Research shows 49m active Hi-Definition TV homes to be added globally in 2013, giving a total of 228m

Posted on 18/06/2013 by keithw

There has been further upset this week in Greece when on Tuesday, the government announced the immediate closure of their public broadcaster, Hellenic Broadcasting Corporation (ERT) which consisted of 5 TV stations (ET1, NET, ET3, ERT World and ERT HD) and 29 radio stations.

Others will be making comparisons with the present situation in Turkey, which has seen a month of public rioting, but one thing is clear: that when all else fails, people fall back on their televisions.

It is not just whole nations that are in the tight grip of IMF prescribed fiscal measures that find themselves in this state: conversation with the elderly often reveal that their television programming is their last conduit with the wider world – you often here them say ‘I’d be lost with out my television’.

But it’s not just the financially impoverished or the elderly that depend on their televisions. In every home in the world that has mains electricity,  it can be assumed that there will probably be a television.

What the television is used for is another issue. According to a survey into why people thought they did not need to buy (in the UK) a TV license was the delightful response ‘We only use it for background lighting’. Whatever.

Yet despite the many and varied uses for television sets – apart from actually watching it – new research from Informa Telecoms & Media reckons that high-definition television (HDTV) continues to make impressive gains in terms of household penetration and by the end of 2017 TV platforms in several countries will be approaching the point where most, if not all, users are actively watching HD content (see chart below).

Platforms at or near full HD penetration, 2017, source Informa Telecoms & Media Global HDTV Forecasts to 2017 – 7th edition market study

As recently as 2005, HDTV-ready sets were only located in 3 percent of the world’s TV households and was still seen as something of a novelty. Since then Informa reports HDTV has taken off quickly, benefiting from much reduced set/equipment prices and a wide range of HD channels on offer to attract a mass audience.

Perhaps most significant is that a progressively high proportion of new TV sets and set-top boxes have HD-capability, so TV households are automatically becoming HD-ready via the normal renewal cycle. This, of course, is being also propelled by the global switch-off of the analogue signal being promoted by the International Telecommunications Union.

Once upon a time the death of the film industry was widely reported, but the proven drivers of HD penetration remain films (movies) and sport. Having said that, the devoted film channels, in particular, have become less important in recent years.

In the report, Europe, by way of example, has seen the number of ‘film’ channels in HD increase from 55 to 144 during 2009 to 2012, meaning they accounted for 20 percent of all 274 HD channels in 2009, but this had fallen to 15 percent of the 941 total in 2012. ‘TV fiction’ and ‘Entertainment’ channels are amongst those that have seen an increased percentage during that period (see chart below). While only experiencing a small increase in percentage terms between 2009 and 2012, sports channels remain the largest category and it is still often marketing around major sports events such as the Olympics and World Cup soccer that continues to spur consumer awareness of – and demand for – HD content.

Europe, HD channels by genre, 2009-2012, source Informa Telecoms & Media Global HDTV Forecasts to 2017 – 7th edition market study

So whatever they are used for – mood lighting; movies or marathon-watching – HD set sales are growing fast, according to Global HDTV Forecasts to 2017 – 7th edition, with a net 70 million HD households forecast to be added in 2013. This means that almost a third (32 percent) of the world’s primary TV sets will be HD-ready by the end of 2013. Ongoing rapid take-up will push that figure to 57 percent of TV households – or 823 million – by 2017.

During 2013, a net 49 million ‘active’ HD homes will be added globally, bringing the total to 228 million. This number will rise by a further 64 million in 2014. By 2017, there will be 603 million HD active homes globally – equivalent to 42 percent of the world’s TV households.

Owning an HD-ready set does not, of course, automatically mean reception of HD programming. And by 2017, 73 percent of homes with HD sets will be actively watching HD programming. The shortfall comes from households that have an HD-ready set and either a) are not interested in HD content or b) are interested but do not yet have an HD-compatible set-top or access to HD content.

Category b) also further sub-divides into those households that are aware they are not watching HD content and those that are under the misapprehension that simply having an HD-ready set means they are watching all programming in HD. This latter group indicates there is still room for additional education on the subject.

This, of course, is great news unless you live in Greece where the content has come to a rather rapid and premature end. Still, look on the bright side, there will be a useful glow from the HD-enabled set so saving on EU-dictated energy saving light bulbs. Arguably the two types of devices will be as equally effective in that regard.

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Of 360 million global HDTV-ready households at end-2012, 179 million are viewing HD content

Posted on 17/06/2013 by keithw

I hadn’t really given much thought to our television picture until my brother-in-law jetted in a few months ago from the USA. Playing with the UK remote, he soon found the BBC’s HDTV channels and was flicking through them.

As the TV adverts suggest, maybe I do need to visit the UK’s leading opticians at ‘Specsavers’, but it was my US-orientated relative that first noted that there didn’t seem to be busting difference between the regular picture and the HDTV picture.

It would seem it comes down to the number of lines which in the US is a total of 525 scan lines of which 483 make up the bit you can see, whereas in the UK the standard is 625 for plain-old television; although in fairness this is the current incarnation, the previous standard being 405 lines.

But I was interested to read in a new study published last month entitled Global HDTV Forecasts to 2017 – 7th edition that my household is – for once – in the vanguard of the new technology as some 27 percent of the world’s TV households currently have an HD-ready TV set, and analyst house Informa reckons that by the end of 2017, that number will have risen to 57 percent of global TV households with an HD ready set.

Of the 360 million global HD-ready households at end-2012, almost half (179 million) were actively using their set to view HD channels. Actually, one small problem in the UK is that not all content is in HD-format yet, so on the BBC there’s a sudden break when they cut to the local station which isn’t piping HD content, and then you have a nice picture with restful music which rather spoils the effect.

Not surprisingly, the percentage of HD-ready homes that are active HD content viewers is forecast to rise to 73 percent by end-2017, and by end-2017 half of the world’s digital TV households will be actively viewing HD broadcasts.

Informa notes that UHDTV will have a presence in just 0.5 percent of global TV households by the end of the forecast period. One cannot help but think that its uptake will ultimately come down to content, and that fast-moving subjects such as sport or films that can take advantage of larger screen formats will be the obvious formats.

Adam Thomas, Research Manager, Informa Telecoms & Media summed up the present state of affairs: ‘In some advanced markets, high-definition has become a mainstream broadcast technology. But numerous markets remain immature – meaning the scope for future growth is enormous’. Truly opium for the masses…

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Informa study highlights sales potential for basic mobile phones

Posted on 14/06/2013 by keithw

Everyone has a smartphone. Well, not quiet! But nonetheless, there appear to be some strong regional variations in terms of which devices are popular where, with no one device being truely uinversally popular.

BlackBerry offers more than just a phone, with its encrypted service package, but it found itself in jeopardy not very long ago; caught with the need to upgrade and update whilst competitors appeared to sweep the market.

I was stuck with this regionalisation of smartphones when paging through a copy of Portio Research’s recent ‘Smartphone Futures 2012-2016′ which provides a world map with the major players in each region stamped on it. BlackBerry is popular in Africa and Latin America, whereas Nokia is strong in Africa bit not in Latin America, whilst Samsung sits alongside BlackBerry in Latin America.

But this also highlighted another issue. A market like Africa is simply not ready for mass smartphone adoption. The issue of affordable handsets has been recently addressed by Informa Telecoms & Media. Simply, Africa has some very low income groups.

If there was every a long-game to be played, this is it. There is a direct correlation between mobile phone ownership and GDP, established by various studies from the World Bank, et al. The more people who use mobile phones, the higher GDP growth.

It therefore follows that supplying devices to a classic low ARPU market now will help prime a future high ARPU market of the future. One of the problems for vendors in Africa is the illusory mobile penetration, as many of the existing phone users have multiple SIM-cards. At the end of 1Q13 ‘Africa & Middle East Telecom-Week’ put the mobile subscriptions per head of population at 69 percent, with the suggestion that the mobile subscriber per head of population is closer to 45 percent.

Ericsson in its ‘Mobility Report’ for the first quarter noted that the regional differences are large. It reckons that in 2018 almost all handsets in Western Europe and North America will be smartphones, compared to 40-50 percent of handset subscriptions in the Middle East and Africa and Asia Pacific regions.

The report suggests that less mature regions are dominated by 2G technologies, like GSM/EDGE, while more mature regions like Western Europe are dominated by HSPA. LTE is growing very strongly, particularly in North America. In all regions, 2G networks (GSM/EDGE, CDMA 1X) remain as fallback networks for 3G and 4G subscriptions when coverage is missing.

Ericsson notes that in 2012 the Middle East and Africa were dominated by GSM/EDGE, and that by 2018 it will have the largest share of GSM/EDGE, driven by demand for low-cost phones. The region is hugely diverse, so there are, and will be, large differences between developed and less developed areas.

This suggests that there is still a huge potential market for affordable (or low-cost) phones, rather than smart phones.

The ‘Affordable Handsets: From Imitation to Innovation’ study defines three strategies for affordable phones, namely Mobile phone centric; Integrated; and Computing centric. The study defines three approaches, with Mediatek leading the Mobile phone centric sector; Qualcomm heading up the Integrated approach whilst Intel and Nvidia are driving Computing centric designs.

From an African perspective, Mediatek’s mobile phone centric approach means that their phones can be targeted mainly at the low-cost segment with competitive pricing. Perhaps, crucially, there is a fast time to market which the study suggests could be 20 weeks or less. There is a downside, namely that there is late adoption of innovation, with design based on thin modems. Informa also notes that there’s also a weak software-hardware integration with little flexibility for differentiation/local variations, and no ‘go-to-market’ support.

The Integrated approach offers greater opportunity for up-scaling, and is being led by Qualcomm. The advantage is that there’s something for all segments from high-performance to low-cost, and design is based on fully-integrated media/communications processing. There’s also deep software hardware integration. This results in flexibility for differentiation/ local variations coupled with strong ‘go-to-market’ support. And for a market like Africa, there’s the bonus of strong ties with the developer community, but the phones are ecosystem-centric.

Finally, there is the Computing centric approach being progressed by Intel and Nvidia. They are currently targeting value high-performance segments, and there are longer time-to-market issues (typically 45 weeks plus). There’s differentiation on performance, with early adoption of innovation, and design based primarily on media processing.

On balance, the mobile phone centric approach is the right one now for Africa as a whole, although there are the well-known Asia smartphone heavyweights sizing up the high net-worth individuals located in markets such Nigeria and Kenya, where submarine cables are already glowing, and 3G and 4G networks are deployed or planned.

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How do the PPI people get your number? A plague of unsolicited phone calls examined.

Posted on 13/06/2013 by keithw

One of the tragedies of modern telecommunications is the burgeoning volume of nuisance voice calls. Once upon a time it was someone sitting in a call centre waiting for you to return home. These were, in hind site, the ‘good old days’. It was thought to be a problem, and the UK the Telephone reference Scheme was born.

Companies involved in cold calling could obtain a list of people who had opted-out. Companies continuing to call could be reported and subsequently fined.

That was the theory. Stage 2 saw unsolicited inbound calls with number withheld, so clearly reporting the originating nuisance number was problematical. British Telecom realised that this was a problem/sales opportunity and introduced a service which blocked such calls (at a cost).

The originators twigged they needed to generate an originating (false) number to bypass the BT protocols. But nonetheless, calls with withheld numbers also get through.

BT has attempted to raise their game by introducing the BT 6500 handset, which not only blocks calls from withheld numbers but also allows the user to add numbers to the directory, so providing some relief for subscribers receiving calls from the same numbers.

Nothing in the overly complicated UK bureaucracy is ever straightforward. Chatting to the ever friendly Ofcom (UK telecoms regulator) revealed that there are actually three government agencies with an interest in these calls – and presumably the reason why we now have a plague of them.

The current focus is Payment Protection Insurance which was mis-sold by British banks, and because this is a financial fraud, comes under the remit of the Department of Justice and the Claims Management Regulator (CMR).

Assuming that the company calling has not drawn the attention of the CMR, but has made a call to a subscriber who has registered with the Telephone Preference Service, then it is the Information Commission’s Office (ICO) that is responsible for policing unsolicited calls, unless, of course, when you take the call, there is just silence.

These silent calls are the province of regulator Ofcom, who have a remit to track down the makers of ‘silent and abandoned calls’. In this respect, Ofcom have tasked research house Gfk to set-up a panel of 800 consumers with diaries in which they log all the different types of call they receive, so there is an official measure being taken of the magnitude of the problem.

This doesn’t deal with the problem of how the telephone numbers to be called are generated. Reference to a number of discussion groups for financial marketeers offered the view that there are lists of people who have registered on Websites that are being brokered. The underlying suggestion was that anyone getting one of these calls had previously volunteered their details, and from the moment they requested a free financial guide, they were a marked man.

Regular readers of this blog know that TelecomsMarketResearch now has its own fleet of mobile phones allowing the testing of on-net and off-net calls and texts for both MNOs and MVNOs. These numbers have not been given to anyone and are only called from other phones in the ‘fleet’.

But in the last three weeks we have had calls from an unsolicited sources. Now there is a further complication, in that one of the originating numbers is apparently for a dog-training school in the Lake District that last advertised its services in 2011, and another appears to be from a legitimate and authorised claim management service trading as helpyourclaim.com (HYC). I say legitimate as it is possible to ring them and speak to a company representative.

Now another possibility with the mobile numbers is that the SIM cards have numbers which have been previously assigned. I just happen to have to hand the current criteria used by Ethio-Telecom, and assume it’s pretty standard, crucially the process ends with the number being recycled: : 1. Pre-active period 2. Active period 3. One-way blocked period (suspense period) 4. Two-way blocked period 5. Termination period 6. Number recycled.

It would be perfectly possible for a computer system to be set-up that was given a start number – say 020 71001000 or whatever – and be programmed to add a number to the previously dialled number before ringing the new number. Each time someone answered, the machine would play its PPI message, saying dial 5 to talk or 9 to be taken off the database. Any one pressing 5 gets to talk to someone; anyone pressing 9 has just ‘proved’ the number, and could now well be added to a database! And because the machine will almost certainly uses a Microsoft operating system, the chances of there being no taped response when someone answers is probably quite high.

In fairness, Ofcom are aware of the problem and told TelecomsMarketResearch: “Since last year, Ofcom has issued fines of more than £1.5m to companies that break the rules”. But Ofcom is also aware of the magnitude of the task, noting: “This is a complex area that requires action from a number of different regulators, industry and Government….Ofcom and the telecoms industry is already working closely together to help trace companies behind nuisance calls. We’re seeking other technical solutions to the problem of nuisance calls with industry and this remains a key area of focus for Ofcom.”

Given the volume of calls being generated, it is ‘considering enforcement action in relation to suspected silent and abandoned calls made by companies within the claims management sector’. Good luck with that then.

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Virgin Mobile RSA blames the market…but where’s the entrepreneurial flare?

Posted on 12/06/2013 by keithw

This weekend in the South African ‘Sunday Times’ newspaper Virgin Mobile South Africa CEO Jonathan Marchbank blamed Vodacom and MTN for his firm’s lack of success, saying their ‘unregulated, anti-competitive behaviour’ was making it difficult for smaller players to enter the market.

According to Marchbank, it’s the retailers who are not giving Virgin Mobile the required shelf space.  So what is it that Virgin reckons they have brought to the market?

Backtracking to June 2006, Virgin Mobile was saying it would introduce per-second billing for all its mobile packages when it launched and that it would not tie clients into fixed-term contracts. Virgin Mobile’s marketing manager, Tristão Abro, said at the time that that Virgin would separate itself from using ‘tricks and gadgetry’ to sell products. He said that Virgin will adopt a ‘simple and transparent approach.’

It did not plan to offer free handsets. Instead it launched deals to resell handsets from the major manufacturers, with customers paying for them over time, but without a strict set-period contract with airtime bundled in.

It must have been difficult for the prospective clients to figure out how that differed from what MTN and Vodacom were offering, so at launch the ‘simple and transparent approach’ might have sat uncomfortably with the target audience.

Never one to miss an opportunity, Virgin’s Branson was in print saying: ‘South Africa is a key market for Virgin and a country that I personally love very much. Our partnership with Cell-C will bring a new approach to the mobile market and will be a refreshing alternative from the bland offerings of other players. I am looking forward to coming to South Africa to launch this exciting new business next year’. He subsequently lept from a hot air balloon to show his solidarity with the South African populace.

But seven years down the line Virgin, with its reported half a million subscribers, has won just 0.7 percent of the market, which at the end of 1Q13 had some 67.9 million mobile subscribers.

To give Virgin its due, it too is evolving, and in Qatar it provided its name for Qtel (now Ooredoo) to create an offering aimed at the mobile youth sector. This too was flamboyantly launched by Branson, this time crashing into town on a jet ski. This was skilfully done, as it gave the impression that Virgin was launching in MVNO rather than reseller mode. However it all came to a sorry end when Vodafone complained to the local regulator that the relationship with Qtel was not sufficiently, err, transparent.

In June 2012 Virgin partnered with Middle East-based FRiENDi Group to create Virgin Mobile Middle East and Africa, with 1.2 million subscribers and annualised revenue of USD 150 million. After Oman, it was looking at Egypt, the United Arab Emirates and Saudi Arabia for future launches. However now it is intending to do these in reseller mode, so continuing to distance itself from the classic MVNO model.

This is a characteristic of the Branson-based businesses, as many of its flag ship brands lease their equipment rather than own it: Virgin Atlantic leases its planes; Virgin Trains leases its rolling stock from HSBC, and so on.

In fairness, Branson is a canny player, with a flare for seizing opportunities, such as when he rescued a whole financial retailing business from the wreck of the UK’s Northern Rock bank, leaving the UK government with the toxic debt to sort out.

But South Africa might just be one market too far, and given that it has many common characteristics with Singapore – another market that Virgin Mobile launched in – it is perhaps surprising that the plug has not been pulled before.

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Why Vodafone should not pay UK Corporation Tax; or how the Government wins either way

Posted on 11/06/2013 by keithw

Should Vodafone pay UK Corporation Tax? Or is it one of the good guys that is doing its bit to help the British economy?

Let’s first consider the case against them. The telecoms.com site yesterday wrote: “UK operator Vodafone has not paid any corporation for the second year in a row… This is despite generating revenues of £5bn in its home market. The group paid over £2.5bn in corporate tax in other countries. Vodafone said it was able to forego paying corporate tax due to allowances for investment it made in its network, on spectrum and in interest payments….it noted that it paid £882m in other UK taxes and contributions during the year.”

Even TelecomsMarketResearch.com has to spend the odd pound or two on developing its infrastructure and these are legitimate costs that have to be met by the revenues generated by selling market research studies. Should we feel the heat from our competition, we would reasonably increase the level of investment. Most people would regard investment in a new Website as a good one, even if the price tag was a few million. And again most observers would not be surprised if we thought we should borrow the  money. Consequently costs would exceed revenues and there would be no profit this year, and so no Corporation Tax.

Vodafone now finds itself in a slightly awkward place in the UK market. At the time T-Mobile and Orange clubbed together and formed ‘Everything Everywhere’ in the first quarter of 2010, Vodafone found itself outmanoeuvred in it that it was previously a comfortable number two in the market, and after the formation of EE, had been pushed into third place. Click here for UK mobile market share data.

The new grouping behind EE found itself with an oversupply of base stations, but crucially, it inherited a job lot of spectrum, which with a little bit of re-farming, would allow it to launch the next generation of mobile services – 4G or LTE.

This clearly caught its competitors on the hop, as ’3′ knee-jerked into a telesales campaign targeted at its existing customers desperately trying to tie them into 5-year contracts. ’3′ seemed such a great name not that long ago, but it does highlight the problem of linking your brand to a specific technology.

It follows that Vodafone now has some serious competition and has found itself in a less good market position, but can see that data is the major driver for future revenues. It has no option but to invest heavily in its network not only to catch-up but to now place itself ahead of its competitors. And this requires borrowings, which require to be serviced with interest.

My theme here is that Vodafone has to make a heavy investment to retain its position; whereas the likes of Google and Starbucks still have to invest, but not at the rate that Vodafone has to.

In the quoted piece there was also a reference to Vodafone having to pay for spectrum. Now it is argued that this is a national resource and access to it should be paid for, like access to other national infrastructure is paid for. When you put you car or lorry on the road, there is a ‘road fund tax’, which pays for new roads and the upkeep of the existing roads.

But the big difference here is that the roads and railways have had to be built and then maintained, whereas ‘spectrum’ costs the government nothing. Strictly speaking there will be the regulatory cost of ensuring that other operators do not hi-jack the spectrum or create interference but this pales into insignificance compared to the quoted cost of building the High Speed 2 railway line from Birmingham to London which is put at £33bn.

In February 2013 Vodafone paid the UK regulator some £790m for 4G spectrum, noting it had paid £2.5bn for spectrum in UK, India and the Netherlands in 2012-13, and has spent some £7.9bn globally in the last four years.

The underlying assumption is that governments are the good guys in all of this. Yet as Vodafone in India and the citizenry of Cyprus have learnt, the authorities are quite capable of re-writing the rules mid-game to suit themselves. Indeed Vodafone is currently fighting the Indian government over a US$ 2.2bn tax bill which was applied retrospectively. Vimpelcom/Orascom have run into similar problems in Algeria.

The mobile space is a fast-moving technologically-based market. It would not just be wrong, but disastrous, if a British success-story – which is paying UK taxes and spectrum charges – was taxed out of its natural market.

Maybe the reality is that the government both wants to have its cake and to eat it; but also needs some handy scapegoats to stop the masses from pointing a finger at those who are really responsible for the financial crisis…

Check here for more on the Vodafone Group. Also check out Market Mettle’s VodafoneWatch update service. For more on 4G and the LTE ecosystem, check out TD-LTE: Spectrum, ecosystem dynamics and early deployments.

 

Posted in LTE, Orange UK, T-Mobile UK, Vodafone UK | Tagged , | Leave a comment

What happens to your credit when your SIM card is deactivated?

Posted on 10/06/2013 by keithw

Who owns your money? The relevancy to telecommunications is that I have a T-Mobile Pay-as-you-go data dongle. As someone who needs regular and reliable access to the Internet, this has proved a life-saver, allowing access when the promised hotel Wi-Fi has failed; or I am out of range of the ’3′ UK network.

I have kept a reasonable credit on the account, as it was a ‘emergency’ facility. But the inevitable happened and there was a period I didn’t use it and the SIM card was deactivated.

So having finally got round to thinking it needed reactivating, I started calling T-Mobile. Contacting all the UK’s mobile operator’s when you don’t have a number is a tad irritating as all calls are answered by an IVR system, and all assume you have either the number or access to the phone concerned so that you can send a text with ‘number’ as the message to 150.

Tricky even if you an active dongle. Apparently, as a general rule, if you let the IVR system cycle through its message three times, it will route you to a more appropriate menu.

Last year, T-Mobile’s customer service centres were UK based, and I was able to make four calls in which I was successfully connected to a call centre operative. The first issue was that the only number visible on the case was the IMEI number, which didn’t cut any ice, as it wasn’t recorded on the T-Mobile system.

The first operative told me the account had been terminated, the records destroyed and I could not reapply the credit as there was no record of it. I pointed out that it seemed ironic that Google – which provides a totally free service – has records on my surfing habits right back to the beginnings of its existence, yet T-Mobile, who I am a customer of, and who held my money, had apparently deleted the record. This ‘discussion’ sadly put me in the ‘too difficult to handle’ category and Jenny disconnected the call.

Since I started my quest to have my account re-activated, a number of events have occurred. Perhaps most shocking is the ‘taxation’ of deposits held in Cypriot bank accounts. Not only does this seem to be the thinking enshrined in Basle 3 (a policy document authored by the central banks), it means that savers in the UK are not be ‘protected’ by the Government’s guarantee should a tax be levied.

But the crucial point here is that when you make a deposit with a bank, you ‘give’ the money to the bank, and until they allow you to have it back again, it’s theirs. This was illustrated with long-established Norwich Union, who when acquired by Aviva, the new owners decided they had been mis-sold the business (forget that they were tasked with carrying out the due diligence). The books were adjusted with Aviva taking three sevenths of the investor’s funds as compensation. In the subsequent ‘class action’ it was established that when payments are made into a private pension fund, you literally give them the money, for them to do what they like with it. In this case, Clare Spottiswood fought the action and had one seventh of the fund restored.

Even if you thought you were being clever and bought gold (real gold, not shares in gold) and then needed somewhere to put it, a bank safety deposit box might actually be one of the worst places in terms of ‘security’.

The point here is – without making reference to T-Mobile’s Terms and Conditions – the likelihood of me getting my money back is very low. In itself, not a major issue, and one that most people would probably shrug-off.

By call four it had been established that it should be possible to remove the SIM-card and read its number, and so locate the account. Sadly Tom did not know how this might be achieved, but thought there might be a flap on the side or similar. Just as we were getting into the detail of SIM card removal, the line went dead…

Informa Telecoms & Media’s ‘Exposing the Retail Experience: ‘Mystery shopper’ surveys assess retailers’ approach to recommending and promoting handset models and brands’ should make interesting reading in this context. This case-study also highlights why subscribers do need effective personal support, and Analysys Mason have some pertinent observations in their new report ‘Customer self service: CSP architecture and case studies’.

Hope springs eternal. Having played with the dongle, the SIM card tab was finally discovered. For the record, it is at the silver ‘USB’ plug end of the device, and appears to be part of the black edging that has two solver screws on either side of the plug. If you look below the silver plug on the widest side (but before the dark grey T-Mobile casing starts), on one side the black edge is continuos and unmarked, but on the other side there is a small depression in which you can insert a thumbnail – just like a memory card on a camera. Insert your thumbnail and pull away from the dongle, and it should pull out easily.

T-Mobile have relocated their call centre in Asia, and this morning a very pleasant ‘Stephen’ couldn’t find my SIM card number of the database, it being ‘too old’. And he told me that both the card and my credit had been eliminated.

I pointed out to Steph that – rather like energy – you cannot destroy ‘wealth’, rather it is ‘transferred’, and I suggested that my credit hadn’t been eliminated but in fact had been transferred from my bank account to T-Mobile’s balance sheet.

Stephen is going to talk to his supervisor and will call me back. That’s was an hour ago, but rather like the citizens of Cyprus, I am not expecting a wealth transfer in my favour anytime soon…


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UK mobile consumer test: O2 worst for spam texts

Posted on 07/06/2013 by keithw

‘Spam texts’ figure frequently in customer complaints made to Regulatory bodies globally.

There are two sorts of ‘spam’ as defined by users: those received from their operator, and those received from a third party that they have had no previous dealings with. Now most marketeers would regard informative texts sent to users as a legitimate communication, and not spam at all.

Whereas, those e-mails and texts claiming you have won the Canadian lottery or there’s a failed construction contract that has left unclaimed millions in a bank account which just needs you to claim it…that’s spam!

But its an interesting problem, as I suspect many people have a personal phone so that friends and family have immediate access to them, and they resent the operator’s legitimate attempts to drum up business under the guise of giving them better deals for volume usage.

Whatever. TelecomsMarketResearch as part of on on-going survey of the mobile phone market has recently acquired a fleet of mobile phones to allow it to carry out its own assessment of operators in the UK.

And it didn’t take long before things ‘kicked off’ with our research fleet.

The most remarkable thing was an in-bound call just 107 minutes after registering the phone with Orange. The call was from 01792-211846, which if Googled, is a cloaked ‘spook’ – it has the legitimacy of a number registered in a major city in the United Kingdom (Swansea) but when answered there is silence. How our recently activated SIM was called in this way we will leave for another day.

For our in-bound promotion text monitoring (was ‘spam’), we used two mobile phones registered with five Mobile Network Operators (T-Mobile, Orange, Three, Vodafone and O2) and a Mobile Virtual Network Operator (Virgin), making 10 in total. Orange and T-Mobile have been involved in a prolonged merger of their operations in the UK to form ‘Everything Everywhere’. However TelecomsMarketResearch acquired SIM-cards for the original host networks, allowing any differences between the two to be recorded.

If you don’t like receiving promotional texts from your operator, then you should consider Three as the only operator who – except for texts confirming actions had been taken – has kept the channel clear.

The operator most likely to send you a promo text is O2, and the frequency is almost double that of the next ‘bad guy’ which was Orange. Interesting O2 and Orange were the only operators to offer the opportunity to opt-out of promotional texts.

Despite the claimed merger, Orange and T-Mobile have not yet unified their texting programs. In the three week period of the assessment, Orange have offered ‘magic numbers’ 2-for-1 cinema tickets, and the chance to go to Glastonbury; whilst T-Mobile has wanted us to choose a messaging service, and put some effort into ‘welcoming’ us.

Both sent a text about the formation of EE, but obviously not from the same team. Orange told us: ‘You are seeing EE on the screen because as an Orange customer you now use EE’s 3G network, the biggest in the UK’. Incidentally it was sent by, err, Orange.

T-Mobile texted: ‘The company behind T-Mobile has launched a new brand called EE. You’ll still be a T-Mobile customer – your number and plan details will stay the same but the T-Mobile network will form part of the EE network so you’ll see EE on your phone screen. For more info see  www…’.

In case you didn’t quite get that, they have merged but are staying separate. As to what might be displayed on the phone, this is a bit of a moveable feast. We have two phones displaying ‘EE’ and two phones displaying ‘Orange’: the only snag is that one of the phones displaying ‘Orange’ has a T-Mobile SIM card. Clearly a little bit more work required then.

But despite the rise of data and MMS, plain old texting still remains a strong revenue source for mobile operators. In 2011, the worldwide mobile messaging market was worth USD 202 billion, and according to Portio Research (Mobile Messaging Futures 2012-2016) messaging still provides the backbone of mobile operators’ non-voice revenues.

One of the biggest themes under discussion in the mobile messaging is the ‘the end of SMS’ and the booming rise of Over-the-Top (OTT) messaging services (or ‘next generation’ messaging services, to offer just one of a great many aliases). That said, the underlying question (SMS vs. OTT) is a valid one.

Within the mobile space, messaging is the biggest revenue generator after voice. Within messaging, SMS is king and yielded the highest revenue for mobile network operators (MNOs) in 2011. With these largely free or ‘almost free’ OTT messaging services seeing uptake, it is of course proper to assess precisely how pressing the concern is that the highest margin messaging service for operators (SMS) is being cannibalised by OTT services that are overwhelmingly yet-to-be monetised, and with usage thereof being largely beyond the control and influence of MNOs.

The volume of OTT messaging traffic is set to be twice that of Peer-to-Peer (P2P) SMS messaging by the end of this year, according to data collected by Informa Telecoms & Media (VoIP and IP messaging: Operator strategies to combat the threat from OTT players) . Daily OTT messaging traffic has already overtaken daily P2P SMS traffic, with an average of 19.1 billion OTT messages sent in 2012, compared with an average of 17.6 billion P2P SMS messages.

And we were worried about a handful of harmless texts inviting us to a muddy field west of Bristol from somebody who could be in Germany or France but not Spain and definitely not Hong Kong (a reference to the ownership of the UK’s mobile networks).

Posted in EE4G, Messaging, O2 UK, Orange UK, T-Mobile UK, Vodafone UK | Tagged , , , | Leave a comment

Smartphone strategies: innovation v low-price. Which way to go?

Posted on 06/06/2013 by keithw

There is an expression in the UK ‘as cheap as chips’. Not computer chips but fried potato chips (I have fried a computer chip, although not intentionally).

Mobile operators are rapidly orientating their networks and their marketing towards data, but this also means that in some major growth markets – such as Africa – this can only be delivered if there is a source of low-cost Internet-enabled devices.

It seems doubly ironical that the need for low-cost smartphones comes at a time when European regulators are calling for higher manufacturing standards of the existing up-market lines. Yet manufacturers such as Samsung Electronics in 2012 were looking to double their market share in the sub-Saharan smartphone market to 20 percent in 2013, as they focused on affordable handsets.

Samsung’s ‘Built for Africa’ line features energy-saving electrical appliances purpose built to withstand high temperatures and erratic power supplies, and Kwang Kee Park, Samsung’s President and African Chief Operating Officer, said last year that he saw a major opportunity with the rising demand for low-cost smartphones. Consequently, it is developing products, such as the Galaxy Pocket, a stripped-down version of its Galaxy smartphone.

Samsung estimated that the total African market for handset devices shipped was around 97 million, with smartphone penetration in early 2012 running at around 6 to 8 percent, and Samsung reckoned that its share of the smartphone market in Africa stood at about 10 percent.

Crucially, according to Samsung’s strategy, it is ’thinking globally, acting locally’, as it has assembly plants in South Africa, Nigeria, Ethiopia, Senegal, Mali and north Sudan, and was aiming for sales of USD 3 billion sales in 2012, up USD 1 billion on 2011, and saw African revenue increasing to USD 10 billion by 2015.

Its plan, however, requires the development of more locally relevant products at cheaper prices. Whilst satisfying a crucial market need in Africa is one thing, a European Union weathering a triple-dip recession but still wishing to satisfy a craving for new-wave electronic baubles, might also be ready to welcome low-cost smart devices.

The demand for smartphones – and access to the various mobile technologies they bring – is increasing. Consumers are being presented with a choice of devices, at a variety of price points and across a number of operating systems, which is greater than ever before.

While the ‘traditional’ handset vendors continue to be the innovation leaders, up-and-coming vendors are providing similar-spec handsets but at much lower price points and are competing head-on in this ‘affordable handsets’ segment. This trend is causing significant disruption in the market, with a few of these incoming vendors outselling the ‘traditional’ OEMs. Furthermore, smaller companies are finding ways to maximize their operating profits by keeping down operating expenditure, which can be a significant burden to the ‘traditional’ OEMs.

Clearly there are opportunities, and the issue is discussed in greater depth in Informa Telecoms & Media’s recent study ‘Affordable Handsets: From Imitation to Innovation’.

Interestingly Ericsson in its 1Q 2013 ‘Mobility Report’ notes that mobile subscriptions for PCs, mobile routers and tablets that use larger screen sizes are increasing. They suggest that the number of subscriptions will grow from 300 million in 2012 to around 850 million in 2018, and so exceeding the number of fixed broadband subscriptions globally.

The conclusion has to be that wherever you live and whatever your income, there will be reasonable access to the Internet in some form or other; be it a dongle for an existing laptop or a low-cost smartphone, capable of providing basic browsing. Portio (Smartphone Futures 2012-2016) suggests that global smartphone shipments will top half a billion in a year, smartphone shipments reaching 485 million in 2011, topping 655 million in 2012, and rising to 1 billion smartphones per year by 2016.

As a happy feature phone user with dongle-enabled laptop, maybe I’ll leave the smartphone another year and see if they really do become are ‘as cheap as chips’ ( a bag of chips in the UK currently costs GBP 1.50/USD 2.30). There’s no rush….

Posted in Africa, Emerging Markets, Global Mobile Market, Handset Shipments, Smartphones | Tagged , , , , | Leave a comment

Asia Pacific readies to take mobile payments mantle: USD 2 trillion of global transactions by 2017

Posted on 05/06/2013 by admin

Portio Research reckons that Mobile Payment volumes – that’s the total value of goods and services and utility bill payments made through mobile devices annually – reached USD 81.3 billion globally in 2011, and then rose by an amazing 148 percent in 2012 to reach USD 202 billion.

Portio in its Mobile Payments 2013-2017 report sees the global market growing to USD 410 billion in 2013, with volumes growing at a CAGR of 59 percent to 2017, breaching the USD 1 trillion mark by end of 2015, and the USD 2 trillion mark by the end of full year 2017. They will be 1 billion consumers globally making mobile payments by the end of 2015. Africa led the way in mobile payments from the start, as there wasn’t much fixed infrastructure and large numbers of people did not have a bank account but did have a mobile phone. But now it looks as if Asia-Pacific could take the top spot by 2016.

According to Gartner, it will be the largest contributor in 2013: interestingly Gartner is more bullish than Portio and has forecast USD 235.4 billion worth of transactions in 2013, but as a general rule TelecomsMarketResearch prefers the more pessimistic forecasts for strategic decision making purposes.

Gartner sees Asia-Pacific’s transaction value growing 38 percent in 2013 to reach USD 74 billion, spurred by the launch of a number of mobile money services in developed markets like South Korea and Singapore and emerging markets like India. So in 2016, Asia-Pacific will overtake Africa to become the largest region by transaction value, reaching USD 165 billion, according to Gartner. Africa’s transaction value is forecast to reach USD 160 billion in 2016. Africa will see strong growth but after the rapid uptake in Kenya, Vodacom et al have seen other national markets show greater initial resistance, although in South Africa, some of the issues were regulatory.

But what is so striking about the Asian markets is that there are two major national markets that dominate all else. Portio in their Mobile Payments 2013-2017 study show the mite of China and India with a chart showing the ‘Inward Remittance Volumes’ in USD billions showing China growing from USD 49 billion in 2008 to USD 66 billion in 2012, whilst India grows from USD 44 billion to USD 70 billion in the same period.

But another factor in Asia’s growing prominence is NFC mobile wallet services, which currently – according to Berg Insights – is dominated by North America. But Berg notes in its newly-published Mobile Wallet Services that the implementation of TSM (Trusted Service Manager) infrastructure for NFC wallet services is progressing rapidly and there are high levels of activity in Europe, parts of Asia-Pacific, Turkey and North America. Crucial, though, the largest share of TSM projects have been implemented in Asia-Pacific.

So it looks as if Asia-Pacific is poised to grab the initiative on all fronts.

Posted in Africa, Asia-Pacific, Mobile Banking, Mobile Payments | Tagged , , , , , | Leave a comment