Setting a new world order
In an effort to shape the future of the mobile communications industry and ensure global compatibility, the top 200 companies have signed up to a new alliance.
It was never going to be easy to get 200 of the world’s biggest telecoms, electronics and IT companies to agree on anything - except, possibly, that business could be better.
Last month in New York, however, a roll-call of big hitters with an interest in the future of mobile communications signed up to a new organisation that aims to shape the industry for years to come.
The Open Mobile Alliance (OMA) was formed in an effort to make sure technology does not hold up the business it was intended to assist. It aims to set global standards for the development, testing and commercial launch of third generation (3G) mobile systems and applications.
In theory, this should clear the way for developers to make their products compatible across the world. For example, a US company developing a mobile banking application should be confident that it can run on a European telecoms network and be accessed via a Korean-built personal digital assistant.
The urgency behind this unprecedented display of unity comes from mounting concern over the transition to 3G mobile networks around the world. The delays surrounding the roll-out of 3G have been extensively documented, much to the discomfort of the share price of the leading network operators.
But it is finally rolling, albeit painfully slowly. 3G services are already operating in Japan and, on a far smaller scale, on the Isle of Man in a pilot project run by MMO2.Mobile operators are currently pre-empting its arrival with a range of 3G-style services designed to ease their customers into the new world (see below). The OMA is the industry’s bid to learn from its mistakes and ensure that when full-scale 3G services arrive, the user is not left at the mercy of incompatible standards and technologies.
A glance at the mobile sector’s short history quickly provides good reasons for setting up the new body. Phone handsets that work in Europe but not the US are one example of how the growth of different mobile infrastructures around the world had a direct impact on users. (Ironically, this problem may persist for a while, even with advanced 3G phones).
A far more serious blow to the industry was the painful introduction of WAP. Its launch was supposed to instantly convert mobile phone users to the idea that their handset was useful for far more than making voice calls, giving them access to football results and cinema times on the move.
But WAP was pushed on to the market as a semi-developed technology before networks and handsets were properly able to support it. The result for consumers was frustratingly slow download times, if they were able to access WAP services at all.
The network operators know that 3G technologies, which are far more complex than WAP, could easily suffer the same fate if pre-emptive action is not taken.
The umbrella term 3G actually covers a long list of different standards and systems designed to transform mobile telecoms from its current voice-based infrastructure into one able to transmit the same type of content as the internet. Internet protocol (IP), a basic building block of the World Wide Web, will also underpin much of the data transmitted on 3G phone networks.
That means the telecoms industry, historically a carrier of voice messages, and the world of IT software and hardware will be entwined as never before.
Companies operating in either of these sectors already have a bewildering array of forums, standards bodies and technology platforms to deal with. Proprietary systems developed, owned and operated by one company and incompatible with those of its rivals have also abounded. For telecoms operators in particular, 3G will require a fundamental adjustment in approach if the problems of WAP, the last effort to bring internet-type services into the handset, are not to be repeated.
Prof Michael Walker, Vodafone group research and development director, highlighted the need for a shift in thinking at a recent conference on 3G technology organised by the Institution of Electrical Engineers. Walker said the transition from 2G to 3G had turned out to have bigger implications than originally expected for telecoms operators.
’In the old world, the 2G world, it was all about person-to-person communications supported by IT systems which we used for billing and for customer management. There was a very tight coupling between the services we offered and the networks we used to deliver those services.’
According to Walker, the key feature of 3G will be the untangling of the services from the networks, allowing them to operate universally across a variety of delivery channels based on IP. ’The consequence of that decoupling and the move to the IP-based networks is that everything we do now is much more underpinned by IT, and IT thinking, than the traditional telecoms way of working.’
Walker said consumer devices were changing from phone handsets into something far more advanced. ’We are now delivering to devices which are slowly becoming more like computers than mobile phones,’ he said. The use of Java - the computer language developed by Sun Microsystems - within mobile phones was one of the clearest examples of this trend.
This convergence of the telecoms and IT industries will present the OMA with its biggest challenge, especially because it brings together sworn enemies from some of the world’s most cut-throat consumer markets - Orange and Vodafone, Motorola and Nokia, IBM and Hewlett-Packard to name but a few.
In the course of their everyday business, these companies devote considerable energies to stealing a march on each other.
Another of the OMA’s members is Microsoft, which is developing an operating system for mobile phones in direct competition to established wireless giants such as Nokia.Most commentators on the mobile industry agree that the OMA’s intentions are admirable. But some are questioning how effectively it will work in practice.
’The more players that get involved the longer it will take them to agree on anything at all,’ claims Michelle de Lussanet, a telecoms analyst for Forrester Research. ’Many will participate only to slow down development and control the market.’
De Lussanet also predicts local geographical interests are likely to prevail over a truly global approach. ’While global politicking slows OMA down, pan-European operators such as Orange and MMO2 will have a vested interest in driving regional agreement,’ she says.
Forrester expects to see subgroups emerging in Europe and elsewhere to push progress in their own region.
Whatever its limitations, the formation of the OMA recognises that working together to head off problems before they arise is preferable to picking up the pieces later.If it helps 3G avoid the many pitfalls in its path, June 2002 may be remembered as the month the mobile industry became more than the sum of its parts.
In business terms, the whole commercial foundation for the massive global investment in 3G is the premise that consumers want more from their phones than the ability to talk to each other.
Universal Mobile Telecommunications System (UMTS) will be the dominant 3G standard, offering data transfer speeds of up to 2Mb/s and opening the way for video streaming and high-speed internet browsing.
But with next generation networks not due to be widely operational until next year at the earliest, the industry is looking for a way to get consumers used to 3G-style applications now.
Its technology of choice is Multimedia Messaging System (MMS), an evolution of SMS text messaging that enables transmission of audio-visual content.
For the mobile operators, the big advantage of MMS is that it can run on existing networks. It is particularly well suited to operating on General Packet Radio Service (GPRS), the interim technology between GSM and 3G often called 2.5G.
Nokia says MMS represents ’a natural migration path that will boost the adoption of new products and services.’ The manufacturer has just launched an integrated phone-camera that allows users to snap digital images and then send them via MMS to compatible handsets or an e-mail address.
MMS services are only just beginning to appear on UK networks. T-Mobile, the re-branded One2One network, recently began advertising picture messaging for the first time.
But the operators will take comfort from Japan, where it has already proved hugely successful. Sha-mail - operated by Vodafone’s Japanese subsidiary J-Phone - is a ’mobile postcard’ service that gives users a handset with an integrated digital camera and a colour display. They can point the phone, capture an image and send it to other subscribers to the service.
The popularity of Sha-mail has astonished Vodafone and the rest of the Japanese telecoms industry. J-Phone has added 2.2 million customers since the launch of the service in November 2000, propelling it from fourth to second place in the country’s mobile market.
Sha-mail did not represent a hugely complex technical challenge for J-phone, thanks to miniaturisation of digital camera technology and the increased processing power of handsets. Its major task was to convince handset manufacturers that integrating cameras into their products was worth their while.
Initially only Sharp provided the terminals, but it was soon joined by Sanyo, Toshiba and an array of other electronics giants. Consumers now have about a dozen models from which to choose. Vodafone, understandably delighted by its unexpected success, believes three key factors have worked in Sha-mail’s favour.
The first is the integration of the hardware, removing the need to connect an external camera to the phone. Second, Sha-mail is also simple to use, involving little more than a single button click to take the picture and a second to transmit it.
Third, it can be offered as an uncomplicated commercial proposition in much the same way as the text message. Subscribers know what they will be charged per picture, removing worries about connection times to the network or the quantity of data involved.
J-Phone is now upgrading Sha-mail to offer video clips, and its parent group will introduce similar services to Europe before the end of the year.
The irony of Sha-mail’s success is that it is competing directly with one of the world’s few operational 3G networks.
The company’s rival, NTT DoCoMo, has been offering 3G services since last year, but the take-up has so far been relatively disappointing. Even though the high data rates offered by 3G make it faster and more efficient at sending audio-visual content than Sha-mail, consumers have voted for the cheap and cheerful alternative.
The lesson of Sha-mail, like SMS before it, seems to be that users are keener on a mobile technology that delivers a simple, quantifiable service than one that promises the earth but is complicated to use.
The same would appear to be true in the UK. Detica, a mobile technology developer, last month published the results of one of the biggest studies yet into expectations of what 3G will deliver.
It gave a test panel of consumers the chance to use mocked-up versions of 3G handsets and try out the types of service the industry aims to offer.
Unsurprisingly, they were highly enthusiastic about the prospect of banking, booking tickets and watching videos via their phone handset.
And among the positives, one statistic stood out. Three-quarters of the 2,500 people quizzed by Detica said they would spend a maximum of 10 minutes learning to use a 3G service before abandoning it.