2005 : how about Europe ?

So 2004 is over, with WCDMA reaching the 16M user mark globally (up 60% since end of Q3), essentially thanks to three players : DoCoMo (migration speeding up in Japan), 3 (cheap voice sells and there's no better way of attracting stupid European men than displaying some soccer action) and Vodafone (at last at ease with marketing). As expected, the technology is starting to catch up with CDMA2000 (145M users end 2004, up from 100M in july, thanks to 107 operators covering 53 countries) : WCDMA just represents 10% of the total 3G customer base, but already 32% of Qualcomm's Q4 royalties (up from 12% one year earlier). And doc Jacobs is speeding up on HSDPA.
But Qualcomm are also investing in Europe, and a much clever way than they did with Dolphin (a genuine TETRAgedy). The cdma family is saved, Brew enjoys its own market like any Microsoft me-too product, and the battle may well move closer to the enduser. Look how Mr Q purchased Europe's Trigenix, a specialist in user interface. Look how they sell their mobile broadcasting MediaFLO techno in the US : it's all about user experience (no progress bar, less consumption, easy shuffle...), at a time when Orange marvel at the daily 25 mn their Orange Intense early adopters spend on live TV in France... but don't realise yet this may not be the best technology to perform this basic task.
Another interesting move, from Asia to America this time : the SK-Earthlink JV, a MVNO projecting 3M subs and a $2bn turnover by the end of 2009. Smart move from both players - a perfect match in a coopetitive world. The days of the merger with Mindspring long gone, Earthlink claims about 5M subs and its wireless MVNO experience shows a strong focus on business and data services. SKT has it all, plus the wireless expertise, the consumer focus and the entertainment touch. Wireless internet services represented 20% of their 2004 ARPU, almost 24% during Q4 (24%, that's about the percentage of the mobile users who had some mobile multimedia experience beyond sms in France !). Yet if they want to implement all their success stories in the US, SKT should expect some resistance from powerful lobbies (ie banks vs Moneta, music majors vs MelOn...). But they survived portability and managed to gain more than 400K customers last year. And succeeding in the US is a strong commitment.
How about Europe ? There was a time when its players ruled 2G. Before the 3G licensing madness, a few did have some vision but much too early and with the wrong priorities (remember Telefonica ?). So forget about an aggressive agenda in Asia or in the Americas. But who knows ? Sometimes it pays not to be the first to blow a bubble.


Wake up you should

"Mobile TV broadcasting consider I will", says master Voda. The dark side of the 3G force is taking over Japan : KDDI led in december net adds just ahead of DoCoMo while J-Phone stalled (less than one thousand customers added over one month - not much less humiliating than the first losses last summer). The score for wireless data access services stands now at 43M for i-mode, 17.5M for EZ Web and 13M for J-Sky. And when it comes to 3G, Vodafone trails with a meager 366,000 base - far behind FOMA (8.5M) and Au 3G (16.8M).
So ta-daa, here comes Vodafone Japan's answer : when 2-3 years ago, SKT would broadcast TV over 3G EVDO, and as MBCo and
TU media keep releasing DMB novelties, the closest thing to a buzzing laser sword master Voda can produce is a NEC V601N. Basically, a mobile phone coupled with an analog TV. Mercifully, the scotch tape happens to be honorably transparent.
If you look at the brighter side : Vodafone was bound to suffer for at least two years in this battle on W-CDMA early bird's home turf and against a cdma2000 operator. This very challenge was the ultimate test to spur its innovation drive, the heck of a wake up call, boosting the collaboration with DoCoMo on Super 3G. If it weren't for Japan, master Voda may have lost one more year (put aside the inevitable "lost in translation / lost in transition" time following the purchase of Japan Telecom) contemplating levitation stunts performed in a far far away archipelago. Stephane MOT


Neck plus ultra

Step by step, TU media is making DMB history :

  • SK Telecom launched their satellite last march but it took them almost a year to launch a preservice for early adopters - but don't blame this master of TTM for the delay : regulatory hurdles were tough (actually, SKT literally had to build their own arena to make sure the race would start before competitors were born).
  • for a week now, TU media preservice has been freely providing 3 video channels already familiar to June customers (Music with m-net, News with YTN and Drama with SBS Drama and MBC Drama) plus 6 audio channels. Ads have been running featuring a man pushing a shopping cart while his son's enjoying a show on the horizontally turned 5.5 cm screen of the Samsung SCH-B100 hanging from his father's neck. With mini mobile theaters, it's not about the audience doing some necking when the lights are out - it's about the theater itself ruining the owner's neck.
  • That's a 622 euro (850,000 W) theater and batteries are supposed to run for 150 mn of intensive usage : forget a LOTR marathon or handset subsidies (the latter forbidden by the government). And Koreans also have to invest in digital TV : already 15% own it today for a projected 48% end 2007 according to the Electronic Industries Association of Korea...* More devices (including in-car sets) will be available by may, when overall 14 video and 24 audio channels are broadcasted (the first 3 data channels are scheduled for 2005).
  • The access fees will then cost about 14.6 euros per month (20,000 wons) and SKT expects a 9.5 euro (13,000 wons) ARPU. Not too aggressive a business plan considering today's wireless internet ARPU for SKT's WI enabled handset owners (about 6 euros according to their monthly stats). SKT's partner in Japan MBCo launched their DMB service last october and claims a lousy 10,000 subscribers but they solely provided in-car devices and don't have the marketing power of Korea's leader. SKT expects 600,000 subscribers end 2005 and 5.6M end 2010. Not aggressive either : that's the equivalent of 3 and 30% of their customer base and it took much less time for them to equip 6M people with EVDO handsets.

How about cannibalization, then ? That's the big issue... but that's also the way this first mover is keeping its edge. Stephane MOT

* while we're at it : Korea remains at the top for broadband access among OECD members (24.08% equipment rate - to be compared to 15% for Canada, the distant runner-up). If you are to believe last NIDA poll, 69.3% of all Koreans already used the internet at home back in june 2003 (55% through xDSL and 9.5% through CATV), 46.3% managed more than one e-mail address (and 12.6% their own homepage - thank you Cyworld). Wireless internet usage reached 36.1% (over 83% for the 12-19 year olds), and among users 53.4% paid for premium sites and 21.2% did some m-shopping (74.5% for downloading stuff but already 14.3% for clothes, groceries or food).


mobile taichi

In Seoul, you may come across people on the street doing strange figures with their hands. To tell the usual taichi afficionado from the mobile phone addict, just check if that hand holds the new Samsung phone which allows the caller to "dial" by just waving the figure in the air. Imagine mobile gaming applications, from distant "kaibaibo" battles to dance contests. Or just imagine yourself at rush hour in City Hall station, darting through the crowds while dodging uppercuts (sorry pal, just completing my "0"). Stephane MOT


Spamy sauce

If Monty Python made spam famous, Korea made it infamous for breaking all records on the internet variety - even on the go (last year, "mobile spam" outscored "classic spam" by a 2 to 1 ratio). Lycos, now owned by Korea's leading portal and e-mail service provider (Daum), released a new spam killer : a screensaver designed to overwhelm the spammer's servers by distributed denial of service while you're away from your computer (over 30,000 users so far). The concept is called "make love not spam", but could be dubbed "spam the spammers". Stephane MOT


Wireless*Mart - everyday lo-carb 3G

Shall I switch to "Super 3G" or keep my old and unproved "3G W-CDMA" ? How about this pack of "HSDPA (hotspot - don't pay attention) 3G" ? Not to mention ye olde "3G TDD"... Shopping at Wireless*Mart's getting tougher by the day lads. Remember the days when marketers just had to focus on household operators under 50 kbps ? Now they realize they can empower other purchasers or why not do the job themselves. Hey, they even managed to sell that lousy techno of theirs, 802 dot something, direct to the enduser ! Actually, IT players would love to carve a huge chunk outta some mobile operator's warchest (even after the broadcasters' feast, leftovers may remain quite attractive). Cruising in between as usual, Qualcomm try and take a bite at each dish. This time, they won't have enough time to go solo, cooking their homemade lo-carb nextgen soup while feeding the competitive norm with proprietary ingredients, slowing the process and collecting fees from both sources. This time, they won't have a promising country's government invest in their company and create an artificial CDMA island at the very gates of Japan and China. Two penny 4G won't sell. Anyway, it doesn't look like it's gonna be any more "universal" than the previous generation.
When you start putting "MAX" or "SUPER" on your packaging, that's the beginning of the end : your product is entering the magical kingdom of washing powder and biscuits. Need a "search enzyme" for your portal ? Meet Kraft, Unilever and P&G.
Stephane MOT


Chips and cheats

Youngsters must leave their videophone before entering the movie theater (disturbing ringtones are no longer the issue - illegal taping matters now), and metal detectors will prevent more fraudulent innovations during national exams (no wireless device left behind)... welcome to 2005 Korea. The good news is you won't hear Dubya debate anywhere nearby till Karl Rove masters the craft of telepathy. Stephane MOT



Visited Little Potala near Zhongdian. Got blessed by the main monk - a close friend to the Dalai Lama, even if he meets him less often than the Hollywood crew. Heard him hummmmmmmmm his beautiful mantra. No visitors today. Quiet site. Splendid view on the village below, a few ancient houses uphill and the traditional GSM totem towering over the whole area. A young monk is climbing the stairs while dancing and talking to someone over his mobile phone. Not far away, a Tibetan girl's own amulet starts ringing a polyphonic elevator-tailored version of some George Michael's tune. For those who wondered about coverage in Paradise. Dial M for mantra.


Why, bro ? WiBro !

Doc Jacobs plays it the Murdoch way : Qualcomm purchased a 700 MHz TV channel in order to launch multimedia broadcasting services using his FLO (Forward Link Only) technology. Why dub a techno "flaw" ? Ask William Gates III : aftersale services embedded in the very name - Microsoft should have made such a brilliant move much earlier.
This side of the Hangang, SK Telecom will proceed with their DMB agenda (launch mid 2005), and announce WiBro services around mid 2006. Why bro and not max ? Ask Craig Barrett : intel's CEO his trying to have LG by his side and see both standards converge the US way.
The key to standardization remains division.

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