Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
As the end of the year approaches, the question many people are asking is whether 2010 will be as tumultuous as 2008 and 2009. Although economists are divided on where the global economy is headed next year and I don’t have a crystal ball, I am going to be brave enough to make five predictions for the mobile industry for year ahead. All of these relate to powerful trends that should continue regardless of whether Europe and North America slip back into recession as some experts fear they might.
The first, and probably the safest of my predictions, is that growth in the adoption of mobile broadband will accelerate in 2010. One of the reasons why this seems like a safe bet is that ongoing rapid growth in Europe, North America, Brazil, Russia and many other markets will be compounded by the rollout of HSPA networks by China Unicom in China and mobile operators, such as Bharti Airtel, in India, meeting the pent-up demand for broadband in the world’s two most populous nations.
At the same time, the cost of HSPA devices and services for consumers is falling inexorably, making mobile broadband more affordable in both developed and developing markets. For example, Infonetics Research in their Mobile Services report forecasts that the average revenue per user that operators generate from HSPA connections will fall by 50% by 2011. It is not surprising then that Wireless Intelligence forecasts an average of 13 million new HSPA connections every month in 2010 compared with 7.7 million in 2009.
My next prediction for 2010 is also largely immune to global economic trends: The mobile industry will rally around and move forward a common approach to offering voice calls and text messaging over the forthcoming Long-Term Evolution (LTE) networks, which are IP-based and don’t have native support for these circuit-switched services. The current technology fragmentation has the potential to negatively impact consumers’ voice service experience, including their ability to roam effectively on to other networks, as well as affect choice when it comes to available phones. The industry is becoming increasingly aware of this so 2010 will see the debate on the voice solution for LTE put to bed for good.
My third prediction isn’t quite as safe. I am hopeful that the global operator community will succeed in reducing the fragmentation in the mobile applications market in 2010. Although device manufacturers are increasingly using software as a means of competitive differentiation, both mobile operators and developers have a vested interest in generating economies of scale by creating standard platforms that will enable applications and widgets to run across many different devices.
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The Joint Innovation Lab, or JIL for short, a consortium of Softbank, China Mobile, Verizon and Vodafone, is one of the operator-led initiatives trying to tackle fragmentation. Using agreed-upon industry standards, such as those from the World Wide Web consortium (W3C), JIL is developing a middleware platform that will sit above the operating system layer on devices and will enable developers to write standards-based apps, or widgets, that will be accessible from most devices.
My fourth prediction also depends on cross-industry collaboration and the development of standards. In 2010, after years of promise, the market for embedding mobile connectivity in machines and other devices will take several major strides forward and begin to solidify around vertical sectors, such as health, transport and energy provision. The GSMA has identified three key steps the mobile industry needs to take to really move this high potential market forward. First, there is a need for a broad specification setting out what each vertical sector requires from embedded mobile chip sets. Module makers could then work to standardised templates and drive up volumes and drive down costs. As economies of scale kick in, we expect the average price of HSPA modules, which can be embedded in machines and devices, to drop by 50% in the next 18 months.
Secondly, as it just isn’t economically feasible to test new chips on mobile networks individually, the industry needs to develop a system for pre-certification of chips for the embedded mobile market. Finally, there is a need for a simple and low-cost means of provisioning these radio chips by operators. As many of these chips will remain relatively passive and only transmit bursts of data as required, the whole model of activating them on the network and charging for usage could and should be reconsidered.
My fifth and final prediction is related to my fourth. There will be a marked acceleration in the adoption of mobile technologies to lower carbon emissions, primarily by using embedded mobile modules to remotely control energy usage and reduce waste. In Europe alone, there are 109 million gas meters and 253 million electric meters. The addition of a wireless modem to each of these meters would give businesses and consumers finger-tip control over their energy usage and could lead to a dramatic reduction in wastage, as well as eliminating the need for physical meter readings by utilities. Of course, this kind of upgrade to the utilities infrastructure will take time and only a small proportion of these meters will be wirelessly enabled by the end of 2010, but I do see smart grids beginning to take shape in many more markets next year.
At the same time, the mobile industry will also move towards making its own operations greener by using more renewable energy, such as wind and solar, to power off-grid base stations, as well as preparing to adopt a universal charging solution for handsets that will remove the need to ship a charger with every new mobile device.
So, regardless of the fortunes of the wider economy, 2010 looks set to be a pivotal year for the mobile industry in many respects. What’s more, our sector should make substantial progress on several major fronts in 2010, further cementing the place of mobile services at the heart of the global drive toward a sustainable and prosperous future.
Dan Warren joined the GSM Association (GSMA) in 2007 as Director of Technology with a particular focus on helping the Association drive forward standards and technologies including High Speed Packet Access (HSPA) mobile broadband, Long Term Evolution (LTE) standards and IP Multimedia Subsystem (IMS) as well as providing internal technical consultancy to GSMA’s Projects and Working Groups. Prior to joining the GSMA, Dan worked for Vodafone and Nortel. Dan has a degree in Mathematics and a PhD in Applied Mathematics.