DI Live! IT Executive Insights

Digital Investor's news roll & commentary

Fujitsu launches USX ubiquitous connectivity SDK

In an announcement that might have flown under the radar Fujitsu launched what it calls its USX ubiquitous connectivity solution.

It leverages presence management functions to automatically route calls over the optimal network, such as wireless LAN (via internet or intranet) or internal or external phone lines including cellular, depending on the location of the mobile handset user.

The USX software package enables instant communication with other parties without having to think about where they are, creating a ubiquitous networking environment.

The package also supports an optional push PoC/W function, enabling a user to transmit voice or data messages to multiple recipients simultaneously.

USX also enables "easy to build" customized mobile applications. For example it includes an interface for linking with main office operations and a software development kit, making it easy for customers to build customized operational applications for mobile handsets.

Initially, intelligent mobile handsets from Net-2Com Corporation, the WiPCom 1000 series, will be available as client handsets. The WiPCom 1000 series, which run on Windows(R) CE, can operate over both wireless LAN-VoIP and cellular networks.

In the future, Fujitsu plans to also support mobile handsets that run on either Linux or Symbian OS, facilitating the development of client application in an open standard environment and making it easier to integrate with existing operations.

Because the software includes all functions such as user and handset management, remote client software transmission, presence management, and address book with corresponding server functions in one package, it reduces the operational management burden that is typical of mobile systems.

Other features such as PIM (personal information manager) and secure VPN transmission come standard with the software.

Net-2Com and Fujitsu Laboratories announced in June 2004 the development of the "world's first wireless IP mobile handset capable of seamless switching between wireless LAN and public wireless networks".

Although mobile PCs and PDAs can run various applications freely, they lacked the compact portability offered by mobile handsets. Given this, needs grew for a device that features both the compact mobility of handsets along with open architecture available for PCs and PDAs.

Net-2Com Corporation was created as part of a Fujitsu program to cultivate venture startups in July 2000 to focus on VOIP technology.  Net-2Com uses the Radvision SIP toolkit as the base platform of their new series of handsets.

The launch of the USX platform should boost mobile business applications and VOIP over cellular usage.  Previous verions of the WipCom Wifi-LAN handsets have suffered from high pricing and low battery life, as is so common in new generation handset launches, but these will be overcome in time.

Technorati Tags:
Mobile VOIP Japan mobile Fujitsu mobile Net-2Com

---

How do you think that mobile VOIP will develop as the first major point of penetration e.g. in consumer or in enterprise?  Post your Comments.  How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he has the ability to identify business opportunities that benefit all sides, creating networks of customers, suppliers, investors and intermediaries. His breadth of knowledge and willingness to push himself beyond the brief are tremendously valuable." Zenon Pasieczny, Director, Saphet Capital Management

---

Wireless is the killer app for VOIP - Aruba

When Don LeBeau, President and CEO of Aruba Networks, spoke at ATRE 2005 in Beijing, he said that "VOIP is the killer app for wireless and wireless is the killer app for VOIP".

Because of the cost effectiveness of commercial wireless deployment new mobile applications are being developed which again allow enterprises to compete.  That is, just like in the initial days of consolidation of networks into IP-based flexible and cheap fixed line deployments, early adopters are able to take advantage of competitive benefits.

This is much more than the deployment of adoption of wireless consumer technology, which has limited deployment potential - but enterprise grade security, scalability and robustness - out of the box.

LeBeau said that we are on the verge of a new change in the way networks are built, with wireless at the network edge everywhere.

He also made some other points, that Aruba had moved all production to China and saved between 30-50% of costs and actually improved quality, that customers are finding a ten to one cost advantage in using wireless technology to support office and mobility as compared to previous approaches to enterprise networking.

---

What do you think will be the killer app for wireless? Post your Comments.How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK) 

---

i-mode Content Forum Analysis of Australian i-mode Content Revenue

With the recent renaming of iClub Edit to i-mode Content Forum (iCF) and the publication of new Aims and Objectives, they have also opened their campaign for more Australian members.

New members of iCF can enjoy the following activies:

• Peer-to-peer networking to help members make the connections they need to enhance their business.
• Education about mobile content and the i-mode ecosystem, in the form of specific tours and seminars and conferences e.g. World i-mode Content Providers Conference.
• Occasional advocacy on technology and issues in i-mode.
• A knowledge-base providing access to opinions and trends within the membership, primarily through the website www.imodestrategy.com
• Liaison with NTT DoCoMo on matters of broad interest to content providers.
• Liaison with i-mode alliance partners on content issues and trends.

In addition, and of special interest to Australian content providers, and content providers to Telstra's i-mode service, is iCF's unique analysis of content revenue for i-mode Australia.

Learn how the guided hand of Telstra in managing "my menu", plus the expectation of achieving attractive subscription prices, makes the initial projections and opportunities for content providers appear quite favorable for smaller players and new entrants into i-mode.

Join the i-mode Content Forum by emailing or contacting:

• Pascal Lorne - President pascal@i-cf.org +33 670 765 643 (France)
• Walter Adamson – Vice President, Asia-Pacific walter@i-cf.org +61 403 345 632 (Australia)
• Axel Dreyfus - Vice President axel@i-cf.org

Sign up and receive the full 5 page PDF report.

(Or simply post a comment below with your details, and Walter will contact you.)

---

What do you think about the potential of i-mode and content providers in the Australian market.  How will the content market develop? Post your Comments.How can I help? Email me; Call (Australia) +61 403 345 632.

---

Hutchison 3 shows how 3G pays

In a previous posting Hutchison continues to pave the way in 3G in Australia I made the point that despite industry and analyst scepticism 3G both Hutchison and 3G were a winning combination:

Customers at 3 Australia totalled 240,071 at June 30, up nearly threefold from 86,758 at Dec. 31, with the strong growth continuing into the second half. Average monthly revenue per user at its "3" service increased to A$85 (US$60) from A$80 (US$56.50), the highest in the Australian industry, Hutchison said at that time.

Before releasing those numbers Hutchison's mobile market share was estimated at 3% with Telstra at 46%, Optus at 35% and Vodafone at 16%. Optus acquired 168,000 customers during the first quarter 2004, bringing its base to 5.7 million. Optus Zoo, the company's mobile information and entertainment portal, registered a customer increase during the quarter of more than 860,000.

On Ecademy, Tomi Ahonen (m-Profits Making Money from 3G Services) made this recent posting:

One interesting thought. Three has released its ARPU (Average Revenue Per User) numbers for Italy and the UK for the second quarter of 2004. The total subscriber numbers have doubled 1.4 M in Italy, 1.3 M in the UK, yet the ARPU level is almost identical, at twice the average for 2G customers in both markets. This is very remarkable and against the conventional wisdom of most forecasters and modellers. The assumption was that the first few to get 3G will be the heavy users, with astronomical ARPU levels, but as more mainstream customers sign up, they will bring more typical usage, dropping the average across the whole network. Three has been incredibly successful this year (as opposed to seemingly doing everything wrong last year).

.

---

For specific business commentary on telecoms see:

i-mode Business Strategy at www.imodestrategy.com
Australia's 3G Party and Why Hutchison 3 is Attractive to Telstra's i-mode Strategy
Ca va? DoCoMo's i-Mode Clone Grows Quietly in France
Telstra's 3G Decision - Where the Analysts Missed the i-mode Play
Redesigning the i-mode Sales Process for Success - Part 3 Creating Excitement
As It Happened - i-mode History - Exploding the myths of a well-planned birth

---

Complete and Free Articles on Broadband and Asia at www.digitalinvestor.com.au

Asian Broadband Cooperation Leads Standards-setting
Presentation to the Australian Telecommunications and Network Applications Conference 2003

What do you think about the commercial future of Hutchison 3 and 3G in Australia and their other markets? Post your Comments.

---

How can I help? Email me; Call (Australia) +61 403 345 632.

Optus Vodafone Cut to the Bone on 3G Network Sharing

When Optus and Vodafone Australia announced their 3G network sharing deal this week Alan Lew, Optus MD for Mobiles, made it clear that the Optus/Vodafone 3G network sharing arrangement is purely about achieving back-end cost savings.

This is a refreshing contrast to the hype developed around the Telstra / Hutchison 3G deal where Telstra’s CEO and others successfully created associations between ideas of strategy and more effective competition in relation to network sharing. This was successful to the extent that even the leading business commentators hailed a “new era in mobile competition”.

Sharing the radio masts is hardly that, and this is a point upon which Optus and Vodafone were in violent agreement in their announcement.

The Heads of Agreement announcement between Vodafone and Optus comes just three weeks after Telstra agreed to buy a 50% stake in Australia's only 3G network from the local unit of Hong Kong's Hutchison Whampoa for AU$450 million.

Asked if Telstra had a significant advantage because of its earlier announcement Lew pointed out that Telstra “only had access to H3G after 1 July 2005 and this assumes that all other parts of service provision and service billing chain will be ready in full and will be able to be rolled out."

Optus does not see Telstra having a significant advantage, and the key point is that for Australia this means that all carriers will be operating 3G networks during the second half of 2005.

The clarity of purpose, the price and the construction of the venture are the three key differences of the Optus Vodafone deal as compared to the Telstra Hutchison deal.

Optus wins on Capex but what’s the deal with Opex?

The price of the Telstra deal was criticised by Optus incoming chief executive Paul O'Sullivan who said Telstra had paid too much. Alan Lew clarified O’Sullivan's position, "Our own estimation was that the cost of that (our own 3G build) was AU$435 million.”

"By doing this deal with Vodafone we have reduced the spend that we would have had to put in for the 2,000 base stations by about AU$130 million to $140 million.”

The deal with Vodafone will reduce that cost to between AU$305 million and $315 million.

This means that Optus clearly believes that it is getting an equivalent coverage of 2,000 base stations for about AU$140m less than Telstra.

Little things add up, and back in 2001 when the 3G spectrum auctions were announced Telstra had paid 25% more than Optus for what all commentators agreed was far less than 25% extra capacity.

Optus also expects operating expenditure savings of about AU$100 million over 10 years. That latter figure contrasts interestingly with Telstra’s savings estimate of AU$40-$45 million a year that it stated that it would save from its agreement with Hutchison.

The deal here seems to be that because Optus and Vodafone will be sharing 2G site infrastructure they did not have the build-out that Telstra must have been planning for its 3G network infrastructure and therefore had less to save.

The Optus Vodafone JV structure is cleaner

In terms of construction of the venture itself Optus and Vodafone are starting a JV with a clean sheet of paper – no physical assets. Vodafone will contribute its pre-work 3G intellectual capital. Physical assets will be rolled into the JV as the network is built – starting from scratch.

Both parties will contribute access to their 2G sites for the installation of JV assets which are essentially only the 3G radio units – the Nokia Node B units – even “the shelves, batteries and antennas may or may not be shared if they are already there,” according to Optus. How these non-shared units will be operationalised into the commercial arrangement isn't clear but presumably by each carrier leasing existing assets and sites to the new joint venture.

The JV will negotiate service level agreements and KPIs to the requirements of each operator, in conjunction with Nokia as the infrastructure vendor.

Asked if Nokia as the common infrastructure vendor would be a loser from this announcement Optus said that they needed now to go back and “discuss the implications of this deal before we finalise Long-Form Agreement”.

Since Nokia was the global 3G infrastructure vendor to both Vodafone and Singtel (Optus's parent) it is expected to be relatively compliant.

Optus and Vodafone are sharing less

Neither Telstra and Hutchison or Optus and Vodafone intend to share any part of their core network.

In contrast, under the agreement with Telstra, Hutchison will establish a 50/50 enterprise to jointly own and operate H3GA's existing 3G radio access network and the agreement allows both parties to share their 3G spectrum.

Unlike the Telstra and Hutchison joint venture, mobile spectrum, bought for a combined AU$500million by Optus and Vodafone in March 2001, will not be shared by the pair. (Australian carriers only paid AU$61 per head of population covered compared with European 3G auctions where carriers paid AU$407 a head.)

Network sharing not a global strategy for Vodafone

Join the Tour Mobile Intelligence Tour 4 X in 2005

Asked if this was indicative of a global strategy Andy Reeves, Chief Technology Officer at Vodafone's Australian unit said that while “we fully support the idea of 3G sharing” this is not a model that Vodafone is looking to adopt globally. He said that “each operating country needs an approach that is right in that market”, and that is all this deal is about.

No surprises in the timing and the 3G deals

Chris Lane, Director Mobile Strategy at Optus, who was their main negotiator for the deal, said that the industry started talking about a year ago about 3G network sharing - between all parties.

Optus came to Vodafone in February and from there continued to develop a joint understanding. "We were speaking exlcusively when Tesltra deal was announced," he said. "We were already concluding our discussions well before the Telstra announcement."

That these types of discussions were taking place at the same time between all the parties was well known even if the details and arrangements were not.

Hutchison continues to pave the way in 3G in Australia

Telstra, Optus and Vodafone are all playing catch up to Hutchison which has been operating its 3G service for about a year and earlier this month reported very strong growth in its customer base in the first half of 2004.

Customers at 3 totalled 240,071 at June 30, up nearly threefold from 86,758 at Dec. 31, with the strong growth continuing into the second half. Average monthly revenue per user at its "3" service increased to A$85 (US$60) from A$80 (US$56.50), the highest in the Australian industry, Hutchison said at that time.

Before releasing those numbers Hutchison's mobile market share was estimated at 3% with Telstra at 46%, Optus at 35% and Vodafone at 16%. Optus acquired 168,000 customers during the first quarter 2004, bringing its base to 5.7 million. Optus Zoo, the company's mobile information and entertainment portal, registered a customer increase during the quarter of more than 860,000.

Former telephone monopoly Telstra has been losing market share of Australia's A$9.6 billion (US$6.78 billion) cell-phone market to Optus, according to telecommunications researcher Paul Budde. Optus's mobile-phone unit accounted for one-third of sales for Singapore Telecommunications last quarter.

---

For specific business commentary on telecoms see:

i-mode Business Strategy at www.imodestrategy.com
Australia's 3G Party and Why Hutchison 3 is Attractive to Telstra's i-mode Strategy
Ca va? DoCoMo's i-Mode Clone Grows Quietly in France
Telstra's 3G Decision - Where the Analysts Missed the i-mode Play
Redesigning the i-mode Sales Process for Success - Part 3 Creating Excitement
As It Happened - i-mode History - Exploding the myths of a well-planned birth

---

Complete and Free Articles on Broadband and Asia at www.digitalinvestor.com.au

Asian Broadband Cooperation Leads Standards-setting
Presentation to the Australian Telecommunications and Network Applications Conference 2003

What do you think about the differences between the Telstra/Hutchison and Voda/Optus deal and do you think that there are any competitive differences? Post your Comments.

---

How can I help? Email me; Call (Australia) +61 403 345 632.

Who's who in the Zoo of Hutchison 3G in Australia?

When Telstra announced that it will buy a 50% stake in Hutchison's 3G business there was confusion about what that meant – not only from a strategy point of view but also from an entity structure.

The London Times reported as follows: "Telstra, Australia’s dominant phone company, will pay A$450 million (£174 million) for a 50 per cent stake in the Australian unit of Hutchison Telecommunications' third-generation mobile network, enabling an early launch of high-speed services."

That's not clear what the equity vehicle actually is, since it is certainly not Hutchison Telecommunications the listed company - so to which part of it is the investment directed?

Locally, it is reported that the companies will establish a jointly owned venture to own and operate Hutchison 3G's existing 3G network and to fund future network development. Under the agreement, Hutchison 3G's Australian network will become the core asset of the venture. Telstra will pay $450 million for 50 per cent of the asset in four instalments, starting in November 2004.

The 3G network cost Hutchison about A$3 billion (US$2.14 billion) to build, according to analysts.

Australia's AAPT, through Telecom New Zealand (TNZ), has a 19.9% stake in "Hutchison Telecommunications' 3G business" and also intends to offer services to its customers using Hutchison's 3G network capacity (AAPT currently sells its mobile services to customers using Vodafone's network).

The chief executive of AAPT has said that their 3G service would be ready "later this year or early next year". He added, "AAPT is going to be known for being a great marketing company, not a great telephone company".

The question here is in which entity TNZ/AAPT have their investment, and how is that affected by Telstra's investment?

Hutchison is 57.8% owned by Hong Kong's Hutchison Whampoa Ltd through Hutchison Communications (Australia) Pty Ltd (in the Annual Report TNZ is also listed as a 57.8% shareholder – see note below).

So who's who in this mix of "Hutchison" and its partners?

The listed company is Hutchison Telecommunications (Australia) Ltd – HTAL. HTAL operates both the "3" 3G brand and the Orange brand.

HTAL is 57.8% owned by Hutchison Communications (Australia) Pty Ltd.

The subsidiary Hutchison 3G Australia Pty Ltd is listed under Hutchison 3G Australia Holdings Pty Ltd and HTAL declares an equity holding of 80% in each.

Telstra's investment was reported by The Age to be a 50 per cent stake in "Hutchison 3G Australia Pty Ltd".

This is a little confusing because according to the same report in The Age TNZ has a 19.9 per cent stake in "H3G" (sic).

The venture with Telstra will form a separate entity to own the 3G network, presumably with contractual obligations to the Hutchison 3G entities (and therefore to TNZ). This entity is presumably to be formed under the level at which TNZ hold their 19.9% interest in the "Hutchison 3G business".

TNZ has been quoted as saying that Telstra won't undercut its prices for high-speed wireless services. "You should assume that since we're original partners with Hutchison, that's not going to happen,'' said Telecom's Chief Executive Theresa Gattung in a televised interview on Business Sunday today, answering a question on whether Telstra will be able to undercut Telecom on 3G prices with its investment.

"Also our stake in Hutch is a long-term play with potential in New Zealand as well because mobile (telecommunications) is increasingly going to be about trans-Tasman, it is not going to be about one or the other market", she added.

Taking these comments into account and the structure as explored above it would seem that the new entity which is a 50:50 entity cannot be at the same level as TNZ's investment in Hutchison 3G Australia Pty Ltd. Most logically it will be a special purpose wholly-owned subsidiary of that entity. Therefore TNZ would in effect be a 19.9% owner of the 50% owned by Hutchison 3G Australia Pty Ltd in the network infrastructure entity.

Although there has been lots of excitment about the competitive landscape created by Tesltra's investment, in reality it is simply a strategic sourcing decision. The value is in the efficiency and mindset, and little in any market-facing competitive positioning.

The new Telstra/H3GA entity, which shares the network expenses and investments, is analogous to a shared services backend entity for mortgage processing between two banks. When such deals are announced between banks, for example, it has little impact on the market because it is seen as just another step in effective cost-cutting. And this is correct. It just sometimes seems more remarkable because banks and telcos are not known for their open minds towards strategic sourcing for their mission-critical but non-core assets.

Their joint investment does not imply any interest or ownership in the parent companies of Telstra or Hutchison Telecommunications (Australia). Optus still has every chance of continuing to outpace Tesltra and Hutchison in mobile internet, irrespective of a 3G network - although Telstra now has a huge advantage if they execute well on their i-mode alliance.

Note in the HTAL Annual Report 2003: TNZ's substantial shareholding arises solely as a result of the relevant interest in shares held by Hutchison Communications (Australia) Pty Limited and certain commitments given to Telecom Corporation of New Zealand Limited by Hutchison Whampoa Limited, the ultimate parent company of Hutchison Communications (Australia) Pty Limited which were approved by shareholders in August 2001, not as a result of a direct or indirect holding of shares in the Company by Telecom Corporation of New Zealand Limited.

---

For specific business commentary on telecoms see:

i-mode Business Strategy at www.imodestrategy.com
Australia's 3G Party and Why Hutchison 3 is Attractive to Telstra's i-mode Strategy
Ca va? DoCoMo's i-Mode Clone Grows Quietly in France
Telstra's 3G Decision - Where the Analysts Missed the i-mode Play
Redesigning the i-mode Sales Process for Success - Part 3 Creating Excitement
As It Happened - i-mode History - Exploding the myths of a well-planned birth

---

Complete and Free Articles on Broadband and Asia at www.digitalinvestor.com.au

Asian Broadband Cooperation Leads Standards-setting
Presentation to the Australian Telecommunications and Network Applications Conference 2003

What do you know about the entity arrangements for the new network entity between Telstra and Hutchison - let us know? Post your Comments.

---

How can I help? Email me; Call (Australia) +61 403 345 632.

Aussie Commentators Scatter as Telstra Endorses 3G

After firing its first salvo of i-mode, sending analysts and commentators into a frenzy of confusion, Telstra delivered them a knock-out blow with its deal with Hutchison 3G Australia (H3GA) to jointly own 3G radio access network infrastructure.

Telstra will pay AU$450 million to share H3GA’s radio access network infrastructure, as well as go 50/50 in expanding it.

When Telstra’s CEO Ziggy Switkowski announced the deal he pulled off a rare coup. For the first time during his tainted stint as CEO he simultaneously stunned silent both the analysts and the commentators. Not even the sudden resignation of Telstra’s Chairman in April this year managed this feat.

The analysts were floored by the extent to which Telstra’s newly announced Capital Management Program has apparently penetrated the “Not Invented Here” church of the inner sanctum of network engineering and operations. And the commentators were silenced by the realisation that their archives of damning reasons why 3G was a dud were now all worthless.

As far as the network sharing deal itself, Optus' incoming CEO Paul O'Sullivan says Telstra has overpaid, and could not see what obvious benefits Telstra would gain from the deal but considered it to be a reasonably good deal to Hutchison.

O'Sullivan's comments highlight that the deal is a shared-services efficiency-oriented deal. Whereas when the analysts and the commentator recovered their thoughts, they filled columns with praise for the new era of mobile services competition as a direct consequence of this deal itself.

The commentators are wrong. The deal itself has no direct consequence for competition, except to reduce operating costs for Telstra and H3GA and to allow H3GA to fix problems in its network coverage and performance.

However, the deal is significant to Telstra, aside from the cultural change, because it builds on the strength of their previous i-mode alliance announcement, not because of this deal itself.

Ironically, since all the analysts and commentators were negative or sceptical about Telstra’s i-mode strategy they have blinded themselves to this aspect of the real competitive position created by the 3G announcement.

As to 3G itself, it was never a dud and was never going to go away. Commentators, especially Australian commentators, have grasped at historical statistics and also recounted poor judgement in capital investment decisions as their basis for 'proving' that 3G was never going to make it.

They often also recount the WAP disaster in Australia as proof that (1) mobile internet is a dud, and (2) the public don't want it and will not pay for it.

Obviously if 3G services are rolled out as incompetently as WAP was then it will be another commercial failure, but that is not an inherent failure of 3G. Just as WAP-based mobile internet is used successfully in other parts of the world, 3G is also out there making money through satisfying customers today in a range of delivery technologies.

3G is here to stay just as fixed broadband is here to stay. This analogy is a very strong one. We now understand that broadband delivers services, efficiency and wealth generation that is not possible on dial-up internet connections. In fact this now seems obvious to broadband users.

The same is true for 3G - exactly.

Not only does 3G deliver services and wealth generation opportunities for users that prior technologies cannot deliver, but is does it at a small fraction of the capital cost and the operating cost of those technologies. This is a remarkable confluence of technology and business advantage that makes a compelling case - the only question is one of timing.

The timing decision has many parameters, mostly relating to prior investment and capital management decisions. Some parameters relate to market acceptance and handset and content availability, but these are secondary to the capital management strategies.

In China, for example, commentators and many local technology companies have declared that 3G is unnecessary and that the services available on 2.5G are sufficient. That may well be true but it misses the point that in China the operators need 3G because of its spectral efficiency and its huge operational and capital cost efficiencies. The operators will drive 3G into that market because it is a compelling solution for their technical and business challenges in operating their networks.

3G has never been a dud, although many of the capital investment decisions certainly were in the Western world. Australia needs 3G in the same way as it needs broadband - because it is a platform to generate national wealth.

In the press release for Telstra's network sharing Ziggy Switkowski, Telstra's Chief Executive Officer, said, "...this agreement recognizes that the interests of the industry and the nation are best addressed through this type of infrastructure-sharing agreement."

Almost every news organisation deleted this quote because of its appearance as being patently self-serving.

However, Switkowsky's making a valid point, that it is in the national interest to have the most advanced telco infrastructure and services, and 3G is the next stepping stone to that end.

---

For specific business commentary on telecoms see:

i-mode Business Strategy at www.imodestrategy.com
Australia's 3G Party and Why Hutchison 3 is Attractive to Telstra's i-mode Strategy
Ca va? DoCoMo's i-Mode Clone Grows Quietly in France
Telstra's 3G Decision - Where the Analysts Missed the i-mode Play
Redesigning the i-mode Sales Process for Success - Part 3 Creating Excitement
As It Happened - i-mode History - Exploding the myths of a well-planned birth

---

Complete and Free Articles on Broadband and Asia at www.digitalinvestor.com.au

Asian Broadband Cooperation Leads Standards-setting
Presentation to the Australian Telecommunications and Network Applications Conference 2003

What's your take on the national value of 3G? Where does the key challenge lie ahead and how can economic wealth best be created? Post your Comments.

---

How can I help? Email me; Call (Australia) +61 403 345 632.

User Experience Builds Content and Leadership in Ubiquitous Communications and Technologies - Korea

Japan, Korea and China have a combined strategy to lead in the setting of defacto standards for two important technology areas - 4G wireless and home networking. Their motives are driven in part by the desire to make these technologies available in the market quickly, faster than any traditional standards-setting process, and to have the standards strongly reflect experience from early experiments which are now underway.

A recent article brings this strategy to light. It highlights the effect of broadband "beyond the wires" and in everyday social use. The article also highlights the continuing debate, in the US at least, about the Korea success being mainly due to a tight geography and demographics - which merely deflects inexpert readers from understanding the deeper underlying causes and the deeper impact for economic wealth generation.

CNET News.com July 28, 2004
South Korea leads the way

"Many U.S. executives and policy makers are quick to dismiss the disparity, noting correctly that South Korea's densely populated areas have made it easier for telecommunications companies to offer extremely fast service to large numbers of people. But even with such geographic and demographic differences, the United States can learn some valuable lessons from South Korea's experience in jump-starting a broadband powerhouse.

"I think there are quite a few lessons," said Taylor Reynolds, an International Telecommunications Union analyst who recently completed a survey of Internet and mobile services in South Korea. "Most of the growth is tied to effective competition, which you don't see in a lot of places in the United States."

And even more interesting is the reach of this ubiquitous communications into everyday life. This reach brings into question the official status of Japan as the world's leading broadband nation - which it is according to the ITU criteria.

For example a recent Japanese Government report highlighted that "Japan's broadband subscribers at the end of March 2004 reached 14.95 million, and the monthly fees are much cheaper than those in other nations. Price comparisons show that the monthly fee of US$0.09 per 100kbps offered in Japan was also the least expensive among all nations."

This is certainly true, but the reach and pervasiveness of broadband in Korea is much more intense than in Japan. So while Japan may be the leading broadband nation, Korea is the leading "broadband people". The CNET article illustrates this reach:

"Citizens can get "video on demand" online, often even with high-definition video, for less than Americans pay to rent a DVD. Low-income students use high-speed Net connections to take free tutorials for the national aptitude test, an SAT-like exam that can determine college admissions and future job paths.

Online gaming is a massive cultural phenomenon, with three TV channels dedicated to the subject and good players attaining the fame of American sports stars. In addition, South Koreans spent more than $1.6 billion shopping online in the first quarter of 2004, or about twice as much per capita as U.S. residents .

"The vision of a broadband society is already here in Korea," said Eric Kim, executive vice president of global marketing operations at Samsung Electronics. "We are two to three years ahead in wireless broadband, and people are using it, too."

Eric Kim was a key influencer at this meeting that I attended on a small island of the coast of Japan, where Japan, Korea and China formulated their strategy for leading in defacto standard-setting for home networking and 4G.

Policy makers and industry leaders in other countries might observe that Korea leapfrogged the "traditional" paralysing effect of companies not investing because they don't have or understand content - Korea built the infrastructure and then the content evolved.

"In many ways, the most important question answered in the country's grand broadband experiment has been one of demand. Broadband progress has long been delayed in the United States and other countries as a result of uncertainty about how much interest consumers would have in paying for the expensive infrastructure needed for high-bandwidth services.

As a result, entire industries have been paralyzed for years by a classic Catch-22, as content companies and network carriers waited for one another to make the first move before investing in broadband products.

This infrastructure and national experience of broadband fuels the strategy of settiing and controlling important future standards, particularly for 4G wireless and home networking. This is a goal of Japan, Korea and China, and Korea is well advanced.

"The government's goal is to have 10 million households with (complete) home networking by 2007," Yong Duk Yoon, a vice president at Samsung's Advanced Institute of Technology*, said in an interview in this related article South Korea's house of the future on CNET.

The role Korea has taken in adopting broadband, through active Government policy and intense competition, has build a level of national experience that is unsurpassed elsewhere on the globe. Their collective attitude reflects that of Softbank Broadband in Japan where they have aggressively rolled-out leading edge high-speed broadband following a strategy of "experience first, content second" (see the importance of this strategy in mobile internet Lead with Design, follow with Content, the Power of the i-mode Handset Strategy for Telstra).

This shared experience is the basis of being able to understand and take the lead in setting very effective and market-driven de facto standards for the two key targets of home networking and 4G wireless. And from this Korea, Japan and Chiona will be able to drive whole new industries see Broadband in the Home Drives an Entire Industry. This is the point that decision-makers and policy-setters in many other countries, including Australia, seem to miss or be incapable of interpreting.

- from my website How Korea Built the Broadband that America Wanted

* Established in 1987, SAIT is Samsung's main research institute.

---

Complete and Free Articles on Broadband and Asia at www.digitalinvestor.com.au

Asian Broadband Cooperation Leads Standards-setting
uKorea and the Remarkable Dr Chin
Presentation to the Australian Telecommunications and Network Applications Conference 2003

What's your take on the content versus experience argument holding back broadband rollouts? Where does the key challenge lie and how can the hestiation best be broken? Post your Comments.

---

How can I help? Email me; Call (Australia) +61 403 345 632.

The Power at the Edge of the Network Regroups

Roger Buckeridge, the co-founder of Allen & Buckeridge, challenged me* when he said, "you told us that the future is thin clients in mobile and elsewhere, yet I remember not too many years ago when we were all told that computing power was heading to the edge of the network - I'm confused!".

This was after I had held somewhat to ridicule the current generation of smart phones and other mobile "smart" devices for their Wintel-like paradigm of complexity, confusion and poor usability as a communication device. My basic thesis was that the mental model of what we see in so-called smart phones, such as the Motorola A920, is hinged on computational models and computation as in putting men on the moon. Thus, in consequence, we get phones that take 90 seconds to boot up, that are difficult to interact with in simple user interface terms, that reduce effective interaction to keyboards and sticks, and which bluescreen and lock and can only be made usable again by literally ripping out the battery to kill the hang-up.

We all know that the average user is almost completely overwhelmed using a home computer and in fact uses a minutely small percentage of its "features" and "advantages". Why then, take this model to the mobile phone?

Following on, I speculated that one answer is to remove all the "smart" stuff and put it in the core of the network and therefore create thin mobile clients with high functionality driven by the network.

This is the same idea as driving multiplayer games over broadband, which in this sense puts "Playstation" usability and peformance at the core and delivers "images" to the end device. All updates, improvements, maintenance, would be done centrally, thus at the least removing the need to leave the "smart" phone at a dealer for 24 hours so they can upgrade the software (and inadvertently erase your on-board calendar and address book!!).

Where does this leave Roger's question?

The answer is that we have to differentiate between different forms and functions of computing and where they lie in the network/handset architecture. First point is that there will in fact be more and more power in the handsets/terminal devices - whether they be phones or TVs. But this power will not be directed towards the support of general purpose operating systems and file systems which are the source of the current stupidness of smart phones.

The power will be as intense as possible in support of man-machine communication of all forms. This means in supporting A/D and D/A conversions, since at the moment we humans do not yet have a USB port. Thus handwriting, speech recognition, speech generation, visual displays, still and video cameras, feature-rich video display functions and video camera functions, etc. will all use heavy computing power, probably in programmable DSPs.

A raft of communication-oriented, instant on and instant response interfaces, and a wide variety of integrated and syncronised input and output modalities, will require massive new power. This includes of course the basic requirements of more powerful video decoding and encryption/deencryption and driving high definition displays - just the basic raw capacities like these require a big increase in device computational ability.

It is networking and consumer electronics applications (games) that are driving the evolution of a new semiconductor industry with huge special-purpose processing capacity.

This microchip power will be as intense as is possible in also supporting the integration of the mobile device or terminal into its environment and with the person who is most closely associated with that terminal or device at the time.

This means it will take enormous computational and sensing power to determine time, location, environment, even emotion of the owner, presence sensing of circumstances and context of the environment, and communications around the device, and whatever can personalise and make most effective the current use of the device. The device will become extremely adaptive.

Therefore ever more computing power will be distributed to the edge and the extreme edge of the network, but not for Wintel architectures and jamming more and more dumb operating systems into overloaded computation-centric chips.

At the same time more and more power will move into components in-network and at the same time also more and more power to the network core heavy duty processing which may be centric or grid-based. For example across the network the power and throughput of in-network computers (high-end core routers) have increased dramatically, to the point where a next-generation core router will be at parity with the highest-performing parallel supercomputers. In fact, next-generation high-end routers will have memory-bandwidths, and high-availability requirements beyond that of contemporary supercomputers.

The functions common to everyone, the same boring functions that overload and crash our smart phones today, will move away from the device. That is the point at which I started the conversation with Roger.

Scott McNealy said a long time ago that "the network is the computer" (McNealy kicked off Sun's user conference, SunNetwork 2002, beating a drum to the same mantra the company has held during its 20-year history, "The Network is the Computer.")

This has become now become a truism, and the question now is more around "what sort of computer?".

The new mantra, one I have not commonly noticed, should be "the Internet is the database".

The Internet being the database, and the network the computer, and the end-user device the extension of the human, will all require as massive an increase in computing power as can ever be delivered at any time.

The computing power at the edge will not diminish, it will increase, but change in its objectives and functions as compared to today and as compared to the history of the mobile terminal devices up to now.

---

*At Roundtable with Paul Budde and Industry Experts: Expanding through a virtual company. Sydney, June 24, 2004.

---

How can I help? Email me; Call (Australia) +61 403 345 632.