Monday, June 9, 2014

What do predictions about 5G mean for the Future of Mobility?


With the recent exponential growth of mobile devices, it is hard not to look ahead for the next big thing that will transform technology as we know it.

One current hot topic is 5G. While most industry experts agree it is a ways off, there are obvious reasons for excitement -- including how it will impact the future of mobility, the Internet of Things, and ultimately the Internet of Everything.

If 5G is all that it’s speculated to be, the mobility landscape will be in for a dramatic change , especially as businesses and organizations embrace all that 5G stands to offer such as ultra-fast network speeds and an increase in capacity.

However, while the industry grapples with understanding “just what is 5G” many experts, such as Peter Jarich, Vice President of Current Analysis Consumer and Infrastructure services, declares that it is “more relevant today than you might think” as 5G will introduce new network architectures. In addition, many of the technologies being developed today will be a part of the longer-term implementation of 5G.

Recently, I participated in a new Future of Mobility podcast with Peter Jarich to discuss what IT and business leaders can do today to prepare for the evolution of the 5th generation of mobility and speculate on long-term implications. You can listen to the full recording here.

In this post, I’ll share some of those key insights from my discussion with Peter and discuss why 5G will revolutionize how we define mobility.
Let’s start at the beginning. What’s all the hype with 5G?

Since we are in the technology industry, it’s pretty standard to hype emerging solutions and ideas. However, the jump from 4G to 5G will be similar to the evolution of 2G to 3G, in that it will enable a broad range of new capabilities through lower costs and faster speeds.
We see a lot of buzz words surrounding 5G such “infinite capacity” and “virtualization of the network,” but really, it’s not just about how wireless technologies can be applied to what people are doing, but also how we connect everything to the network in a way to best meet our needs.

In terms of mobility, 5G is an enabler of a new world.
Gartner often refers to a Nexus of Forces – the convergence of four major tech trends: social interaction, mobility, cloud, and information – as a means of changing our business landscape. Today, we are seeing this convergence first hand. And it needs a network to support it. For example, the influx of mobile devices and applications are measuring heartbeats and monitoring brake pads on trains. This capability is being combined with an influx of data – available in real-time through the cloud.

From a network technology standpoint, 5G will continue to connect these capabilities.  It’s hard to predict exactly how all these pieces will come together, however 5G will be able to provide relevant networking – both over licensed and unlicensed spectrums – independent of people managing that process. With this in mind, 5G will be essential to bringing together people, process, data and things in an Internet of Everything world.
So, what can I do today to prepare for 5G?

I agree with Peter Jarich when he said, “You don’t need to wait until 5G arrives to figure out what you can do with it.”

If you’re a retailer, what does this mean?  How do you start running your business differently?  How do you start using mobility to engage with the customers that come in to your store like any e-commerce experience?
If you are a mobile operator, what does 5G mean for your business? In this new 5G world built on heterogeneous networks, how will your business need to evolve to stay competitive?

Regardless of your industry, the future of mobility – and next generation networks – will require every IT and business leader to redefine, reengineer and recreate business models based on the an infrastructure that is a lot more powerful and more pervasive than it is now.  5G isn’t here yet – but it is never too early to prepare and begin building a strategy.
Listen to the podcast: What do predictions about 5G mean for the Future of Mobility? featuring Cisco’s Stuart Taylor and Peter Jarich, Current Analysis.

Monday, June 2, 2014

How Will Mobile Operators Make Money in the Future?

The mobile market continues to evolve at a blindingly fast pace. It seems as though new faster, sleeker, and more powerful mobile devices are launched every day. And new categories of mobile devices are created almost overnight. The number of applications available to run on these revolutionary new mobile devices is staggering, numbering in the millions. The insatiable demand for mobile devices and new bandwidth-hungry applications is generating enormous amounts of mobile data. The Cisco Visual Networking Index™ (Cisco VNI™) predicts that these trends will cause global mobile data traffic to increase 11-fold from 2013 to 2018, surpassing 15 exabytes per month by 2018.

In spite of this phenomenal growth and insatiable consumer demand, many MNOs are struggling to profit from this mobile gold rush. Mobile operators are watching as their average revenue per customer (ARPU) flattens or declines. Despite increasing customer appetite for mobile data, minutes of use in their cash-cow voice business are falling off sharply, and usage of text messaging is peaking. In fact, Ovum predicts that 2018 will mark the first year of revenue contraction in the history of the global mobile market. Following four years of less than 1 percent growth between 2012 and 2017, revenues will decline by 1 percent in 2018, ending the year $7.8 billion lower than in 2017.

This mobile paradox - huge growth and customer demand, yet significant business and market challenges - seems to be unique to the mobile industry. When other industries, such as the automotive industry, face healthy customer demand, they build out more capacity, sell more cars, and reap greater profits. Mobile operators need to build out more network capacity to keep up with the voracious customer demand, but they are struggling to convert these investments into higher revenues and profitability. Much of this business is being lost to substitute over-the-top (OTT) services and to major shifts in usage behaviors. Mobile consumers would rather pay for these OTT services or be subjected to advertising from the likes of Google, Facebook, YouTube, and the App Store, than pay more to mobile operators.

Not only is it a challenging world for mobile operators to be doing business in, but a number of major disruptors are radically altering the entire mobile ecosystem. The rise of software platforms (from “walled gardens” to “walled ecosystems”), the availability of new fast mobile networks, and the Internet of Everything (growth of network-connected devices) are causing significant disruption and uncertainty across the industry. Equally, the move to cloud delivery models (“everything as a service”), the changing industry structure, and the role of regulators are fundamentally changing the mobile ecosystem.

The history of the mobile industry has involved huge and successful waves of revenue growth.  For a long time the mobile industry made huge sums of money from the mobile killer app - voice. However, high or unlimited minute plans and changing usage have meant the end of that growth wave. Messaging provided operators with perhaps one of the highest-margin and highest-growth products of all time, from any industry. OTT applications such as WhatsApp, Snapchat, and social media saw that revenue wave crest. Lately, MNOs are watching mobile data access rise to well over one-half of their total revenue, fueled by the insatiable consumer need to connect their mobile devices and applications. However, the crest of this third growth wave is visible on the horizon as the industry disruptors begin to shape a new mobile world.




The question for mobile operators everywhere is, what is this fourth, or next, wave of mobile growth? What are the new opportunities for them to monetize their assets and extensive investments in their mobile networks? How can MNOs continue to enjoy the success and profitability in this new mobile world that they have had in the past?
 
Questions to these answers can be found in our white paper:  Digging for the New Mobile Gold: The Next Generation of Mobile Monetization

Read the blog on Cisco.com

Tuesday, May 27, 2014

Digging for the New Mobile Gold: The Next Generation of Mobile Monetization

The mobile market continues to evolve at a blindingly fast pace. It seems as though new faster, sleeker, and more powerful mobile devices are launched every day. The number of applications available to run on these revolutionary new mobile devices is staggering, numbering in the millions. The insatiable demand for mobile devices and new bandwidth-hungry applications is generating enormous amounts of mobile data.

In spite of this phenomenal growth and insatiable consumer demand, many MNOs are struggling to profit from this mobile gold rush. Mobile operators are watching as their average revenue per customer (ARPU) flattens or declines. This mobile paradox - huge growth and customer demand, yet significant business and market challenges - seems to be unique to the mobile industry.  Mobile operators need to build out more network capacity to keep up with the voracious customer demand, but they are struggling to convert these investments into higher revenues and profitability. Much of this business is being lost to substitute over-the-top (OTT) services and to major shifts in usage behaviors.

The history of the mobile industry has involved huge and successful waves of revenue growth.  For a long time the mobile industry made huge sums of money from the mobile killer app - voice. However, high or unlimited minute plans and changing usage have meant the end of that growth wave. Messaging provided operators with perhaps one of the highest-margin and highest-growth products of all time, from any industry. OTT applications such as WhatsApp, Snapchat, and social media saw that revenue wave crest. Lately, MNOs are watching mobile data access rise to well over one-half of their total revenue, fueled by the insatiable consumer need to connect their mobile devices and applications. However, the crest of this third growth wave is visible on the horizon as the industry disruptors begin to shape a new mobile world.

The question for mobile operators everywhere is, what is this fourth, or next, wave of mobile growth?

Unfortunately there is no obvious tsunami-size fourth monetization wave cresting on the horizon for mobile operators. Unlike the preceding three waves, there will be no gold rush created by a single killer app, such as voice, messaging, or data. A lot of gold still remains in the mobile business, but it is going to come from multiple sources and require some sophisticated mining techniques. 

Cisco believes that there are four key strategic thrusts, or monetization areas, for operators to create new value from their mobile business.

1. Cost Optimization
While not a revenue-generating opportunity in itself, cost leadership will be a critical component in creating value for service providers. In Cisco’s experience, working with our major service provider customers, we have been able to improve overall service provider OpEx efficiency by at least 10 percent. Key activities to deliver these improvements include: virtualized production architectures; next-generation mobile access; improved business agility; and, new business and operating models.
2. Pricing
Pricing has always been an important tool for mobile operators. While pricing is, in fact, the most powerful of a firm’s profit levers, it is often overlooked by managers. Key considerations in enhancing profitability through pricing include: tiered pricing and usage caps; value-based pricing; shared plans for Internet of Everything (IoE) readiness; plan rationalization and simplification; and, bundling.

3. Network-Enabled Features
Mobile operators realize that many of the assets and capabilities in their network and operations allow them not only to improve the quality of the user experience, but also to sell relevant information and services to other interested parties. Key opportunities to monetize network-enabled features include: quality of service (QoS); policy; APIs; data analytics; and, security. 

4. New Solutions and Services
As the world becomes truly mobile, service providers have a unique opportunity to use their core technology and business assets to create new solutions and services to enhance their users’ experience and utility, reshape businesses and business models, and create new sources of value beyond their core access business. Potential new solutions and services that mobile operators could successfully deliver include: mobile cloud; Internet of Everything and machine-to-machine (M2M); connected vehicles; enterprise and small and medium business (SMB) solutions; OTT collaboration; and, location and data analytics solutions.

While mobile operators can derive new and incremental business value by focusing on all four of these strategic monetization opportunities, Cisco believes that the truly untapped gold lies at the heart of the mobile operators - their network. This new gold exists in the information and capabilities deep in the core network elements and infrastructure.  The key to mining this new gold and creating new and lasting business value involves building, and successfully delivering, the monetization layers that lie above the network. The features/services and solution layers extract the inherent technical value from mobile networks and translate these into market-ready products and services that can be sold through different channels to the ultimate end user.

Further details on these new mobile monetization opportunities can be found in our white paper:  Digging for the New Mobile Gold: The Next Generation of Mobile Monetization

Thursday, May 8, 2014

How Service Providers Can Profit From Smart Cities

The UN estimates that at some point between 2008 and 2009 the world’s urban and rural populations became equal in size for the first time in human history.  Urbanization is set to continue as the rural population seeks the wealth and social opportunity that cities offer. In the period from 2007 to 2050, the UN estimates the urban population will grow from 3.1bn to 6.4bn.  As cities around the world grow in size, we are beginning to see that strained resources, infrastructure, and services are causing natural limits to urban growth, which in turn limits the economic growth opportunity. The challenge of managing sustainable urban growth is one of the defining challenges of the 21st century. In parallel, city leaders are looking for ways to establish clear identities for their cities and to use the growing connectivity of everything to improve urban life for their citizens.

Cities as diverse as Barcelona, Nice, Dallas and Songdo in South Korea, are already starting to leverage advanced technologies and data analysis to create smart, connected cities.  These cities, and others around the globe, are building out new digital services such as smart lighting, traffic, waste management and data analytics to reduce costs, tap new sources of revenue, create new innovation business districts and improve the overall quality of urban life. Not only will the creation of smart cities generate huge value for the cities and their inhabitants, but there are great opportunities for the vendors and partners who help the cities to create and operate these digitally smart cities of the future.

Connecting all of the sensors, devices, people and data is critical to making a city smart.  With highly developed wireline and mobile networks, Service Providers are at the center of providing this network connectivity.  However, Cisco believes that the SPs have a much greater role to play beyond simply providing the connectivity.  There are numerous opportunities for them to move up the stack to extract a much greater portion of the more than $1.5 trillion that Cisco estimates will need to will need to be invested in ICT and “smart” urban infrastructure worldwide over the next decade.

To understand the best role for a service provider in smart cities and how they can make money, we need to consider three strategic dimensions – benefits, role and finance/governance.




1.    Benefits to the Service Provider – Different types of potential benefits include:

·         Direct – network access; network management; services (e.g., location-based, cloud, security); solutions (e.g., smart parking, traffic, lighting); technology/business platform (build and operate)

·         Ancillary – rights of way for network deployment on city assets; upsell to city, local businesses and consumers; customer retention

·         Indirect – branding; PR/communications; customer experience; regulatory relief; government relations

2.    Service Provider Role – We view the potential SP smart city roles as a pyramid, or set of layers with each layer supporting the layer above and increasing the potential business return as we move up the pyramid.

 


3.    Financing/Governance Models – Range of financing and ownership models:

·         City Funded and Owned – City buys and owns the equipment and services and funds through budget or bond issue

·         Vendor/SP Funded – Vendor/SP finances and owns the infrastructure and leases it to the city with services

·         Public-Private Partnership – Funded and operated through a partnership of City and one or more private providers

·         New Separate Entity – Create new legal entity of key ecosystem partners, finance and operate as a separate business with profitability/break-even goals

By carefully assessing their options and opportunities along these three dimensions service providers can define a successful strategy and operating model for profiting from smart cities.  SPs are in a unique position to deliver Internet of Everything enabled, smart digital city services to key urban areas by providing a combination of connectivity, Wi-Fi network, platform, operations, implementation and integration, and specific applications and solutions.

Read the blog on Cisco.com

Friday, April 25, 2014

Understanding the Changing Mobile User


Mobile communications today is virtually indistinguishable from the first mobile call that was made four decades ago.  We have gone from monster handsets to pocket-sized portable computers.  Mobile communications has become an essential part of our daily lives.  For mobile operators and other companies operating in this space it is essential to know the facts about the mobile market and how the mobile user is changing.

The recent video by Cisco “Understanding the Changing Mobile User” provides key insights for SPs into how mobile users are using LTE, Wi-Fi and their changing mobile behavior.  The video identifies options for operators to be successful in the changing mobile world.

The video highlights the results of Cisco’s recent mobile consumer research study.  The complete results and white paper can be found at “Service Provider Wi-Fi and Small Cells:  Discover What Consumers Want from Wi-Fi and Mobile”

Read the bog on Cisco.com

Wednesday, April 2, 2014

Small Cells Are Big For Business

Closing the big deal.  Calming an irate customer.  Clarifying instructions given in an email.  Voice has long been the killer app for business.  As the world goes mobile, smartphones are becoming a key way for business people to stay connected, not just when they are out of the office, but an important means of voice communication in the office.  Like consumers, many business users are cutting the cord and using their mobile device, instead of their desk phone, to make and receive voice calls.  A recent Cisco study of mobile users reveals that 50 percent of knowledge workers use their mobile phone at least one-quarter of the time to make calls in the office, instead of reaching for a desk phone.  And, 35 percent of knowledge workers equally choose between a mobile and desk device when placing a call.  We expect this mobile displacement of the traditional desk phone to grow as employees increasingly bring their own mobile devices to work and use them for conducting business.

Mobile cellular networks were built to cover large outdoor and semi-outdoor areas.  They were never built to penetrate the steel, glass and concrete of modern buildings.  While there may be some coverage near the windows, the signal strength rapidly degrades as you head towards the center of the building.  This is only going to get worse as new building materials, such as blast resistant glass, make it even harder for signals from the macrocell network to adequately cover the place of work.  Our research found that one-third of all business users receive only 1 to 3 bars of signal strength at their place of work.  And, 10 percent of business people obtain very poor quality mobile service (1 to 2 bars).

The shift to mobile in the workplace should be good news for mobile operators.  But, if business users can’t connect at their place of work operators are never going to see that increased mobile traffic and revenue.  What is worse is that these high value business customers are going to look elsewhere for better mobile coverage at work.  Almost one-half of business mobile users told Cisco that they would likely switch to another carrier who offered better mobile coverage.  And, according to the same research, 25 percent of business users were extremely, or very likely, to switch to another mobile operator to ensure that they can reliably use their phones at work.

Fortunately, the licensed mobile network can now be easily extended indoors using, low power and low capacity licensed radio access points, or small cells.  These indoor small cells connect to the core mobile network through the business broadband data connection.  The best thing is that these licensed small cells are very compatible with existing business Wi-Fi networks, sharing the same power, broadband and often same location on the building’s ceiling.  In fact, many vendors, like Cisco, now make it easy to add mobile small cells to the corporate Wi-Fi network, by simply clipping the new small cell on to the existing wireless access point.  With a simple and elegant solution so readily available to solve the business mobile dead zone challenge, it is no wonder that ABI Research estimates that at least one-third of the projected 37.5 million small cell deployments in 2018 will be in enterprises and small and medium businesses. 
While better mobile voice quality is definitely the killer app for business small cell deployment, many businesses are starting to look beyond voice.  Of course, the small cells can also carry mobile data, providing a seamless and continuous data session and experience from the outdoor mobile macro network through to the deepest reaches of the office.  Other value-added services include such things as: collaboration applications, HD voice, on-net calling, location-based services and extending all of the traditional PBX functionalities to the mobile device.  Businesses and mobile operators alike, we see real value and opportunities when they move beyond delivering just better indoor voice quality for mobile business users and develop unique and valuable solutions that leverage business small cells for key verticals like education, retail, healthcare and hospitality.

Read the blog on Cisco.com

Thursday, March 27, 2014