some of our users have reduced their engagement with Facebook in favor of increased engagement with other products and services such as Instagram." But before you start seeing the writing on the wall for Zuckerberg, don't forget: Facebook owns Instagram, too.

Not long ago, many Instagram users were locked out of their accounts with a demand that they produce some government-issued documentation to prove their identity. Many on the forum said they thought the notice was a phishing ploy to get personal information. This comes after Facebook had infuriated users of Instagram by changing its terms of service to allow it to sell peoples' uploaded photos or related data. The change led to an outpouring of anger online — although the move echoes similar moves made by other services, such as Twitpic in 2011, which are allied to fast-moving micro-blogging services such as Twitter. Even Twitter is looking at becoming more commercial with ad placements.

But getting back to the point, if things take their natural course we may soon see sites like Facebook, Twitter and Instagram offering an ad-free option – presuming you are willing to pay NOT to be annoyed!

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

It really was no fun cramming onto buses and trains to get to the venue. Taxis were plentiful but restricted in movement because of poor management and traffic control in and around the venue. The distances people had to walk each day would qualify them for an Olympic event. There was barely any under-cover seating, but plenty of outdoor garden space that was only usable when temperatures reached 10 degrees centigrade or it wasn’t raining. Some even resorted to using toilets as temporary work seats! And the food, even with 54 outlets, was passable at best.

The new venue can only be described as an island smack in the middle of an industrial sea. It is large (very large), yet functional, has no cobblestones (a blessing), provides undercover walkways along its 1.2 kilometre span and despite having 72,000 people tramping over its nine massive halls, it coped really well. Barcelona itself is probably one of the few cities in Europe that can survive such a massive influx of people all needing accommodation, restaurants and bars to melt into after a hard day in the congress. Not to mention the endless round of parties, dinners and special functions put on to woo customers and press. No wonder people leave exhausted each year.

Yet all of this combined means that in one place for four days each year you can see, meet and hear almost every key player in the GSM mobile world. And there lies its secret. The glitz, the ritzy exhibits, the partially clad promo girls, the gimmicks, the giveaways are all inconsequential when you get down to the business of doing business. No longer do people turn up at events like MWC just to attend the conference sessions, walk the stands or attend the parties, they all come here to network in person and do business.

For suppliers, all their customers and prospects are in one place for one week. No need to send sales teams around the globe to meet with them, they come to you. And not just the managers and directors, there are more telco C-levels in Barcelona for MWC than are left behind in the office. For suppliers and operators alike, if you are not seen at MWC you are either out of business or out of a job.

Forget virtual social networking, this is good old-fashioned, physical networking at its best. Most meetings are arranged ahead of time and stands are changing slowly from gaudy temples pulling in passer-bys to sophisticated business environments complete with comfortable meeting rooms, lounges, bars, espresso machines and delicacies including Swiss chocolates, Portuguese egg tarts, French pastries and wines from every corner of the globe. Ericsson even recreated a village market square complete with food vendors on tricycles and roads taking prospects on ‘journeys’ into customer experience and network performance.

All of that aside, the most pleasing aspect of this year’s MWC was the appearance of so many digital service players. Carmaker, Ford, had a massive presence showing off its connected car solutions. There were e-Health players, smart grid and utility suppliers, m-Payment providers and the event itself was NFC-enabled. Hall 8 was packed with the most amazing application developments and mobile marketing purveyors. It was not quite moving the mountain but it was great to see the digital and telecom worlds really getting together after years of playing around.

Above all, the indications are that despite our worst fears of declining revenues and margin erosion there was a real appetite, not just for the delicacies mentioned above, but for venturing into new business opportunities with new partners. There is no doubt the digital economy is ramping up, and it looks like the telcos may actually be along for the ride.

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

There is some merit to the argument when you consider that regulation stemmed from the old PSTN days when telecommunications was a national security asset operated by a government-owned monopoly. Regulation was established mainly to protect it. But when markets were eventually allowed to open up and ‘deregulation’ did take place, the regulator’s tack changed to protect the new players from unfair competition emanating from the monopolies they were trying to establish a beachhead against.

Now that most markets have multiple established fixed line, ISP and mobile operators competing on more even ground, the need for anti-competitive regulation and even universal service fund obligations are probably no longer viable or required. This alone should have been a fair enough argument by the operators, but they took it one step further in Barcelona.

Franco Bernabè, CEO of Telecom Italia complained that regulation and taxation in the industry harked back to days of high margins from a decade back, saying that the mobile industry was burdened by a ‘dated’ regime while struggling to compete. Vittorio Colao, CEO of Vodafone, said that the telecoms groups would talk to the European regulator in Barcelona and that he favored an approach that factors in pan-European scale, rather than one based on a single country. He also backed proposals for a single European regulator to help this happen and, when you take into account the inconsistencies across Europe, that argument makes eminent sense.

Surprise, surprise even AT&T’s CEO, Randall Stephenson, said he was “in violent agreement’ with his European counterparts, and that alone has to be a first! The conspiracy theorists are, no doubt, thinking all the CEO comments are a pre-meditated attack on the regulators, but the fact remains that all of them really do believe that it’s time to change the playing field.

CSPs are no longer competing just with each other; they are fighting a new battle for revenue from everyone that uses their network resources, not just their customers. This is the real world. They might believe that everyone that uses the digital highway should pay the toll, but that is simply not viable, at least for now. The big traffic comes from the OTT players like YouTube and Netflix, and the guys appearing to be making the most money are Google and, to lesser but growing extent, Facebook.

Turk Telekom Group CEO, Hakam Kanafani, held back no punches when he suggested on the TM Forum’s Business Transformation Panel that the very same regulation that CSPs had to abide by should be extended to everyone that used their networks, i.e. the OTT players. He felt clearly disadvantaged that his company was regulated, yet those using his network were free to do whatever they liked, especially with regard to capturing personal information. Is that a fair point?

The digital services players, however, are not only not hindered by regulation, they are also not hindered by all those legacy systems that burden CSPs. They live in an all-IP world. What do they care for the differences between copper, fiber, 2G, 3G and 4G mobile networks. They have less business processes to worry about, less delivery platforms and very simple subscriber and unit pricing models when delivering content or apps. They give voice away simply because the cost of billing it exceeds the margins earned and most only sell to customers that have bought pre-paid cards in shops or have credit/debit cards.

They don’t have extensive customer care operations, in many cases none. They run lean and mean – so should they be penalized for their efficiency just because their CSO counterparts are stuck suffering because everything they implement has to ‘backward compatible’?

Come on CEOs, stop griping and start fighting back. Maybe it’s time to dump the legacy and meet the challenge of the new competition on an even footing or, better still, start acting like OTT players yourselves.

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

Net neutrality proponents have been duly freaking out. And like last time, it's looking like a lot of dithering over nothing.

The FT-Orange deal - which was actually signed a year ago - was revealed by CEO Stephane Richard in a TV interview, who said he'd managed to get Google to pay him money to carry its traffic in France. He didn't say how much, but according to reports, he allegedly pulled it off thanks to the fact that Orange has major smartphone presence in Africa, a market that Google needs to tap to reach Android users there.

Tech blogger site GigaOM rained down the shame on Google, accusing Google of betraying its own net neutrality principles, and setting a dangerous precedent for every other web content provider - if FT-Orange can force Google to pay for priority traffic, it can force others to do the same.

But the impact of the Google/FT-Orange deal on net neutrality depends on the details of the agreement - and right now, no one knows what those details are apart from Google and FT-Orange. People are making a lot of assumptions based on a throwaway comment Richard made in a TV interview. For all we know, he's making a bigger deal out of it than it is.

Rob Powell of Telecom Ramblings has put forth a reasonably educated guess as tothe nature of the deal. Namely, it may be nothing more than a standard IP transit or peering deal with a protectionist twist - FT/Orange managed to convince Google to pay for peering with the incumbent telco instead of an international backbone player (in this case, Cogent).

If that's the case, it's not so much the end of net neutrality as some savvy deal-making on FT-Orange's part to win business from a competitor.

Either way, Google has yet to make any kind of public statement about Richard's comments. FT-Orange hasn't said anything about it since the interview was aired, but on the company website you'll find the official company position on net neutrality, which is this: "the public internet must be open and É traffic management, necessary for the effective function of the network, must be non-discriminatory in effect."

So, based on the information made pubic so far, I'm inclined to assume the Google/FT-Orange story is business as usual.

Killing the internet

Still, the kerfuffle over the news does serve as a reminder that net neutrality and the model of the open internet remain such sensitive topics for some that even the hint of a shift away from net neutrality raises fears of The Destruction of the Internet.

We saw a similar freak-out in the run up to December's WCIT-12 summit in Dubai, in which the ITU updated the International Telecommunication Regulations treaty. Net neutrality proponents and American politicians alike were worried sick that the ITU would approve proposals by a handful of delegates to take over administration and regulation of the Internet from ICANN.

In the end, the final document only mentioned the internet once - in the appendix (which is non-binding), by way of a one-page resolution that basically said members were free to state their feelings about internet-related issues at future ITU forums if they felt like it. And that alone was so noxious that the US staged a walkout, and 55 countries refused to sign it.

That's where we are in 2013, I suppose. The first rule about net neutrality is: you do not talk about net neutrality - unless you're in favor of it.

The Outsider was written John Tanner, Global Technology Editor at TelecomAsia

Don’t get me wrong, they are both serious issues, but the latter should have Facebook users that choose to login to other sites using their Facebook credentials shaking in their shoes. How many sites now allow you to login using Facebook, your Microsoft account and others? Why anyone would opt for Facebook login for anything but Facebook defies logic. The whole idea of having different logins is to protect oneself from hacking in one vulnerable site that could expose the user’s personal accounts on other sites.

Twitter accounts for Burger King and Jeep were also compromised this week. As AdAge digital points out, “Twitter began as a platform for people to send short, mass messages, and as brands began to uncover its usefulness, they, too, jumped in. Today Twitter essentially treats as equals - brands with millions of followers and people with only a handful - offering one standard account type to serve both.” But the breaches certainly point to the need for a distinction.

Twitter declined to comment on the hacks, citing the privacy of individual accounts. But Gizmodo has made a speculative ID of the hacker based on the content of his tweets and posts that the Burger King account was breached by resetting a password via a compromised email account. Great, that might help find the culprit but there will be another tomorrow and the day after. Damn the excuses, the accounts were hacked and if Twitter wants to raise its status and remain viable it simply cannot allow these things to happen.

So many internet sites and social networks only require single factor authentication when most banks now require at least two. Speed and simplicity, however desirable, may prove to be a liability for many, but carrying around bags of security tokens is not be a viable alternative either.

It raises questions of whether identity and security should be inextricably linked but that also raises the question of who or what will be trustworthy enough to be act as the secure handler of those security details, and what if they are compromised. Governments, CSPs and banks have all been mooted as potential trusted partners, and even though they sound like far more secure options than Facebook as identity brokers, they too are a risk.

Consumers are advised to have a different login and password for all access to secure sites so that if any one site is compromised their information can’t be randomly used on other sites to gain access. But if you have logins to hundreds of sites, how can you possibly remember them all, especially if they have been created by those clever password generators?

Oh yes, there are those password storage applications that have proliferated on mobile platforms that store encrypted information in the cloud so it can be accessed by all your devices. They are brilliant in concept, design and operation but who are they created by, where is the data stored and who manages the encryption. I’m not saying that any of them cannot be trusted but if you plan to keep all your confidential information in a safe place you should probably check just how safe it is. If you can, that is!

So, what’s the solution? Stopping all access to any site via the internet is a start, but is no guarantee. Reverting to cash, writing cheques and quitting all web-based portals that hold any of your information might work, but is it really an option, e.g. you or your house could get robbed or your date may not be deleted. Having multiple virtual identities, if you can remember them is another.  As more and more ‘free’ social sites revert to any means of ‘monetization’ the options of being safe and secure are reduced. we are in danger fo killing of the digital age before we even get into it.

So, what’s left? 

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

That may not seem such a bad idea but in such a fiercely competitive market, content has been a highly prized, lucrative and crucial differentiator - up until now, that is. Back in the days of iMode, for those that can remember, content providers were being wooed with up to 90 per cent plus revenue share models by operators, unheard of in other countries.

The form factor of the very popular ‘clam-shell’ phones, the early high-definition screens and the use of space saving Kanji characters all contributed to a comfortable content delivery and consumption model that really did not catch on elsewhere until the era of smartphones and high speed networks. Japan was truly the country where content was ‘king’ and walled-gardens never questioned.

So, why the sudden change of heart? It seems that NTT DoCoMo, KDDI and Softbank have always been battling to increase the number of their subscribers in a market that is tantamount to saturated. At the same time, revenue growth from communication charges have stagnated and the days of price wars are well behind them. As a result, they are all turning to content services to bolster sales, but not just with their own customers, as has been the tradition.

Now that smartphones have taken hold, 30 million units shipped in the last twelve months, and customers are free to purchase online content and apps for any number of OTT players it makes sense for the mobile operators to open up, hoping to sell their wares to their competitors customers as well. It doesn’t seem to be a collusive effort, more an opening up of those old closed shops. There is also no sign that they will join forces to form another ill-fated WAC-type platform. Each continues to maintain its own shop fronts but with the doors wide open for all to visit.

For example, DoCoMo has been offering its “dgame” mobile gaming service to smartphone and tablet users irrespective of their providers. The company is considering expanding its content services for smartphones and tablet devices to include video streaming and online shopping, with an eye toward generating one trillion yen ($10.77 billion) in sales through new business. KDDI and Softbank are doing the same with their music and video streaming services to both iOS and Android customers of any provider.

Is it possible we may some day see operator billing opened up so that customers could be charged by their own provider when they buy goods and services from another? It sounds bizarre but not so far-fetched when we see efforts being made to provide the same service to OTT content providers.

Ultimately, a telco ecosystem of sorts might evolve where the dominant provider in a particular area, e.g. games or apps, might become the specialist and the others point their business in that direction with some sort of margin or revenue share arrangement in place, yet keeping the all important billing component in-house, of course. And would a model like this catch on outside of Japan? I, for one, would like to see it tried. Any takers?

Oh yes, there’s Bing, but that belongs to the other archrival, Microsoft. After the debacle with replacing Google Maps on iOS with its own homegrown not-so-great Maps application, it is highly unlikely that Apple would tempt fate a second time. Anyway, they don’t have their own search engine – yet.

So why is Google paying Apple when it is pretty clear that there is very little other choice for Apple? According to a report titled ‘The Next Google is Google’ by Morgan Stanley analyst, Scott Devitt, Google’s mobile business depends heavily on iOS devices. In fact, a whopping 80 per cent of mobile advertising revenues come from Apple mobile devices. That figure alone blows the iOS/Android general market share figures out of the water. There may be more Android devices out there, but their owners are obviously not as ad-happy as their Apple counterparts.

By the way, those traffic figures became public only because of the patent and copyright infringement battle between Oracle and Google and comments made by Google CEO, Larry Page. Another interesting revelation from Devitt is that he believes the payment is based on a very simple fee per device and not a revenue sharing deal as generally believed.

That makes a lot of sense as Google would be reticent to share its ad revenues with anyone, let alone opening them up to a ‘competitor.’ Apple, on the other hand, seems only too happy to release its iOS device sales figures. Google pays once, up front, but gets a lifetime customer using Google by default. Apple also has a hedge against users going to Google.com and searching from there instead of the default search box on iOS.

Google is already known to pay Mozilla $300 million in order to keep Google search the default option on Firefox. Devitt estimates Google controls 95 per cent of the mobile search market dominated by Apple and Android and that “paying ~$1 billion a year for a monopoly on the most lucrative online business in the world is a no-brainer.” Who could argue?

This is one example of how rivals can actually benefit from each other in today’s digital eco-system. It also helps explain why CSPs like Free in France are questioning why they are not sharing in some of Google’s lucrative revenue stream, considering they provide the means of connection for many of those mobile devices. Take away that brilliant connectivity and no amount of search box monopolization will be of any value. Fair point, but not one that will scare Google anytime soon.

Apple is one big player owning a big slab of the mobile device market. CSPs are a disparate lot of relatively small operations (in comparison to Google and Apple) and could only carry the necessary gravitas to move Google if they were a monopoly themselves in a market that Google desperately needed. Even then, Google could probably buy them out with one day’s revenues. It seems CSPs are going to have become much creative if they are to extricate money from Google.

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

It's reasonably well understood that these subgroups, these online communities, are the power of the web, not the simple connectivity. I have virtually nothing in common with the people in my street, other than the geographic accident of proximity, whereas I belong to a number of virtual communities that are really, really important to me. Checking my Facebook page will always give me more of a thrill than going to the council web site. I used LinkedIn a couple of times yesterday, whereas I used central government web sites a couple of times in the last year (once to file may taxes, once to pay my car tax). I'm addicted to twitter (although I only follow people that I've met) feel very strongly connected to my twitter friends, as I do to my son's soccer team, the writer's circle that I belong to, the people at Consult Hyperion (where I work) and so on.

These notions of community as the locus of the next money connect with the work of Gill Ringland, who wrote a report for Long Finance called "In Safe Hands? The Future of Financial Services". The report explored four scenarios for financial services in 2050, labelled "Second Hand", "Virtual Hand", "Long Hand" and "Many Hands".

In the ‘Second Hand’ scenario we remain rooted in the physical world and geography still matters, the Washington consensus holds and we manage to muddle through.

The ‘Virtual Hand’ scenario is one where the Washington consensus proceeds. The report, however, sees a breakdown of international institutions and regards this scenario as most unlikely, largely because it is insufficiently diverse and its homogeneity means it is unable to resist more shocks. Since it ends in chaos, it will collapse into one of the other scenarios.

In the more likely ‘Long Hand’ scenario, there is a breakdown of the Washington consensus and it is replaced with agreements between what the report calls "affinity groups". There's a certain amount of tiptoeing here, because no-one wants to offend affinity groups that may coincide with ethnic or religious divisions, but I think we can all see that the nature of such virtual communities make this a realistic projection.

Personally, I can't help but see the final ‘Many Hands’ scenario as the most likely. In this scenario, international society reforms around city-states. This scenario explores the impact of parallel shifts in power away from nation states toward cities and away from "the West". The report talks about a system of 50 or so global city-states (including London, Istanbul and Singapore in the first rank) forming the backbone of not just the economy, but society.

So what does all this mean for financial services in general and payments in particular? The report suggests that ICT will reduce the size of the financial sector overall, perhaps even doing away with some sub-sectors altogether (insurance being specifically mentioned as being under threat). It also, to my mind, supports the idea that community, rather than national, currencies are a more likely medium-term vision than some sort of global currency.

This is why I watch the evolution of money in virtual worlds, online games and social networks with such interest, because I think that the seeds of new monetary arrangements and institutions are being planted here and not in the corridors of the European Central Bank. So the news that Facebook has a billion inhabitants catches my eye. So does the fact that the Google Wallet stores coupons and loyalty points as well as a credit card. So does Bitcoin appearing in The Economist and e-gold showing up in pension portfolios. This isn't a vision of hippynomics or anti-capitalist fantasy. An ecosystem founded on a greater number of diverse form of money, particularly rooted in communities, whether those communities are geographic or virtual, offers greater flexibility and resilience. Stability is good for business as well as society. Banks won't vanish because they are lending you kilowatt hours instead of Yen. (As a matter of fact, banks were invented a long time before money was, because people needed to store, and borrow, things like grain.)

What does this have to do with the winters of the eastern seaboard? Well, governments, central banks and the existing international monetary institutions are the ones using the newly-invented refrigerators to create ice that is being sent in wooden ships around the world. Meanwhile Facebook, Google and kids in basements the length of Silicon Valley are figuring out how to give everyone a refrigerator so that they can do it themselves. My message to the folks at Occupy? Stay cool. If you don't like the man's money, make your own.

This Outsider blog was contributed by David G.W. Birch of Consult Hyperion, described by The Telegraph as “one of the world’s leading experts on digital money,” and named by Total Payments as number 1 of the top 10 influencers in European payments.

TM Forum members present at Management World in Dublin in 2011 and Singapore in 2012 will not be surprised at this news because it was an idea openly presented by board member, Michael Lawrey, who is also executive director at Telstra.

At the time, Lawrey’s comments were picked up by a number of publications, with a variety of interpretations. Light Reading quoted him saying "that (this) will allow us to differentiate on traffic, and to be able to manage differentiated services as close to actual customer as possible." RCR Wireless News quoted Lawrey as saying that Telstra would soon take action against customers thought to be abusing the carrier's fair use policies. IT News Australia said that “Lawrey made waves ….. when plans emerged to throttle or cut off ‘downloaders of illegal content,’ whom he reportedly blamed for network congestion.”

The Insider made note of one particular statement that made eminent sense. When referring to those exploiting the Telstra networks for illegal downloading of content and P2P activities Lawrey said,” "I'd love for them to go to the regulators” to complain.

The concept of ‘throttling’ P2P traffic has been around for a long time and Telstra is certainly not the only one looking at it as a means of controlling over-usage and abuse by a small number of users. Even though P2P networks are commonly used to download pirated material such as movies, music and video games this is not always the primary reason for controlling them.

At the time there were concerns that illegal and copyright infringement traffic over a CSP or ISP’s network could see them prosecuted. A landmark case by Hollywood studios against one ISP along these grounds was subsequently lost. Nevertheless, there is no doubt that content owners still hold some sway and may be continuing to put pressure on operators to curb illegal traffic to preserve both their revenue streams from legitimate content sales.

In a post on the Telstra News website, it was stated that “online piracy is an important policy issue and Telstra remains open to discussions with a range of stakeholders to identify workable solutions that protect the interests and privacy of our customers. However, this trial is solely about examining ways of improving our network management to ensure that all of our customers enjoy the best quality service for their specific needs at the best possible price.

As part of this project, Telstra is trialling network enhancements that allow the identification of specific types of traffic on our network. The technology being used looks at characteristics of the data packet to identify the type of the traffic present. Any inspection that takes place is used only to identify the signature of the traffic; it does not identify the content (e.g. whether this is a movie, the title or any other details).”

This was followed by the all-important disclaimer that, “This trial does not involve any monitoring or tracking of the sites visited by our customers, and the trial’s findings, including customer feedback, will be collected in accordance with our Privacy Statement.”

Of course, not all P2P traffic is of a dubious nature and critics were quick to jump in and criticize Telstra’s move. It won’t be long before the ‘net neutrality’ proponents also jump in with their two cents worth. However, the fact remains that network operators are having to manage their resources as fairly and evenly as possible to provide good service to ALL their customers. If this is threatened by a minority of abusers then any form of control or traffic shaping is surely their prerogative. No doubt, others will be watching and applauding from the sidelines as Telstra sets a precedent.

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

In the last two weeks, The Insider has been exposed to presentations by big name internet operations showing off not only the extent of data being collected but also how easy it is to access, process, analyze and utilize for monetary and other gains. This is not to say that any of these activities are illegal, but for many the knowledge that their every move in the digital space is being monitored and recorded, and is being sold on to advertisers, government bodies and regulatory authorities, may be too much to bear.

The constant debate over who ‘owns’ a customer means very little in this surreal digital data dimension. CSPs have to understand that just because their customer pays them a line subscription they don’t necessarily own them, and knowing who they call and what websites they visit barely converts into valuable assets. The moment anybody connects to a network access point, and even before that if they are mobile customers, someone, somewhere is tracking their every move, literally.

Location tracking of mobile phones is pretty accurate these days; IP and device MAC addresses can become, over time, very accurate means of linking to a person. Every financial transaction, purchase, search query, site visit, etc. helps companies like Google to build an incredibly detailed profile. Facebook’s drive into commerciality and its endless push to offer one-click secure access and identity verification into other commercial sites is just the start. ‘Shopfronts’ on Facebook are also generating some formidable profiling. Tie this with a view of one’s complete network of family and friends and the whole scenario begins to unfold.

While CSPs dabble with big data and tiptoe through the hype and hard sell, companies like Google, Amazon and Facebook have already mastered its use and are reaping the benefits. Google demonstrated the most incredible queries into petabytes of data live at TM Forum’s recent Big Data Summit in Amsterdam, with results in less than two seconds. This makes real-time analysis of a customer and linkage to other systems to offer services that they may be interested in happen in the blink of an eye.

Facebook demonstrated remarkably successful campaigns for Burberry and BT at the Middle East Summit in Dubai this week. These appealed to users they already know and are getting to know much better. The concept that analysis of customers is a grouping exercise has been shot down in flames. Averages and medians for customer profiles have proven it to be next to useless, now the average is ‘one’. Profiling to the power of one is the new creed and it’s happening even while you are reading this blog.

The telecom industry in its cautiousness may be slipping behind in the ‘data wars’ but may be viewed by customers in a more trusting light. Not being able to profile customers in real time could actually be a blessing in disguise, but only time will tell. The big issue, reverting back to the Ovum survey, is now more a concern over privacy and being ‘tracked.’

Privacy, what privacy? Even if you choose to opt out it is doubtful the data collection will stop; it may simply not be used for your benefit, but who knows what happens to it, or where it lives, and for how long. And while those data dealers may be giving regulators and customers assurances of their data’s safety, what happens if it ‘falls’ into the wrong hands? By my reckoning, the only way to avoid all of this is to become a hermit and live in a lead-lined cave in a deep ravine on an island in the middle of the Antarctic Ocean. Hmm, but these days, even that not be enough!

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

I am not planning to sing the praises of big data here but to try my best to encapsulate the key points I picked up, and there is no way I will deep dive into any of the technicalities as there are far better qualified people to do that. For the layman, which I freely admit to being, big data seems to have come about simply because we are now collecting, processing, storing and utilizing data at a ridiculously gargantuan rate, and that legacy BI technology simply can’t cope.

Every business, especially CSPs, have data being created and stored all over their networks and beyond into the cloud. It is no longer viable to collect all that disparate data, ‘normalize’ it and store it one place specifically for analysis and reporting purposes. Sure, it’s fine for historic data but these days we are talking about real-time analysis of a customer, a connection, a handset, a cell site, a router, a switch, etc. The list is endless.

My understanding is that big data, and the technologies it embodies, make it possible to access data from anywhere, in real time and generate output for a specific query in the blink of an eye. This is the sort of analysis that Google does when you search, and what Amazon does when you browse, and what mobile operators are hoping to do when offering customers new services, and also to predict when they are going to churn or need a new handset. It’s the same thinking around pushing targeted ads to mobile customers and being able to guarantee to advertisers that they have been delivered and read.

I have been hearing about customer profiling for years but this traditionally grouped like-minded types together using medians or averages to determine where they fit. As pronounced by one speaker, you can never deliver ‘average’ for a one-to-one customer experience. But it has been simply too difficult and required too much processing power to be able to do this for individuals. Not any more, big data is promising and actually delivering this ‘power of one’ today.

However, not every one of the 150+ attendees believed all they were hearing. The skeptics were not necessarily vocal, but certainly cautious. A number spoke of big data’s current position in the famous Gartner hype curve. Most thought it positioned at the peak of inflated expectations phase, about to slide into the trough of disillusionment. One speaker described the trough more like a very deep ravine but with short distance across to the plateau of productivity. Amazing how graphic techies can get sometimes.

One hosting and data center operator admitted to NOT using big data because she felt imminent breakthroughs in Scalable SQL technology would be more viable.

The most common word used throughout the event was ‘Hadoop’ (an open source software project that enables the distributed processing of large data sets across clusters of commodity servers) that seemed to be utilized by almost everyone in some fashion. For sheer shock value the Google presentation demonstrated the massive processing power being offered to governments and corporations and just how effective big data was in being used to do queries in seconds that would have taken days only a few years back. The fact that the whole internet can today be indexed in 30 minutes, a process that used to take four days, is mind-boggling.

There was no shortage of case studies by leading operators as well as eBay, Google, Microsoft, Verizon, Telefónica and CapGemini, to name a few. Needless to say, I have now become a ‘believer’ and will be keeping a close eye on advances in big data and how it can be best applied to the telecom industry.

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

Orange CEO Stephane Richard slipped in the information that Google is paying it for transit during a recent French TV interview.

While Richard did not elaborate on the financial terms of the arrangement, a company spokesperson told The Register that a deal has been in place for at least a year.

The company's disclosure has sparked a flurry of speculation over what the arrangement means for Google's espoused net neutrality principles, and whether it may set a precedent for other markets and content providers.

An oft-quoted statistic in the discussions is that Google now accounts for more than half of the traffic on Orange's network.

As Forbes points out, Orange believes its strong market position in the emerging smartphone markets of Africa gave it the leverage needed to convince Google to play ball, as it appears to have decided that building Android market share is more important than holding out.

GigaOM senior writer David Meyer suggests that Google's decision betrays its own net neutrality principles. He cites a 2006 quote from chairman Eric Schmidt complaining that “phone and cable monopolies...want to build a two-tiered system and block the on-ramps for those who can’t pay.” 

The agreement also sets a dangerous precedent for other internet content providers, Meyer said. Orange now has the incentive to demand similar agreements from other content companies, particularly “if Google is paying a carrier such as Orange to handle its traffic better than it might otherwise be handled.”

TelecomAsia contributor Rob Powell has meanwhile engaged in some informed speculation about the possible nature of the agreement. As Powell wrote on his blog Telecom Ramblings: 

“My understanding is that Google has been reaching most French customers through IP transit, at least part of which is purchased via Cogent (and delivered through Cogent’s peering connections with French service providers). If they haven’t come up with a brand new business arrangement in which traffic that arrives through a peer actually gets charged *again* by the receiving party depending on the origin of the bits, then what I suspect is that Google may simply have agreed to buy transit or paid peering from FT/Orange to replace at least part of it. After all, isn’t that the easiest way for Google to put out this fire? FT/Orange can’t very well complain that Google isn’t paying for using its network if they are actually paying IP transit or paid peering for it.”

The precedent that could be set in France could therefore be the ability of operators to force large content providers from buying French connectivity from French providers rather than an international backbone, Powell said.

While this could mean Google's bandwidth costs go up a little, the greater impact could be on the backbone providers. “That could simply shred the current economics of the internet backbone business, and fundamentally reshape the industry in unintended ways,” Powell said.

Finally, the timing of Richard's disclosure is unlikely to be a coincidence. It comes in the wake of rumblings by the French government that it is considering requiring Google to pay local content providers for search engine traffic generated by their content.

The government also recently proposed an internet tax on the collection of user data, as a method to force Google and other multinational internet companies to pay more taxes on their French earnings.

But the government this month also ordered Iliad's Free to stop blocking ads by default via its new Freebox modem. The ad-blocking move had been widely considered to be an attack on Google, in a possible attempt to coerce it into a similar arrangement to the Orange deal.

This Outsider blog was written by Dylan Bushell-Embling and re-published with the kind permission of TelecomAsia.

Skype has already become the largest carrier of international voice traffic on the globe and, apart from a handful of operators terminating their calls to the traditional phone networks, most will have felt the effect on their revenue stream.

The industry’s headlong rush into offering high-speed data service via fixed-line, cable, 3G, LTE and Wi-Fi is admirable but potentially suicidal. It now means that anybody that can replicate traditional voice and messaging services can threaten the service provider’s money flow.

The latest, and perhaps the greatest threat is coming from none less than Facebook. It has just updated its Messenger for iPhone application to allow people in the USA and Canada to make free voice calls to their social network friends, and there are billions of them out there. In fact, if you start to consider Facebook as potentially one communications network, it is, by far, the biggest in the world. How long before it offers this service internationally and extends it beyond ‘friends only?’

This calling functionality makes Messenger into more than just an SMS or iMessage challenger. Now Facebook is potentially a bona fide threat to carriers. But ‘The Verge’ seems to think the bigger play here is for teen attention. “With free calling, Facebook has built itself a large enough straw to drink out of the fountain of youth. Teens carry around iPod Touches and smartphones with limited or shared voice and data plans. Even if texting is their first love, they probably still want to make actual phone calls on occasion.”

I am not so sure that voice will catch on with today’s youth that seem, at best, to be mutes with very fast fingers. However, there are many ‘older’ users of Facebook that will see the advantage of being able to call family and friends because typing isn’t their thing.

Interestingly, for the conspiracy theorists out there, the VoIP features are only available on the iPhone app at this stage. Is this an extension of the love affair between Apple and Facebook we have seen growing for some time now, at the expense of the evil ogre, Google and its Android empire? Probably nothing quite as sinister as that because many Facebook users have Android phones, too.

However, it seems that everyone is now playing in the space. Microsoft with Skype, Google with Google Talk, Facebook with Messenger, Apple with FaceTime and all made possible because of the fantastic connectivity provided by CSPs.

Despite countless reports, analysis, theories and suggestions on how CSPs should diversify and monetize things they are not familiar with, the core element they provide - connectivity – continues to being undervalued. The awful ‘dumb pipe’ analogy raises its ugly head every time this is discussed but extracting the best value out of that pipe has to be every CSP’s objective.

If charging more for data plans, limiting data usage and abuse, wholesaling services to the OTT players that are eating away at their revenues, charging them for their share of the traffic consumed (a new two-sided business model perhaps) or just becoming a commodity provider is the way to go, then its probably time to start thinking seriously about it.

One wonders if the big OTT players don’t see the entire communications industry as a fragmented, ultra-competitive, highly regulated, big spending, mishmash of ‘old school’ businesses they have very little in common with. Will we see them start to invest their billions in developing their own infrastructure (as Google has done in a small way) or will they wait for existing infrastructure players to falter under the triple burden of revenues under pressure, increased technology spending and less than enthusiastic investors and stakeholders?

The Insider is written by TM Forum's Market Strategist, Tony Poulos.

When refrigerators were invented, the ice traders sensed a terrific new business opportunity: now they could make ice all year round instead of having to wait until the winter. So they began to manufacture ice instead of harvesting it from inland waterways. And then they packed it in sawdust and loaded it onto sailing ships.

Meanwhile, other inventors, entrepreneurs and visionaries were sending refrigerators around the globe so that everyone could make their own ice. In a decade, everyone could, and the global ice trade was gone.

This all happened a century before money as we know it today was born (on 15th August 1971) when Richard Millhouse Nixon ended the external convertibility of the US Dollar into gold. Before that date, old money was linked, however tenuously, to something tangible. Since that date, money has been imaginary. That's why it's amusing to hear people talking about "real" money such as Canadian dollars and "virtual" money such as World of Warcraft Gold Pieces. Neither are real.

Now it is in its forties, money is having a bit of a mid-life crisis. It doesn't know what it's for any more. Is it to facilitate commerce? Is it to fund government spending? Is it to establish national identity and sovereignty? Is it to control inflation and deliver stability? Perhaps it is trying to be too many things at once, and this is why it is stressed. Perhaps its existential crisis began when it realised that it is imaginary. This must be most unsettling. We tried buying it a sports car, or "quantitative easing" as some people call it. In the UK, the printing presses were running flat out to put more than £200 billion into circulation. (Metaphorically, since only a tiny fraction of Sterling is in the form of cash.) Money should have been happy, but it's still sulking (inflation is high), and it's been refusing to come to work (economic growth isn't).

According to the Bank of England, its policies have, over the last couple of years, transferred tens of billions from the cautious and sensible to the profligate and reckless to no avail. Perhaps it is time to begin a national debate on how money should work. It's not a law of physics, unchanging and immutable. It's the product of technology, culture and business: the current institutional arrangements could, and should, be changed so that money serves the community rather than undermining it.

Money will become a menu on the mobile

There are a great many candidates for post-fiat currency, the next new money. People have been talking about time dollars in the US, the Lewes Pound in the UK and the WIR in Switzerland as potential successors for years, but there's a new factor that is re-energising these discussions about community-based currencies. Technology and the financial crisis are like biorhythms in synch at last. Cash is on the way out, and it won't be replaced by plastic cards or paper vouchers but by mobile phones.

This Outsider blog was contributed by David G.W. Birch of Consult Hyperion, described by The Telegraph as “one of the world’s leading experts on digital money,” and named by Total Payments as number 1 of the top 10 influencers in European payments.

By all accounts, Bob was an “inoffensive and quiet” but talented man versed in several programming languages, who took advantage of his company’s telecommuting policy to the extreme. His ‘sub-contractors’ must have been pretty good at their jobs too because he apparently received excellent performance reviews for the last several years in a row, even being hailed the best developer in the building - his code was clean, well-written, and submitted in a timely fashion.

The Next Web (TNW), which broke the story, reports that Bob had the same scam going across multiple companies in the area, earning “several hundred thousand dollars a year,” and only paying the Chinese consulting firm “about fifty grand annually.” According to TNW, the scheme was discovered accidentally. The firm’s telecoms provider, Verizon, received a request asking for help in understanding anomalous activity it was witnessing in its VPN logs: an open and active connection from Shenyang in China.

Needless to say, somebody from China having access into their VPN must have been frightening, especially for long periods. The investigators could not understand how this was happening and only after they used forensic means to monitor Bob’s desktop did they make the startling discovery of hundreds of PDF invoices from the Chinese company to Bob, and the fact that he was on social media sites most of the day that the penny dropped. If you are wondering how the Chinese stepped around the security requirements, it seems Bob just sent them his RSA token by FedEx. Brilliant!

Sadly, the company no longer employs Bob. You’d think someone with his business acumen and cost-cutting skills would make good management material. He was, after all, able to reduce costs by 80 percent and still produce excellent code. Maybe they kept the invoices for future reference?

However, his actions raise a number of questions. Is it possible that Bob is the only person in the world working online or telecommuting that has thought of this ruse? Probably not! And what a great ruse it was.

You can’t blame him for doing it; after all, he has watched a large chunk of US manufacturing ‘outsourced’ to China by some very big, and legitimate companies. He may have just been following the example they set - charging the same price for your goods and services in the US but getting them done for you in China at a fifth the price.

A budding capitalist he may have been, but Bob was not so clever about covering his tracks. He should have realized that Chinese traffic into the VPN would someday be noticed. And why did he send the RSA token to them when he could have just sent the numbers by instant messaging each time they logged in. Maybe this was simply too much work for him?

Most important of all for VPN customers of any ISP or CSP is that Verizon was able to track down the activity (at least after being tipped off) and then use it is a case study warning other firms of a simple, yet effective, activity that may expose them to potential risk. It does highlight yet another source of extra revenue for ISPs and CSPs that can offer to monitor unusual traffic over VPNs and provide warnings. In this particular case, apart from the Chinese IP addresses coming up there were little else to attract attention. Offering to monitor security for customers must be a potential winner on the back of this story, surely.

The Weightless Special Interest Group (WSIG) has been formed to develop and evangelize the Weightless standard, which it claims is a paradigm shift in M2M technology. The WSIG is building a large global ecosystem, having already attracted nearly 500 members in its first year.

The Weightless SIG touts that white space spectrum provides the scope to realize tens of billions of connected devices worldwide overcoming the traditional problems associated with current wireless standards - capacity, cost, power consumption and coverage. It states that the forecasted demand for this connectivity simply cannot be accommodated through existing technologies and this is stifling the potential offered by the M2M market.

However, the combination of the unique and unusual nature of that access, and the very different characteristics of machine traffic compared to human traffic, means that using any existing standard is said to be far from optimal. Hence the need for a standard designed specifically for machine communications within white space. Weightless technology has been optimized for this specific scenario and is now being delivered as a royalty-free open standard.

Traditionally, industry SIGs, alliances and forums rely on volunteer support from member companies to work on standards development, to staff working groups and to publicize the technology and the SIG’s interests. Aware of the enormous potential of the M2M/Internet of Things opportunity, the Weightless SIG has made a significant change from standard industry practice by engaging with an independently operated skills center that will manage a dedicated awareness-building and membership growth campaign.

Weightless Marketing Limited has been established and assumes the responsibility for promoting the Weightless SIG’s interests. A comprehensive, cross-platform marketing campaign is being rolled out using the WML founders’ extensive PR, marketing, digital publishing and social media skill sets and experience. WML will engage with SIG executives and Members on a continuous basis to build momentum, and to create a dominant market position for Weightless and the Weightless standard.

With a market forecast to be worth over a trillion dollars with 50 billion connected devices by 2020, WML claims it is uniquely positioned to help the SIG deploy its differentiated proposition.

Phys.org feels that tapping into unused spectrum requires two things: reliable sensing to determine which parts of the airwaves are not being used at any given time; and spectrum-agile radios inside of devices that can reliably determine and switch to the clearest parts of the band for wireless communication.

Unlike spectrum auctioned to run 2G, 3G and 4G services, UK regulator Ofcom and the FCC in the US want the white spaces spectrum to remain license exempt — which means anyone would be able to operate in the spectrum without having to first shell out for a license to run their service. The only condition Ofcom would place is that those using the spectrum “do not cause harmful interference to existing users of the spectrum”.

This is where the potential conundrum lies. News reports late last year that Google and Microsoft were ‘sniffing’ around white spaces spectrum in the UK and as more and more organizations eyeing this white space for things like enhanced Wi-Fi, rural broadband and M2M, and a free-for-all develops, there lies the potential for interference between users.

If this situation is reached then it is likely the regulators will have to step in and the initial objectives of using that freely available white space may be dashed. In the meantime, Weightless may be well become the ‘black swan’ disruptor we didn’t expect.

Roaming is also out of the question after reading so many horror stories of bill shock. Wi-Fi only for this digital despot, and syncing all devices via Wi-Fi and the cloud is not just handy, it’s essential. Life should be getting simpler with all this technology, but it just isn’t, because now you have to have an app for everything. We are not talking about standalone apps like games and tools, we’re talking about those ones that simply access a site somewhere else and basically do what a browser already does, albeit not quite as prettily.

What’s wrong with using a trusty web browser on all the devices? Why do we now have to have an app to do banking, check-in for flights, buy tickets, get directions, and so on? We can do all that, and have been doing all that with browsers, since the dawn of digital time. So why do we need 100 apps to do what a simple browser can achieve?

When this topic is raised in the company of technophiles, The Insider is immediately lambasted for being behind the times and missing the point. What point? Most of the function specific apps I have may look pretty, provide a simple and clean interface and provide greater security, supposedly, but most times they don’t give the full functionality a website does or do it any faster. Those apps still have to communicate with something somewhere, probably the same engine that runs the website, to function.

All browsers support bookmarks, most have multiple tabs and, depending on the website they are accessing, work very fast. Most websites are designed to display on any device and screen size and are optimized for any access speed or network. Oh yes, and most of the apps we are using now are ‘native’ apps, optimized for the operating system of the device, but many are changing to HTML5, but isn’t HTML what my browser has been using for years?

Is it wrong to assume that when all those apps are rewritten in HTML5 The Insider will have 100 little browsers on his smartphone and tablet, all doing basically what a normal browser does so well already. Are we going app mad just for the sake of it? Are banks, retailers, airlines, et al just showing off so they can say ‘we have an app for that’ and jumping on a bandwagon that may be totally unnecessary?

The Insider is bracing himself for the torrent (no pun intended) of scorn that may be heaped on him as he challenges what has rapidly become the norm. Apple alone has downloaded 40 billion of the pesky things. It’s near impossible to find one you really want among the hundreds of thousands on offer and you don’t know if they are fit for purpose until you try or buy them.

So there it is, possibly the first (and maybe the last) anti-app tirade of 2013. Is this an unreasonable argument?

Laurent Perche from Thailand, quite the expert in all things French and internet-related, was quick to point out that I had missed one stakeholder in my list of three and that it might actually be the most important: the Content Delivery Network (CDN) providers.

He felt that talking about QoS (quality of service) and content delivery without mentioning CDN is missing a large part of the story and would lead to the wrong conclusions most of the time. About 45 percent of the global Internet traffic is already being delivered by CDN providers and it is growing very fast. Akamai, Limelight and EdgeCast are the main CDN providers with the vast majority of the traffic being delivered between these three companies.

Google, it seems, has decided to deploy its own CDN solution (Google Cache) and not rely on any third party CDN. This, Perche says, is the core of the issue between Google and Free as Google wants to deploy their Google Cache in Free's network while Free is asking them to buy paid peering instead.

That is assuming that Google Cache is actually deployed in other ISPs in France (Orange, etc.) but this cannot be confirmed at the time of this writing.

As for video service TF1 being affected, Perche found this very odd since TF1 is using Akamai as a CDN provider and therefore, unless Akamai platform was experiencing outage or disruption, there should have been no issue with the TF1 website. For example, Canal Plus, which is also driving massive video traffic, was not mentioned in the original article as having had trouble although it is also an Akamai customer.

Back to the Free-Google issue, Perche suggests, “you need to put yourself in the shoes of Free because ultimately somebody has to pay for additional 10GE ports, routers, switches, etc. to carry an ever growing Internet traffic. The fact that ISP's revenues are based on number of subscribers while cost is based on total capacity creates a gap that needs to be filled. This is why most operators are currently deploying CDNs or making plans to do so.”

In the meantime, news sources report that Free has dared to take on the might of Google and other online advertisers by enabling its customers, an estimated 5.2 million users in France, to block web advertising, Google’s major source of income. Free provided this ad-blocking facility last week when it updated home router software. The move could cost Google up to 1 million euros every day, a source told news agency AFP.

The BBC reports that Philippe Jannet, the former president of Geste, the French online publishers association, said that when operators "see Google come in like a cuckoo bird and make profit off the internet service they provide without receiving a penny in return, it's normal that they get mad."

But Free’s ‘David vs Goliath’ disruptive battle was short-lived. Yesterday, France’s Digital Economy minister Fleur Pellerin persuaded Free to restore full access to all content on the internet, including Google ads. It is reported that Pellerin has scheduled a meeting with Google about Free's actions and one can only wonder how that meeting will go and what stand she may take.

This whole affair has certainly raised awareness of the plight of network operators and sends a shot over the bow of the good ship Google, and all who sail in her, that the perceived status quo can be challenged. Free has a reputation as disruptive player but there must be other network operators in awe of them for having the audacity to challenge Google.

By providing its customers with the ability to block ads it shoots down the net neutrality moaners who were quick to claim the end of the internet was nigh because of Free’s actions.

In any case, the story is not yet over, and it may take many twists and turns in 2013 as all the players jockey for position in the digital revenue stakes.

The UK has, at the time of writing, precisely one NFC-EMV handset on sale (from Orange) and industry observers think it unlikely you will see a torrent of similar handsets reaching the shops in the near term. Events have started to overtake the argument that NFC-EMV made sense because it meant that the existing acquiring infrastructure could be used and it would minimise the retailers' expenditure on POS equipment. I'm no longer satisfied using NFC-EMV to pay at the car park ticket machine at Woking station because I'd rather just use the RingGo app on my iPhone and not go near the ticket machine at all.

Retailers are abandoning the conventional POS for staff wandering around with iPads and the one mobile wallet that I use all the time is from Starbucks and doesn't use NFC at all. Now is not the time to simply carry on with the same-old, same-old. Now is the time to stop and re-think the mobile wallet. It's time for the ‘hyper wallet’.

A hyper wallet doesn't try and simulate a physical wallet: it meets the requirements for a wallet in the modern, online world. It doesn't emulate the leather wallet, it blows the leather wallet away. [From: Wallets, mobile wallets and hyper wallets]

I went along to the excellent Mobile Wallet Summit in London in November and sat through some excellent sessions, in particular the well-informed discussion about mobile acquiring featuring Petter Made and TT pals Stewart Roberts of iZettle and Dan Wagner from mPowa.

I spoke about this idea of hyper wallets in an identity-centric context, meaning that is the identity of the consumer that is the source of value in a world where the margin on payments continues to trend down. I also said that the convenience of NFC will put it into consumers' hands. But the convenience will be used for purposes other than EMV payments. The hyper wallet will do things that physical wallets and digital wallets can't do, not emulate the things that they can do just fine, like make card payments. The fact that hyper wallets are smart and connected means that they can deliver entirely different kinds of services.

Mobile wallets can use their computing power to instantly resolve these questions and present the user with optimal choice(s). [From: The Digital Wallet Value Proposition (NetBanker)]

Jim is characteristically spot on here. I want my mobile phone to do all the boring stuff that I don't want to do, like figure out where to get Waitrose cash back or British Airways miles on any particular transaction. As I've written before, I can imagine selecting various overall policies from a menu somewhere on my phone and then leaving it up to the device from then on. I certainly don't want to get involved in any dreary per-transaction decisions. I made another point at the Summit to go with this: hyper wallets should implement functions that simply cannot be implemented in physical wallets (I used the example of cryptographic tokens for review sites, but I'm sure smarter people than me will think of others).

When you pay your hotel bill, your wallet sends a blinded token to the hotel which then signs and returns it. Your wallet unblinds the token. When you log in to Trip Advisor, or whatever, you can send the token to them. The token proves that you stayed at the hotel, but is mathematically unlinkable. Trip Advisor and the hotel and the other viewers can know for sure that you stayed in the hotel but your Trip Advisor account can remain anonymous. [From: Security isn’t the killer app for digital identity]

This all does rather change the nature of competition in our industry, though. If consumers aren't involved in the decision whether to use Amex or MasterCard at POS, because the computing power and the connectivity of the mobile wallet does it better, then what's the point of the adverts and direct mail and promotions?

Barclays will have to convince my phone, not me, to use one of their products. This won't happen, of course, because consumers either won't be bothered to make these decisions or won't be capable of making them. What they will do instead is download policy profiles into their wallets: the Money Telegraph Profile or the Suze Orman Profile or the Walmart Profile, so the issuers will be reduced to making deals with the policymakers. If the "Saga" policy is a popular choice for older British persons with their phones, then Barclays will have to do a deal with Saga in order to be part of their policy. It will be my Saga app that decides which payment card to use in the shop, not me. The TV advertisements will be even more of a waste of money than they are now.

If you put all this together, you see an impending shift in wallet strategy. The hyper wallet is getting closer.

This Outsider blog was contributed by David G.W. Birch of Consult Hyperion, described by The Telegraph as “one of the world’s leading experts on digital money,” and named by Total Payments as number 1 of the top 10 influencers in European payments.

Before delving into the all-important rankings of popularity it should be noted that even though over 75 per cent of the world’s national leaders have Twitter accounts, it is highly unlikely that they are always the originators of the Tweets from their account. Just as many others have discovered, Twitter provides a very simple yet very effective means of distributing snippets of information on any subject and their minders have been quick to exploit this growing digital service. It would be hard to imagine Barack Obama sitting in a meeting discussing the ‘fiscal cliff’ and tweeting about it on his favoured mobile device, but he does occasionally Tweet directly.

It does, however, highlight just how pervasive digital social networking has become when a total of 123 world leaders out of 164 countries had accounts on Twitter set up in their personal name or through an official government office. The Digital Policy Council’s (DPC) research continues to provide analyses on world leaders and institutions of government employing social media outlets to discover how they govern and connect with their citizenry.

The data DPC has been tracking for the last three years shows an amazing 93 per cent compound annual growth rate (CAGR) in adoption of Twitter by Heads of State.  Based on these growth rates, the DPC anticipates penetration on Twitter for world leaders to be nearing 100 per cent in 2013. Remarkable to think that this would render Twitter as a de facto communication tool for all heads of state.

US President Obama again maintained the top spot of all world leaders, with a vast 24 million followers, adding 15 million followers in one year. 2012 was an election year, therefore, the Twitter account continued to be managed by the presidential campaign staff. Obama occasionally post his own tweets, and these are signed with his initials.

The rest of the top ten list features leaders that many may never heard of, emphasising that their popularity is achieved by free choice of a large numbers of followers, and not figures conjured up by analysts or marketing people. The list is:

1. Barack Obama, President, United States, 24.6 million followers, @BarackObama
2. Hugo Chavez, President, Venezuela, 3.8 million followers, @chavezcandanga
3. Abdullah Gul, President, Turkey, 2.6 million followers, @cbabdullahgul
4. Queen Rania, the Queen Consort of the King of Jordan, 2.5 million followers, @QueenRania
5. Dmitry Medvedev, President, Russia, 2 million followers, @MedvedevRussia
6. Dilma Rouseff, President, Brazil, 1.8 million followers, @dilmabr
7. Cristina Fernández de Kirchner, President, Argentina, 1.5 million followers, @CFKArgentina
8. Juan Manuel Santos, President, Columbia, 1.5 million followers, @JuanManSantos
9. Enrique Peña Nietoin, President, Mexico, 1.4 million followers, @EPN
10. Sheikh Mohammed, Prime Minister,  United Arab Emirates, 1.3 million followers,@HHShkMohd

Ah, but this is France we are talking about. This is the same country that has introduced a ''temporary supertax'' of 75 per cent on annual incomes of more than €1 million and wondering why the rich and famous are renouncing their citizenship and moving to neighboring Belgium, led by famous actor Gerard Depardieu, to escape paying.

It should not be surprising that the time chosen for network operators to exercise their new found power was the peak internet usage period between Christmas and new year when most people are indoors due to the cold weather and from over-indulging. Millions of French netizens were a little less than pleased to find their YouTube streams sputtering, dying or not starting at all. Other video services, including TF1, were also affected but the disruption seemed to occur randomly and at different times of day.

Respected consumer organization UFC-Que Choisir found between 20 per cent and 50 per cent of over 16,000 users surveyed online had problems. There was, and still is, connectivity and much of the traffic gets through, just not at the speed consumers have become accustomed to. It would appear that French networks, with France Telecom in the lead, are refusing to accept growing traffic from Cogent, a major backbone carrier that services Google and are demanding payment to accept all the streams via Cogent that their customers request.

According to fastnetnews.com, the five French networks (FT, Free/Iliad, Bouygues, SFR & Numericable) are holding firm, providing a collective front against the mostly foreign content companies. Free which had been adding the most customers and experiencing the highest traffic growth had the most problems. Press reports emphasize the Free-Google conflict, but apparently all the other ISPs as well as other video providers are affected. Google is counting on public protest to force them to stand down and ARCEP, the regulator, along with several legislators are threatening to jump in.

The network operators are arguing, and have been for some time, that they are being burdened with the cost of constantly increasing capacity to carry the growing demand for video content but that their customers are not willing to pay more. This may be the first salvo in a net neutrality war, and one that is apparently sanctioned by the French government and regulator, but it could simply be a case of posturing by the network operators trying to make their point?

They also need to be careful that charges of collusion are not leveled at them again so soon after price-fixing was exposed. But this seems unlikely because Free, the major disruptor in the French market, appears to be the hardest hit in terms of customer complaints over reduced YouTube delivery quality. Xavier Niel, founder and CSO of Free/Iliad, stated that the “pipes between Google and we are full at certain times, and each pushes the responsibility to add pipes. This is a classic problem happens everywhere, but more often with Google.” Cogent event went as far as releasing a statement claiming there was no dispute between it and Free/Iliad.

If only one network was affected, customers would simply jump to another, but this is clearly not the case. Could it be, as some have suggested, that Google is restricting the traffic from its side hoping to aggravate French customers to pressure a reversal of the Autorité de la Concurrence charging plan that affects them most directly?

This may be a good time to clarify that there are three types of stakeholder operating in the French Internet interconnection market (the sixth largest in the world):

• Transit operators, such as Cogent, Tata Telecom or France Telecom (via its Open Transit brand), which interconnect ISPs with each other and with content providers via their international networks.
• Internet service providers (ISPs) such as Orange, Free, SFR and Bouygues Telecom, which provide internet access services to consumers;
• Content and service providers (Google, Amazon, websites more generally, hosting services, etc.).

Operators interconnect with each other using either the “peering” or the “transit” method. In the most common cases, ISPs and websites purchase transit services from one or more transit operators in order to connect to the Internet and deliver traffic flows to internet users.

Internet operators are also able to connect with each other without a transit operator, via “peering” agreements whereby each “peer” operator exchanges data flows free of charge - in a balanced exchange - with another peer to provide access to its customers.

Peering-based data exchanges, although generally free of charge, are sometimes charged for, hence the term ‘paid peering,’ if the traffic exchanged between transit operators is asymmetric.

Reports suggest that France Telecom had submitted a request to charge a fee for opening additional interconnection capacity but this does not appear unfair inasmuch as it is consistent with its peering policy.

So, we are back where we started. Could this be a simple misunderstanding between players (unlikely), a standoff over peering charges or a full-blown conspiracy theory bringing to a head the CSP vs OTT player arguments?

Who or what is responsible for the drop in service needs to be investigated and addressed urgently, not only for the sake of French consumers, but for the internet as a whole. 

If it’s the latter, which I believe accounts for 90 per cent of the cases, it would be far more clever if they reported to us how many of last year’s predictions they made actually came true, or even close to true. And I’m not talking about the really obvious stuff like ‘telcos will cut costs’ or ’10,000 jobs will be lost because of new technology’ or ‘digital services will boom,’ any idiot can predict those things.

Let’s take a look at the top 20 ‘clangers’ that have passed my desktop in the last few weeks. I’ll keep them anonymous to screen the perpetrators from total embarrassment, although hanging, drawing and quartering would be advisable for some. The first five came from one of the world’s leading research and analysis companies (my comments are in italics).

1. By 2015, nontraditional money creation and exchange will enable 125 million more people to participate in the mainstream global economy (whatever does all that mean?)
2. By 2016, half of US utility customers will have access to standardized energy usage data, but only 20 percent will use it (I’m lost)
3. By 2014, less than 2 per cent of consumers globally will adopt Near Field Communication (NFC)-based mobile payments (is that 2 per cent of people with NFC enabled mobile devices are all consumers?)
4. More than 50 percent of government shared-service organizations that provide cloud services by 2015 will discontinue or downscale them by 2017 (well, that’s bucking the trend, surely)
5. By 2016, patients will be harmed or placed at risk by a medical device security breach (Where? How many? By what?)
6. Interest in iOS and Android platforms to remain stable (brilliant, why even bother)
7. Mobile will forever change retail (sorry, I think it already has)
8. More business opportunities around big data for service provider (you’re kidding, really?)
9. Omni-channel to become a top priority for 2013 (Omni what?)
10. Potential partnerships to establish between service providers and machine-to-machine vendors to roll out connected home initiatives such as proactive care (just woken up, have we?)
11. More strategic partnerships to form among service providers, OTT players and device manufacturers (who’d have thought that?)
12. Big data grows up - there will be an emergence of Big Data Administrators, who will play a critical role in using new technologies and processing power to take a cold, hard (and useful) look at data and its business application (wow, all that stuff about big data must be true, how do I become a BDA?)
13. In 2013 people are going to have a harder time managing the security of their devices (no problem if you keep them with you at all times)
14. Africa will become a new safe harbor for cybercriminals (there may be some other continents that will fight for that dubious crown)
15. M2M is about to enter the next evolutionary stage: at the moment we collect data, but the real benefits of M2M will become apparent by analyzing this data (is that really the reason for collecting all this data?)
16. Digital "ants" will protect the US power grid from cyber attacks (I dread to think what a digital ant looks like)
17. Software will predict traffic jams before they occur (that I have to see!)
18. Criminals will benefit from unintended consequences of espionage (unintended espionage, never heard of such a thing)
19. Advancements in speech, natural language understanding and artificial intelligence will continue to revolutionize the mobile user interface (this one is a perennial favorite)
20. Mobile video calls and Facetime will explode (I threw that one in because it’s another annual favorite that never seems to happen, despite Apple’s best efforts to convince us otherwise).

Of course, there are some people you really didn’t want hear predictions from, like your boss. When he or she predict there will be cutbacks in your department then it’s probably a good time to look for a new job. For 'The Insider' it's time for a dubiously earned break, he'll be back in the new year, unless his boss has another prediction!

A recent article by Ed Finegold appearing in BillingViews questioning the rationale behind one of Gartner’s Magic Quadrant reports is causing quite a stir. Finegold steps out on a limb by asking how Gartner could come to some conclusions about business system vendors, well known to all of us, and be so wrong. That certainly takes some courage, but based on the responses the article has generated, many others have been wanting to ask the same questions but may have been afraid to.

The report, titled the “Magic Quadrant for Integrated Revenue and Customer Management (IRCM) for CSPs,” rates solution suites that provide billing, customer care, rating, charging, pricing, partner relationship management, policy management, mediation, self-service, analytics and other functions. That is a pretty comprehensive list for any suppliers and that alone, you would think, would restrict the list dramatically.

I can’t reprint any of the report here, even though I have read a copy, but I can support some of the observations made by Finegold in his article. For many suppliers included in the report there was also some confusion because they had been called by Gartner and provided information that was not included or taken into account in the report. One said, “we briefed Gartner three times and they said we had received credit for all the innovation we had done in our prime markets, and our huge scale deployments, but in practice they seem to have ignored this.”

For example, the report places NetCracker, Ericsson and AsiaInfo-Linkage, along with Redknee, in the niche player quadrant that Gartner explains is “because of a geographical shortfall, narrow focus (they may provide only a limited subset of IRCM core and adjacent functionality) or lack of financial strength (that is, they have not achieved financial viability compared with the Leaders), or they have not come as far as the Leaders in advancing their technologies or functionality.”

The first three, to my knowledge, are anything but niche players and offer a full suite of solutions as defined by IRCM. NetCracker is now part of the massive NEC group, Ericsson manages over 2 billion customers worldwide, and Asia-Info is probably the largest IRCM vendor by subscribers billed, in Asia, due to their massive presence in China. Redknee, having just acquired NSN’s BSS business is firmly in the big league now, but that may have been after the report was published.

As Finegold points out, not all the report is out of line, but the glaring inconsistencies put it into question. Maybe this particular report is an exception, maybe it was written by inexperienced analysts, maybe the IRCM bundle is just too broad to objectively address, whatever the case, it is not what we would expect from a firm like Gartner. You would also expect to see some detailed overview of how the results were arrived at. Whether analytical, statistical or physical, the evidence should be transparently provided as it is in many other MQ reports.

I’m sure that major purchasing decisions aren’t made solely on Gartner or any other commercially available analyst reports, but they do influence many decisions as pointed out earlier. For fear of sounding nepotistic, this is where the TM Forum’s own conformance certification program comes into its own. Used in conjunction with third party reports, CSPs can quickly determine the suitability of a solution that has been thoroughly evaluated and conforms to the requirements of the Frameworx that most CSPs utilize in their operations.

Heaven forbid, all this publicity for the Gartner IRCM report may even generate sales for it, especially from those keen to assess if all the criticism is justified. 

Without being too hypocritical, if you are flying in an aluminium capsule 40,000 feet in the air and duty free sales are underway you can pretty much assume that you under nobody’s immediate jurisdiction except, perhaps, the country you are flying over. But I digress.

Why then, are there so many variations in rules about the use of electronic devices on board flights? Do they really interfere with the planes navigation system and, if they do, how come you can’t use them when the plane is taxiing on the ground? Are they still on auto-pilot and using navigational aids then? Why do some airlines insist that you don’t turn on phones until the door is opened, is it because the radio waves also use the doorway to travel from base stations to you phone?

How come you can read a book at any time, but if those evil Kindles are being read you risk the lives of everyone on board, despite the fact that with their Wi-Fi turned off they transmit less electromagnetic radiation than any one of the hundreds of fluorescent light tubes scattered throughout the plane.

Can somebody also please explain why mobile phones must be turned off completely and not just put into ‘airplane mode’ for take-off and landing. Isn’t that why they invented the ‘airplane’ setting? Why is it that planes equipped with Wi-Fi and internet transmitting stations and satellite links to the outside world now allow, even encourage, use of mobile phones on board when we have been told for years that turning on a phone will risk sending the plane, and everyone in it, into a plummeting death spiral? Amazing how revenue potential can override safety rules.

In fact, CNN reports that “despite the fact that 20 years of testing still hasn’t definitively proved that mobile phones, let alone any other electronic device, can cause aircraft interference, passengers are still prohibited from using tablets and e-readers during take-off and landing.

In August, the Federal Aviation Administration (FAA) released a study on the in-flight use of cell phones — devices that operate on the same frequency as aircraft navigational  equipment — in multiple European countries, and no direct incidents of interference were found. Two anomalies in Belgium did pop up, though the cause was left inconclusive. Though there have been plenty of instances where passengers have left their cell phones on during flight, there have been no reported problems regarding cell phone interference that have been positively linked to gadgets. Yet we’re still worried about non-transmitting devices.”

Even the venerable Federal Communications Commission (FCC) Chairman, Julius Genachowski, has called the FAA’s policy on in-flight electronics use into question. FAA tests and those carried out by Boeing, one of the leading proponents of caution, have also been unable to create interference to aircraft navigational equipment. Considering our ever-increasing dependence on mobile phones, tablets and e-readers and our need to be hyper-connected with the broader digital world, it’s only a matter of time before changes come about.

CNN put it quite succinctly by writing, “anyone who believes that using an iPod during take-off and landing will endanger a flight needs a reality check.” 

What is even more concerning is that the referendum was about stripping Facebook users of the power to endorse or reject policy changes through popular vote, just like the one they ignored anyway.  Even though it was opposed by a majority of voters, all 668,125 of them, it wasn’t enough, percentage-wise, to be passed. You see, Facebook set some ground rules before the poll that if fewer than 30 per cent of Facebook’s 1 billion users voted it would be free to go forward with a plan to eliminate the voting structure altogether and integrate recently-purchased Instagram’s data for advertising purposes.

I’m smelling fish here. For a start, I can’t recall receiving any notification as a Facebook user about this poll, or its importance. If I had known the consequences I would surely have voted against the bill. I wonder how many of the other 999,331,874 Facebook users that didn’t vote had the same experience as me.

So, along with an overhaul of privacy and other policies, this monumental event has became the last binding referendum of its kind at the huge social network. That’s assuming it can still call itself a social network after exhibiting such non-social behaviour. Since its under-whelming public listing, Facebook appears to be doing its best to transform itself into the ugliest of corporations by revoking its users’ rights to privacy and monetizing everything it possibly can.

Of course, that’s what its shareholders expect, but not all its users are shareholders, and since its valuation was based on the number of users it would be fair to say that they were its prime assets. Seems a funny way to manage your assets.

An AFP report suggests that, according to privacy rights groups, the changes will make it easier for advertisers and others to send messages on Facebook, limiting users’ control. Activists have raised a ruckus, saying the new policies, if implemented, could violate some laws or Facebook’s agreement with US regulators earlier this year after complaints from privacy groups. But it raises the question of who actually regulates social networks and who protects the users?

Despite its original social ideals, Facebook is fast becoming the antithesis of what it set out to be. Is this is a life cycle we can expect from all social networks that aspire to corporate greatness? I suspect that Facebook users will eventually become disillusioned with its direction, get annoyed by its attempts to extract revenues from them or fear that their privacy is being compromised and sold on. And there will be no shortage of options to move to.

Like MySpace before it, Facebook may find that its biggest challenge will be to remain popular, even relevant, to its users after corporatization takes hold. The digital services world may not be all that different from the corporate and communications services worlds after all!

The one man on earth with a purported direct line to God now has a direct line to his flock as well, and with Twitter that means almost all his flock. One wonders how long before he has a Facebook page and LinkedIn profile! Seriously, though, now that religious leaders have adopted social media (no doubt as a result of the success political leaders have already gleaned from the media) it’s like an official stamp of approval.

Parents trying to control social media use of their children will now be met with the response, “It’s OK, Mummy, the Pope Tweets so it must be a good thing!”

It’s going to be interesting how many followers the Pope gathers. Will he be as popular as Justin Bieber? Can you imagine how many requests for clemency he will receive, and how will the Vatican be able to cope with the volumes? I’m guessing a special social media team will be assembled in the Vatican to manage all of this. Or maybe tasks will be distributed to members of the clergy spread around the globe as the internet comes into play for the church’s media activity.

By the way, don’t expect the Pope to be following you. The same will apply as in the real world, he will be the ‘followed one.’ Last year, Pope Benedict wrote that new media and social networks offered “a great opportunity,” but he also warned that they carried the risk of alienation and self-indulgence. Let’s hope he doesn’t fall into the same trap.

Banks will take a page from Charles Darwin and follow an evolutionary approach to mobile payment.  This means narrower product launches in the mobile payment space (think Barclays PingIt or PayTag).  Rather than go the way of Google Wallet, it is more likely banks will focus on more “silo-ed” products.  And unlike Google Wallet, banks will hopefully experience fewer hiccups in the early stages of launch. 

An evolutionary development approach is sensible for banks for a few key reasons.  It will allow banks to meet the needs of their clients while saving themselves the hassle of being in the business of changing consumer behavior.  This is something mobile wallet providers have struggled with to date.  As a prime example, ISIS was delayed multiple times to ensure the appropriate level of consumer “readiness”.

With high risks and looming uncertainty in mobile payment (e.g. NFC versus non-NFC) it will take a visionary company/joint venture to turn the mobile wallet into a reality for mainstream commerce.  And let’s face it; bankers aren’t the best innovators.   There are far too many loose ends that need tying that are outside of the scope of core banking practices.  Because of this, banks should find it difficult to justify allocating resources to remedying the mobile wallet quagmire.

For the shorter term, banks are better suited with a mobile payment strategy that offers complimentary products that round out the current suite of banking services.  Rather than revolutionizing the wallet, the mobile payment products we will likely see offered alongside our current account will meet our basic transactional needs.  They won’t change our lives but they will be straightforward, easy to use, and will seamlessly connect with our bank accounts and credit cards.

In the longer-term, some customer focused banks, such as PNC, Barclays, or Wells Fargo may rise to the occasion to provide us what we are looking for in a mobile wallet.  However, even these banks will surely let other companies bear the risk of taking the mobile wallet to market first and will happily follow behind.

So, while we might be anxious for the mobile wallet to become reality, let’s leave the banks out of the revolution for now.

Reprinted courtesy of BillingViews.

Governments promoting the rollout of smart meters are being asked who is actually paying for them and what real benefits they bring consumers. The skeptics are quick to point out that the public always ends up paying somehow, and do they really want to have to check their meters to decide whey do the washing, or take a shower, or even cook dinner, simply to benefit from lower off-peak prices. As if we don’t have enough to worry about with modern living. What’s wrong with just have two simple tariffs that can already be determined by historic peak usage times.

In fact, the increase in ”peak demand” remains the industry catch cry to rationalize rampant spending, even though peak demand in many countries, has actually been falling for three years. As reported in one revealing newspaper story, as the myth of peak demand is now harder to propagate, industry is pushing for smart meters. The smart meter is the next big ruse.

The same story claims that smart meters and ‘flexible pricing’ merely shift the business risk from the electricity company to the consumer. And then, as if to add insult to mobile operators, the statement that “like mobile phone bills, their sheer complexity will enable the promoter to game (take advantage of) the customer.”

The article also claims there is little evidence yet that smart meters lead to lower energy bills. Whilst we don’t know how well they work, we do know that they are expensive - and that expense is borne by the consumer. “For industry, smart meters promise enormous returns - and not just via tricky pricing opportunities and the transfer of risk to the customer. As it is likely the devices will spur a fall in consumption at times of peak demand, the power companies can expect a rise in profit margins.”

Strong arguments? Maybe not, but, just like most other public services, questions are being asked about the efficiency of the power industry. At times of peak demand, not always planned, where power generators have to be brought on line, or ‘fired up’, the cost of a kilowatt hour skyrockets and distributors are forced to pay the extra prices, often via a spot-market system. But it’s the end user that ends up paying. The electricity retailers benefit by reduced costs (meters are read automatically), remote control over supply to a property, faster and mire accurate billing and the subsequent reduction of bad debt.

While not ubiquitous, smart meter opt-out programs are gathering momentum across the US creating more consumer choice but also bringing new challenges for utilities and regulators. For a variety of reasons, including health and privacy concerns, a small percentage of customers remain unconvinced or hesitant about having a smart meter in their home. Accommodating this group creates its own set of challenges.

Perhaps ”demand management” initiatives and energy efficiency are the answers to lower power bills, not smart meters. The technology required for successful demand response already exists in today’s marketplace, and many agree that the potential for financial savings exists as well. Electricity and water are commodities of everyday life and increasing their prices does not lead to lower demand. Educating consumers and more energy efficient appliances will achieve this, not costly smart meter hardware that has to be manufactured, distributed and installed without a clear or yet proven return on investment.

Views like these may temper or even dissuade CSPs from wanting to be end-to-end suppliers of smart meter technology, but it should not deter them from being an integral part of the ecosystem in managing and providing the communications links for them.

There is no need to reiterate what we read every day in the press. Cash flows are being curtailed due to increasing OTT competition, voice is now a commodity, data monetization is patchy, technology demands have to be met to remain competitive, spectrum is limited and expensive, etc. etc. It’s almost all doom and gloom, and it is an image that is being projected to the investment markets that are steering well clear and embracing the new wunderkinds of social networking, internet business and mobile advertising.

Customers have the perception that the communications provider is a wealthy, bloated, money-grabbing machine that doesn’t deserve their loyalty and actually owes them a favor by them just being a customer. Their expectations of customer service levels from CSPs exceeds what they expect from their banks, travel companies, online merchants and government, but why?

They have all become spoiled is why. With the era of deregulation came competition and that bought benefits in the form of lower service costs, subsidized handsets, unlimited usage, low-cost or even free VoIP and messaging on demand. Things are hardly desperate yet, but they could get a lot worse before they get better.

What the industry needs is an epiphany – a sudden realization that things have to change and they have to change pretty damn quickly. There lies the core problem – CSPs, by their very DNA structure, don’t like change and they certainly don’t like moving quickly.

Apart from finance, it may be difficult to find a more risk-averse sector. Sure, they are happy to hand out handsets and SIM cards willy-nilly, but when it comes to investing in anything remotely risky or non-core, they suffer brain freeze.

Every single expenditure item, either capex or opex, has to be justified by countless investigations, detailed business cases and drawn out selection processes. Often, by the time a decision is made, the business opportunity has passed. Even when this happens there is a sense of accomplishment at not having taken a risk in something that wouldn’t have worked out anyway, instead of it being viewed as a missed opportunity that may have succeeded with the right level of support and investment.

CSPs today are not competing with each other; they are competing with digital service providers (DSPs) vying for their customer’s hearts, loyalty and wallets. These “new kids on the block” are exactly that, they act like kids without a care in the world, no sense of danger and a “suck it and see” attitude.

Take the hundreds, maybe thousands, of developer millionaires created by the applications boom for smartphones, the OTT players that are delivering services over mobile and fixed internet, the content providers pumping out music, TV, videos and games to the hungry masses. Look ahead to the M2M suppliers, e-health and mobile payments players; there’s hardly a telco among them, let alone leading them.

Most, if not all, innovation is being driven by this agile “new world” and even when presented with innovative services, CSPs are still trying to justify their ROI within three to six months rather than the loyalty value, network usage and marginal revenue they may bring.

With the exception of a few like Telefónica and SingTel, as examples, most CSPs act like fish out of water when faced with that crossroads decision to go the digital services route.

Even these two shining examples have taken very different routes – one establishing an arms length innovations and investment vehicle headed by bright young unfettered minds, and the other investing in people and acquiring technology that they see as viable and giving them competitive advantage.

The overriding message to all CSPs is that they will have to do something to embrace the digital world; even if they only resell third party digital services or partner with the DSPs.

There is risk involved and the margins will be lower, but making the right decision, any decision, particularly with investments in DSPs, may be the first step in becoming a DSP themselves. The question is – can they?

Original article written by Tony Poulos, reprinted courtesy of TelecomAsia.

The report defines social business as embedding social tools, media, and practices into the ongoing activities of the organization. Social business enables individuals to connect and share information and insights more effectively with others, both inside and outside the organization. Social business tools facilitate engagement in extensive discussions with employees, customers, business partners and other stakeholders and allow sharing of resources, skills and knowledge to drive business. However, despite the intention to rapidly ramp up their social business efforts, many companies recognize the potential challenges of such a transformation. Nearly three-quarters of survey respondents reported they were underprepared for the required cultural changes.

The report also highlights that social business represents a significant transformational opportunity for organizations. Many companies, after initial forays into external social media, are now realizing the value of applying social approaches, internally as well as externally.

It clearly recognizes that social business can create valued customer experiences, increase workforce productivity and effectiveness in addition to accelerating innovation. It also reveals how organizations can use social approaches to create meaningful business value, nevertheless, many companies still wrestle with the organizational and cultural challenges posed by these new ways of work.

Two-thirds were not sure they sufficiently understood the impact social business would have on their organizations over the next three years. Executives are concerned because social business represents a different way of thinking about employees, customers and how work is accomplished, as well as the potential risks of increased organizational openness and transparency.

Social business is moving beyond basic promotional activities to encompass the entire customer lifecycle, including lead generation, sales and post-sales service. No wonder we are seeing the emergence of specialist consulting firms offering social business expertise to the those of us, and a large percentage of those interviewed, that are finding it all a little daunting.

As the scope of activity broadens, so too does the number of touch points with the organization, necessitating a consistent set of customer experiences. Social business practices will need to be more closely embedded into traditional marketing and sales processes, with loosely coupled marketing and advertising campaigns giving way to tightly linked lead generation and sales efforts. Further, providing customer support through social channels will become a more prominent focus, with organizations incorporating social platforms into their larger customer relationship management strategies.

The regulator is planning to utilize spectrum in the 700-MHz frequency band to ensure there is enough capacity to meet mobile data demand in the future. Ofcom predicts mobile data usage could grow by 80 times between 2012 and 2030, after consumption more than doubled from 9 million GB in 2011 to 20 billion GB in 2012. 

While the 700-MHz frequency is currently used by digital terrestrial television, Ofcom believes harmonized spectrum planning throughout Europe means new frequencies can be released without the need for a second TV switchover – it has just completed the shift to digital, which has freed up the 800-MHz spectrum previously used by analog TV for the forthcoming 4G auction.

“Within the coming months we will hold the UK’s largest-ever auction of mobile spectrum for 4G. However, that may not be enough to meet consumers’ future data demands, which is why we are already making significant efforts to prepare to go beyond 4G,” Ofcom chief executive Ed Richards explains, adding. “Our plans are designed to avoid a ‘capacity crunch’, ensuring that the UK’s mobile infrastructure can continue to support the inescapable growth in consumer demand and economic growth more generally.”

Ofcom’s announcement comes less than a week after a team of UK researchers revealed they are working to commercialize a technique that boosts the amount of data that can be handled by current optic fibers. The team has already achieved 20-Gbps data rates using their technique, which is based on Optical Orthogonal Frequency Division Multiplexing, the BBC reports.

Story by Michael Carroll, courtesy Telecomasia.net

For the uninitiated, Dropbox is what today’s computing is all about – being able to access your files from any of your devices, anywhere and also be able to give others access to them, all done securely. It is essentially a storage mechanism in the Cloud but what makes it really special is that it is free (up to 2GB) and it looks and feels, for all intents and purposes, just like a local hard disk on your device. If you need more space you can buy it by subscription or get up 18GB extra space free just by referring friends at 500MB per referral.

Once you sign up and load the app, Dropbox magically appears on your finder and you are free to save files immediately, any files. Apple’s iCloud limits what application files can be stored and is very clunky to use. Google’s Drive that requires you to login with your Google credentials, something many people, like myself, prefer not to have to do. Dropbox is simply there and it works.

Despite being a ‘free’ service, Dropbox has generated over $500 million in revenues over the last year. A recent Forbes article investigating this phenomenon reported that it has over 100 million users (double what it had one year ago), manages 100 billion file saves every day, and does all of this with less than 250 employees. No wonder there were stories out that Apple wanted to buy it. Even the arrival of many new competitors, including Google, has not dampened its popularity or growth. It was rumored to be worth $4 billion last year, this year it seems the sky is the limit.

If you are wondering how, four years ago, the Dropbox founders had the foresight to go into cloud storage solutions, one can only guess. They could not have foreseen the introduction and runaway success of smartphones and tablets, both of which are now driving their massive growth. It is obvious to device makers that adding extra memory increases their build costs, but today companies like Samsung and HTC are bundling Dropbox with the products as a cost-saving and customer attractive feature.

Simplicity and function, coupled with a ‘freemium’ offer has allowed Dropbox to blitz its competitors to date, and it’s a tough model to compete against. CSPs now jumping into the Cloud and online services space should take Dropbox as the ideal case study, better still, partner with them and like the device makers, benefit from the cost model Dropbox can offer as a bundled product. The collaborative Pro and Team products that Dropbox offers SMEs and enterprise customers definitely lend themselves to partner bundling.

Of course, that may all look too easy for some CSPs that have made an art form out of complication. There will be telco executives, and vendors no doubt, that will build fantastic business cases for an in-house offering, but you can almost guarantee that, longer term, this will be the wrong choice. Working with the best, like Dropbox, might rub off some of that OTT magic CSPs have been dreaming of.

“Through an intuitive app that will automatically detect whether a call is possible and whether that call is included in their home phone talk plan. This even includes phoning the UK from abroad, so holidaymakers could wave ‘au revoir’ to the shock of roaming call charges or hefty hotel phone bills.” So goes the marketing spiel from Virgin Media in the UK as it announced SmartCall, billed as the UK’s first ‘converged’ calling plan. (There’s that awful ‘c’ word again).

Virgin Media also claims to be the first provider of all four broadband, TV, mobile phone and home phone services in the UK, so you would have to ask why it would potentially cannibalize its mobile business to keep its fixed line broadband customers happy. According to Graeme Oxby, Virgin Media’s executive director of mobile and home phone, “SmartCall will stretch the home telephone cord all the way to wherever you might be, whether in a coffee shop in Cornwall or on a beach in Bali. All you need is a home phone from us, a smartphone and a Wi-Fi connection.” (I’m not sure Graeme has been to a Bali beach lately but we get the drift.)

Perhaps home phone customers consuming Virgin’s broadband and TV services are more valuable than their mobile customers being serviced through its MVNO? Or is it that there is little crossover of the two customer bases? Either way, we will not likely be told. However, full credit to Virgin for providing what is essentially a free VOIP service that looks and feels like an extension of the service their customers are used to.

This is an example of something we will be seeing more of in the coming months. Not satisfied at sitting back whilst their long distance traffic dwindles due to the numerous OTT offerings their customers are being bombarded with, Virgin makes consistency and ease of use a key stickiness factor.

Earlier this year Virgin Media introduced a Line Rental Saver by which customers could save even more. For a one-off up-front price of £120, when paid in advance by debit or credit card, customers can get an entire year of home phone, saving £46.80. The company has also introduced a new talk plan that, for the first time in the UK, will include unlimited calls to UK mobiles.

Combined, these make a compelling case to stick around. For those of us that are starting to suffer from ‘VOIP-APP fatigue’ there will some comfort in a Virgin-like package (no pun intended). If you have ended up with Skype, NimBuzz, Viber, etc all running concurrently on your smartphone and then been unable to work out which of them is calling, you will know exactly what I mean.

Today’s ‘digital criminals’ have worked out a way to extract ransom money from unsuspecting internet users via ‘ransomware!’ There is little fear that the  victims will come to any physical harm, but their computer, and its contents, just might.

A ‘ransomware’ attack goes something like this. You have just opened a web page but it suddenly goes grey, then a window emerges purporting to be from a national crime authority, depending where you are located it could be the FBI in the U.S., or the Federal Police in Australia. It all looks very authentic, too, and it states that you have been violating Copyright laws by downloading illegal content, viewing pornography or similar damning claims and that you computer has been locked.

The ‘offenses’, you are told, are punishable by a fine or jail term of up to three years.  There’s only one way to unlock your computer, according to the warning on your browser, and that’s to pay up. And if you don’t pay the specified “fine” within 48 or 72 hours—often by purchasing a prepaid cash card such as Green Dot’s Moneypak, which makes the transaction hard to trace—it claims that you’ll be locked out of your machine permanently, have your files deleted and face criminal charges to boot.

Of course, the criminal charges are bogus, but nevertheless unnerving, especially if you have been involved in one of the activities mentioned. What is more frightening is the fear of being locked out of your computer and, even worse, losing all your files. This threat is, in fact, very real with a number of ‘victims’ reporting their files actually being deleted.

There are many variants of ‘ransomware’ being reported, and some people are actually paying up. It’s pretty easy to see why, but there are alternatives. The version described above is actually the product of a virus called Reveton. Slate.com reports that “you can contract it either by clicking a malicious link or visiting an infected website, which triggers an automatic download. Beneath the video feed (that also appears) and registers the surprise on your face as you recognize yourself, are your computer’s IP address and hostname and an urgent message: ‘Your computer has been locked!’ Scroll further and you’ll find yourself accused of possessing illegally downloaded files in violation of federal copyright laws.”

 So what should you do if this happens to you? As Slate.com further explains, “Once the malware has control of your machine, chances are that most of the damage has already been done. First, instructs Sophos’ Paul Ducklin in a helpful video, don’t panic and don’t do anything rash. Ignore those threats not to tell anyone about the attack. Unless you’re an expert yourself, it’s absolutely a good idea to enlist the help of a computer security expert to help you figure out how to handle it. There’s a chance that an antivirus program could do the trick, but in most cases, you’ll have to reinstall your operating system from the ground up.”

I would suggest disconnecting form the internet at the very least. Apart from stressing the obvious that you should avoid dubious websites and links, and have the latest updates of your OS and antivirus software in place, keeping a recent backup to recover from would be the best advice. Whatever you do, don’t pay up, it will only encourage more of the same.

The results? Everything worked perfectly. The QuickTap with a BarclayCard MasterCard pre-paid PayPass application worked perfectly and forced the terminal online for authorisation:

The Samsung S3 with a prepaid Visa card was offline authorised for an excellent user experience:

And, of course, a boring old-fashioned Barclays debit card, which doesn't even have a custom picture on it, works excellently in a pub-friendly tap-and-go with offline authorisation:

This was a great day for me. Once again, I forgot my wallet. But today, it didn't matter. Because I got a coffee in Costa and lunch in the pub and I paid with my NFC phone in both. As soon as Marks & Spencer in Guildford chuck their stupid new unattended checkouts that take cash but not contactless, I won't bother taking my wallet to work at all.

“Eliminating the need to carry a credit card does not remove the leather wallet’s value as a central location to keep cash, ID cards (e.g., driver’s license, public transportation cards, and insurance cards), and more."

This is, of course, an extremely good point. But when I nip out of the office to grab a sandwich at lunch time, I don't want to carry cash, insurance cards or ID with me either (I don't live in a country where you need an ID to buy a sandwich, yet). Similarly, when I'm standing waiting for a bus in London, I already have my phone in my hand. When I'm in line at Starbucks I have my phone in my hand. When I'm watching TV I have my iPad on my lap (and my iPhone next to me). The goal of the m-commerce mavens shouldn't be to make an expensive simulation of the wallet in my back pocket, but a new way of transacting based on the fact that my phone is always with me.

Given all of the bad press that mobile NFC payments have been getting recently, I thought it was worth pointing out than when it works, it's cool. Cool enough to replace contactless cards I couldn't say, but contactless makes sense in a busy pub. The average basket size is less than £20, lots of people want to pay with cards, everyone in our office at least never goes to the pub without a smartphone, and a 10-second tap-and-offline payment saves time (and is faster than cash) so the bar staff can get on with the more profitable task of serving customers. If you don't believe me, then take the opportunity to come and try out the technological marvel of paying with your phone down the pub and you might even get a pint out of me too!

Incidentally, if you want a status report on world mobile payments, my UK mobile Barclaycard and my US mobile Google wallet both failed at the contactless terminal in Tim Horton's in Toronto recently.

“Journalism is very under threat at the moment with the digital transition,” he said, and that the Guardian still had time to innovate before it really must turn a profit. How it can adapt to digital, and do that, may be quite a task because currently only 30 percent of the Guardian’s revenues come from digital. “So, to say we can sustain a business for a long time with a high level of journalists with this mix of revenue is very, very difficult.”

As a result, staff numbers have had to be cut, but the news still has to be written – whether in print or digitally. Newspapers, it seems, are going through much the same agony as CSPs - how to generate revenues from digital services. Writing good, original news was why people used to buy newspapers and the advertisements in them generated the money to pay for the news (and generate profits).

Those traditional advertisers have been lured away, presumably now spending their money where they get better results or can better monitor the return on the spending. It’s not as easy to tell how newspaper ads are working compared to open rates and click-throughs via digital channels. So, why don’t those same ads from print work in digital versions of newspapers?

The answer to that is pretty obvious. The much richer medium offers the opportunity for much more creativity and interaction, but many advertisers haven’t quite understood that or don’t want to spend the extra money in production. Strangely enough, classified ad revenue is still the main earner, with Miller pointing out that a significant part for that for The Guardian came from dating classifieds.

Presuming that good or popular journalism gets the readers to the digital site, the next challenge is getting them to pay for the privilege, even before they click on an ad. It seems weird that we were happy to pay for a newspaper but not for a digital version of the same thing. Are we so conditioned to think everything on the internet should be free? This is the first hurdle that publishers are trying to cross by adding ‘pay walls’ to their sites. Newsweek magazine, that is going all digital shortly, is assuming that if there is no other choice of medium readers will happily pay.

That plan may also backfire and most publishers overlook the fact that moving from print to digital gives them a bare canvas to work on. Creativity and good design are needed to take advantage of the digital world. Just recreating an electronic version of the paper edition simply won’t ‘cut the mustard’ and will turn people away. Yet, there is a fear that losing the familiarity of the print version is an even greater risk.

The real creativity may be left to the advertisers that can now add video to their space. I used to marvel at the scenes in the Harry Potter movies when the newspaper images came to life as the pages were turned. With the advent of the iPad, the same can almost be achieved today. How much fun could you have with that?

I suspect that we haven’t yet touched the surface on how far digital press can go, but it’s going to take a pretty adventurous publisher to get there and, adventurous newspaper publishers, it seems, are almost as common as adventurous, risk-taking CSP CEOs. Something else they have in common?

Just think about it. What was in your pocket next to your iPhone, a handkerchief maybe? And how clean were your hands, or your colleagues’, when you were showing off your latest snaps on that iPad? How long since you cleaned out that grotty handbag where your phone shares space with filthy money? And what about those ‘throne surfers’ using their devices in the bathroom? I dread to think.

An article in the Wall Street Journal quotes Jeffrey Cain, the president of the American Academy of Family Physicians saying, "Some things we think are personal are actually more public than we imagine." Bacteria from a phone can cause flu, pinkeye or diarrhea.” I bet that’s not all!

When WSJ tested eight randomly selected phones from its Chicago office for the article, “the phones showed no signs of E. coli or staphylococci bacteria. But all phones showed abnormally high numbers of coliforms, a bacteria indicating faecal contamination. Of the eight phones tested by HML Labs of Muncie, Ind., there were between about 2,700 and 4,200 units of coliform bacteria. In drinking water, the limit is less than 1 unit per 100 ml of water.”

So, what can you do to prevent the spread of deadly disease from your closest ‘friend?’ Apparently wiping it over with water is next to useless. Windex and Nice’N Clean cleaning wipes were marginal, but alcohol came up trumps, killing almost 100 percent of the bacteria. This does not mean dipping your phone in a glass of Scotch is advisable – the side effects could be damning. Not just because you would ruin a good glass of Scotch, but the electronics may not take to kindly to it either. A spokeswoman for S.C. Johnson, that makes Windex, notes that its glass cleaner isn't recommended for electronics - news that will concern those millions of Greek fathers and Windex addicts out there.

There are lots of commercial anti-bacterial cleaners available but some may cause damage to the surface of your expensive gizmo. Off-the-shelf alcohol wipes look to be the best bet but how often you will need to use them becomes the issue. Then comes the problem of where you carry them. Do we really expect our emergency chargers, backup or booster batteries, fancy cases, iPad covers, etc. to make space for wipes?

The industry is concerned enough to look for alternative materials that help keep the bacteria rate down. Forget your shiny plastics, aircraft grade diamond and laser cut aluminum and your Corning Gorilla glass; the next big thing may be sharkskin. Sharklet Technologies, a start-up in Colorado is using microscopic patterns that mimic sharkskin—known for its unique design that is more resistant to bacteria than other animal skins, and it could be on phones by second half of 2013.

Real geeks could opt for a high-tech UV disinfectant wand. Creators of a new product called ‘PhoneSoap’ say it uses UV-C light to clean the phone while charging it, and that the device will begin shipping to consumers in January 2013.

In the meantime, and if you are really paranoid about all those germs, think where you last used your device and when was the last time you cleaned it or washed your hands. Maybe those rubber gloves are the best solution. They are easy to pack, take up little space and come in a variety of colors and styles. You may even attract a whole lot of new friends you didn’t know you had.

Of course, multi-play operators did not suffer the same restrictions and were happy to offer bundled plans to add ‘stickiness,’ but not all customers were lured into the web (no pun intended). Many astute customers were able to ‘cherry pick’ the best of the fixed and mobile data offerings and appeared quite happy keeping the two world’s separate. Generally speaking, fixed line offerings via ADSL, cable and fiber have offered greater speed, higher usage tiers (many unlimited) and better service unfettered by the vagaries of mobile transmission into weak reception areas.

However, LTE networks are able to offer comparable speeds with the added feature of mobility and are the first real threat to the domestic and business dominance of fixed line ISPs. For enterprising ISPs, however, LTE is providing the perfect opportunity to fight back. By opting to become an MVNO and offering some very creative data plans, ISPs can offer the best of both worlds without getting bogged down with the concerns of voice service and its complex billing. After all, most of their existing customers are well versed in VOIP and messaging from third parties and OTT players.

CommsDay reports that Dodo, a well-established ISP in Australia, is about to launch a 4G mobile service through Optus’ LTE network. The catch here is that, by doing so, Dodo will become the first player in the country to offer ‘data buckets’ that can be spread across multiple devices. It will allow a single post-paid mobile plan with its data quota to be shared in conjunction with up to five devices. The ‘data buckets’ can also be shared by family members as well, just liked existing fixed line broadband plans to the home linked to WiFi.

Dodo CEO and co-founder, Larry Kestelman, believes that people currently have multiple devices connected to multiple mobile service providers and is hoping that by being the first to offer the new plans he may be able to capture a number of new customers. There is also the possibility of reducing revenues from some existing customers as well, but the added ‘stickiness’ should go a long way in offsetting those short-term effects.

The move into LTE and data buckets is not the only expansion on the horizon for Dodo, which has recently moved into the electricity retail market and will soon launch its gas utility offering, possible in Australia’s unrestricted utilities market place. Kestelman believes that the experience gained in the telco sector had set it up for other industries, particularly in using the fixed broadband and LTE service to provide smart electricity monitoring tools. With this foresight, Dodo may well avoid the extinction of its namesake.

For LTE operators it raises the opportunity for more wholesale customers via the MVNO channel, but does not prevent them from also offering similar ‘data bucket’ plans, as many already do, linked to home broadband offerings. Covering all bases may not be a bad option.

Google has created a site devoted to exposing the inner-most workings of its massive data centers, at least visually, as well as exposing some of the people that work in them. In Google’s own words – “Who's behind the doors of the vast global web we call the Internet? Rocket scientists? Sure. But also zombie marathoners, board game enthusiasts and classic car fanatics.”

Fascinated? If looking at high-resolution pictures of racks and racks of equipment turns you own, this site will have you entertained for hours. The images are brilliant in their composition and colour, even the cooling and power conduits are painted in Google colors. Some shots look more like a set from a sci-fi movie – brilliant, but scary.

This is a massive turnaround for a company that has always been quite secretive about its data center locations and their make-up. Is this a new Google we are seeing? However, despite allowing anyone with a web browser to peer into its data centres, Google continues to closely guard physical access to its buildings. This virtual site is as close as we mere mortals will ever get. There is also no indication of how many computers are in its data centres, saying only that there are hundreds of thousands of machines running the many Google services.

A video tour on the site also stresses that all data is kept on at least two servers and that the ‘most important’ data is stored on digital tape backup systems that resemble robots. It has also turned the company into a major electricity user, although management says it is constantly looking for ways to reduce power consumption to protect the environment and lower its expenses.

And there is planet of data to store! Google tracks all of our internet searches and web surfing habits claiming to gain a better understanding of what people like. It is then able to show ads of products and services to the people most likely to be interested in buying them and, presumably, offer this data to third parties that want to reach a particular demographic group. Advertising, however, accounts for virtually all of Google's revenue, which totalled nearly $US23 billion in the first half of this year.

In any case, as Google.com is the number one site in the world for hits and, as the world’s largest search engine, it plays an integral part in the digital service ecosystem. If you’ve ever wondered how they do it, this is the site for you.

The Insider was reminded of the agony the start-ups also have to go through. Great ideas are one thing, but getting them to market, quite another. This was highlighted in a recent episode of “Dragon’s Den,” a UK TV show that introduces entrepreneurs to successful people with money that have the first option of investing if they feel so inclined.

The candidates are subjected to a mind-boggling array of questions about size of markets, competitors, revenue and profit forecasts, etc. etc., as you would expect, but viewers must have been dumbfounded when a particularly impressive lady with a unique product, healthy frozen treats for dogs, was lambasted that she had not provided a competitive market analysis to determine potential volumes. She calmly replied, “there are no competitors to compare with, it’s a completely new product!”

And here lies the dilemma for CSPs looking at investing in digital service start-ups, many of their ideas have never seen seen before. There exists a culture of being risk-averse and only wanting to make absolutely safe choices. Likewise, in vendor relationships that have been in place for years, size matters. CSPs like the comfort of dealing with big, established players. This may work well for traditional IT and network supply chains, but in the digital world, things are very different. It’s a relatively new space and there are lots of smaller players vying for space and attention. This is a foreign environment for many CSPs.

Rob Duchscher, CIO of Starkey Industries, the largest hearing-aid manufacturer in the US, when discussing his policy of investing in smaller start-ups said, "Safe choices lead to a culture of status quo. And status quo, especially today, can make it hard to survive and remain profitable." In the same article in CIO.com, Mark Settle, CIO of $2.2 billion BMC Software said, "Small, start-up companies are the primary drivers of innovation within the IT industry."

The same article goes on to state that, “working with start-up vendors is complicated. They lack the processes and customer support frameworks of their more-established counterparts. Their rollouts and updates require extra oversight. And the CIOs that partner with them have to do a lot of hand-holding throughout the relationship.” So what will make these new relationships work?

Investing in or acquiring start-ups can be the ‘kiss of death’ for some, especially where CSPs try and absorb the entity into the fold or try to impose a stifling set of restrictions cultivated internally for years. Start-ups just don’t think that way. Their very essence of creativity depends on not being corralled, but they need big customers and partners at some stage to grow, or even survive. One of the biggest issues for IT leaders, in particular, who bring in these niche suppliers, is integration, both with the technology and the culture.

Many CSPs are realizing the need to navigate the previously uncharted waters of partnering with start-ups and many are not finding it easy going. The normal vendor relationships with their financial commitments, restrictive penalty clauses and SLAs can be daunting for small players and equally daunting for CSPs procurement departments that have them indelibly attached to every contract. CIOs always talk about vendor engagements as partnerships, but that's often just lip service. When working with start-ups, partnerships are a requirement.

We are seeing the beginnings of dramatic mindset changes from both sides of the equation. For example, Telefónica has set up an arm’s length entity managed by thought leaders and non-traditional CSP staff with a budget and mandate to go forth and discover, invest in and nurture new digitals products and service start-ups. Others are acquiring, some are looking at exclusive partnering arrangements, others investing for percentages of equity and a place on the board to offer direction and expertise.

The current environment is being compered to the dotcom boom at the turn of the century, but the players are different. Venture capitalists are not dominating the space and the start-ups are cautious at letting them in. Perhaps the image of a fatherly CSP offers the comfort and security they are looking for. Maybe that’s the image CSPs should be trying to project, after all, both sides could certainly benefit from ‘mutual monetization.'

One panel, composed of two CSPs, a CSG executive and Dean Bubley, of Disruptive Analysis fame, were asked if they thought CSPs could successfully transition into becoming fully-fledged DSPs (digital service providers). Needless to say, eyebrows were raised yet all but Dean agreed they could. To be fair, even Dean admitted that some would be able to succeed but was careful to emphasise the ‘some’ part.

Earlier presentations had highlighted the inherent DNA of CSPs, and the lack of ‘digital services’ blood flowing through the veins of most, a situation not likely to change in the short term. It raised the question of how this would be achieved and which CSPs would be most likely to embrace the digital services world and become much more that the carrier of its traffic.

When news of the three to one vote hit the Twittersphere howls of derision were heard from some quarters. “I don’t believe CSPs can do it. They’ve tried. They’ve failed,” being one notable example. Was the result skewed because two of the panellists were CSPs not wanting to admit defeat before the battle had even begun?

What are the barriers anyway? Well, if you take Telefónica Digital as an example, and it’s early days yet, setting up a completely new and separate division at arms length from the tentacles of the staid CSP HQ, is probably a good start. It is certainly making lots of noise and getting lots of attention, but it is just beginning to get its stride. Investing in many small start-ups with promise is a model that venture capitalists have relied on for years, after all. Having it run by non-telco people is another. Digital services people like advertising people, are a different breed altogether.

Let’s also be clear that even though digital services, in one shape or another, have been around since the earliest days of IP and internet traffic, the new breed is addressing untested avenues and pushing the boundaries of existing digital thinking. There are not that many people on the ground that can say they have been successful at it, so finding the right people to man these new ventures is also an issue.

All this aside, those stodgy old conservative telco boards have to make a radical mind shift to invest in this new digital era with its social networking overtones. Telefónica, and the likes of SingTel and a handful of others are definitely the minority in making early stands. The majority are seeming to take a ‘look and see’ attitude. Not surprising because, for many, early gambits into the content and applications space were unmitigated disasters.

Maybe they should all take note that polls taken at the event that an overwhelming 72 per cent of delegates believed a strategy of co-operation between OTT players and CSPs the best joint value opportunity, so that would be a good place to start. That same grouped when polled about the greatest near-term threats to CSP revenues resulted in 50 per cent rating lack of innovation and foresight by CSP management as the biggest concern with only 12 per cent believing OTT players a threat!

So, it’s all about innovation and motivation of management to get serious about digital services in partnership with others and also in developing or acquiring the necessary services and skill sets to launch CSPs into the digital world. That makes TM Forum’s new Digital Services Initiative and MW Americas event, focussed on all things digital, so timely. Are you taking up the challenge?

Joint research by Canada's Mobidia Technology and Informa Telecoms and Media revealed LTE networks and devices are stimulating increased data usage, by up to 50 percent in some cases. A separate 4G study by mobile intelligence firm, Validas, found the addition of LTE in a phone could double consumers' use.

Surprise, surprise! The smarter, faster, thinner, bigger-screened, app crazy device is just begging to eat more data. But don’t just point the finger at Apple. Just like the evolution of PCs, as soon as memory and disk capacity grew, programmers found a way to eat up every ounce of extra capacity. You can’t blame today’s app developers for doing exactly the same in order to give their own products the edge in a frighteningly competitive market place.

What self-respecting developer of today cares for how much data you use up. The assumption is that there’s plenty more where that came from, and since they are not paying the bills or responsible for delivering the data to customers, why should they care?

Have you ever seen an application come with a ‘Data Usage Rating’? You know, like refrigerators and air-conditioners showing their energy usage rating from one to five stars. How come you don’t get told how much data the application you are buying actually uses? How long before we see ‘green’ apps that use less data and, as a result, less energy? Pigs might fly?

The idea may not be too far-fetched because the message is coming home to roost with data users around the world – someone has to pay for it, especially mobile delivered data. Reports indicate that operators are pricing 4G data on average 20 percent higher than 3G when they first launch, but there are signs that competitive forces are already starting to pressure 4G tariffs, new research shows.

TelecomAsia quotes a report from ABI Research showing that pricing pressure is already emerging in early-adopter LTE markets such as South Korea. SK Telecom has already effectively cut 4G data prices – for example by including an extra 2GB in its $55 LTE 62 plan – in response to competition from rivals.

Similar 4G mobile data quota and/or pricing revisions are underway in Norway, Hong Kong and the U.S. The report also shows that CSL in Hong Kong currently offers the world's cheapest LTE data plan, while Singapore's M1 has the cheapest 3G data plan at under $10 for 4GB. 

We seem to be going down the same path we did with 2G and 3G. When the market heats up, prices drop and then complain bitterly that data revenues are not supplanting dropping voice revenues. Oh, and what about Voice over LTE (VoLTE), has anyone worked out how to price that, or will just be another giveaway under a data bundle?

And with all of this comes the inevitable warnings of ‘bill shock’. LTE subscribers in Australia are even getting tips from the regulator on how to avoid bill shock:

1. Download apps to regularly monitor your data use and spend.
2. Learn how much your plan charges for each MB of data and excess use.
3. Use Wi-Fi when it's available, especially at home, for big apps and for video.
4. Disable location services, switch email to manual and use mobile websites.
5. Turn off data roaming when you're overseas.

Regardless of the warnings, it will continue to happen, and consumers will blame their network operators, of course. Isn’t it time the whole value chain from device makers and app developers to OTT players and networks sat down and put some basic rules in place, before governments and regulators step in? Otherwise we are bound to see a lot more finger-pointing as everyone tries to divert blame in the data game.

Spot on! I’ve been critical of NFC for some considerable time, and it feels pleasing to be vindicated by Apple’s doubtless consumer-centric and design-first approach.

I see three main problems with NFC:

1. Focus on mobile payments and other transaction-based use cases;
2. Complexities around the secure element stemming from telcos’ insistence on being involved in the NFC value chain;
3. Ergonomic deficiencies.

The third one is easiest to explain. Simply: tapping a piece of expensive, glass-encased electronics on solid objects is stupid. Furthermore, making people interrupt whatever they’re doing on a phone to buy something / get on a train / whatever is equally stupid. We all multitask. Let me use my phone and a card/cash simultaneously.

1 and 2 are linked. The belief that the ‘killer app’ for NFC is paying for things - or other ‘monetised’ apps like ticketing - has led mobile operators to say “we want a slice of that!”. This has then led to interminable wrangling over the architecture for security, and in particular the linkage of NFC to SIM cards. This has had numerous side-effects:

• It’s delayed the whole thing through massive bureaucratic and political procrastination;
• It’s created a technical structure which means that transactions are actually too slow on many phones (e.g. turnstiles on London’s Tube need to work in 300ms from tap-to-open, so people can walk through without breaking stride. Oyster cards work, phones don’t);
• It’s meant that NFC hasn’t been properly opened up to developers as a general API to do cool stuff with;
• It wouldn’t be able to work well on non-SIM devices (e.g. tablets) and would likely have a hard time dealing with dual-SIM devices, or the half the planet which either has 2 phones, or swaps SIMs all the time;
• It’s led to ridiculous protracted trials and consortium-forming which has earned a lot for lawyers and PR people and totally messed it up for everyone else.

But the simple fact is that the whole mobile payments thing is a chimera. Yes there are some corner cases (unbanked people in Africa on M-Pesa, specific apps like Starbucks, Square for accepting payments). But the basic notion of ‘paying for stuff with a mobile phone’ is simply flawed. Firstly, cash and cards work perfectly well. I’ve never had a problem buying a sandwich and thought ‘what terrible experience taking £3 out of my pocket’. I can use cards anywhere on the planet with a pretty good acceptance rate. ‘Chip and pin’ means it’s more secure than before. And I never see anyone bothering to tap their cards on the contactless readers either.

The idea of your purchases ‘going on your phone bill’ completely ignores the fact that most people on the planet use PAYG prepaid and don’t get a bill. Average outstanding prepay balance is something like $5, I believe. Most contract users won’t want a sandwich or a flight on their phone bill - especially corporate expense managers. It just doesn’t fit with our mental model of ‘phone bill’, which many people don’t both looking at anyway as they’re on a standard plan. Linking purchases to credit cards stored virtually in your phone just seems pointlessly geeky and needs interruptive apps to be useful. I don’t buy all this couponing and analytics hype either - it’s just putting lipstick on the pig.

The idea of electronically transferring money without so much as a PIN or a signature scares me and most other people. I don’t trust any of the parties involved except the card provider and my bank, and adding in the handset-maker and mobile operator just increases the already-too-high perceived risk. Note: this is totally different to my Tube Oyster card as that is stored-value and decoupled from my bank and credit accounts. The most I can lose is the £20 I top it up with. I can also use the card while I’m on the phone - I like to multitask when I’m travelling.

It’s notable that the much-vaunted Japanese Felica system is still little used for actual purchases of goods with phones. And that’s despite NTT DoCoMo spending something like a billion dollars buying a bank and a stake in a convenience-store retailer to catalyse the market.

Schiller is right. The ‘tap-to-pay’ thing is a nonsense, a solution looking for a problem. The involvement of a telco adds zero value and lots of friction. At some point I might want to use the phone to make transactions against a loyalty account (hence Starbucks), but that’s likely to be very specific to a particular brand or store and I’d like to do it ‘in the app’. QR codes (as used for airline mobile boarding passes) are not a bad option for this, and *maybe* NFC in the much longer term, but even then I still prefer the ‘visible’ code - and no need for physical contact with the device. [I don’t believe in phones for *reading* QR codes, but displaying seems OK]

Where the real value of NFC might lie (and I’m still not 100 per cent convinced on these either) is in what I refer to as ‘interactions’, not ‘transactions’. Stuff like a ‘click to connect to Wi-Fi’ pad in a cafe, or a ‘touch-to-like’ Facebook icon in a restaurant. The Wi-Fi example has already been done by Blue Butterfly is much more elegant and sensible than the pointless and wrong-headed ‘seamless’ approach suggested by some carrier-Wi-Fi advocates. I wrote about this 18 months ago - the volume of free non-monetised NFC interactions will outstrip paid ones by orders of magnitude, like free apps in the AppStore. Operators probably won’t want to be involved in that loop - and will likely slow down the developer app-creation process anyway.

We need to get rid of cellular operators from the NFC value chain, except as just another class of app developer. There won’t be many transactions for them to take a cut from anyway, and their involvement in ‘interactions’ just adds extra complexity and bureaucracy without providing any value. We also need to bin the idea of NFC being transactions-first entirely, as it has perverted the entire development course of the technology. It *might* come later, once normal uses of contactless have crossed the barrier of public acceptance - along with trust that it’s OK to tap your precious device on things.

Apple has not ‘killed’ NFC with iPhone 5. It’s just merely pointed out that it’s on its deathbed already, dying from a virulent payments and telco-involvement disease. It might be resuscitated, but I doubt it - and Apple has cleverly avoided contamination from its corpse.

One last thing: If a miracle happens and NFC does start to recover from its debilitating case of payments, then tablets will make great NFC *readers* for many applications. Apple, Google, MS, Samsung and co. should be embedding that functionality, before Square takes even more of the merchant market away from them.

Dean Bubley, founder of industry analyst & consulting company Disruptive Analysis. He offers outspoken, insightful and sometimes acerbic observations on the world of mobile technology - handsets, networks, operator strategies, applications & business models.

This, however, was enough to send mobile network operators and a slew of OTT players scrambling to take up a position in the space. Despite all the hype and optimism, it is difficult to find anyone, even those in the traditional advertising space, claiming big revenues from mobile.

There are many reasons for this. Firstly, the advertising world is a bit of a closed shop. Agencies vie for big accounts, develop campaigns, decide where to place ads and usually make lots of money doing so. (If you’re hooked on the TV series Mad Men, you’ll understand where I am coming from.) The other big winners are the offshoots that ‘place’ ads by buying space in media most desirable for the target market. Then comes the actual media that charges for the ad placements according to numerous metrics based on socio-economic data, spread, age groupings, income bands, race, religion, social awareness, etc etc.

It is pretty hard to find room in there where network operators can make a killing. They have tried to build platforms that insert ads in content and applications, distribute SMSs and even identify target markets using analytics, and the ‘know your customer’ (KYC) arguments, to provide specific target audiences to advertisers. They have even hired some of the best brains in advertising to consult to them but has all this investment paid off?

It seems to be that Google and it’s all encompassing search engine is making the big money, with access to millions of mobile devices and their users being provided courtesy of the networks, gratis.

One recent article reports that the worldwide advertising market will generate half a trillion dollars in revenues this year, but mobile will only account for little more than 1 percent of that! The big winner is still good old TV. In America, the only thing people spend more time doing than watching TV is sleeping and working. Advertisers like that because watching TV is a focused, immersive experience and they presume their ads get more attention as a result.

But with so many people watching more and more video content on the internet you would think it would be fast replacing TV. Apparently not, TV beats the web on time spent and on focus of attention (or “frequency, reach and engagement” in marketer-speak), according to Matt Cohler on Tech Crunch. Must be all that web surfing, social networking and messaging that distracts the viewer.

Strangely enough, according to Cohler, “using a mobile device is also a focused, immersive experience. Like watching TV, the screen focuses the user’s attention on one thing at a time and “changing the channel” is even less distracting than with a television.” Go figure. So why aren’t advertisers rushing to mobile to get their message across. “The market is still illiquid and sub-scale, and great ad products haven’t had time to develop,” says Cohler.

Well blow me down, we have tablets and smartphones coming out our ears and we still haven’t worked out how to use them successfully as advertising media. How long is it going to take, and will yet another OTT player step in and take that market as well? Every single social site is driving to get users on board so they can make money from advertising, but every time I start getting hit with ads I tend to switch off.

Of course, we will be offered the option to go ‘ad-less’ if we subscribe to ‘premium service’ but how many of us will fall for that old line? Remember when cable TV replaced free-to-air ad-ridden channels with the promise of less or no ads if you paid the monthly sub? Hmmm, now we get inundated with cable TV internal programming ads instead.

I digress, but I’m still trying to work out who will be the winners in the still-to-come mobile advertising bonanza. Any suggestions?

The ‘grey’ adjective presumably describes the hair color of the aging and often retired community sector that hasn’t quite taken to everything beginning with ‘m’, or ‘i’ for that matter. This end of the market has a penchant for cash, folding money or ‘real moolah’ and doesn’t seem to trust things virtual. Their motto - if you can’t touch it, it probably doesn’t exist.

OK, that might be a slight exaggeration but a story that appeared yesterday in ‘The Age’ newspaper in Australia must have twigged the reporter to dig deeper and uncover a daunting ‘grey’ conspiracy. It seems that Australia is bucking the trend towards becoming a ‘cashless’ society. Our mPayments guru, David Birch, will be shaking at the news but there are more bank notes in circulation than ever before ‘down under,’ and the number is growing.

The Reserve Bank released figures that showed holdings of bank notes (the plastic variety invented over there) had grown 7 percent in the year to June, but the population grew only 1.4 percent. As only a federal bank could do, it quoted figures that each person holds an average of seven $5 notes, up from five a decade ago, and five $10 notes, up from four. The explosive growth, however, was in the holdings of $50 notes - up from 15 per person to 23 per person - and $100 notes, up from seven per person to 10.

Those of you that have watched too many TV crime shows will automatically assume that there is a thriving criminal element, probably mob or drug-related, using cash as the preferred means of settlement, and you could be excused for thinking that. However, this is a ‘furphy’ according to a former Reserve Bank official, Peter Mair.

In a letter to the Reserve Bank governor, Mr Mair laid the blame squarely on elderly people wanting to get the pension and hiding their income in cash to ensure they qualified for the means-tested benefit. The article went on to claim that Mair’s best guess was the average pensioner couple could be holding up to $50,000 in undeclared $50 and $100 notes to get access to the pension.

He based his theory on an observation from 1996, when the green plastic $100 note replaced the grey paper note, he observed regular visits from retirees wanting to withdraw large quantities of the new notes. He said the commercial banks had sent them to the Reserve because they did not have enough $100 notes on hand.

That raises another question – where are they hiding all that cash? Petty thieves across the nation are probably casing homes of known ‘greys’ as you read. Is the money hidden under the mattress, in the biscuit jar, the attic, the shed? It’s plastic so it may even be buried in the yard. Will this trigger a series of dawn raids by fraud squads and dogs trained to sniff out illicit hoards of cash. Pensioners will be too frightened to venture out in case they are scorned by other law-abiding members of society.

No doubt the tax authorities are even more concerned that this criminal element is paying tradesmen in cash thus avoiding GST. What used to be known as ‘black money’ has suddenly become ‘grey money’ and ‘grey market’ has taken on a whole new meaning. Will you even be able to look at your grandparents in the eye again?

This news may change the very fabric of society and may put the digital economy in jeopardy. Let’s hope Australia is able to clear up this mess, put all those criminals behind bars and set an example for the rest of the world –  don’t mess with our cashless ambitions!

This picture is flawed for many reasons. We pointed these flaws out two years ago, and our views are no longer controversial.

• Demand is not a force of nature, and open-loop forecasts are, literally, fantastical.
• Growth is constrained by the capital intensity required to deliver it.
• MNOs can, if they choose to do so, very effectively pull pricing levers to control traffic.
• New users will dilute any growth in average usage per device.
• There were already signs two years ago that the shifting balance between smartphone and mobile broadband would result in lower growth of mobile data traffic. Growth in Western Europe was 61% in 2011, and every sign indicates it will be far lower in 2012.
• Demand for mobile broadband is cyclical, a way of quickly monetising excess capacity, but as networks fill up operators will ideally wish to swap mobile broadband traffic out for higher-value, lower-volume handset traffic.
• It is easier for operators to create an artificial spectrum crisis by exaggerating demand than to improve the utilisation of what spectrum they have.

And last, but by no means least:

• Wi-Fi is the default network for most smartphone and tablet traffic. Wi-Fi is not a work-around for cellular in the home and in uncontested public spaces – it is the default option – although it is a poor substitute for outdoor mobile data. The most data-intensive traffic will tend to get consumed indoors, because that’s the natural place to consume it, not because it is the only place with good enough connectivity.

All of which is to say that the data wave, or capacity crunch, or whatever one chooses to call it, isn’t as big as had been predicted. But the real problem could be that it isn’t big enough. Instead of worrying about the impact of a mobile data explosion, operators should worry about making it happen in the first place. Current and future trends as we see them indicate that there is not enough growth in mobile data to stop the mobile industry in most developed countries from contracting. Coupled with some loss of core voice/messaging revenue to over-the-top players, and some erosion of their position in device distribution, this contraction could be severe.

Too little, not too much, data growth

In our recently published Wireless network traffic worldwide: forecasts and analysis 2012–2017, Western Europe has the lowest growth rate in mobile data out of eight global regions. We forecast that mobile data in Western Europe will grow at a CAGR of just 29% from 2012 to 2017, equivalent to a growth multiple of 3.6. At a global level, we predict that mobile data will grow by a multiple of 5.5, equivalent to 41% CAGR, a little ahead of what we predict for Internet traffic as a whole.

Figure 1: Growth multiples for mobile data traffic, by region and worldwide, 2012–2017 [Source: Analysys Mason, 2012]

These are nothing like as much as the ‘doubling-every-year’ forecasts that tend to get heard a lot, but they are nonetheless decent enough growth rates. So what is the problem?

Costs too low, not too high

Over the last decade or so, improvements in spectral efficiency have contributed to a decline in mobile network unit costs (cost per byte) equivalent to about 30 per cent every year, and we expect this trend to continue. This means that if volume growth is higher than 30 per cent/(1–30%) – that is, 42.8 per cent or times 5.9 over 5 years, then overall costs rise; if growth is lower, costs fall. Our forecasts indicate that growth will be lower than this in developed regions.

In an uncompetitive market, falling costs would mean rising margins, but in a mature, competitive market such as Western Europe they mean a contracting business. In other words, it’s not getting dangerously expensive to cater for demand; it’s getting worryingly cheap to transport what little demand there is.

So what can mobile operators do about it?

Mobile data has an imperfect but cheaper substitute, Wi-Fi, which makes demand stimulation difficult. Consumers have got very familiar with using Wi-Fi as an alternative to mobile, and in most respects appear to prefer it. In order to stimulate demand for mobile data, MNOs could do the following.

• Offer bigger, fatter packages on handsets. Our on-device tracking app showed that smartphone users in the USA tended to use proportionately more cellular (49 per cent as opposed to 38 per cent in Western Europe). However, these packages need to be firmly embedded in a higher-value bundle of device, data and voice; cellular data will almost always be more expensive than Wi-Fi. The trend in both regions, though, is towards a higher share of Wi-Fi.
• Emphasise the unique capabilities in wide-area connectivity and mobility: public transport, M2M etc; emphasise the higher quality of experience afforded by licensed spectrum in an outdoor environment.
• Go for the vulnerable light-user end of the fixed broadband user base with some serious fixed–mobile substitution offers. After all, people will stop using Wi-Fi at home only if they no longer value fixed broadband. This approach would doubtless damage the value of gigabyte, but in the longer run it could help stimulate the release of more spectrum.

The truth is that mobile operators in developed economies are going to have to get used to being the victims, not the perpetrators, of disruptive substitution: fixed and Wi-Fi can do most of what mobile does (except the wide-area/mobility bit) at a fraction of the price to the end user, but mobile can do only a fraction of what fixed and Wi-Fi can because of its inherently limited capacity.

Whatever happens, we believe that mobile operators will have to re-adjust to higher-than-expected unit prices and lower-than-expected volumes. At worst, they will have to think about managed decline.

Rupert’s primary areas of specialisation include next-generation networks, long-term industry strategy and forecasting the dynamics of convergence and substitution across fixed and mobile platforms. Rupert has a PhD from the University of Cambridge, where he was a Lecturer before joining Analysys Mason.