Wireless and Broadband Policy, Net Neutrality and the Free and Open Mobile Internet

By Berge Ayvazian

During the opening day of 4G World on September 15, attendees were told that FCC Chairman Genachowski was unable to personally deliver his luncheon keynote, and he asked Bruce Gottlieb, the FCC’s Chief Counsel, to outline the Chairman’s priorities for wireless and broadband and the role of wireless broadband in the U.S. National Broadband Plan. This presentation kicked-off the WCAI’s 15th Annual International Symposium, co-located at 4G World

The primary message in the Chief Counsel’s brief presentation was that the FCC is genuinely interested in receiving more industry feedback and public input regarding the most critical policy and regulatory initiatives of the new administration regarding wireless and broadband. He observed that the FCC receives most of its comments from industry associations, service providers and equipment suppliers, and he called for broader and more diverse responses from stakeholders across the wireless and broadband ecosystem.

In August, the FCC initiated a fact-finding inquiry seeking the public’s input as it drafts the National Broadband Plan that the American Recovery and Reinvestment Act of 2009 directed the FCC to submit to Congress in mid-February. One of the central elements of this policy is to establish a common definition of “broadband” to define the basis of how the industry delivers high speed Internet access to consumers. While the industry is leveraging advanced FTTx and DOCSIS technologies to maximize the speed of broadband service for some subscribers, the current FCC definition allows anything faster than dial-up to be classified as broadband. In his presentation, Chief Counsel Gottlieb reported that the FCC’s has launched a new web site http://www.broadband.gov/ with a number of innovative “open government” features including a blog which solicits feedback and public comment. The FCC has also planned an ongoing series of staff workshops to promote an open dialogue between its staff and key constituents on matters important to the National Broadband Plan. These regional field hearings are intended to involve a broader scope of the community as it gathers ideas and comments, and the public discussion forums will address a wide range of topics including rural broadband infrastructure deployment, adoption, affordability, and the use of broadband to advance solutions to national priorities such as health care, education, energy, public safety, job creation, investment, and others.

On August 27, 2009, the FCC issued two Notice of Inquiries (NOIs): i)Mobile Wireless Competition and ii) Wireless Innovation and Investment, to study the competitive nature of the U.S. wireless industry and how to “encourage further innovation and investment.” In its far-reaching investigation and broad inquiry on the future of the wireless industry, the FCC will be looking at “upstream” markets, like tower sites, and “downstream” markets, like devices and applications. This notice to examine the wireless industry was recently highlighted by Chairman Genachowski as he expressed concerns about exclusive smartphone agreements and the recent rejection of Skype and Google voice applications for the popular Apple iPhone. At 4G World, Bruce Gottlieb reminded attendees that the FCC recently extended the comment date to September 30, 2009, and the reply comment date to October 15, 2009 for both of these NOIs to help ensure development of a more complete record on these and other important issues.

This week, the FCC has issued a public notice seeking focused comment on the sufficiency of current spectrum allocations in spectrum bands, including but not limited to the prime spectrum bands below 3.7 GHz, for purposes of the Commission’s development of a National Broadband Plan. At 4G World, the Chief Counsel referenced discussed the objectives of this notice related to the American Recovery and Reinvestment Act of 2009, and highlighted the wireless industry’s need for more spectrum and the challenge of ensuring that all available spectrum bands are put to their highest and best use.

WCAI President and CEO, Fred Campbell, who served as Chief of the Wireless Bureau in the Bush Administration, hosted the two opening keynote presentations at the Symposium, and stated that it demonstrated the FCC Chairman’s commitment very early in his tenure to wireless broadband and new initiatives addressing wireless innovation and competition. He also thanked Dr. Hossein Eslambolchi, Chairman and CEO of 2020 Venture Partners and Former CTO and CIO of AT&T, for his powerful keynote presentation, featuring his technology vision for the next fifteen years on how advanced mobile and broadband technology will transform daily lives and every aspect of society in the future.

Now that we have left Chicago, we have a better understanding of why FCC Chairman Genachowski asked Chief Counsel Bruce Gottlieb to represent him at 4G World. Just two days after this 4G World keynote presentation, the Chairman testified before the House Subcommittee on Communications, Technology and the Internet. Based on a review of his written statement, it is clear that the national broadband plan and the inquiry on wireless innovation and investment are among the FCC’s top priorities. But he also used this discussion to obtain critical Congressional feedback on Net-Neutrality, another related but even more far-reaching issue that will have significant implications for the entire telecom, broadband, wireless and Internet industries.

In a speech at the Brookings Institution the following Monday, FCC Chairman Julius Genachowski outlined the concrete actions he believes the Commission must take to preserve the free and open Internet. Chairman Genachowski has proposed the addition of two new principles in addition to the open Internet principles already embraced by the FCC which affirm that consumers must be able to access the lawful Internet content, applications, and services of their choice, and attach non-harmful devices to the network. The first new principal would prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management. The second principal would ensure that Internet access providers are transparent about the network management practices they implement. The Chairman also proposed clarifying that all six principles apply to all platforms that access the Internet.

At the FCC’s October meeting, Chairman Genachowski plans to issue a Notice of Proposed Rulemaking (NPRM) to begin the process of codifying the Commission’s existing four open Internet principles, along with the two additional principles. This fast track proceeding will ask for input and feedback on a set of proposed rules and their application, such as how to determine whether network management practices are reasonable, what information broadband providers should disclose about their network management practices and how the rules apply to differing platforms, including mobile Internet access services. In keeping with Chairman Genachowski’s commitment to openness and transparency, the FCC launched a new website, www.openInternet.gov to encourage public participation in this important rulemaking proceeding.

In just a few short days since this speech, there has been a groundswell of press reports and many blogs expressing a wide range of opinions and positions on the FCC’s initial “net neutrality” proposals well before seeing the NPRM. While there has been plenty of heat, we have yet to see much light that would help build a framework for assessing the proposed policies or their implications for how the resulting rules will apply to differing access platforms.

Here is a first attempt at building that framework, and in the spirit of the Chairman’s commitment to openness and transparency we welcome your feedback and comments:

Cable Broadband	Telco Broadband	Wireless Broadband
DOCSIS	xDSL	Greenfield Mobile WiMAX
WiFi	FTTx	3G Mobile Broadband
WiMAX		4G Mobile Internet Access

Cable Broadband: As content provider, cable operators will need to establish a Broadband Service Platform separate and distinct from the Open Internet in order to lawfully discriminate in terms of pricing, performance and ease of access for any of its own content or applications services relative to those offered on sites on the Open Internet. This issue would revolve around how cable operators would support their own video on-demand platforms versus similar services being offered by Netflix, Hulu, YouTube or Amazon VOD.

Telco Broadband: The FCC may recognize differences between telco DSL and FTTx access platforms in how their rules and network management practices apply, and telcos may need to establish themselves as “content providers” in order to lawfully discriminate like cablecos.

Wireless Broadband: Greenfield operators like Clearwire that are positioned as wireless broadband ISPs will have the full obligation to abide by the new net neutrality principals and rules, and will need to position this commitment to an open and free Internet as part of their value proposition. This will likely extend to cablecos and mobile operators using WiFi and WiMAX to offer nomadic wireless broadband as well.

Mobile Broadband: Mobile operators using 3G technologies to connect subscribers to the Open Internet will need to leverage their “on-deck” platforms in order to lawfully discriminate in terms of pricing, performance and ease of access for any of their content and applications services relative to those offered by sites on the Open Internet.

Mobile Internet Access Services: Mobile operators using 4G technologies (LTE or mobile WiMAX) with an all-IP packet core may need to shed the notion of an “on-deck” platform to abide by the new net neutrality principals and rules and offer full mobile broadband access to the Open Internet.

Even with this initial framework in mind, it is difficult to predict how the proposed net neutrality rules would create a level playing field amount the myriad of broadband content and mobile applications that are made available through cable, telco and wireless operators. This is especially problematic when you consider the current movement to use “widgets” to download and launch mobile broadband applications, especially those like Google Voice and Skype which compete with the operators’ core mobile telephony offerings. It is clear that the industry will have much to say regarding these proposals and the Commission will have its hands full trying to achieve consensus on these complex and contentious issues.

September 25, 2009 | Filed Under Special Reports | Leave a Comment

Operators Get Help from White Label Vendors to Launch Mobile Applications Stores

By Berge Ayvazian

By Berge Ayvazian and Roberta Wiggins

“This is not a watered down version of the Internet. Or the mobile version of the Internet.

Or the kinda sorta looks like the Internet, It’s just the Internet on your phone - the iPhone.”

These ads for the Apple iPhone have now been replaced by the ubiquitous ads for the iPhone App Store.

“There’s an App for that - There’s an App for just about everything - only on the iPhone”

Who isn’t sick of hearing this endless refrain on TV commercials this summer? If not, I suggest you check out the endless number of parodies available on YouTube.

But they have been effective at convincing consumers that the iPhone offers the best mobile Internet experience and you can do just about anything with an iPhone app. To the point that 1.5 billion applications downloaded to date from the Apple App Store, one million iPhone 3G models were sold during the launch weekend in July and nearly a million of AT&T’s 1.4 million new wireless subscribers opted for the iPhone in the second quarter of 2009 alone.

This has certainly sent all the other handset vendors scrambling to improve their mobile Internet browsing experience and to build a portfolio of mobile applications that can be bundled on new smartphones, offered free or sold for a fee on an ever increasing array of applications stores.

As described in my last 4G trends article, “given the runaway success of the Apple iPhone App Store, the race among handset and operating system vendors has begun to compete in the mobile applications market”. In that article entitled Who is Minding the Mobile AppStores?, I profiled the efforts of ten handset and operating system vendors to compete in the mobile applications market, including RIM Blackberry, Google Android, HTC, Motorola, Samsung, LG, Nokia Ovi/Symbian, Microsoft and Sony Ericsson.

Not to be left behind, mobile operators are now starting to respond to the rapidly expanding apps store market. Rather than rely on existing stores, they are reaching out to third parties to build, run and white label an applications store, on their behalf. The proliferation of smartphone devices has elevated the benefit of the apps store and monetization opportunities for operators, but also increased the complexity of applications management across multiple platforms, devices and developer communities.

Some of the leading mobile operators, such as Vodafone, have recently announced initiatives designed to stimulate a new generation of mobile internet applications by providing developers with a single point of access to their global customer base. This approach will allow developers to create an internet application once in order to reach millions of Vodafone customers on any device and will be able to charge for it directly through Vodafone’s cost-efficient and effective micro-payments billing system. These operators will also provide partners and developers with customer controlled access to their network capabilities, such as location awareness, enabling them to create even more innovative mobile internet services and applications. This framework will also provide customers with transparency and control over how their information is accessed and used.

Other operators are forming tactical alliances with selected smartphone vendors, such as the previously reported joint development and marketing of an optimized Facebook phone with a YouTube uploader tool by Hutchison 3 and Sony Ericsson. Some, like T-Mobile USA, have established Mobile Applications and Partner Programs designed to promote the rapid-growth of the mobile application space, based on an open approach that gives more developers access to operator resources and to offer thousands of new applications and new mobile experiences for their customers.

Then there are the operators that have recently announced plans or initiated the launch of their own applications stores in 2009. China Mobile recently launched its on-line mobile application store called “Mobile Market”, offering its customers entertainment applications such as music, games and videos for download to their cell phones. Mobile Market currently features applications for China Mobile’s new Android-based smartphones (”OPhone”), and provides support to wireless handsets by industry leading vendors such as Nokia, Samsung, LG, HTC and Dell. Mobile Market is expected to strengthen China Mobile’s domestic 3G services drive subscriber adoption and improve ARPU through increased customer adoption of value-added mobile internet applications.

O2 has already launched the Litmus mobile apps storefront that brings customers and developers together in a common portal to create better applications. Orange has started to expand its existing Orange Application Shop to support more than the initial four Nokia, HTC and Sony Ericsson smartphones and more than 200 games and applications it offered at launch in France during April. The Orange Application Shop is due for a proper rollout in the fourth quarter starting with France and the UK, and the shop will be preloaded on new handsets and available for download by existing customers. We understand that the largest MNO groups want to offer their customers fast access to all mobile apps and are prepared to start their own stores to enhance and control the customer experience. At the same time, many analysts observe that the market cannot bear more than five or six successful mobile application stores.

Behind many of these new storefronts is the back office support of several applications store enablers, including billing operations and business support providers such as Comverse and Amdocs. A number of applications store specialists have also entered this market, such as SurfKitchen, an early stage company based in the UK. SurfKitchen delivers a mobile Internet platform used by mobile operators to increase the uptake of mobile internet applications and services by enhancing discoverability and the user experience across a broad device portfolio.

SurfKitchen was recently selected by Telstra to deploy the SurfKit Platform to support the launch of TelstraOne Experience which gives Australia mobile Internet subscribers 1-click access to the applications and services they regularly use on their mobile phones. The SurfKit Platform can be compared with Microsoft’s recently announced OneApp application environment and widget platform.

Drutt was a European unified messaging and WAP portal start-up founded in April 2000 as a joint venture between Oracle and Telia Mobile based in Sweden. Drutt introduced its Mobile Service Delivery Platform (MSDP) platform as a comprehensive, highly modular end-to-end service delivery business support system for mobile application storefront commerce. The Drutt MSDP had the largest installed base in the industry when the company was acquired by Ericsson in 2007. As a leader in the fast growing SDP market, Ericsson acquired Drutt to sell, deliver and support the MSDP as a part of the complete Ericsson SDP offering to provide mobile operators an end-to-end multi-channel solution for establishing a profitable mobile application and service delivery business. The Ericsson MSDP is now commercially deployed by more than 90 mobile operators in 35 countries, including 3 in Scandinavia.

Ericsson is now preparing to re-launch the MSDP as a complete, turnkey solution for operators deploying a mobile applications storefront with an on-device portal, recommendation engine and a widget management platform. The new MSDP will reportedly support a common set of interfaces for accessing key device and network resident capabilities thus creating an open environment in a secure manner under the Bondi initiative being developed by OMTP in collaboration with W3C and Open Ajax Alliance (OAA). This will allow the Ericsson enhanced MSDP to deliver similar user experiences for mobile applications and content cross-platform across devices and all major mobile operating systems, including Symbian and Android.

Ericsson has placed its expanded MSDP application store solution, along with its rich media and multimedia brokering services, within the Ericsson Multimedia portfolio. It is a hosted mobile retailing application store fully controlled by operators, which allows them to deliver a wide variety of applications and widgets directly to the consumer. Ericsson is also developing support services to offer with the MSDP platform, including system integration, localization, presence, personalization, subscriber information management, billing and settlements. Operators have the option of using Ericsson to host and fully manage the application store, thus allowing them to enter the market without starting from scratch. Ericsson will soon have the ability to recruit and manage the developer community and manage access to an operator’s application programming interfaces, which would let a developer tap into GPS, SMS services or applications resident in the device. Ericsson can also handle the business end of the service, brokering the transactions between consumer, carrier and application/content developer. Ericsson is in discussion with several operators worldwide, as customers for this expanded service, but cannot identify any of them at present.

The model Ericsson is developing is very similar to the new approach Qualcomm Internet Services is taking with its existing BREW platform. Last month, Qualcomm launched Plaza Retail, a more robust application distribution platform that can be scaled across a wide range of mobile devices and operating systems. Now Qualcomm is building on its carrier customer relationships to provide white label mobile applications stores, leveraging Plaza Mobile Internet and Plaza Retail, a suite of products targeted at mobile that are sold together, but with different value propositions.

Plaza Mobile Internet is an operator branded, mobile widgets architecture and monetization platform. A multi-platform client is preloaded or OTA deliverable, and provides exposure to internet content and apps via subscriber, publisher or operator Web portals. Qualcomm leverages the benefits of a publisher ecosystem including existing web developer communities with standards based widget authoring tools, a global widget ecosystem across devices and viral distribution

Qualcomm launched Plaza Mobile Internet in late 2008 and announced its first customer, América Móvil, on July 28, 2009. Qualcomm is deploying Plaza Mobile Internet to power América Móvil’s “Ideas” Widget service across its 18 subsidiaries in Latin America, reaching 190 million wireless subscribers. End users will have access to customizable Internet content from mobile devices across the América Móvil device portfolio and publishers and content providers will develop and submit widgets to América Móvil’s catalog.

Plaza Retail is an end-to-end apps store solution. It is not just a front end, but brings in the ecosystem - content developers and OEMs - and provides the tools for operators and retailers to manage and deliver apps. Qualcomm is extending support beyond BREW to other content types including Android and Java. Symbian support will be added in 2010.

Plaza Retail automates the retailer’s application supply chain by enabling multiplatform applications to reach the market transparently. Unified content merchandising across platforms includes licensing, packaging, placement, segmentation, personalization, delivery, and analytics. A multiplatform storefront enables retailers to update store layout, promotions and microstores for merchandising effectiveness, common branding and user experience

Customers for Qualcomm’s Plaza Retail services include many of the 60+ CDMA mobile operators including Verizon Wireless, China Telecom, KDDI and, more recently, non-CDMA operators concentrated in North America and Asia Pac; OEM handset and mobile device manufacturers and retailers like Best Buy looking to extend their retail experience into the mobile world and leverage these Qualcomm capabilities. Although not yet announced, we believe Verizon Wireless is also about to launch its mobile application store initiative with the support of Qualcomm Plaza Retail services.

Plaza Retail supports customers in three different ways: most operators will contract for a full managed service including server hosting, catalog management, and content acquisition. Others opt for network platform operation, support and hardware/software customization. A remaining few interact in a quasi customer relationship where Qualcomm manages the network in their facility, but the MNO strategically deploys and manages applications on day to day basis

Qualcomm handles 80m transactions a month via a combination of in-house (in North America) and third party data centers where Qualcomm has rack space and can manage remotely. Qualcomm differentiators include:

Ability to leverage large customer base and system elements
Internal expertise in managing device complexity, new devices
Platform scalability - support developers in multiple markets
Technology advantage: leveraging investments in R&D across 60+ operators
Ability to expedite new product features and integrate across multiple device platforms e.g. micro-billing

With the help of white label application store providers like Ericsson and Qualcomm, mobile operators can maximize monetization opportunities of increased mobile internet usage and increase customer stickiness by offering a personalized product. Rather than yielding these revenue opportunities to a tug-of-war between device vendor and operating system-centric platforms, mobile operators are aggressively carving out their role in the mobile applications and content market. This has caused some of the newer entrants to rethink their strategies and consider sharing revenue from their application stores with operator partners. Samsung Mobile, for example, is reportedly considering such revenue sharing partnerships with operators as it plans to add new Android phones in 2010.

August 27, 2009 | Filed Under 4G Trends, Special Reports | Leave a Comment

Who is Minding the Mobile AppStores?

By Berge Ayvazian

At one time, mobile applications were highly monolithic, with highly structured platforms and centralized networks to support their operator and user communities. This is changing rapidly as we move from a voice-centric to a data and Internet-centric mobile industry. As the mobile industry evolves toward 4G, the retail market for mobile Internet applications is expanding rapidly through the combined efforts of software providers, device vendors and mobile operators.

Given the runaway success of the Apple iPhone App Store, the race among handset and operating system vendors has begun to compete in the mobile applications market. With just 13% of the smartphone market, the Apple iPhone App Store is the current market leader with 100,000 application developers, 65,000 applications available and 1.5 billion applications downloaded to date. It is going to be very hard for others to catch up with the Apple App Store, which has made it easy for consumers to download and pay for applications using the already familiar iTunes on-line interface. In the US, the beneficiary of this success is AT&T which recently launched the iPhone 3G S and continues to invest heavily in maintaining its exclusivity over Apple iPhone sales in the US. In the second quarter of 2009 alone, AT&T spent $720 million to subsidize iPhone sales and two-thirds of its 1.4 million new wireless subscribers opted for the iPhone.

Even so, we have seen a rapid proliferation of mobile applications stores to compete with Apple, many which revolves around a specific smartphone device, operating system community or service platform. The mobile Internet applications market is expanding rapidly through the combined efforts of software providers, device vendors and mobile operators. This article focuses on the recent launch of BlackBerry App World, Nokia OVI Store, the expansion of the Google Android Market and Sony Ericsson PlayNow Arena as examples of the effort to capture the demand for mobile applications stimulated by the success of new 3G smartphones.

RIM BlackBerry App World was officially launched at CTIA Wireless in April, 2009 to support the growing family of consumer and enterprise Blackberry smartphones with a 19% share of the smartphone market. BlackBerry App World 1.1 is a new platform that now offers enhanced performance and new features including improved search, software update notifications, memory indicator and the ability to archive third-party applications to microSD memory cards and easy re-installation of apps. Until recently, BlackBerry App World was only accessible via RIM handhelds, making it difficult for users to browse and research applications due to the tiny displays found on BlackBerry devices. App World web pages now have descriptions of apps, pricing, sizes of downloads, screenshots and reviews, as well as all the necessary device and system information for compatible BlackBerrys. BlackBerry users can now browse App World from any laptop or PC, but still need to place orders over-the-air from their smartphone.

Although it targets the fast-growing consumer market, BlackBerry App World was also designed to improve mobile productivity and meet the ever-increasing demands of large-scale enterprise deployments. As such, many of these applications will leverage new 3G mobile broadband performance and RIM’s next generation push-based business mobility server software, BlackBerry Enterprise Server 5.0. The growing software and applications portfolio will also focus on advanced security features and administrative tools that simplify the management and use of the BlackBerry within the enterprise. RIM is also implementing a new distributed network and hosting architecture to support the rapid growth of both the enterprise and consumer customer segments and its application marketplace worldwide.

Google’s Android Market was initially launched in the fall of 2008 around the unique positioning of the Google Android open source operating system and an open marketplace for developers. The Android Market currently supports approximately 5,000 applications for five HTC Android phones, including the G1 and the G2 recently released by T-Mobile USA as the myTouch 3G. Vodafone is now promoting the use of the Android Market to users of the new HTC Magic initially in UK, Spain, Germany, France and Italy. Orange is now selling the Android-powered HTC Dream smartphone and SFR is selling the HTC Magic in France. The Android Market remains quite flat with only a listing of top paid and free applications. T-Mobile has recently launched a new application package within the Market called AppPack, which highlights a sampling of noteworthy applications (including Sherpa, WorldTour, Phonebook, FreshFace and imeem Mobile) to help customers further personalize their myTouch 3G and manage their T-Mobile accounts.

The portfolio of Android smartphones is poised to grow rapidly, with additional HTC phones and some 20 manufacturers around the world planning to introduce Android smartphones by the end of 2009. This list includes market leaders like Samsung, LG, Sony Ericsson and Motorola. Samsung has already released its first Android phone, the Galaxy i7500, which is being marketed exclusively by O2 in Germany and the UK and by Bouygues Telecom, third largest mobile carrier in France. The LG GW620 “Eve” Android smartphone and Sony-Ericsson’s first Android phone, based on Qualcomm’s Snapdragon platform and codenamed “Rachel”, are both planned for release during the third quarter.

Motorola is currently building an extensive portfolio of smartphones powered by Android, and is widely reported to be preparing the launch of two new Android phones for Verizon and T-Mobile, code-named Sholes and Morrison. While there are many rumors regarding the features and technical specifications of these specific devices, Motorola executives are planning a broad portfolio of tens of Android smartphones and 20-30 devices over 12-18 months. The company’s Android phones will span the consumer and enterprise markets and range from mid- to high-tier in pricing. Motorola will use a diverse number of form factors, hardware and software features to appeal to various demographic market segments and address the user experience of its customers. Motorola’s success with high-end Android smartphones that specialize in messaging and multimedia may depend on a unique technology that can frequently and cost-effectively push updates from multiple email accounts and social networks directly to a user’s mobile phone. Motorola is also reported to be developing low-cost Android handsets that would appeal to the mass market, and this strategy could be risky since a powerful hardware platform is required for the Android mobile operating system to run optimally. However, the initial price of the handset may not be as important to consumers as the cost of a monthly data plan, which could add $30 to a monthly plan for voice services.

With the smartphone battles increasingly hinging on the number of attractive and useful applications available for a particular device or operating system, Motorola believes that application developer support is more crucial than ever to its success. Unlike other smartphone manufacturers, Motorola has been actively recruiting and supporting third party Android application developers through its extensive MOTODEV developer network. Motorola is leveraging its MOTODEV application developer community to position Android as the open mobile platform of the future. Motorola has spent the past few months reaching out to Android developers through weekly podcasts, in-person meeting and tutorials commissioned from experts. Recognizing that the existing developer community is very diverse, Motorola software executives are positioning Android as application developer friendly, especially for those that are experienced using Symbian, Java, Ajax and web-based HTML languages. Motorola believes that widgets are useful as UI elements, but are becoming fragmented and proprietary to specific devices. While praising the partnership with Google and Android operating system’s deep integration with mobile Web services, Motorola is promising to unleash HTML5 and WebKit and help developers to create, deploy and market their applications truly innovative applications.

Motorola believes it will offer developers two important advantages: a broad portfolio of Android devices and global distribution through its close relationships with mobile operators. After partnering with MOTODEV–which coordinates developer efforts across all of Motorola’s businesses–to flesh out their ideas, developers will be able to distribute their apps through a variety of channels, including Google’s Android Market, carrier stores, third party distributors and direct sales. Motorola is also working with certain developers to potentially preload selected applications on its handsets in order to differentiate itself from the competition. Motorola has not announced any plans to launch an AppStore and recognizes that the Android Market is the clearest path to the application marketplace. However, MOTODEV is not tied to any specific mobile storefront and Motorola will use different business models and participate in a diversity of channels in order to succeed in multiple market segments. Motorola supports the enablement of operator retail storefronts and is currently talking with its customers about the shortcomings they see in the market - which is very flat, making it hard to differentiate, or promote specific applications. While it supports operator interests for security, performance and revenue in the application market, Motorola wants an open ecosystem for users and doesn’t like walled gardens that block the open Mobile Internet. We expect to hear more on these topics at the MOTODEV Summit scheduled on October 6 in San Diego.

Nokia continues to be the largest supplier of mobile devices worldwide, but its share of the smartphone market has been eroding especially in the US with the success of the Apple iPhone, RIM Blackberry and HTC Android devices. With more than 45% share of the worldwide smartphone market, Nokia is projected to ship only 500,000 of the 18.4 million smartphone devices in the US during 2009. The company is positioning a number of sophisticated new smartphone devices in distribution through several US mobile operators targeting various market segments, such as the “Surge” with a full QWERTY slideout keyboard jointly developed with AT&T. Nokia recognizes its biggest challenges may be in the operating system, applications software and retail storefront businesses. Ovi Store is Nokia’s one-stop shop for digital media content and applications, supporting mobile users from more than 170 countries. Soon after its global launch in May, Nokia Ovi Store was recognized for technology innovation by the Mobile Entertainment Forum (MEF), the global trade association for the mobile media industry. This award was in part based on its advanced technology such as the relevance engine which allows users to surface the right content on Ovi Store, in several languages and across more than 75 devices targeted to multiple customer segments.

In late 2008, Nokia acquired the outstanding shares in Symbian, Ltd, and soon after turned over the market-leading Symbian mobile operating system and S60 software to the Symbian Foundation for royalty-free licensing beginning in 2009. The non-profit Symbian Foundation continues to gain momentum for its new “open source” mobile OS among handset OEMs and application developers, and it recently established a second headquarters in the Silicon Valley targeting US market growth. The Symbian Foundation has recently previewed Symbian Horizon, a break-through application-publishing program designed to assist developers in building applications for Symbian devices and in placing applications and promoting sales through many global stores. With Symbian Horizon on schedule for general availability in October 2009, participating companies and developers will gain access to a variety of services that support the development, distribution, and marketing of mobile applications, from application certification and in-store presence, to language translation services and marketing programs.

With just 9% of the global smartphone operating systems market, Microsoft recently announced plans to launch its new App Store, the Windows® Marketplace for Mobile, which will makes it easy for developed to manage and distribute their applications, and directly connect the resulting apps with millions of Windows Mobile users worldwide. Soon after launching the “Race to Market Developer Challenge” contest in July, Microsoft announced an alliance with Nokia - the world’s largest cell phone vendor - to bring the latest versions of Microsoft’s Office business software applications to 200 million Nokia smartphone customers. While this provocative move is designed to counter the dominance of the RIM BlackBerry and the emerging challenge of Google Android, it is clearly a significant endorsement of both Nokia’s dominant position in the global smartphone market and the open-source Symbian mobile OS. Even so, it is difficult to understand how the highly profitable Microsoft will participate in the open OS and mobile development hub managed by the non-profit Symbian foundation en behalf of the entire mobile ecosystem. The Symbian Foundation plans to officially launch Horizon and will inevitably address its new Microsoft partnership at the Symbian Exchange and Exposition (SEE), in London and simultaneously at different locations around the world in October 2009.

Sony Ericsson announced at the JavaOne Software Developers’ Conference in June 2009 that it will partner with GetJar to roll out an addition to its PlayNow Arena download service, which will allow users to obtain third-party software for the company’s handsets. The PlayNow Arena currently allows users to download music, movies, games and themes to their mobile, and the GetJar tie-in will enable Sony Ericsson to launch with a library of 45,000 apps. According to press reports, developers will be able to begin submitting software for approval on 1 July, and Sony has said that it will not be charging developer fees for submissions. App downloads from PlayNow Arena should be compatible with all Javascript-capable devices, including Windows Mobile, Symbian, BlackBerry, Palm, and phones running Flash Lite. Sony Ericsson recently approved its first swath of 40 applications targeting the UK market for its new PlayNow Arena app store, which were obtained from Handmark, a US-based mobile application developer. The commercial launch of PlayNow Arena brings Sony Ericsson into competition with other mobile handset and software companies that have developed third-party software platforms, including the Apple iPhone App Store, Google Android Marketplace, BlackBerry App World and Nokia Ovi Store.

August 19, 2009 | Filed Under Mobile Internet Trends | Leave a Comment

4G Roaming, Pathfinder and IP eXchange

By Berge Ayvazian

Data roaming has been a challenging and complex function for mobile network operators for more than ten years. Roaming is more than the ability of customers to use their mobile phones outside the geographic coverage of their primary network operator. SMS Roaming allows customers to send and receive SMS text messages when outside of their home network or while traveling abroad. Data roaming enables the use of mobile data services including MMS, GPRS, push email, and mobile broadband services while traveling outside the home network. With the advent of 3G networks, data roaming traffic (measured in megabytes) has been increasing rapidly due to the popularity of data-enabled smartphones and improved network quality and performance.

Initially GPRS data roaming was based on complex relationships between individual operators requiring dedicated links between roaming partners. This meant that mobile data subscribers could only use GPRS roaming if their operator had a direct agreement and dedicated link with the other operator. By 1999 the GSM Association (GSMA) came to the realization that data roaming based on bilateral relationships between individual operators was too complex and expensive to maintain, in particular if the number of roaming partners is high. Beginning in 2000 the GSMA developed the GPRS Roaming Exchange (GRX) which acts as a hub for GPRS connections between roaming users, eliminating the need for dedicated links between GPRS mobile operators. A GRX is typically based on a private or public IP backbone using GPRS Tunneling Protocol (GTP), and each GRX service provider has a network of routers and links connecting to GPRS operator networks. For operators this allows quicker implementation of roaming partners, faster time to market for new operators and lower capital expenditures. GRX service providers also have links to other GRX hubs to support GRX peering between roaming networks. GRX was developed to facilitate a more efficient way for operators to interconnect networks, and played a large part in the transition to 3G mobile systems.

The GRX was designed to be a highly scalable data roaming solution, since each participating mobile operator could start with low-capacity connections and upgrade them depending on the bandwidth and quality of service requirements of the traffic. GRX also provides quality of service (QoS), security, monitoring, inter-operator billing, reporting, and real-time troubleshooting tools for GPRS roaming. As trusted third-parties, GRX service providers provide authentication and AAA proxy services creating a centralized point of control and audit for mobile data roaming administration. Using a mediation engine, GRX also offers flexible rating, clearing and settlement reconciliation for roaming partners. GRX hubs also provide DNS support for a worldwide “.gprs” DNS root, and GRX operators collaborate by managing the root and connecting each operator’s DNS servers to provide translation of DNS names specific to any one operator.

The first full-service, scalable GRX Peering Exchange (GPE) was established in 2001 at the Amsterdam Internet Exchange (AMS-IX), the world’s largest single metro-area Internet exchange. More than 20 GRX operators and hundreds of mobile network operators currently exchange GPRS roaming traffic with each other at one or more of the four AMS-IX GRX peering locations in Amsterdam. In 2008, the AMS-IX GRX peering exchange was co-located in the AM1 Internet Business Exchange (IBX) data center, which was acquired and developed by Equinix, a leading global provider of network-neutral data centers and Internet exchange services. The result was the first global multi-party peering point which facilitates mobile data roaming as a core component in enabling a truly global mobile Internet. Since 2008, GSMA selected Equinix to establish two additional peering exchange points in its Singapore and Washington, DC IBX centers for the interconnection of GRX operators seeking to expand their coverage for mobile operator customers in the United States and Asia. There are now three common neutral peering points for GRX service providers that wish to exchange mobile Internet traffic with their peers of choice. GRX peering is a fully-managed Ethernet switching infrastructure that facilitates the exchange of “mobile Internet” traffic and the GPE switching platform has a redundant architecture designed to improve resiliency and increase port density.

The global market for mobile data roaming and GPRS exchange services is still quite small, but is now growing rapidly as mobile data and broadband traffic growth is accelerating. Mobile data roaming is currently between 1.5% and 2% of mobile data traffic, but recent analyst reports estimate this represents between 6% and 10% of mobile data services revenues. Data roaming revenue has been estimated at 2.3 billion Euros for E.U. countries alone in 2008, two-thirds of which is GPRS/UMTS traffic. A recent market assessment forecasts a 47% CAGR for data roaming traffic from 2007 to 2012, in part due to the predicted tsunami in IP data traffic as mobile operators implement HSPA and LTE to support mobile broadband applications, content and Internet access.

Many of the largest carrier groups operate their own GRXs, including France Telecom/Orange Group, Belgacom International, Vodafone, Telefonica/O2, Deutsche Telekom, Telia Sonera, Telecom Italia, Bouygues Telecom, KPN Group, Hutchinson 3G and SFR. The top 20 global GRX service providers support hundreds of mobile operators and their subscribers throughout the world. There are also several independent mobile data roaming providers that have demonstrated market leadership in GRX and mobile IP interworking services.

Syniverse is the largest of the independent roaming providers based in the US. As a public company, Syniverse has achieved rapid growth in the past decade to a level exceeding $500 million in 2008 net revenues. Having completed several complementary acquisitions, Syniverse recently expanded its comprehensive roaming hub services to include data clearing, financial clearing and award-winning fraud protection. Syniverse Roaming Hub services are now used by the largest pool of mobile operators, including the leading US operators and others in over 120 countries on three continents. Syniverse has been active in the GSMA Open Connectivity roaming hub trials and is developing its own ENUM service with GSMA.
Aicent is a mobile data roaming provider focusing on the Asia Pacific region, with its headquarters in San Jose, CA and a subsidiary in Beijing, China. Founded in 2000, more than 150 operators representing 103 countries currently connect to the Aicent network for GRX and CRX peering. Aicent maintains GPRS roaming hubs in all major Asian centers, including Hong Kong, Malaysia, Singapore, Japan and Australia. Aicent also operates in Europe and North America, and has a large network in Latin America to support customers including RIM Blackberry. Aicent specializes in IP peering to deliver mobile data traffic, and is therefore well positioned to support 4G roaming as a natural growth from GRX infrastructure to support both LTE and WIMAX.
MACH is a privately held company with its origins as the roaming provider for European mobile groups such as Millicom International and Telefonica. With headquarter locations in Luxembourg and Denmark, MACH has an established global client base, including some of the leading international groups. MACH currently shares private equity investors with Aicent, and provides complementary data clearing, SS7 signaling and billing services within roaming, as well as business intelligence, revenue assurance, fraud detection, re-pricing, and MMS interworking.
Other carrier independent participants in the GRX and mobile data roaming/hubbing services market include Comfone AG, Sybase 365 and Transaction Network Services (TNS/Verisign).

Although the overwhelming majority of mobile operators worldwide operate within the GSM/GPRS standard, many independent roaming hub operators also support mobile broadband data roaming for CDMA Roaming Exchange (CRX) for operators and subscribers of 1xRTT and EV-DO (Release 0 and Rev. A) networks. Some GRX operators are also extending their roaming and hubbing services to include Wi-Fi broadband and most recently mobile WiMAX networks. The WiMAX Forum recently announced that 14 ecosystem leaders are now participating in the first ever commercial WiMAX interoperability and roaming trials. These trials will provide a baseline for establishing roaming services and agreements for WiMAX worldwide to enable users to automatically access networks when traveling outside the geographical coverage area of their home network. The participants in the first end-to-end test of roaming over live WiMAX networks include:

Mobile WiMAX network operators including Clearwire and DigitalBridge Communications;
Infrastructure equipment vendors and device manufacturers such as Intel, Motorola, Alvarion, Cisco and Juniper Networks;
Roaming clearinghouses represented by Syniverse, Aicent, MACH, Comfone AG, iPass, Bridgewater Systems and TNS/Verisign.

This is one example of an industry-wide interoperability solution that will enable 4G network operators to manage global roaming and routing of mobile IP traffic. There are now a number of technical platforms, services and solutions being developed to help operators offer 4G roaming, scalable access to multimedia content, applications and mobile Internet services. GSMA is conducting Open Connectivity (OC) Roaming Hub Trials and leading industry-wide initiatives designed to enable operators to leverage their 4G network investments and manage global roaming and routing of mobile IP traffic, such as Pathfinder and IP eXchange.

The GSMA recently announced the successful completion of the pilot of its Carrier ENUM service, now branded ‘PathFinder’^TM. PathFinder is a managed service for global routing of IP interconnect traffic which offers a private global address registry for dynamic route discovery with rich policy capabilities. PathFinder is now operated by NeuStar, a leading provider of clearinghouse and directory services to the global communications and Internet industry. PathFinder automatically translates a phone number into an IP-based address, making it simple and transparent for users to initiate a wide range of IP-based communications via their existing phone numbers and handset address books. The PathFinder service facilitates global IP service interoperability by translating telephone numbers to a logical “endpoint name” based on the source network, and is available to all participants in the traffic/service delivery supply chain, including Mobile and Fixed Network Operators, Transit Carriers/IPXs, ISPs, Hubs/Aggregators, content/application providers and other trading partners. Under the umbrella of the GSMA PathFinder Service Initiative, several companies are developing managed services to exchange large and growing volumes of global IP interconnect traffic, manage multimedia content, deliver hosted applications and provide mobile Internet connectivity.

As the mobile industry evolves toward 4G and as mobile network operators move more of their services and traffic to IP networks, the complexity required to interconnect with other operators has grown dramatically. This is in part because of the continuing need to support their existing TDM infrastructure and interwork services provided via both TDM and IP networks (e.g. VoIP and traditional TDM voice). Because of this the architecture and strategy carriers have used for interconnect has been somewhat ad hoc. Today it generally requires service providers to negotiate individual agreements with every other service provider they wish to connect with, an approach that is complex, costly and has proven difficult to scale. In addition to the need to interconnect different service providers’ networks, many network operators own multiple, geographically separated heterogeneous networks and are interested in interconnecting them across a private IP backbone. The requirements for these types of networks are in many ways similar to those for inter-operator interconnect as both require the ability to support a diverse set of IP and TDM signaling protocols, ensure end-to-end quality of service, and provide low cost but high quality media transport.

In response, the GSMA has defined and carriers are now testing a new standardized interconnection service - IP Packet Exchange (IPX). IPX has been designed as an evolution of the GSMA’s existing GRX service, and is a service-aware, global, private IP network that provides end-to-end QoS and cascade billing features in support of interconnect and roaming services. While the GSMA serves the GSM mobile community, the IPX offers a standardized architecture for interconnecting 2G and 3G GSM and CDMA mobile operators, fixed line operators as well as connectivity to content and application service providers. The expectation is that there will be multiple providers of IPX service and that each will be fully interconnected to form a global IPX domain. Numerous GSMA-sponsored tests of IPX have been completed, and the first commercial IPX services are being launched in 2009 by companies such as Syniverse.

The IPX promises to offer service providers a true end-to-end, service specific QoS guarantee defined by service availability, jitter, packet loss and delay. Each IPX service provider not only guarantees the performance of its network but also that of any IPX network to which it connects. Unlike the volume-based GRX charging model, IPX includes support for a wide variety of charging schemes triggered by different factors (e.g. originating party pays, terminating party pays, revenue share, volume based, event based). This will enable service providers to choose an optimal charging model for each of the services they wish to interconnect over the IPX. IPX offers network operators three models of interconnect: Bilateral Transport Only, Bilateral Service Transport and Multilateral Hubbing. Each of these models offers a different level of service and connectivity. The combination of different charging and interconnect models provides IPX customers with a high degree of flexibility in how they use the IPX service.

July 30, 2009 | Filed Under 4G Trends, Special Reports | Leave a Comment

Sprint Outsources Now Network Operations to Ericsson, while Cox Awards Wireless Network Contracts to Huawei, Starent Networks and Bridgewater

By Berge Ayvazian

After months of speculation, last week Sprint finally announced an agreement to turn over day-to-day operations of its networks to Ericsson. Under the agreement, Sprint will retain ownership and control of the network assets, while Ericsson will take over responsibility of network maintenance. The potential benefits to both companies are substantial. Sprint will be liberated from technical maintenance concerns while retaining control of the customer experience, and Ericsson will manage day-to-day operations of Sprint’s CDMA/EV-DO, iDen and wired networks as it gains a larger foothold in the US market and non-GSM network management. As part of the agreement, 6,000 Sprint employees will be employed by Ericsson at the end of the third quarter, and neither company expects any force reductions in the near term.

The Sprint-Ericsson “Network Advantage” deal is valued at between $4.5 and $5 billion over the next seven years, and as a result Sprint expects to significantly reduce its annual operating expenses associated with network operations and management. J.P. Morgan estimates this savings to be between $35 million and $260 million over the next seven years, which could provide modest improvement in Sprint’s profitability. Sprint has begun to emerge from financial problems as it reduces its debt burden, but needs to expand its coverage as if it hopes to start adding new subscribers and further reducing its roaming and access expenses which are currently among the highest in the mobile industry.

Ericsson will incur the risk and expense of taking over Sprint’s workforce and operating costs, and will expect a return on this investment during the second half of the contract period. The potential downside is that if Ericsson found the deal was not profitable in 2-3 years or if Sprint found that network performance declines, it would be complicated to unravel this agreement. This agreement will have little or no effect on the original suppliers for Sprint’s mobile network, Nortel and Alcatel Lucent, and Ericsson has limited experience managing a CDMA/EV-DO network. This deal also does not impact Sprint’s plans to use Clearwire’s WiMax network for 4G, under this new agreement Ericsson will be responsible for the migration and provisioning of more cost-effective Ethernet backhaul as Clearwire builds out its overlay network using Sprint cell sites.

Sprint has less than 50 million retail subscribers, while Verizon Wireless now serves 86 million customers after completing the Alltel merger and AT&T supports 78 million subscribers. Sprint has been forced to sharply reduce its capital spending in 2008-9, and Yankee Group now estimates its CAPEX ratio as a percentage of revenue has fallen to 8.5%, as compared to 15-17% for its larger rivals AT&T and Verizon for the full year 2008. By relying on Ericsson’s “best in class” network management and productivity tools, Sprint plans to re-allocate its limited capital to enhancing its network performance.

The Ericsson announcement comes at a critical time for Sprint, since it allows the third US mobile operator to focus on expanding its network coverage, improving service quality and enhancing its customer service experience. Sprint has been much maligned for its poor customer service ratings and limited network coverage, but has recently taken large steps to address these problems. Sprint’s customer satisfaction ratings are starting to rise, according to its own surveys as well as the latest Yankee Group Anywhere Consumer U.S. Survey 2009. To date, this has resulted in the slowing of subscriber churn, but ultimately it must support a return to growth in net new subscribers through all of Sprint’s many distribution channels.

For Sprint, the Ericsson deal will free the company to focus on innovation in bringing new products and services to market. The new relationship is part of a shift in priorities aimed at making Sprint leaner and more responsive to market needs. Sprint continues to deliver the highest data ARPU of the major carriers and expects to continue expanding its customer base of data users. Data traffic creates a big traffic spike for mobile operators, so network performance and coverage expansion will be a priority. This agreement will make Ericsson responsible for delivering common SLAs and performance indicators for Sprint’s diverse retail channels including Consumer CDMA, iDen, Business/Enterprise and Boost Mobile Prepaid. The Ericsson deal will promise network performance SLAs that could help secure major Sprint enterprise and business customers, who would likely prefer to have Sprint backed by Ericsson than Sprint alone.

The Sprint-Ericsson agreement is likely to have the greatest impact on Sprint’s participation in the fast growing mobile data market, especially with those devices and services that are content and applications intensive and linked to the mobile Internet. This point is amplified by the recent launch of the Palm Pre on the Now Network and the limited time offer of a Compaq Mini 110c-1040DX netbook for 99 cents with a two-year mobile data Sprint contract, which typically runs at $60 per month for 5GB of data. The Compaq Mini also includes Qualcomm’s Gobi Global Mobile Internet Technology which supports both CDMA and GSM wireless network access and the HP un2400 EV-DO/HSDPA integrated Mobile Broadband Module so the netbook can be activated on the subscriber’s choice of the AT&T, Sprint or Verizon Wireless network and permits roaming on wireless networks in many countries worldwide. By contrast, the same Compaq Mini with 1.6 GHz processor, built-in webcam and 160 GB hard drive sells for $389.99 without a service contract, or for $199.99 with a two-year contract with either AT&T or Verizon Wireless. AT&T kicked off the netbook competition with a $100 device offered through RadioShack, and Verizon Wireless subsequently jumped in with a similar offer via its own retail outlets. This latest netbook deal was available for one week only at participating Best Buy retail stores, and could significantly drive Sprint mobile Internet data traffic growth.

The seven-year deal represents the first time a U.S. mobile carrier has outsourced any network functions to a third-party vendor, but it is part of a global trend toward network outsourcing and managed services by major mobile carriers, because this approach can reduce fixed internal costs. Sprint is the US mobile carrier most likely to strike such a deal, as it struggles to keep its most valuable contract customers and badly needs to focus on customer service. It underscores the growing need for carriers to differentiate on different areas such as better smartphones and applications, and could lead to similar moves by other wireless players. Ericsson is also a recognized industry leader in content and applications hosting, and delivering solutions that can help operators exchange large and growing volumes of IP traffic, manage multimedia content, deliver hosted applications and provide mobile Internet connectivity. Although the current agreement does not address hosting services, both parties recognize the potential for expansion in this critical area as the mobile applications and content market expands.

Ericsson currently manages more than 100 fixed and wireless networks serving 275 million subscribers around the world, and 40% of all mobile traffic goes through Ericsson’s networks. However, the Sprint deal will be its first managed services agreement with a major North American mobile carrier. Ericsson will now try to position itself to sign similar deals with other carriers on the continent, including Verizon Wireless, AT&T, Bell Canada, Telus, Rogers and America Movil. But Sprint is very different since it owns two different wireless networks and a wireline infrastructure that also must be maintained. Most Wall Street analysts maintain that it would be highly unlikely that AT&T or Verizon Wireless would consider outsourcing their network operations. Even so, the North American telecom market has finally cracked open, and the Sprint deal is a game changer that challenges ingrained perceptions of what is core and non-core to telecom operators’ business activities.

Ericsson will also be expected to meet the requirements of Sprint’s diverse wholesale customers, including Virgin Mobile USA, Clearwire, cable partners including Comcast and Cox, and the Whispernet wireless data network for the Amazon Kindle e-book reader. As previously reported by 4G Trends, Comcast recently announced that it has started reselling Cleawire’s WiMAX service initially in Portland, Oregon, under its own brand Comcast High-Speed 2go^TM. Although the Comcast High-Speed 2go Metro provides the fastest wireless broadband service only in its 4G service footprint, Comcast High-Speed 2go Nationwide delivers the fastest metro 4G service plus coast-to-coast access on Sprint’s national 3G network.

Among Sprint’s cable partners, only Cox Communications is trying to differentiate itself by building its own 3G mobile network in an already crowded U.S. market. With 6.2 million subscribers, Cox is the third-largest US cable operator and currently offers a triple play bundle of cable TV, high speed broadband and digital phone service to residential and small business customers. Cox recently established a wireless business unit headed by vice president Stephen Bye, and is currently building a mobile network using spectrum secured in auctions, having spent $304.6 million for the 700-MHz licenses and $248.3 million for AWS licenses. Cox plans to offer cellphone service as well as wireless broadband access for smartphones, netbooks and laptops in its home markets. Cox Wireless services will offer local and national voice and data plans with monthly and prepaid service contracts and mobile phones similar to all other wireless service providers to both existing customers and non-subscribers.

The strategic relationship with Sprint will allow Cox to offer a bundle of cable TV, high speed broadband, digital phone and wireless service. Together, this approach allows Cox to get-to-market quicker, while building mobile networks in targeted markets using both AWS and 700 MHz spectrum for the delivery of wireless services over the longer-term. This arrangement will also enable Cox to provide competitive wireless coverage supporting both 3G and potentially 4G services in its coverage areas, both in terms of availability and with in-building coverage. Cox is committed to enhancing the experience of its customers through the addition of wireless service to the Cox bundle, and has roaming deals so its customers can get service elsewhere.

Cox was one of the first service providers to offer customers a communications and entertainment bundle and a one stop shop for video, telephone and Internet services more than 10 years ago. Today two thirds of Cox customers are buying at least two of these services within a bundle and one third of its customers are buying all three bundled services. With wireless as an additional component to the bundle, Cox has another opportunity to serve the communication and entertainment needs of its customers, adding greater value and enhancing the Cox customer experience. Cox also plans to use its TV experience to exploit the nascent mobile video market. Although only about 4.5% of U.S. mobile phone users regularly watch video on the small screen, Cox believes that market is poised to grow as smart phones get more advanced. Cox is also considering a mobile-software store along the lines of the Apple iPhone Appstore and the Google Android Market. Cox is reported to be working with a vendor, mPortal Inc., to develop its own mobile applications store.

Although Sprint has now selected Ericsson to manage its network operations, Cox recently announced that Huawei Technologies has been selected as a strategic partner to support its 3G wireless network deployment. Huawei will provide an end-to-end CDMA-based network, utilizing its LTE-ready SingleRAN solution and 3900 Series base stations. Headquartered in China, Huawei is a recognized global industry leader in mobile communications infrastructure, with major customers in North America including Leap Wireless, Telus and Bell Mobility. Huawei’s latest network deployments in North America include Chicago, Milwaukee, and the vendor was also recently awarded LTE contracts by Sweden’s TeliaSonera and the Norwegian operator Telenor.

Cox has also selected Starent to provide the multimedia core networking solutions for continuous visibility into its network. Starent’s intelligent Packet Data Serving Node (PDSN) and Home Agent (HA) was selected to deliver robust data and multimedia services within Cox’s 3G network, supporting enhanced charging, content filtering, application detection and optimization of network performance and reliability. Cox has also announced that it is working with Bridgewater Systems to enable its customers to personalize their mobile services. The choice of the Bridgewater Service Controller and Subscriber Data Broker allows Cox to securely authorize and authenticate subscribers with service personalization and provide critical accounting functions. Cox hopes to accelerate the deployment of its wireless network by leveraging the advanced wireless technology and support services from Huawei, Starent Networks and Bridgewater Systems, and will move quickly toward the launch of its wireless service offerings by working closely with Sprint.

July 15, 2009 | Filed Under 4G Trends, Special Reports | Leave a Comment

Open Range Selects Alvarion® for Largest RUS-funded, Rural Broadband  4G Mobile WiMAX Network Deployment Across 17 States Valued at $100 Million

By Berge Ayvazian

Open Range Communications announced last week that it has selected Alvarion to provide radio access equipment, customer devices (CPE) and systems integration services over the next five years for the largest Rural Utilities Service (RUS) funded broadband wireless deployment spanning 17 states, 546 rural communities, and reaching up to 6 million people. In addition to selecting Alvarion WiMAX Forum® Certified™ 802.16e BreezeMax WiMAX base stations, Open Range will rely on Alvarion’s global experience for the end-to-end integration of its 4G network solution for rural America. Alvarion is not well known for its network integration services in the US, and may need to rely on third party support for the Open Range contract which is expected to be worth more than US$100 million to Alvarion over a five-year implementation period.

Alvarion offers OPEN WiMAX solutions for a wide range of frequency bands supporting a variety of business cases. While many of its larger competitors are now refocusing their 4G efforts on LTE, Alvarion is the largest pure-play WiMAX vendor, with overall cumulative WiMAX shipments of more than $500 million and the most extensive WiMAX customer base with over 250 commercial deployments around the globe. Alvarion was the first WiMAX equipment supplier to receive USDA acceptance as well as “Buy American” status from the USDA RUS for two of its BreezeMAX base stations in July 2008. Both RUS and “Buy American” designations are required for operators requesting federal funds from the Rural Broadband Access Loan program for the purpose of purchasing and deploying broadband systems. This is the second major contract funded by the US Department of Agriculture’s Rural Utilities Service (RUS). At CTIA Wireless, Alvarion announced a similar rural deployment in southern Georgia and northern Florida with Main Street Broadband, which has secured $34 million in RUS loan funding. However, Open Range’s project may be ten-times larger and both projects could potentially grow if the operators secure additional broadband stimulus funding later this year.

Open Range Communications has developed several innovative methods for deploying a WiMAX-based broadband network serving the most remote rural communities in the US. Rather than purchasing its own spectrum, Open Range has signed a 30 year agreement to lease mobile satellite spectrum from Globalstar, allowing it to deploy wireless broadband service in rural communities using the Ancillary Terrestrial Component (ATC) authority granted by the Federal Communications Commission in October 2008. The agreement contemplates using up to 19.275 MHz of Globalstar’s ATC spectrum in the 2.4 GHz to 2.5 GHz range to offer dual mode wireless broadband services to more than 500 communities that do not have adequate access to terrestrial-based broadband voice, data and Internet services. Customers outside of the WiMAX coverage area will be able to use Globalstar service over the satellites. Using the build out schedule provided in its RUS funding application, the fixed and variable payments to be made to Globalstar over the 30 year term indicate a present value of between 30 and 40 cents per MHz/Pop. Open Range is also working with Level 3 Communications to access its fiber optic network for high-capacity transport and backhaul links.

Although Alvarion will be deploying its standard BreezeMax IEEE 802.16e base stations and CPE for the Open Range deployment, it will have to address the unique characteristics of the ATC frequency spectrum which is adjacent to the 2.5 GHz band where Clearwire and other US operators are deploying mobile WiMAX networks. Alvarion must program special filters into their base station and customer premise equipment to avoid interference with the unlicensed 2.4 GHz bands used for unlicensed WiFi. As for the satellite component, chips may be available sooner rather than later to support devices moving in between the WiMax and orbital networks. Qualcomm recently announced an initiative to create dual-mode satellite-cellular chipsets for devices and may place dual-mode satellite-WiMAX chips on its roadmap. While devices might not be supported off the shelf, any software adjustments will be minimal, and ultimately chip makers may embed the software directly into their platforms.

Open Range is funded by an investment of $100 million from One Equity Partners (OEP), the private equity arm of JPMorgan Chase & Co., and a $267 million Broadband Access Loan from the United States Department of Agriculture’s Rural Development Utilities Program (RDUP). The OEP investment satisfies the private financing prerequisite loan terms, making the rural broadband funds available to Open Range. Established in 2001, One Equity Partners manages $8 billion of investments and commitments for JPMorgan Chase & Co. in direct private equity transactions. Partnering with management, One Equity Partners invests in transactions that initiate strategic and operational changes in businesses to create long-term value. One Equity Partners has invested approximately $3.5 billion in recent years to acquire over thirty companies in a variety of industries including defense, chemicals, healthcare, technology and manufacturing.

The Open Range network will be built with an all-IP architecture leveraging the latest 4G technology to give millions of rural Americans the ability to enjoy wireless broadband services across the communities where they live and work. Open Range plans to deploy a best-of-breed network infrastructure in more than 500 rural communities which cover over 6 million people, and to initiate state-of-the-art 4G services customers across rural America beginning in the fourth quarter of 2009. In most communities network equipment will be located on existing towers. The business plan calls for coverage to be deployed in un-served and underserved rural communities with average populations of approximately 10,000 people. To date, Open Range has not announced any plans to pursue additional stimulus funding or to form public-private partnerships around this rural broadband deployment.

Open Range’s Simply EasierSM wireless communications services require no home installation, no awkward and unsightly rooftop antennae, no technicians and simple plug-in hardware setup to initiate service. Customers simply connect an Open Range Simply Easier device to a desktop or laptop computer for instant, portable, dependable and low-cost access to the Internet. Open Range will offer to subscribers that will enable not only a hyper-connected Internet lifestyle, but also new economic opportunities not possible before because of the lack of infrastructure.
Some of the unique attributes available through this “always on” wireless broadband network include:

Simple and instant service activation
Voice and data capabilities
WiFi for connectivity to existing PCs
Highly secure network communication

Open Range’s ambitious plan for rural connectivity has the potential to stimulate local economic development for many rural communities across the US. Within its WiMAX footprint, Open Range plans to deliver portable and eventually mobile voice and data services to its business, consumer and institutional customers. Open Range is the only broadband wireless access provider planning to offer both terrestrial and satellite-based high speed Internet access to reach deeply into un-served and underserved rural American communities. This differentiation could also limit the ecosystem of CPE suppliers and impose a premium on both the subscriber equipment and monthly service fees. Open Range’s hybrid WiMAX and satellite broadband service could also support a variety of innovative public safety and commercial applications, including municipal traffic control, digital signage, remote monitoring and automatic meter reading. In the end, the success of the Open Range wireless broadband network will judged based on its ability to stimulate economic growth, enhance education, improve the quality of life, connect customers and improve public safety in America‘s rural communities while remaining competitive in the mobile Internet age.

June 24, 2009 | Filed Under 4G Trends, Special Reports | 1 Comment

HSPA as a 4G Network Enabler: AT&T and Telstra Update their Mobile Broadband Strategies

By Berge Ayvazian

Two of the world’s leading mobile operators recently announced plans to leverage HSPA technology to enhance the mobile broadband performance of their 3G networks so they can delay their LTE trials and deployments until 2011 or 2012. AT&T and Telstra of Australia both claim to already offer the fastest mobile broadband service in their respective markets, and plan to use software upgrades to increase the data speed available from their HSPA-powered networks. 4G World will provide a unique opportunity to examine the strategies of AT&T and Telstra which are enhancing their existing 3G networks before deploying LTE using new spectrum.

AT&T already claims to provide the fastest 3G mobile data network, using a combination of EDGE, UMTS and HSUPA (R5) technologies to offer the best combination of coverage and speed. Not to be left behind by these 4G announcements, AT&T recently announced plans to upgrade its 3G mobile data service to boost download speeds during the second half of 2009. Specifically, AT&T announced plans to upgrade its existing 3G mobile broadband network to High Speed Packet Access (HSPA) 7.2 technology beginning later in 2009, with completion expected in 2011. The deployment of HSPA 7.2 technology in more than half of the existing AT&T 3G network footprint will be complemented by the reuse of AT&T’s 850 Mhz spectrum previously used for the TDMA voice network decommissioned in 2008. The near doubling of wireless spectrum dedicated to mobile broadband in most metro areas and adding fiber connectivity and additional capacity to thousands of cell sites is designed to enable AT&T to bridge the gap by accelerating current 3G download speeds. AT&T also plans to add 20 metropolitan areas to its 3G mobile broadband network, expanding from 350 markets currently and build 2,100 new cell sites to improve coverage.

The cost of these AT&T’s mobile broadband network upgrades will be covered by the $17bn to $18bn in capital expenditures forecast for 2009. In contrast to Verizon, AT&T has decided to delay the deployment of LTE until the technology has been fully proven and volume manufacturing has driven network infrastructure and handset prices down. In fact, AT&T has reserved the decision of deploying HSPA+ (R7) technology to further increase download speeds to 20+ Mbps until it has better visibility on the availability and cost of necessary infrastructure and devices. As such, AT&T has yielded to Verizon Wireless as the first major US wireless network operator to upgrade its network to LTE, and does not plan trials of the next generation 4G mobile broadband technology until 2010 with active LTE deployments beginning in 2011.

Telstra CEO Sol Trujillo held a press conference and presented a major keynote at the Mobile World Congress in February, highlighting his company’s accomplishments in delivering its Next G HSPA Evolution mobile broadband network. When the Trujillio team took over the management of Telstra, they embarked on a major transformation of the company to prepare it for deregulation and increased competition. One of their most significant decisions was to replace its existing mobile CDMA-based EV-DO network using 850 MHz. spectrum nationwide with a 3G (WCDMA) equivalent, as part of a three-year project beginning in 2005 to operate a single, super-fast national 3G mobile service. The Telstra Next G^TM network was deployed on the existing tower infrastructure in just 10 months, and the excellent radio propagation characteristics of the 850MHz band allowed Telstra to overcome the challenges of distance in Australia. This 3G network now provides Next G^TM coverage to 99 per cent of the Australian population with a footprint of more than 6,700 base stations and a footprint of more than two million square kilometers - an area bigger than Germany, France, Spain, Italy, Portugal, Austria and Switzerland combined, or almost three times the size of Texas.

Mr. Trujillo announced in April that he had completed his transformation objectives and would be leaving his position at the helm of Telstra in June. Prior to his departure from Australia one month early at the end of May, the Telstra CEO announced that he had fulfilled his commitment to delivering Turbo 21 Mbps services to business and consumer customers in April 2009. The Telstra Next G^TM network currently holds the distinction of having the world’s fastest mobile broadband service, enabled with peak network speeds of up to 21Mbps downlink and 5.8Mbps uplink in selected areas served by HSPA+ (R7) technology using 850 MHz spectrum. This achievement is comparable to the software upgrade being contemplated by AT&T to increase download speeds to 20+ Mbps until it has better visibility on the availability and cost of necessary LTE infrastructure equipment and devices.

The recent departure of Telstra’s CEO Sol Trujillo and the appointment of chief executive-elect David Thodey will not significantly affect the Networks and Services unit of Telstra headed by Group Managing Director Michael Rocca or the Wireless Engineering and Operations unit supervised by executive director Mike Wright. With the support of ecosystem partners including Ericsson, Qualcomm and Alcatel Lucent, Telstra was the first operator in the world to launch a commercial HSPA+ (R7) network and the company is now planning to increase this to peak network downlink speeds to 42Mbps in parts of its network by yearend 2009 with testing and availability of devices during 2010.

The Telstra Next G^TM network provides access to a whole new world of mobile Internet rich media content for consumers, and high speed Internet access to hosted applications for businesses in Australia. Telstra is leveraging the mobile broadband Internet connectivity to drive increased productivity and innovation ultimately stimulating economic development. Telstra has commissioned research that demonstrates that Australia’s rapid take-up of mobile broadband has resulted in an annual productivity dividend of $7.4 billion from mobile broadband and better equipped business to weather the global financial crisis.

Like its US counterparts, Telstra’s transport and core networks are heading toward all-IP interfaces, and the evolution to LTE is viewed as a capacity overlay layer in the densest areas of the network over the top of the HSPA+ enabled network. For now, Telstra sees LTE as a data only layer with the existing WCDMA network continuing to carry voice over R99 circuit connections with evolution to VOIP as a later evolution.

Mobile operators like Telstra, AT&T and Verizon believe that LTE will deliver desktop-like broadband data speeds to handsets and help fuel the growth of mobile internet services offsetting flat or declining revenues from traditional mobile voice services. These leading mobile operators have embarked on a new battle for supremacy based on broadband connectivity and speed. As the base of mobile broadband data cards and subscribers are doubling each year, mobile broadband revenues are increasing at a rate of 40% CAGR. Add to that the millions of broadband enabled notebooks, netbooks, and advanced smartphones with Internet browsers being purchased annually, such as the Apple iPhone and RIM Blackberry. The race to 4G is being driven by the competition to capture these high-end mobile broadband customers, and the need to build the capacity to carry the fast growing rich media content of the mobile internet over the next five years.

Comparing the Mobile Broadband Strategies of AT&T, Telstra Verizon and Sprint

Mobile Network Operator	Current MB Network	Next MB Network	4G Deployment Date
AT&T	HSDPA (R5)	HSPA (R6) in 2009	LTE Trials in 2010
	Maximum 3.6 Mbps	Maximum 7.2 Mbps	Deployment Begin 2011
	Ave. 400-700 Kbps	Ave. 700-1,700 Kbps
Telstra - Australia	HSPA (R6)	HSPA+ (R7) in 2009	HSPA+ (42 Mbps) in 2010
	Maximum 7.2 Mbps	Maximum 21 Mbps	No Announced Date for LTE
	Ave 700-1,700 Kbps	Ave. 550 Kbps – 8 Mbps
Verizon Wireless	EV-DO Rev. A	LTE	LTE Trials by yearend 2009
	Maximum 2 Mbps	Ave. Download 600-1,400 Kbps	Deployment Begin 2010
	Ave. Download 600 Kbps – 1.4 Mbps	Ave upload 500-800 Kbps.
	Ave. upload 500 Kbps – 800 Kbps
Sprint	EV-DO Rev A	Mobile WiMAX 2009	Clearwire Network Build out in 2009-2010
	Maximum 2 Mbps	Maximum 12 Mbps
	Ave. Download 600Kbps - 1.4 Mbps	Ave. Download 2-4 Mbps
	Ave. Upload 500 Kbps – 800 Kbps	Ave Upload.75 -1.5 Mbps

June 3, 2009 | Filed Under 4G Trends, Special Reports | Leave a Comment

Sprint Path to 4G: Integrating CDMA/EV-DO and Mobile WiMAX

By Berge Ayvazian

I attended the Sprint Industry Analyst Conference on May 13 and 14, nearly one year to the day after Sprint held the first Analyst conference with Dan Hesse as its new CEO. The 2008 conference was held less than six months after Hesse took office and during the same month that the merger of Sprint Xohm and Clearwire was announced. It took another six months to complete this transaction, in which Clearwire acquired the Xohm assets from Sprint and the partnership with Google, Intel, Comcast, Time Warner and Brighthouse was finalized in December 2008.

As such it was only fitting that I used this trip to Kansas City to get immersed in the Sprint strategy for integrating its existing 3G network and the 4G Mobile WiMAX network being built by Clearwire to enhance the mobile Internet experience. I also had the opportunity to examine Sprint 4G in the context of the company’s other priorities as it restores financial stability by reducing its cost structure and debt, dramatically improves its customer care and satisfaction, introduces new cutting edge devices, refocuses its wholesale and business markets strategies and launches a new ad campaign showcasing the “Now Network.” Dan Hesse presented an upbeat assessment of the company’s accomplishments over the past year and covered this year’s core principals including Customer Experience, Brand and Financial Condition. He highlighted the key customer care and satisfaction metrics that demonstrate that Sprint is restoring its position in key market segments as AT&T and Verizon Wireless battle for the title as the largest US mobile operator.

This meeting was my first opportunity to meet Bob Brust, who joined Sprint as CFO a year ago after retiring as CFO of Eastman Kodak, two years as Unisys CFO and following a 31-year career with General Electric. Under Brust’s leadership, Sprint has reduced its annual labor cost by $2 billion and continues to reduce its cost structure in order to use the resulting free cash flow to pay back $9 billion of debt due over the next three years, rather than raise new financing in tight capital markets. Brust is working with other Sprint executives to reduce access and roaming costs, close contract call centers, sublet office space and evaluate proposals to outsource some network management and information technology functions. He also described plans to reallocate some 25 percent of these savings to marketing and advertising aimed at stemming further customer losses. Brust also described the positive effect of the Clearwire transaction on Sprint’s cash flow and balance sheet, since Sprint traded its 2.5 GHz, spectrum and other Xohm-related 4G assets for a 51% stake in Clearwire, and the costs for deploying the Sprint 4G network and upgrading its backhaul capacity are now being funded by Clearwire and its investors.

Over the past year Sprint has been reorganized to separate the retail and wholesale businesses, to create separate sales and marketing organizations for consumer and business markets, and to build a prepaid retail business around the Boost brand to offset customer losses in the iDEN network and Nextel business. Hesse highlighted the success of the Boost $50 “Monthly Unlimited” prepaid offer launched on the iDEN network in February, and indicated the company is considering Boost-only stores and other initiatives to build on the popularity of the Boost brand. Sprint will also be placing more emphasis on its wholesale business, in an effort to leverage its channel partnerships with Virgin Mobile USA which recently acquired Helio from SK Telecom and Earthlink and companies like Amazon.com which uses Sprint’s EV-DO network to download books to the popular Kindle e-reader.

The Business Markets team under Paget Alves is now responsible for 19 million business customers in segments ranging from SOHO and SMB to Enterprise and is targeting growth by selling 9 core solutions into six key vertical industries. This organization is also responsible for managing the Sprint 4G products and services that will complement the existing EV-DO and iDEN networks, Nextel DirectConnect and mobile broadband services for business customers.

Dan Hesse also used this occasion to introduce a new member of his executive team, Robert H. (Bob) Johnson, a senior marketing, sales and customer service executive formerly with AT&T Wireless, as president of the company’s CDMA business unit. Sprint’s CDMA business unit encompasses all postpaid consumer marketing and sales, including acquisition, growth and base marketing programs, as well as the more than 11,000 retail sales touchpoints. He will also assume responsibility for the demand generated from the new “Now Network” ad campaign, which has replaced the Dan Hesse retro black and white ads with an edgy and futuristic brand image. We can only hope that this new Bob H. Johnson is as successful in reinstating growth in the core consumer mobile market as Bob L. Johnson who has presided over the dramatic improvements in Sprint customer care during the past year.

After a long drought, Sprint is starting to introduce a number of new cutting edge devices to restore excitement for business and consumer customers. Hesse was particularly enthusiastic about the sleek new Novatel MiFi personal hot spot that links Sprint’s 3G mobile broadband to up to five WiFi-connected devices including notebook computers, cameras, media players and smartphones. Over the past year, Sprint has lost millions of customers to AT&T’s iPhone, T-Mobile’s G1 and Verizon’s extensive portfolio of smartphones. The touch screen Samsung Instinct was launched the flagship of Sprint’s Simply Everything plans and used to defend the high end of Sprint’s customer base. But even as the second generation retooled Samsung Instinct S30 has gone on sale at Sprint stores for $129.99 on-contract price, Sprint is now completely focused on the launch of the Palm Pre, scheduled for June 6. This elegant combination of advanced touch screen and slide out QWERTY keyboard could easily serve more as an offensive weapon than as a retention tool for existing Sprint customers. I am looking forward to personally experiencing the smooth functioning WebOS and the seamless integration of productivity applications, media content and web surfing. At the promotional price of $199.99 (with a two year commitment) the Palm Pre should help Sprint address the next iPhone release also reported to be in June, and it should appeal to both high end consumers and individual business customers.

Sprint has been actively marketing and selling its 4G products and services under the new Sprint 4G brand in Baltimore, leveraging the original XOHM mobile WiMAX network now owned and operated by Clearwire. The Baltimore network coverage is being expanded and additional products and services will be launched under the Sprint 4G brand in 2009 and 2010, and Clearwire, 51% owned by Sprint, will also re-launch services under the Clear brand later in 2009. Sprint has been selling the industry’s first dual-mode 3G EV-DO/WiMAX U300 USB card made by Franklin-Wireless primarily to business customers. Sprint claims that the availability of this 3G/4G card for $79.99 (with a two-year commitment) and the 4G mobile broadband service at $79.99 (a $20/month premium over the standard rate for Mobile Broadband) has resulted in significantly higher sales in Baltimore over other Sprint markets. Although the 3G mobile broadband service carries a cap of 5 gigabits per month, the 4G service is unlimited with peak download speeds experienced in Baltimore today up to 12 Mbps and average download speeds of 2-4 Mbps and upload speeds of .75 to 1.5 Mbps. Sprint has plans to introduce EV-DO plus WiMAX equipped notebooks later this year, and also plans to offer a 4G embedded handset later in 2010. This approach will also allow Sprint to provide an uplink capability of 1Mbps or greater and offer extremely low latency to support real-time video and other social media applications.

Sprint 4G is positioned as complementary to its existing 3G mobile broadband services and to Clearwire services and products sold under the Clear brand. While Clearwire is selling WiMAX-only service currently only in Portland, Sprint is leveraging the coverage and reliability of its extensive nationwide 3G EVDO network along with the 3-5x performance improvement of mobile WiMAX targeting business customers first in Baltimore and wherever it becomes available. Sprint is looking forward to the planned commercial availability of mobile WiMAX in Atlanta and Las Vegas this summer and will launch its dual mode 3G/4G services in Portland soon. Both companies will be distributing their 4G products in third party retail outlets such as Best Buy, with Clear pure-WiMAX products aimed at local consumers and Sprint 4G dual mode products targeting traveling business customers.

Sprint’s strategy is to integrate its existing “most dependable national” 3G mobile broadband network and Clearwire’s 4G network to enhance the performance of both networks and the Mobile internet experience of its customers. In many locations, Clearwire is using Sprint towers for its WiMAX base stations and is upgrading the backhaul infrastructure to support both its 4G network and Sprint’s 3G traffic requirements. Sprint also serves as the channel manager for the 3G/4G services sold by the cable partners and expects Comcast to initiate service in at least one market by yearend 2009. I look forward to an update on Sprint’s 4G business and plans from Sprint strategic planning chief Keith Cowan at 4G World in September.

May 27, 2009 | Filed Under 4G Trends, Special Reports | 4 Comments

Wireless Broadband Operators Position Themselves for the Rural Broadband Stimulus

By Berge Ayvazian

More than 1,000 comments were filed when the 60 day public comment period for input into the joint “Request for Information” (RFI) published by NTIA and USDA was scheduled to close on April 13, and late comments continued to be posted on the BTOP web site as recently as May 11.. These federal agencies had set an initial target of approximately 60 days from April 13, or June 12 for officially publishing a Notice of Funds Availability (NOFA) along with grant and loan application guidelines, evaluation and selection criteria. Even if this date may be postponed until the end of June, applicants will likely be asked to submit their proposals within 60-90 days for the $4.7 billion NTIA “Broadband Technology Opportunities Program” (BTOP) $2.5 billion Rural Utilities Services (RUS) Broadband grant and loan programs. The goal is to make the make the first round of funding awards by the end of September.

In an effort to assess how existing service providers are positioning themselves for the “fast track” rural broadband stimulus, I conducted an interview program with four wireless broadband operators, Clearwire, DigitalBridge Communications, Xanadoo and Main Street Broadband. In addition to these interviews, I reviewed their RFI comments, press releases and other relevant information on their web sites. In each case I focused on their BTOP and RUS loan and grant initiatives, their actual rural broadband experience, partnership strategies and unique technology strategy and business case to make rural and small town broadband financial viable. The resulting article provides a starting point for assessing how well each is positioned to leverage the rural broadband stimulus programs.

DigitalBridge Communications (DBC) is a highly experienced operator that currently uses Alvarion equipment to provide fixed wireless broadband services to some 250,000 households (620,000 consumer POPs), businesses, educational, healthcare and public safety institutions in 15 small and medium sized towns and rural communities in Idaho, Montana, Wyoming, South Dakota, Indiana and Virginia. DBC was also one of the first operators to launch standards-based mobile WiMAX, enabling customers with self-install desktop modems and mobile broadband through WiMAX-enabled laptops, netbooks and USB modems. DBC is well positioned to extend wireless broadband and VoIP services to additional rural and underserved regions of the US, leveraging a state-of-the-art network operating center, scalable billing and customer care systems.

Leveraging this experience, DBC filed a response to the NTIA/RUS joint RFI along with the National Rural Telecommunications Cooperative (NRTC). This filing called for RUS to award grants rather than loans, clear grant award criteria, rapid award determinations, and for states to eliminate conflicts of interest by electing how they will participate in BTOP/RUS programs. In this filing, DBC announced its intention to collaborate with NRTC and its more than 1,500 rural telecommunications and electric cooperatives serving 80 percent of US counties. In a subsequent press release, DBC announced that NRTC was among the five Series B investors that participated in its latest round of equity financing. DBC is taking a two prong approach to the broadband stimulus programs.

Rather than focusing on major metros, DBC is focusing on providing mobile WiMAX service in unserved and underserved markets in a total of 20 states in partnership with county governments in areas where it already has or can obtain access to suitable licensed BRS/EBS spectrum in the 2 GHz. band, and
DBC is also partnering with the NRTC, which already provides dial-up and satellite-based Internet services, and in wholesale relationship with NRTC members who will perform sales and front office functions.

DBC’s ambitious broadband stimulus plans promise to create jobs through home based call center agents and local sales teams, technicians and managers in each region served. DBC’s experience suggests there is pent up demand in rural markets, suggesting rapid adoption of wireless and mobile broadband. DBC is committed to rapid deployment and estimates that it can rollout WiMAX network to an area of 500,000 households in 6 to 9 months. In addition to NRTC members, DBC is open to partnerships with cable companies, rural telcos, other wireless broadband operators and regional economic development corporations to accelerate network deployment and sales of wireless broadband services. DBC is also working with Alvarion on compatibility, interoperability and certification of WiMAX customer equipment to ensure seamless’ roaming between operators.

Launched in 2006, Xanadoo is one of the first wireless broadband network operators to bring WiMAX services to three states in America’s Heartland, including seven communities in Texas, Oklahoma and Illinois. In early 2009, Xanadoo launched its first innovative, mobile broadband solutions in Springfield and Decatur, IL, with plans to expand into current and future markets. Utilizing the Cisco mobile WiMAX base station and customer equipment (acquired from Navini Networks), Xanadoo is the only North American WiMAX network operator to be selected as a designated Cisco Powered partner. Xanadoo has extensive 2 GHz. spectrum holdings to expand its wireless broadband coverage to underserved markets in 12 states throughout the Midwest, but has been capital constrained in deploying new networks. Xanadoo is also a licensee of 700 MHz spectrum covering almost 1.56 million people in major markets, such as New York, Boston, Philadelphia, Pittsburgh, Cleveland, Detroit, Chicago, Miami, Tampa, San Francisco, Portland and Seattle. Xanadoo expects that a wide range of 4G services will be deployed in the 700 MHz frequency band.

Xanadoo has experience successfully navigating the arduous RUS application process, and repaid its loan early to avoid the many restrictions imposed by this agency in early rounds of funding. Recognizing that the new rural broadband stimulus programs represent a unique opportunity for expansion, Xanadoo is cautiously working behind the scenes to develop the public-private partnerships necessary for submitting successful BTOP grant proposals. The company is considering a variety of partnership strategies to enhance its ability to rapidly deploy and operate WiMAX networks in a much larger 12 state coverage area, but will wait until the rules and selection criteria are published before making these plans public.

Mainstreet Broadband is a young, privately held wireless broadband provider that has successfully navigated the lengthy USDA RUS loan application process over a period of three years to close an initial $34 million loan in January 2009. Leveraging a small equity investment of approximately $7 million from company founders and strategic partner Xiacom Wireless, Mainstreet Broadband is one of the largest RUS funded initiatives to date. Mainstreet Broadband, together with its subsidiary Broadband South LLC, is currently building a wireless broadband network that will ultimately serve some 350,000 households in 66 markets covering 129 rural communities in rural southern Georgia and northern Florida.

Like DigitalBridge, Mainstreet recently announced the selection of Alvarion to supply WiMAX equipment for this project, based on its outstanding resiliency, scalability and service performance.. Alvarion’s solution for Mainstreet has received USDA Rural Development acceptance and complies with “Buy American” requirements of USDA Rural Utilities Service. The Alvarion BreezeMAX customer premise equipment is optimized for low upfront investment and the base station solution can support 2.3/2.5/3.65 frequency bands in the same chassis providing a low total cost of ownership for rural underserved broadband markets.

Mainstreet has also recently expanded its coverage area through the acquisition of Coastal Broadband, a rural wireless ISP using the WCS band to serve Waycross, GA. Mainstreet plans to pursue additional funding from NTIA BTOP and USDA RUS grants and loans to expand into other rural areas in the southeast region. In preparation for these applications, the company is working to develop public-private partnerships with anchor tenants including school districts and regional economic development authorities. The company plans to use low priced and high quality to stimulate adoption of its wireless broadband services and promotes job creation as a key element of its market strategy.

Clearwire is the largest wireless broadband operator in the US, both in terms of network deployments, customers served and spectrum position. After consolidating the 2 GHz spectrum position of Clearwire and Sprint Xohm, the new Clear™ is in the enviable position of having the largest coverage area and more spectrum capacity – some 43 billion MHz PoPs nationwide - than any other US wireless broadband operator. Clearwire currently provides fixed and nomadic wireless broadband services to more than 500,000 subscribers in some 45 markets nationwide, and launched commercial mobile WiMAX services in Portland, Oregon in early 2009.

Clearwire recently updated its plans to rollout its Clear™ mobile WiMAX services for the remainder of 2009 and 2010:

2009 - Atlanta and Las Vegas to launch in the summer with Chicago, Charlotte, Dallas/Ft. Worth, Honolulu, Philadelphia, and Seattle among the cities going “Clear” in
2009.2010 - New York, Boston, Washington, D.C., Houston and the San Francisco Bay Area lead list of planned Clear launches in 2010.

Although Clearwire’s spectrum position would support extensive WiMAX network deployments in rural unserved and underserved broadband markets, the company plans to focus its capital on building networks in major metropolitan areas across the US to enable the coverage of up to 120 million Americans across 80 markets as mandated by the end of 2010. Clearwire has already initiated network deployments in 75 of these markets with more than 18,000 cell sites deployed to date, and its plans are designed to deliver an unprecedented combination of broadband speed and mobility.

Clearwire currently plans to invest $1.5 to $1.9 billion of the $3.2 billion in capital raised during the merger with Sprint Xohm to build-out its mobile WiMAX networks and finance operations until the business turns cash flow positive. It is widely believed that the company needs an additional $2 billion to $2.3 billion to complete its network plans. Raising additional capital, either through equity or debt, would be challenging and expensive in today’s economy. Gaining access to hundreds of millions in federal broadband stimulus grants and loans would appear to be a high priority for Clearwire’s new CEO and CFO.

Based on our interviews, Clearwire does not view either BTOP or RUS to be one of those game changing opportunities that come along once a decade. Clearwire does not plan to change its current strategy, but is exploring methods of using its existing spectrum, backhaul and WiMAX network operations to extend wireless broadband services to unserved and underserved small towns within reach of its major metros.

One example is the Clearwire plan to work with the state of Georgia to build out a WiMAX network to serve the town of Milledgeville as an outgrowth of the Atlanta network more than 80 miles away in “middle Georgia.” In September 2006, Milledgeville received an $862,000 grant from the Georgia Technology Authority through the Wireless Communities Georgia program to turn the city into one of several model communities to show the benefits of using wireless access to improve economic development, educational access and governmental services. To receive the Wireless Communities Georgia grant, Milledgeville proposed a wireless service that would improve public safety resources, include low-to-moderate income consumers, improve access for area students and help facilitate economic development. The WiMAX network will be designed to help bridge the digital divide and Clearwire will provide a discounted service to low-to-moderate income persons who would not otherwise be able to afford Internet access. To facilitate access for low-to-moderate income persons, the city is partnering with One Community and the Knight Foundation to provide low-interest loans to purchase computer hardware and computer training resources to reach out to the broader Milledgeville community. Public safety is another fundamental application proposed in the city’s grant, and a primary use of the wireless service will be computer-aided dispatch for emergency response personnel. The Milledgeville Police Department will allot part of its technology budget to the purchase of laptop computers so officers will have more efficient and effective access to the Georgia Crime Information Center while on patrol.

However, this example is more of an isolated case rather than part of a larger strategy, and Clearwire is not likely to be distracted from its primary focus by the opportunity to leverage government funding and serve rural broadband markets. Clearwire could apply for federal funding to extend wireless broadband coverage to underserved areas within reach of its major metros, but our interviews revealed uncertainty regarding this approach until the rules and selection criteria are published. Clearwire has been approached by third parties seeking to utilize its spectrum resources as an affiliate to extend service to more rural areas. Without a formal affiliate program, the new Clearwire is considering these offers opportunistically as a way to expand beyond major metros into rural markets. Recognizing that consistent service quality and the Clear™ brand are important to be recognized as the premier service in the 4G space, Clearwire is cautious about using affiliates to provide a unique service package for the rural market. If Clearwire decides to implement a rural wireless broadband stimulus initiative, the company’s senior management would prefer to provide a consistent Clear™ branded offering nationwide.

I will continue to closely monitor the rural broadband stimulus programs and the activities of wireless broadband operators, and we will conduct a 4G Trends Webinar once the rules are published in June. So stay tuned.

May 13, 2009 | Filed Under 4G Trends, Special Reports | 1 Comment

WiFi Integration with 4G, WiMAX, 3G Mobile and Cable Wireless Broadband

By Berge Ayvazian

While most of us in the mobile industry were in Las Vegas at CTIA 2009, many of our colleagues were in Washington, DC attending the Cable Show ‘09. Several announcements made at the Cable Show and other recent reports support my view that WiFi will continue to be a primary bridging technology between 3G Mobile, WiMAX and Cable Wireless Broadband services on the road to 4G.

The first of these announcements came from Cablevision Systems Corp., which reported that its customers had already accessed the Internet more than one million times over its new Optimum WiFi high-speed wireless Internet service since it was launched in September 2008. Cablevision is the fifth largest US cable MSO, with 3.1 million residential subscribers and a hybrid fiber-coax network that passes approximately five million homes and businesses in the New York tri-state metropolitan area. Unlike cellular data plans which can cost $60 per month or more and require long-term contracts and the purchase of additional equipment, Cablevision offers public WiFi connectivity at no additional charge to all of its nearly 2.5 million Optimum Online broadband subscribers. Optimum WiFi is now available in commercial and high-traffic locations across Long Island, Connecticut and Westchester/Dutchess service areas, in Bergen and Passaic counties in New Jersey, and at hundreds of commuter rail stations across the New York metropolitan area.

Optimum Online has achieved a more than 75 percent broadband market share in Cablevision’s service area, and is used by more than 52 percent of cable homes passed. Cablevision has also become the majority residential phone provider across much of the territory served by its fiber optic network. This week Cablevision announced the launch of Optimum Online Ultra, a new high-speed Internet product that will deliver the nation’s fastest broadband connections, up to 101 megabits-per-second (Mbps) downstream and upstream speeds of up to 15 Mbps. Optimum Online Ultra will be offered across the company’s entire service area starting May 11, leveraging the potential of DOCSIS 3.0 technology to provide higher speed broadband at a significantly lower cost than any telco provider. Cablevision also announced that it was doubling the downstream speed of its Optimum WiFi wireless Internet service, to up to 3.0 Mbps - significantly faster than more expensive cell phone data plans.

This has lead me to the observation that WiFi has become one of the most effective and low-cost ways for cable companies to thwart the telco threat, at least in the near term. Cablevision’s high-speed Internet customers have clearly embraced Optimum WiFi as their preferred solution for Internet access when away from home, and the success of Optimum WiFi is a direct result of Cablevision’s decision to pursue a ‘here and now’ strategy for providing its customers with fast and reliable mobile Internet access, and to move beyond the deployment of a few hotspots or access points and build a true market-wide network that demonstrates the company’s commitment to WiFi.

Cablevision is not the only cable MSO using WiFi for wireless broadband access. Comcast is currently engaged in a technical trial offering WiFi service near NJ Transit commuter rail stations throughout New Jersey. Comcast High-Speed Internet subscribers can sign into the WiFi service at no additional charge by entering their usernames and passwords to access the Internet via the WiFi Hot Zones. Cablevision and Comcast are also collaborating on back office integration and authentication that will allow their respective subscribers to access WiFi broadband services at all of the NJ Transit commuter rail stations. Both Cablevision and Comcast have renewed their interest in WiFi, as it gives them an additional weapon to use when competing with Verizon FiOS and Verizon Wireless mobile broadband services.

Although cable operators are well positioned to increase subscriber retention and revenues by adding mobility to their current triple play bundles, none of the major US cable MSOs has successfully launched a 3G cellular network. Cable company Cox Communications announced plans to build its own cellular network to offer mobile voice and data services in some of its markets, while working in concert with Sprint on a wholesale basis in others. Comcast, Time Warner Cable, and Bright House Networks have invested in Clearwire WiMAX-based wireless broadband network, and Comcast has announced it will start offering wireless broadband in Portland, Ore., this summer. Even Clearwire acknowledged the value of WiFi connections when it introduced the CLEAR^TM Spot Personal Hotspot, an accessory which enables standard WiFi products to connect to the Internet, at true broadband speeds, via the company’s CLEAR^TM mobile WiMAX service. Four of the leading US cable MSOs will discuss their respective plans for wireless broadband and mobile Internet during a 4G World panel in September.

BelAir Networks has taken WiMAX/WiFi integration a step further by announcing the industry’s first dual mode wireless node optimized for deployment on existing cable infrastructure, including aerial plant, pedestal, cabinet and vault mounting options. With the modular, dual mode WiMAX/WiFi and cable-ready BelAir100SX node, BelAir Networks has made it faster, more economical and less risky for cable operators to capitalize on the complementary nature of licensed and license-free wireless technology associated with large scale wireless network deployments.

AT&T is also leveraging WiFi to differentiate its DSL fixed broadband services from competitors and to complement its growing base of mobile broadband customers by giving them a faster connection in high-traffic areas nationwide. WiFi also offers AT&T some operational savings, allowing it take traffic off of its congested 3G networks. AT&T recently reported a huge increase in WiFi usage during the first quarter, driven by increased usage at 7000 Starbucks coffee shop locations around the country and the growth of its hotspot network with an additional 3000 hotpots in hotels, car rental agencies and book stores as well as roaming access to 60,000 hotspots internationally. AT&T has been emphasizing WiFi as a key component of its broadband and mobile business strategies since it acquired hotspot management company, Wayport, in December 2008.

AT&T reported authenticating 10.5 million WiFi connections across its 20,000 US hotspot network in the first quarter of 2009. Those connections are more than triple the 3.5 million connections in the first quarter of 2008 and more than half of the total for all of 2008. Driving the surge were 16.7 million AT&T broadband subscribers, which AT&T extended free WiFi use to last year. In addition, any AT&T Mobility customer with WiFi-enabled smartphones such as the iPhone or 3G LaptopConnect connection receive unfettered access to the hotspot network as do mobile customers. In a recent interview at CTIA 2009, AT&T Mobility CEO Ralph de la Vega emphasized the important role WiFi will play in future mobile broadband services as more mobile devices have WiFi embedded. AT&T plans to offload a good deal of mobile traffic onto home, work and public WiFi networks, sparing 3G and future 4G capacity for truly mobile scenarios.

April 29, 2009 | Filed Under Special Reports | 1 Comment