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Deliverable Number: D17
IST-2001-32125 FLOWS Deliverable Number: D17 Analysis of the Market for Multiple Standard Wireless Communications
Contractual Date of Delivery to the CEC: Actual Date of Delivery to the CEC: Author(s): Participant(s) Workpackage: Est. person months: Security (Pub., FP5, IST, Rest., or Int.): Nature of Deliverable (R, P, D, or O): Version: Total number of pages (including cover): (partner short names):
31 October 2004 15-11-04 Stewart, J, Lee, L, (UEDIN); Eskedal, T., Natvig, T. (TELN) UEDIN, TELN WP7 14 IST R 7 83
Abstract:
This document reports on research done in Workpackage 7 activity 2 on the processes of uptake of multi standard radio access systems. Since these devices and the services they make possible do not yet exist, it has been necessary to look for other sorts of evidence on which to base assessments of the prospects of this technology. The report therefore includes a range of empirical studies of existing adoption and innovation arenas, and analysis of recent trends and developments in convergent technology and markets, from which we can begin to make more robust assessments.
Keyword list: Convergence, 3G, WLAN, telecommunications markets, IT Services, wireless in education,
multi-standard devices, innovation in ICTs
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DOCUMENT HISTORY
Date 18-1004 1-11-04
Version 1
Comment Early draft
Editor J Stewart
Affiliation UEDIN
Complete draft assembled with all contributions Minor corrections
J Stewart
UEDIN
2-11-04
R Williams
UEDIN
2-11-04
Addition of conclusions
J Stewart
UEDIN
3-11-04
Minor changes
R Williams
UEDIN
4-11-04
Reformating and additions
J Stewart
UEDIN
5-11-04
Reference reformatting
Lee/Stewart
UEDIN
12-1104
Amended according to Reviewers comments
Lee, Stewart, Eskedal
UEDIN/TEL N
DELIVERABLE REVIEWERS
Name of Reviewer 1st Reviewer 2nd Reviewer Luis M. Correia
Date Reviewed 2004/11/12
Affiliation IST-TUL
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EXECUTIVE SUMMARY
This document reports on research done in WP7 Activity 2 on the processes of uptake of multi standard radio access systems. Since these devices and the services they make possible do not yet exist, it has been necessary to look for other sorts of evidence on which to base assessments of the prospects of this technology. The report therefore includes a range of empirical studies of existing adoption and innovation arenas, and analysis of recent trends and developments in convergent technology and markets, from which we can begin to make more robust assessments. The empirical studies include a study of the public WLAN market and wireless education in Universities, a study of smaller application developers and IT services companies, a review of current technology and market trends, and investigation of the business case of the convergence manager for mobile operators and MVNOs. The study suggests that the convergence manager concept will certainly be in demand, and is indeed already on the market. Key factors shaping uptake are the integration of IT services with mobile telecommunications, and the role of IT services companies in controlling this market. Strategies of the operators to maintain control in the mobile market are clearly a defence against this, and may have to be tackled. Development of VoIP, and integrated messaging are key factors in the convergence of telecommunications and IT systems, and there appears to be a market for this, although one that may develop slowly. WLAN development in public and private spaces is a central part of this evolution. The environment for the Uptake of FLOWS is dependent of decisions that are difficult to predict, such as that by BT to move their networks to an all IP system, and to integrate operations as an MVNO, with capabilities in fixed network and IT services. This move has set an important lead, and the response of customers and other network operators to this is crucial. The study raises a number of crucial issues, such as the way that mobility is valued, how billing is conducted in a multi-standard environment, and whether mobile operators should be limited in the way they control and sell devices. It also suggests a number of paths for taking the development of simultaneous use of standards technology to demonstrator and market status.
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TABLE OF CONTENTS
1. 2. INTRODUCTION ...............................................................................................................11 REVIEW OF CONCEPTS FROM FLOWS D12................................................................13
Convergence .......................................................................................................................... 13 Five Driving Visions ................................................................................................................ 14 Mobile Internet v. Rich Voice Plus .......................................................................................... 15 Other Key Issues .................................................................................................................... 16
2.1 2.2 2.3 2.4
3.
CURRENT TRENDS AND ISSUES ..................................................................................17

Wireless Standards and Intrastructures.................................................................................. 17 Broadband .............................................................................................................................. 20 Fixed-mobile convergence agenda......................................................................................... 20 BT 21st Century Network........................................................................................................ 21 IT Services and VoIP.............................................................................................................. 22 User factors, Applications and Devices .................................................................................. 25 Instant Messaging a killer convergence application............................................................. 26 Music to Mobiles..................................................................................................................... 27 Conclusions ............................................................................................................................ 28
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9
4.
WLAN AND UMTS MARKET IN NORWAY SWEDEN AND FINLAND..........................29

Introduction............................................................................................................................. 29 Public WLAN market............................................................................................................... 30 UMTS market ......................................................................................................................... 31 Conclusion.............................................................................................................................. 32
4.1 4.2 4.3 4.4
5.
PUBLIC WLAN CASE STUDY: BENUGO/BROADSCAPE............................................33

Introduction............................................................................................................................. 33 Methods.................................................................................................................................. 33 Public WLAN Background ...................................................................................................... 33 UK PWLAN marketplace and B2C WISP business models.................................................... 35 Broadscape/Benugo: The Virtually Free for the Third Space.................................................. 36 Conclusions: Implications for FLOWS .................................................................................... 41
5.1 5.2 5.3 5.4 5.5 5.6
6.
MOBILE AND WIRELESS APPLICATIONS IN EDUCATION CONTEXTS: A CASE STUDY OF WIRELESS NETWORK PROVISION AND USE..........................................42
Introduction............................................................................................................................. 42 Background: E- and M-Learning............................................................................................. 43 Wireless at the University: A vision for m-learning?................................................................ 44 Components of e- and m-learning context.............................................................................. 45
6.1 6.2 6.3 6.4
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End-User Perspectives........................................................................................................... 47 Conclusions: Implications for FLOWS .................................................................................... 50
7.
INNOVATORS AND OPERATORS: A CASE STUDY OF APPLICATION DEVELOPERS ..................................................................................................................51

Introduction............................................................................................................................. 51 Company outlines................................................................................................................... 51 Technology Innovation and Service Innovation ...................................................................... 52 The Market for Mobile and Wireless applications ................................................................... 53 Operators as innovation partners and suppliers ..................................................................... 54 Operator Control and Conservatism ....................................................................................... 55 Other Relationships ................................................................................................................ 57 Opinions and attitudes towards convergent systems ........................................................... 57 Mobile Internet and Rich Voice............................................................................................... 58 Summary ................................................................................................................................ 58
7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10
8.
USE OF MMS IN OCCUPATIONAL GROUPS ................................................................60

Introduction............................................................................................................................. 60 Research ................................................................................................................................ 60 Conclusion.............................................................................................................................. 61
8.1 8.2 8.3
9.
BUSINESS OPPORTUNITIES FOR THE USE OF THE FLOWS CONVERGENCE MANAGER (CM) ...............................................................................................................63
Introduction............................................................................................................................. 63 Benefits to End Users............................................................................................................. 63 Alternative locations for the CM.............................................................................................. 64 CM interfacing several operators' PLMN domains.................................................................. 64 CM in the domain of one multi-network operator. .................................................................. 69 Conclusion.............................................................................................................................. 70
9.1 9.2 9.3 9.4 9.5 9.6
10. DISCUSSION.....................................................................................................................71
10.1 10.2 10.3 10.4 10.5 10.6 Introduction............................................................................................................................. 71 Innovation Process ................................................................................................................ 72 Organisational users - clipboard technicians and professionals ............................................. 74 Simultaneous use ................................................................................................................... 74 Costs, pricing and termination ................................................................................................ 76 Control of the handset ............................................................................................................ 76
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11. SUMMARY AND CONCLUSIONS ...................................................................................78 12. REFERENCES ..................................................................................................................80
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LIST OF FIGURES
Figure 2-1 Five Key Poles of Attraction in Networked ICTs ........................................................... 14 Figure 3-1 Paths to the Convergence and Coexistence of Standards? ........................................ 19 Figure 4-1: WLAN Hot spots end of 2002 (series 1) and 2003 (series2)........................................ 30 Figure 4-2: Distribution of WLAN hot spots on various sites ........................................................ 31 Figure 5-1 Number of users per two hour slot ................................................................................ 39 Figure 6-1. Components of m-learning environment...................................................................... 45 Figure 8-1 Distribution of daily use of MMS by various occupations ........................................... 61 Figure 9-1 CM placed outside the border of different operators domain...................................... 65 Figure 9-3: CM acting as a MVNO with its own customer database.............................................. 65 Figure 9-4: Both infrastructure owners and the PLMN selector have customer relations. ......... 68 Figure 9-5: CM in intra domain for one operator............................................................................. 69 Figure 10-1 Social Actors shaping Multi-standard Access ............................................................ 71
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LIST OF TABLES
Table 5-1 UK PWLAN Overview ...............................................................Error! Bookmark not defined. Table 5-2 Repeat use (Period May-November 2003, both Benugo hotspots)Error! Bookmark not defined. Table 5-3 Benugo customer survey: mobile/ wireless technologies (Nov, 2003)Error! Bookmark not defined. Table 6-1 MLearning Pedagogical and Technological Characteristics Error! Bookmark not defined.
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LIST OF ACRONYMS
3GPP 3G AP API BWA CDMA CS ESTI CSCW GGSN CM GPRS GSM HIPERMAN HSDPA ICTs IP ITU-T LAN MNO MVNO PDA PDG PLMNs PS Ofcom QoS RT SME SMS SP (UTRA-) TDD UMTS UTRA VoIP VoWLAN 3rd Generation Partnership Project 3rd Generation Mobile telephony standards developer by 3GPP and 3GPP2 Application Package Application Programming Interface Broadband Wireless Access Code Division Multiple Access Circuit Switched European Telecommunications Standards Institute Computer Supported Cooperative Work Gateway GPRS Support Node Convergence Manager General Packet Radio Service Global System for Mobile Communications High Performance Radio Metropolitan Area Network High Speed Downlink Packet Access Information and Communication Technologies Internet Protocol International Telecommunication Union Telecommunication standardisation sector Local Area Network Mobile Network Operator Mobile Virtual Network Operator Personal Digital Assistant Package Data Gateway Public Land Mobile Network Packet Switched Office of Communications Quality of Service Real-Time Small and Medium Size Enterprise Short Messaging Service Service Provision Time Division Duplex Universal Mobile Telecommunication System Universal Terrestrial Radio Access Voice over IP Voice over Wireless LAN
HIPERLAN/2 High Performance Radio Local Area Network Type 2
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WAP WiFi Wi-Max WISP WLAN WMAN WWAN
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Wireless Application Protocol
Wireless Fidelity Forum to promote standardisation and uptake of IEEE 802.11 standards Name of forum that promotes IEEE 802.16 and ETSI HiperMAN wireless broadband standardisation and uptake. Wireless Internet Service Provider Wireless Local Area Network Wireless Metropolitan Access Network Wireless Wide Area Network
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1.
Introduction
This report presents the studies done in Work Package 7 part 2 (WP7.2), and is entitled Analysis of the Market for Multiple Standard Wireless Communications. The first report of WP7, D12 focused on the macro scale trends shaping the development of telecommunications technology, services and industry, using interviews with operators and regulators, and examined the convergence of a range of different systems [StDo03]. This deliverable focuses on processes of adoption, and the uptake environment for multiple standard wireless communications. As such, it presents cases of existing environments of adoption, and tries to understand some of the dynamics and trends as experienced at a rather local level. This is complemented by a review of recent trends, according to perspectives developed in D12. Rather than focusing narrowly on the idea of simultaneous use of standards using MIMO, the study looks at a broader concept of multiple standards communication and convergence of applications and systems that must develop if simultaneous use will be implemented. A range of different studies were considered and attempted in Work Package 7. The selection of domains and cases for study was underpinned by a number of considerations: 1) the goal of looking at the processes of adoption in arenas of technology uptake; 2) the desire to gather knowledge from areas outside the dominant discourse on telecommunications convergence, 3) considerations regarding ease and feasibility of access to conduct interviews. The range of studies is designed to develop an overall picture of the market, current development and trends and factors that may shape its further evolutions. The concept of uptake is rather broad, but here is considered to be an active appropriation, rather than passive consumption. The early stages of technologies entering the market always consists of local experiments with market intermediaries, and the active involvement of user organisations and individuals [WiSt05]. Thus the cases attempt to look at how new telecommunications services are being taken to market, how users and uses are constructed by intermediaries, from business and technical visions, and how these are developed through the actual processes of engagement with customers and other users. This report presents cases from the perspective of a Telco, a public WLAN network operator, a group of applications developers, and a University. An attempt was made to do a survey of new users of 3G phones, but this was never completed due to low response, a common problem with consumer market research based around a new technology. The results of these interviews, combined with other interviews done with professionals in a number of major telecoms and network firms are also used to examine some of the recent trends and developments. After reviewing key ideas from FLOWS D12 [StDo03] (Chapter 2), Chapter 3 surveys issues from 2003/2004, in the development of technology, standards, visions, and usage of telecommunications, with UK and world sources. Chapter 4 offers a brief review of the current state of wireless telecoms development in the Nordic countries, one of the regions most advanced in terms of uptake, innovation and market structures, where one would expect adoption of multiple wireless systems to be very early. This is followed by 5 chapters looking at experiences ideas of particular user groups, where the user is considered to be users of telecommunications technology, as operator, service organisation or application developer. Chapter 5 is a case study of two public WiFi business models, situated within a review of the market for public WiFi. It includes an examination of the business models, and experiences from locations where services has been made available. Despite evolution of the public WiFi business there is still a degree of uncertainty over future profitability, ownership and charging models. There are a range of Application Domains where networked IT is being deployed, such as the Networked Enterprise, E-Health or Mobile Entertainment. One of the most interesting areas is in education, in particular higher education, where IT has long been held out to offer considerable social benefit The combination of young, literate users with peripatetic lifestyles, information and communication intensive activities, and considerable investment in IT should be a important arena for advanced wireless services adoption. Chapter 6 reviews literature and experiments in mobileeducation, and presents results of a case study conducted at Edinburgh University among decision makers and MBA students on the development of e-education and wireless access. Chapter 7 looks at an area of innovation close to the user market that of application developers. This presents the results of interviews with directors of a number of smaller Scottish companies developing technologies and services based on cellular and wireless systems. It investigates their experience of the existing innovation and adoption environment, how they sell their products, their 15-11-04 Page 11
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dealings with operators, and expectations of future developments. This highlights the power of the operators and the way that innovations are made in the market place rather than laboratories. In particular it introduces a discussion of IT Services, and use of mobile communications as an extension of existing IT systems, by clipboard professionals and technicians. Chapter 8 summarises a study done by Telenor on the voluntary use of MMS by some of these clipboard technicians, in three occupational groups, shows the important of end user innovation in finding unpredictable uses for technologies when users are given a free hand to innovate. Chapter 9 examines the business case for multiple standard service using the Convergence Manager (CM), prepared by Telenor, considering the costs and benefits of the business from the perspective of a mobile operator (MNO) a Mobile Virtual network Operator (MVNO) or a multiple service broker. It concludes that the CM is likely to be implemented by an existing mobile operator, or a market player with a strong background in network services, acting as an MNVO. Finally Chapter 10 brings together these findings to look for clues as to the future potential of multistandard wireless systems.
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2.
2.1
Review of concepts from FLOWS D12

Convergence
FLOWS D12 [StDo03] presented a framework of ideas for understanding environment for the uptake of multi-standard wireless systems. Primarily, it focuses on the concept of Convergence at the level of technology, communications and industry, examined according to dominant driving visions, and the some of the key industrial protagonists in the convergence movement. In particular it highlights the convergence of cellular (mobile) and fixed-line telecommunications businesses and the entry of the IT industry as major group of players in shaping the future technology and business environment, and to a lesser extent broadcasters and consumer electronics firms. Convergence is considered critically, not as a predetermined conclusion, but as a result of strategies, contingent events and technical possibilities, with certain configurations of technology the result of actors attempting to take of maintain control or existing and new markets. In particular, the control of the end user device was shown to be critical to future convergence. Convergence can happen in many ways, and in many situations multiple standards access may not make sense technically, economically, competitively or from a usability standpoint. While many firms talk about convergence, few actually make it central to their strategy.
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2.2
Five Driving Visions
Long and medium term innovation is oriented by technical and social visions which challenge existing paradigms of social organisation and technical configuration, as well as current structures based on existing technological paradigms and entrenched interests and behaviour of firms and technology users. We can understand the strategies of firms by identifying poles of attraction that many diverse players alignment themselves and their technology around. These represent market opportunities and predicted technological trajectories. The dominant poles are those that at any times attract them most attention. There is always a tension over trying to align to too many of these poles, and not focusing on particular short term markets, but equally, long term strategies are judged on how well they cover the dominant expectations of opportunity. Four key technology-based poles of attraction were suggested as driving innovation and investment in the markets for which multi-standard radio devices are relevant, to which is now added a fifth. These are Interoperability, the engineer and technology vendors vision of the inter-working of information and communications systems at all levels, from radio access, through accounting and authentication, to content formatting. In particular this includes the idea of technology neutral network access, often put as Always Best Connected. The driving force behind this vision are technology firms looking for synergy across a range of business sectors, from telecoms to broadcasting to IT Services, and firms pushing towards all-IP networking. Interconnection is putting interoperability to work in a commercial environment, which in many cases may not be desirable, or only implemented under pressure of regulators, or at high costs for end users. Here the concept of Always Most Profitable is the investors response to the engineer. Rather than providing open and transparent interconnectivity, Telecoms operators in particular have an interest in creating and selling closed systems in which they can profit from supplying customers with a bundle value added of services.
Figure 2-1 Five Key Poles of Attraction in Networked ICTs The Wireless World is a vision spearheaded by the technology firms and operators in the wireless sector. It has two expressions, first the operators who envisage the mobile phone, or data device running on public networks taking over from fixed line services among a considerable part of the consumer, if not commercial population. This substitution is growing considerably, and is the norm in many developing countries, and the spread of third generation systems can bring multimedia services to a broader market than fixed line systems, especially in the age of personal portable communications. The aim of this is to maximise profits for operators. For wireless system and many IT firms, the wireless world vision is broader it is connecting everything by wireless technologies. This includes the idea of multiple spheres of connectivity, including personal area networks, local area network connected to local broadband connections, and a range of wide area wireless systems. Here profits flow to network and device equipment manufacturers and those who use them to offer value 15-11-04 Page 14
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added services and content. These two alternative views of the wireless world are of course in tension. This wireless world concept is complemented by the ubiquitous or ambient computing vision, driven by the IT industry, which sees networked ICTs embedded in many objects, and often relying wireless technology. Here the object is very low cost communications, with profits for device makers and applications providers, with much of the communication between machines, not people. Finally, the Personal Device vision is attracting many industrial players consumer electronics, IT hardware and software firms, and content producers as well as end users. This is a key trend, moving ICTs from communal ownership and use at fixed locations, to the individual in multiple locations. This creates a multiplication of the market for devices, and the need for ubiquitous communications, as well as the emergence of a host of social questions. The mobile phone is the benchmark device for this trend, becoming a key social and economic lifeline for many people, and the most symbolic personal technology of this decade. However we are seeing the re-emergence of the personal music player as a key battleground, where there is an established market, considerable innovation and controversy over delivery and content rights. The personal games machine market features many of the same industrial players and is arguably of equal importance today. Mobile IT devices are also a growing market, and many eyes are on personal multimedia and television devices. Convergence of devices is a key theme, but different market trajectories are likely to see parallel emergence of networked devices centred around a number of different core uses. In terms of wireless communication it is the connectivity of these devices to other personal devices, to local (such as home or office) ICTs, and services and content in the Network- that is the challenge. The possibility of a unified or diversified set of access technologies and service providers, and the degree to which wireless operators will be able to increase profits from these devices is a major question. These visions are articulated and used by all the active supply side players we find in the market, as competition, regulator pressure, user innovation and saturation of existing markets forces them to look for opportunities to innovate. Ubiquity and mobility are two key terms of rhetoric are often related to these visions, capturing the ideas of individuals being able to connect anywhere, but raising the question of how we value of ubiquity, how will it be provided and who will profit from it.
2.3
Mobile Internet v. Rich Voice Plus
A model of what end users want is at the bottom of a key difference in the way these visions are linked by industrial players. D12 identified two conflicting visions of technology and business evolution: the idea of the Mobile Internet, contrasted with Rich-Voice plus model. These visions shape how convergence may occur, at a technical and commercial level. The Mobile Internet vision is based on wireless technologies offering a last link to the Internet, which is not just a network technology, but a vast network of people and application, and a particular model of doing business and getting access to information. Key features include open development platforms on devices and services, an end-to-end application model, network transparency and user led innovation. The Internet has been an undoubted success, in terms of social benefits, although challenging to many business models, especially content control and ownership. Wireless technologies are just the latest development, to allow ubiquitous access to this network. This vision is contested by many mobile phone operators, who rightly claim that the mobile phone has been an even bigger market success, and embodies what most consumers, and many commercial users want: reliable, ubiquitous, simple, managed services based on voice and simple message communication, which most people are willing to pay for. The evolution of wireless communications is an extension of this, offering multimedia content and communications, location services, an electronic purse to the individual, and a micro-payment billing system offering content and service providers a way of making money. They characterise the internet as chaotic, open devices as a playground for crackers and spammers, a recipe for user confusion. Far better to use the internet technology, but keep it hidden from users. In this model, individual services ca be developed and sold at a market rate, and key value will come from offering paid-for on demand services based on location and time information, not broadband access to most internet information sources. The mobile internet proponents claim that technology will be able to delivery this quality of user experience, without the dead hand of bureaucratic telecoms operators controlling innovation and extracting a connection tax. The ease of use of mobile handsets is also highly questionable, as are claims for simple tariff systems! Many reports have been written considering scenarios for the different degrees to which either future vision of convergence emerges. Much of the analysis is over how much power network operators 15-11-04 Page 15
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will manage to retain, over the user device, and thus the gateway to the user, and the degree to which an inevitable multiplication of wireless access system will be integrated under the control of major firms, or as commodity connectivity. Technology firms are betting both ways cellular technology convergence with broadcasting and multicasting for the Rich Voice market, and WLAN-cellular integration for business market. It is impossible to keep these market separated. Private WLAN investment is very buoyant, new wide area radio systems may challenge existing cellular market. How fast or slowly will standards and market players emerge with successful half-way house business models? Indeed I-mode appears to do just this in the Japanese market, can this be replicated elsewhere? The development of VoIP technology and business and regulation boosts the case for voice just being another sort of data.
2.4
Other Key Issues
D12 concluded that there is likely to continue to be a proliferation of standards, which opens the space for integration or convergence at many levels, including systems that provide multiple radio access, either on the device, or integrated in the network. The slow move to all IP networks, new spectrum becoming available through reallocation or trading, and the spread of new sorts of radio interface especially aim at broadband internet access opens new possibilities for integration of radios, from user and operator perspectives. However legacy systems in radio access and switch circuit networks are likely to exist for many years, creating a considerable market for technologies that ties together disparate systems, as well as those that aim to create unitary systems. The dominant trend in the market is for reducing costs of operations, and that includes telecommunications and IT costs, as well as using technology to reduce other operation costs. There are several ways for costs to be lowered: by implementing new user technology, or through service competition in the market place. Currently falling costs of telecommunications services can stimulate innovation as it becomes cheaper to use the network for new use, but it can also reduce investment in new technologies by users aimed at reducing those costs. One part of this study is to identify industrial actors who have an interest in investing in convergence technology. The MVNO was seen as a crucial market innovator a commercial player without investment in a particular network access system, in whose interest it would be to develop a multistandard always best connected service to customers who primary interest is access to applications and systems, rather than simple connectivity. What sort of firms will MNVOs be, how will regulators promote them, and how will they relate to operators? How important is the MVNO model to mobile operators themselves, as a way of commercialising their access infrastructure, and entering into new markets where they may have not infrastructure.
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3.
Current Trends and Issues
Since the writing of D12, there have been a number of developments in the market that move on our understanding of how multi-standard access might develop, or is indeed being adopted now. Not only have devices with multiple radios been demonstrated, but WiFi-3G services are on the market and convergence of fixed and mobile telecommunications is getting serious attention. There are a many other trends and events that will have an influence on the uptake of multi-standard radio access. this chapter discuss some of these trends and with examples in particular from the UK market. The following chapter looks at the development of telecommunications in the Nordic Countries. This review was done though the literature and business press, and interviews with a number of respondents. These included the respondents from the applications developer case (Chapter 7), those interviewed for WP7 part 1, and senior managers in various positions in BT Retail, T-mobile PWLAN division, IBM, Cisco, and the UK regulator Ofcom. Reports of company intentions are the basis of much of the review of trends, but must be view with scepticism, as press releases outlining plans, deals and results are primarily intended to create publicity, influence investors and intimidate competitors.
3.1
Wireless Standards and Intrastructures
Many of the expectations of future wireless technology needs were based on the roll-out and uptake of services based on 3G technologies. However this was delayed for a number of reasons and only in 2004 have pilots become early services in many countries. Still uptake is slow, but operators initial strategies for selling are becoming clearer. In the UK and other European countries, data access for business professionals from a laptop has been the leading market. In the meantime the 3 service from Hutchinson has attempted to break into the consumer market, but has had to focus on competition of price of minutes. Nonetheless estimates suggest at least 600 000 UK subscribers [Ofco04a], and encouraging sales of sports video clips. The public WLAN hotspot market has also grown, with a number of trends. Primarily, operators have moved into building or reselling public wireless hotspots and user subscriptions. From being a competitive technology to 3G networks, it is now seen as a key part of the bundle of services that an operator must be able to offer, especially to the travelling business people. This has clearly opened a convergence space based on laptops having two radio access systems. In Japan NTT DoCoMo and NTT Communication have offered joint cellular-WiFi services since 2003 [SrKo04]. T-mobile is the only UK operator to build both a hotspot network and a 3G network, and are following their own US lead in selling bundled mobile and hotspot access. The reason for doing this is to attract business customers with a more attractive package than that offered by the firms dominating the UK business market, O2 and Vodafone. However Vodafone are now offering a hotspot service too, reselling a white label service (as a hotspot MVNO), and BT are entering reselling cellular access as a cellular MVNO. With 3G networks not delivering some of the promised benefits, in particular broadband Internet access that many are now accustomed to in the office, a multi-standard service would appear to be necessary. However, operators are not providing dual radio system data cards1, just the 3G card, and a software dashboard to switch between 3G, public and private WLAN services. They are riding on, or may be suffering from, the independent success of the Intel Centrino wireless laptop, where many laptops already have a 802.11b/g card. However the 3G cards are data-only, one could say that they are crippled as regards a fully converged service. VoIP over public WLAN using a laptop is a viable and growing technology, but with a 3Gdatacard hand over of that voice call to the cellular network is not possible. Public hotspots in private spaces have continued to be deployed, but with firms operating networks stumbling in the face of lack of market, and growing number of locations offering access for free or through easily installed and independently operated equipment. One hotspot technology firm complained of the difficulty of making money when so many people give access away for free. Other respondents have suggested that operators do not make money on the networks, but they are essential to maintain market share. Certain locations are successful, such as hub airports, but
Although vendors such as Ericsson and Nokia sell these to the general public, and have develop systems for authenticating on the WLAN using the cellular system.
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operators are reluctant to give indications of rates of use elsewhere. Research from IDC in 3Q 2004 in European suggested that 25% of a survey of professionals had connected at least 10 times to a hotspot in the last 12 months [Kern04]. These issues are investigated in Chapter 5. Nonetheless, as a technology, WLANs have been very successful in private spaces where the public require access, and of course deployed in homes and enterprises. Three key drivers behind the success of WLAN are 1) the marketing by Intel of WiFi-enabled laptop computers, 2) the growth in fixed broadband internet access, and 3) investment in WLAN facilities by organisations, from offices to Universities2. Many laptops have wireless LAN facilities built in, so encouraging use. Cheap broadband access is complemented very well by cheap WLAN devices in the home and small office environment, where multiple computers are increasingly the norm. Enterprises and organisations are investing, to save costs on wiring but also to allow for hot-desking, and flexible access by employees and students. Universities are important investors, as a later chapter investigates. The deployment of WLAN in enterprises, and to a lesser extent at home, has opened the possibility for connecting phone systems, with WLAN enabled phones3 and VoIP. A number of firms specialising in networking equipment saw this as a potential new market, and a way to encourage investment in new networking equipment. Nortel, for example claim to have saved considerable costs by switching its phone system to VoIP and wireless phones on the internal data network. Not only was this a product that was aimed at replacing existing PBX systems, but also at integrating cellular phones into a firms private network creating a phone centre service that would save the costs of cellular charges when calling from within a firms premises, and allow users to have one device. In addition this device could have a single number, or name, accessible from a private or public network. However it is unclear how well this technology has been selling. One interview respondent suggested that competition in mobile telephony had brought down costs of calls and subscription in a way that it is making capital expenditure in new IT equipment look uneconomic. 2003-4 saw the demonstration of a range of devices with WiFi, 2G and 3G radios, from handset vendors such as Motorola, and silicon vendors such as TI and Philips. NTT DoCoMo announced they were trialling 3G-WiFi handsets, and in November 2004, BT too announced a WiFi-GSM phone product. However achieving seamless handover of voice calls between radio systems is not possible yet, although some firms claim it to have implemented it4 Voice over IP on 802.11 is working5 and so does handover from access point to access point. There is currently a situation where seamless voice handover between bearer standards does not work, but data sessions where seamless handover is not important can be done, opening up the possibility of simultaneous use. One of the delays fundamental to implementing 3G providing handover between 3G and 2G systems appears to be been largely solved. 802.11/WiFi standards have also been developed to solve many of the problems of security that worried corporate customers, opening the market for greater expansion. Integration of WLAN standards in 3GPP is also progressing, creating framework for integrating the technologies from the fixed and mobile domains. However, WLANs still have considerable problems with high power consumption, and concern over limited number of channels available on 2.4GHz bands. Uptake of 5GHz, 802.11a, or HIPERLAN/2 technologies has been very low, despite the US government opening up more spectrum for this use. 802.11b/g products still provide the functionality that almost all users need, with greater range. Economies of scale in product have also made this equipment very cheap. Another technology is also showing potential in the fixed-mobile voice device market, and that is Bluetooth. This will be discussed in a later section The upturn in fortunes and morale in the telecommunications and IT industries during 2004 has focused considerable attention on new air interfaces, from IEEE standards committees, and
. Global Wireless LAN hardware revenues reached $719.5 million in 2Q04, up 3% from 1Q04, and is expected to grow 9% to $786.2 million by 2Q05, according to Infonetics Research [Info04b]
3
Leading firms in WiFi phone devices and network management include Airespace and Spectralink, whose products are resold by many major telecoms vendors.
4
For example Avaya, Proxim and Motorola are working to implement a seamless mobility enterprise solution [Avay04].
5
Handover between access points of the same vendor works at least, but unless handover between points of various vendors is tackled this is a serious drawback. (e.g. [Meck04]).
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extensions and evolutions of GSM, CDMA and 3G systems. This has been driven by the technology firms behind the standards, and pulled by the growth in Internet usage, especially the broadband access market, and the realisation that existing 3G mobile systems will probably not be able to offer the sort of network access for data that people have grown to expect from fixed broadband access. 3GPP has released new version of UMTS standard (R5) with an air interface with 4-5 times cell capacity, and up to 14Mbit/sec peak data rates (HSDPA High Speed Downlink Packet Access) [Wilt04], as have 3GPP2. Broadband wireless internet access is behind the IEEE 802.16 and 802.20 initiatives, and the deployment of systems based on 3GPP TDD standards. The WiMax initiative to develop fixed wireless broadband has the very important backing of Intel and other firms that are interested in the market for devices that will use the system, rather than supplying or operating the system. There are also projects developing completely new 4G air interfaces. There are thus multiple paths to deployment of BWA system, fixed or mobile, and it can be deployed in competition or as a complement to existing mobile systems (Figure 3-1). The existence of complementary radio access systems, and their ownership is one of the basic question in understanding the uptake of FLOWS. One of the key arguments against convergence around access system interworking is that a single standard or family of standards is the easiest and most efficient way of providing radio access, compared to multiple standard systems, especially when it comes to implementing more advanced features, such as seamless hand-over of voice services. In the medium term these types of system are likely to remain separate, with new BWA systems built by firms that do not have advanced cellular networks.
Figure 3-1 Paths to the Convergence and Coexistence of Standards?
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3.2
Broadband
One of the key economic costs in the wireless deployment model has traditionally been the installation of the base station and provision of fixed backhaul. The development of cable, xDSL and wireless broadband systems, and their rapid uptake in developed countries has turned this on its head. Now it is very cheap to install a broadband wireless hotspot in most urban and suburban areas, and many people are doing so, with reports of up to 30% of broadband customers in the US adding local WiFi networking. This has also changed the picture for the home wireless market, as alternative wireless media distribution technologies (such as those based on Ultra Wide Band, UWB) start to compete or complement in the network home market. Bringing broadband connections to street and house level opens up new possibilities for extensive wireless coverage in populated areas, that can offer competition to wide area BWA. Telenor is an example of a firm looking at exploiting this for providing public broadband connections, but using the broadband fixed links of subscribers to attach publicly accessible WLAN hotspots that cover the public space outside the location. Mesh systems using standardised WLAN technologies are also attracting attention as a way of providing public wireless access, even over whole cities, as is the plan in Philadelphia [Phil04]. Broadband into the home has also opened the doors for VoIP as a way of delivering telephony services, and the now famous triple play of television, internet and telephony via one cable, a potential saviour for local loop operators facing consumer desertions to the mobile phone.
3.3
Fixed-mobile convergence agenda
One problem, among many, with the idea of convergence, is that while many firms appear to be following convergence-like activities, and are investing in research in technologies, few major firms in telecommunications have explicitly developed a convergence strategy. While many talk the talk, in the short term it has not been considered a particularly profitable approach. This changed during 2004, when at least two major players operating in mobile arena set out convergence as the central strategic theme. These firms are BT and Motorola. Motorola has explicitly started they have a seamless mobility strategy, and entered into a number of agreements to make their personal devices, centred around the mobile phone, the centre of the convergence. Motorola are of course an important part of the B3G and convergence research programmes of the EC, and there are many documents and report published on ideas from their research labs. Here closer attention will be paid to the case of British Telecom, who have taken the bold step of starting a move to an IP based network, called the 21st Century Network, and expanding their MVNO operations. Corporate decisions like this are contingent events that analysts can never anticipate, although of course they can suggest that it is inevitable D12 highlighted the weak position of fixed line operators in the wireless world vision, and the importance of a move to counter strengths of mobile operators by a tactic such as become an MNVO, and supporting the mobile internet model, based around local fixed access wireless, and network integration. Many operators, as well as technology firms have been talking of convergence around the Internet Protocol for many years, but few have actually embraced it. A number of factors will have promoted this development. Customer actions include substitution of mobile for fixed telephony, email and internet chat substitution of voice telephony and switch of voice providers via Carrier Pre-selection6. Competition and regulation have led to falling voice calling prices and revenues, and the unbundling of local loop. This has led to the focus of business shifting away from voice to value added services, especially IT Services for business and consumer markets, used to differentiate service from other firms on factors other than price, In particular this includes a move away from telephony to selling a package of services to domestic consumers that will need more flexible modern networks to deliver. Of course this has been supported by the maturation of technology to actually run an all IP network. As an example of one of these factors, in the consumer market one of the clear trends is mobile substitution people switching their communications from completely from a fixed line to their mobile.
In the UK this has increased to 4.2 Million lines, 15% of BT s total [OfCo04b], offered by a range of firms, some of which, like Carphone Warehouse and Onetel, are also very active in the mobile sector.
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There are many reasons for this, and notably the cost of subscription to two services, the greater utility of a single personal device, increased solitary living and the falling costs of mobile calling. This substitution is running at up to 10% of all mobile subscribers, and growing [Ofco04a]. This consumer move fits clearly with the wireless world vision, and is in favour of the mobile operators. This makes it urgent for major fixed line telephony firms, usually old national monopoly providers, to change their business model. Pressure is also being put on major operator with separate fixed and mobile business to think of ways of bringing them together again.
3.4
BT 21st Century Network
The decision of BT to move to an all IP network, and move its MVNO operations to Vodafone has given the fixed-mobile convergence industry a considerable boost, and analysts and reporters are falling over themselves to praise the move and the logic behind it. BT are indeed in an interesting position the only major European Telco without a mobile and a fixed line business, de-regulation of the local loop and Local Loop Unbundling (LLU), pre-carrier selection taking domestic business, price controls, competition from mobile operators for voice traffic, and other fixed line operators for corporate networks, pressure from competitors through the regulator, and no cable television network. BT is, however, the major UK IT services company, being effectively a major customer of themselves for networked data services, and do own a public hotspot network. The all IP move is clearly driven by the triple play vision of domestic services, aimed at moving customers from low value telephony to hopefully higher value internet and television, and by the increasing importance of corporate data communications, and the feasible integration of voice into this. It also aims at the new telephony market which is clearly around mobile, but integrating this with the fixed line service. BT claim that moving to the new network by 2009 will save 1bn/year, but many question the length of time it will take to actual make the change, and the proposed savings7. In conjunction with introducing an all IP network, BT have announced two network-linking services, one based on a Bluetooth-GSM phone, and another on a WiFi-GSM phone. The WiFi-GSM phone would enable BT to leverage their large network of public hotspots in locations such as airports, as well as the private WLAN home or office network connected to its broadband service. The Bluephone as the BT consortium have dubbed it is being developed with a number of technology firms8. This is proposed to be a service that will allow a subscriber to use the same phone at home or in the office, and roaming on the cellular network. There are three main components of this system. First, a network has to have both mobile and fixed line system in the case of BT, which owns no cellular network, an agreement has been reached with Vodafone to become an MVNO. This potentially offers a major challenge to the established business of Vodafone, who must consider wholesale an important new way to sell their network services. It also extends BTs operations and MNVO significantly, and opens up an important space of innovation in services linking the fixed and mobile regimes. Second, the network technology has to be developed and put in place that will allow a device to be detected and connected on two radio networks. This is core to the move to all IP networks, and introduces the expertise of IP network firms, as well as traditional telecommunications firms into this market. Firms are promoting such technologies include Calyspo, Norwood and Conmil9 Thirdly, a device that can use Bluetooth and GSM or other cellular system as its radio access. Several firms developing both WiFi and Bluetooth-based voice communication systems suggest that Bluetooth is currently a better radio carrier than existing WLAN for VoIP for a number of reasons: lower power usage, higher quality/less interference, Bluetooth is already integrated into many phones PDAs and laptops, low-cost network access points etc ([Duba03]; [NoSy04]). However since BT would provide
A survey by Sonus of 124 telecoms operations executives in 2004, suggest that while 70% agree IP networks are the way operators will move, only 22% thought BT realistic in changing over by 2009 [ITWe04]
8
The launch of the Bluephone was originally for mid 2004, but has been put back at least until Spring 2005. The announcements of dates of service launches such as these have to be viewed with some scepticism, not only for the ambitious technology targets, but also for they way they are intended to influence the stock market, and the competition.
9
http://www.conmil.com, http://www.calypso.com. http://www.norwoodsystems.com/. These market to end users, mobile operators and fixed network operators.
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new customers with new devices, this may not strictly be relevant, if the multi-standard chipsets are available10. From the FLOWS perspective the integration of antennas, and move to MIMO technology starts to become important. With both major operators such as BT and Korea Telecom, and technology firms such as Alcatel, Nortel and Ericsson promoting the Bluephone and WiFi-phone concepts, this is pushes the concept of multi-standard devices into the public market. Not that this guarantees success. The pricing structure that Bluephone subscribers accept will have important implications for the uptake, and for the future shape of multi-standard service. According to existing reports, BT suggest that while subscribers will have the benefit of combined subscription and messaging from one phone, and low call costs over the Bluetooth link, callers will probably have to pay the mobile terminate rate where ever the call is received. This has interesting implications, since mobile termination costs are one of the publics and regulators principal dislikes [FCC04] [EuCo02] [CoCo02]. It also maintains the pricing model, that the caller pays all the costs, unlike the US model, where the receiver pays the costs of receiving on a mobile terminal. However the BT WiFi-GSM phone model appears to be aimed partly at allowing user to avoid paying the both the termination and calling costs associated with international roaming. Decisions on pricing in a multi-access environment are crucial, because it affects the degree to which the mobility component of a call session is price separately to the actual data carried, and how that cost is shared between connecting parties. Increasing moves to flat rate pricing across all networks up to set amounts, and regulation to reduce mobile and international termination fees will also affect the adoption of VoIP, and the role of end users in stimulating it.
3.5
IT Services and VoIP
Two key developments need to be considered in more detail: the development of Voice over IP, and the IT Service market. These throw light on the mobile internet v. rich voice plus argument, and on the MNVO question.
3.5.1
Voice over IP
Voice over Internet Protocol brings the key traditional telecommunications service, speech communication, into the internet age, and is thus one of the key deciding technologies and services shaping the future of telecommunications. 2003-2004 has seen considerable innovation and change in this area, led by changes in regulation in the US accepting VoIP as an unregulated Internet service [Powe04], and indications of a light regulatory position in the EU and the UK [Ofco04c] that could encourage its development. There are several types of VoIP telephony: 1) between computers with an internet connection, an implementation that is purely user driven, with users installing voice and video clients on their machines to get free calls, particularly important in avoiding international calling costs11. Calls can be terminated on the PSTN through a service provider. For technical astute laptop owners it can be used easily to make calls in WiFi hotspots. 2) Phone to Phone, with adaptors on normal phones. Numbers can be assigned, and subscription to a service can allow calls to be terminated on the PSTN. 3) VoIP over a private IP network run by a telecoms operator with local loop access. 4) VoIP on a private IP-based real or virtual network [Ofco04a]. VoIP can offer personal number roaming, simpler network management, unified messaging (SMS, email, voice, chat, video), and cheaper calls. The retail business of telecoms operators, who have traditionally had the monopoly of fixed voice business become only one of many possible players in this business. VoIP also fundamentally challenges the way we pay for voice telephony, doing way with payment for time, making voice another data service. It brings technical challenges in providing quality of service, but is also a path to create a competitive rather than regulated market in quality of voice service. VoIP-based services and equipment are initially being sold to replace a separate switched private telephone network used by many large firms. The vendors of IP based network technology, such as Cisco, Nortel or IBM see VoIP as a clear market in the business sector. Operators, cable operators [Enge03] and corporate customers are also implementing and trialling VoIP in the core and local loop. Infonetics research suggest that the market for a range of carrier VoIP technology grew by 21% in the
10 11
Philips and TI are among those selling integrated silicon solutions. Many firms offer this sort of peer to peer technology. One prominent firm currently is Skype, www.skype.com
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year to 2Q 2003, with revenues expected to grow from $1.3 billion in 2003 to $4.8 billion in 2007 [Info04]. A 2004 survey of major firms suggest over half adopting or considering adopting VoIP [ATEI04]. The dominant reason is cost savings in infrastructure and in usage charges. Since one of the dominant models is providing VoIP is as an outsourced managed service, corporate adoption can push operators to invest in technology. The combination of VoIP and WLANs is considered by many an important technological convergence, that could help drive the adoption of both [Judg04]. However it is suggested that the existing 802.11b/g standard will not be effective in enterprise class networks, prompting a move to the 802.11a standard [Wexl04]. It is also unclear that a multi-radio system using VoIP will succeed in a competitive environment where GSM is an established voice technology: for example, if GSM operators or vendors start to supply indoor GSM and 3G systems in competition to WLAN radios this could undercut much of the emerging Voice over WLAN business [Judg04]. IP is starting to become the dominant technology in operators core networks. In addition, with recent regulatory clarification VoIP as substitution for traditional telephony products is emerging. Issues exist with the normal obligation to provide emergency calling, and a service during power cuts [Ofco04a]. With these problems sidelined for the moment, VoIP is likely to grow with corporate VPN and domestic broadband adoption. Continued high international and long distance charges are creating mass market opportunities for innovators. One firm, Skype, claims millions of users of a PC-PC and PC-POTS service, and another, Vontage, is attracting considerable business and investment attention with a VoIP phone model. Since voice is still the key telecommunications service, the opening up of new ways to provide and sell voice telephony using VoIP is important in creating opportunities for access technology neutral services, where users, both individuals, firms, ISPs, MVNOs and MNO begin to separate the access medium from the core set of data applications. Session Initiation Protocol (SIP), a technology for unifying peer-to-peer messaging in a network transparent way is important to this process, and should allow end users to link their voice communications seamlessly with other types of communications. However, while there are many benefits to entrepreneurs and network operators alike, it is far from clear how the majority of consumers will benefit if the service is more complicated to use, and existing competition and regulation are pushing prices down anyway. While this technology may also benefit higher users in lower costs and more services, it is not clear that poorer consumers would necessarily be getting cheaper basic service.
3.5.2
IT Services
A important and growing business sector is IT Services, meaning a range of businesses from the installation and management of IT infrastructures and equipment, through sale of IT and telecommunications functionally as a service rather than a capital product, and the outsourcing of entire parts of a business that may rely heavily IT12. The IT services business is not only important for traditional IT firms, and IT consultants, but also for telecommunications operators which regard it as a key value-added part of their business, extending enterprise telecommunications services to running network servers, application services, cell centres, business intelligence and CRM and transaction networks. The leading firms include IBM, EDS, Cap Gemini Ernst and Young, HP Services, Accenture, CSC and, crucially in the UK, BT/Syntegra. The interest of fixed and mobile operators in providing IT services comes largely from the realisation that their key income is from the business market13, and future expansion is not in selling voice minutes or new connections, markets squeezed by competition, and adoption reaching 100%, but by integrating their network services with enterprise IT systems (e.g. [BaCo03]. This comes at a time when many firms are outsourcing their IT capabilities, and many of the operations that rely on IT (Business Process Outsourcing) [East04]. As the definition of telecommunications changes, and becomes more focused on data, transfer, storage, security and integrity, then telecoms firms management expertise
12
Other FLOWS deliverables have discussed and used various types of services. Network services, and bundles of their services sold as products, called service products could be considered type of communications services sold in the IT services market, but more traditionally sold as telecommunications.
13
Corporate data services represent around 12% of all end-user spending on telecoms 100m out of 1bn total spending in the UK. [Ofco04a]
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can compete in certain of these IT services markets, just as well as a firm with background in IT consulting, hardware or software. Incumbent operators, with reach into many firms could be the strongest players. However this depends on their ability to change from operators of networks, to providers of services. Speak to anyone from an operator and they will insist that they are a service company, not a network operators, but to degree to which they actually to do this, and if it really is the correct business direct remains to be seen. There are a number of different types of IT services companies, based on consulting and system management and integration, on IT supply and management, on specific business service provision, or on network systems and services. IT Services firms and telecoms firms have always worked as partners or as suppliers, but which firms can command the premium in the value chain, as principal contractors, and which firms have the greatest flexibility and key technical and management competences and assets? One trend does not bode well for mobile operators. Adoption of mobility in corporate communications is moving from voice though the mobile, to data. This is occurring as IT departments increasingly take over telecommunications responsibilities. A 2002 report for IBM suggested that firms are slowly integrating wireless with IT, and relying on existing suppliers of IT services, rather than mobile operators to do this [QNIn02]. The question for multi-standards networks, and in finding a market for the convergence manager, is whether IT service companies without a mobile network, presence in the local loop, or even a backbone infrastructure will be in a position to operate a convergence manager as part of their inhouse operations, linking together network services of a variety of operators with private LAN infrastructures? Maybe this is best done by those who control a major part of the infrastructure used? That partly depends on protocols and standards in place for interoperability of networks. With fully open and implemented standards this could be possible, but it is hard to tell if it makes sense, or whether partnerships of specialists can provide the service more effectively, perhaps with a lead integrator. The lead integrator in provision of IT services is likely to be in the strongest position in the market, and is uncertain if mobile operators would be able to take this role in the business market at least.
3.5.3
IT Services for consumer products
The delivery of mass market multimedia services is a key emerging business of IT Services firms. They supply and run the network servers and integration with back-office systems of e-commerce firms. This includes centralised server farms and distributed servers for delivery of content to the network edge, important for the mass market supply of multimedia content. A key new business is delivery of video and music on demand and online sales. The firms that run distributed computing and server farms providing turnkey content delivery for major brands, could be important players in the introduction of multi-standard terminals for mass market entertainment services14. Currently the Internet model of content distribution is based on end users providing their own connection to the Internet, and their own terminal. Traditional models of content and communications have integrated the cost of the terminal, connection and service together in one package. This is still a model being pursued in new on-demand television markets, even though most other data markets, such as I-mode, operate on the Internet model. In the mobile content market both systems are prevalent. Mobile operators package and promote download/storage services for content, subsidising terminals and offering downloads of content at prices unrelated to the open channel data costs charged to other customers. This is the value-added service concept in the Rich Voice Plus model. In the music market this could involve separate pricing of music unrelated to data download prices charged to other customers, if the total sale and download profitability made sense15. While existing mobile operators do this, could IT services firms enter into this market, for example providing channels to end users for their customers, the online music services, perhaps by acting as MVNOs.
14
For example Akamai (http://www.akamai.com/) provide web services for Apples iTunes service, MSNBC online news service among many other leading online brands, with 14000 servers in 65 countries. End2End in European offer content services to many European mobile operators and Sonys mobile music service [EnEn04]
15
For example, songs can be sold a fixed price, regardless of the size of the file that has to be transferred to the customer, creating a easier to understand product based on the product one buys rather than data one transfers.
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In both cases it would appear to make sense to use a multi network solution, supporting the downloading of music over WLAN, or other fixed broadband access standard, which is cheaper and faster than 2.5 or 3G. Mobile Operators may well choose to provide subscribing customers with dual standard phones, and let them bear the costs of home internet connection, or allow access to hotspots for only this service at no extra cost (since it saves them money). The benefit for consumer for using a hotpot is faster download, and service browsing. Cellular systems could be used for security, and payment, integrated with WLAN download. An IT services company could run the same service, buying network services for download from WLAN operator and mobile operator or a combined package.
3.6
User factors, Applications and Devices
There have been a number of key trends in the consumer market. Broadband connections to the internet are increasing, at levels around 10% of household in many countries (Korea being the exception with much higher adoption). Use of broadband in the workplace, school, cybercafe or home how has raised the expectations of speed of internet access to levels way beyond the capabilities of existing cellular systems. Use and spending on mobile services is growing, in particular SMS revenues16. MMS did not take off in 2003, but continues to grow in 2004, although as this is a period of rapid adoption of camera phones, stable trends are hard to pick out from adopters experimenting with possibilities of new gadgets. Sales of valued added services are increasing and not insignificant. A study of the UK market suggests that revenues from this business, which includes ringtones and games download were 1.4bn in 2003, compared to total revenues of at least $13.6bn [Ofco04b]. Surveys of what consumers (and business users) want from their mobile are always topped by cheaper call prices. While many are interested in new services, this is the primary desire from the market, and a key factor in attracting new customers to a network. New revenues must be made from diverting spending from other channels or activities, rather than trying to increase ARPU from basic communications services. Competition is giving customers cheaper prices, and new entrants, be they MVNOs, or MNOs with new network capacity compete on price for basic communications. In the UK, the early 3G service launched by Hutchinson has been almost completely reduced to selling voice minutes and messages cheaper than other network, although with a model that attracts higher average ARPU users. However price competition can create difficulties for innovators in alternative technologies. One interviewee found difficultly selling new technology to reduce costs of mobile communications, since firms are able to negotiate ever cheaper cellular subscription deals: price cutting in this case prevents investment in new technology. Until there is a clear business benefit from an alternative which may cost more in capital costs, then convergence is unlikely. Leading mobile user markets are Korea and Japan. In Japan i-mode has become a very successful service, enhanced by advance 2.5G and 3G network access, with local shaping factors such as a strong operator-led market [Tee03], and low PC and Internet penetration [SrKo04]. Internet access on mobiles, with large screens has become common place in Japan. Use of mobile phones in Japan is largely at home or on public transport17, and data services use occurs in the same places. Indeed it is suggested now that some consumers are switching from the PC to the phone as their key point of access to the internet, for email, gaming and information services [Miya04; MiBo04]. Email is the most important service (83.3%, 2002), followed by music download (45.8%, 2002). However use is dominated by younger people, and email exchanges are short and to the point between those with close social relations, in the similar mode to much SMS use in Europe [MiBo04]. Income for operators is dominated by package charges for web and email [SrKo04]. However with the introduction of flat rate 3G access this will obviously change. In other parts of the world many of these services are only just becoming available. One successful user device and service, associated with the business market is the Blackberry, allowing peripatetic and mobile employees access to corporate email systems. Claims are made by RIM (Research In Motion) for over 2 million users by the end of 2004, and popular culture recognises the Blackberry addict as a new phenomenon. This is rather unsurprising just as SMS is used to link together personal social networks, the Blackberry provides a link to the business social network for
16 17
Although in the UK number of SMS send in 3 Quarter of 2004 was flat [Ofco04b]. Japanese use of public transport is also higher than in many other countries.
rd
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many people who are continually out of the office. Now Blackberry email functions are being replicated on other smartphones and there is a supply side effort by firms such as RIM, HP and Palm, to integrate email, voice and SMS through one device, which suggests that this is an important locus for development, driven both by demand and supply. Demand for these devices is growing fast, particularly in Europe. It is also clear path for user demand for broadband connections, possibly through a multi-standard system, as RIM experiment with WiFi connections to their devices. The integration of messaging and communication, through the Session Initiation Protocol (SIP) is an important step unifying the platforms that communications can be accessed on, as well as the creation of user-centred communications facilities. SIP provides platform and access system independent communications framework. Much of the technology to provide this has been developed, although there are still issues of integration of messaging standards [CiSy04]. Driving the move to SIP is the emergence of Instant Messaging as one of the key poles of attraction of communications integration.
3.7
Instant Messaging a killer convergence application
Just as SMS and email are popular messaging systems on mobile devices, instant messaging is another very popular messaging system now transferring from fixed internet to mobile devices. IM use is growing fast. Unlike other messaging systems, it provides visual telepresence, and ability to be continually in touch with an extended social network much larger than could usually be accommodated in physical space, and mix group and personal conversations in real time. While a Japanese study found that phone based email groups were smaller than PC based groups, it is still an important development to link this application to mobile devices [MiBo04]. As a form of messaging over GPRS is may easily replace a great deal of SMS traffic, which is casual chat. For people used to using IM on a computer all day or night, IM on a mobile allows them to take this with them on the move. For those do are not computer users, and there are many for whom the phone is the principal access to communications networks, it is a way to join in socially important networking activities. IM over GPRS is much cheaper than SMS, per message, although not necessarily for total communications how long before operators decide that there are greater profits in encouraging IM, rather than SMS? IM clients include document sharing, and integration with email and SMS messaging. Many IM clients now integrate voice and video chat too, designed to operate over the Internet. A powerful case can be made for these network edge data applications to drive convergence innovation, as IM is as easily done on the bus as in the shopping centre or bedroom, and young, and technologically-savvy IMers seek out locations when they can get faster access (there is a delay at the moment), and lower costs. Since speech and video on IM are certainly lower quality than on QoS ensured system, the demand for high quality may be much lower among these users. Wireless video IM could make this market the heaviest users of wireless video. IM is not restricted to public use. The major providers such as Yahoo!, Microsoft and AOL all provide corporate messaging servers, in an attempt to grow a new market in corporate communications, and take a lead in message integration from telecoms technology firms. Of course messaging is beset by its own standards battle, which may take a while to be sorted out and may reduce power of IM combined with SIP to lead convergence. These vendors have linked with mobile service providers in the US, such as Sprint and AT&T wireless [Saun04] to include messaging clients on handsets, and provide direct connection, rather than via SMS. However, operators sell IM as a special service, with a flat rate subscription or a per minute charge. As well as those provided by operators, IM clients can be installed on PDAs and smartphones, and although messaging is slower, it enables mobile participation in IM groups. With the development of location services, the presence feature and location information, could open a space for interesting social innovation18. As well as cellular devices, number of devices are on the market that are Wi-Fi based IM clients, primarily aimed at children/teenagers who can IM over a home or other WLAN connection in the same way as SMS, without the need to actually own and use a PC, and all the benefits of local portability.
18
Nokia and Ericsson promote a feature called Presence on their new phones, providing those in a predefined network with location and availability information on other members in real time. Push to Talk, a voice based IM service is also being launched by a number of networks.
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The ability to link messaging services in the network and on devices is an area of considerable competition and technological promise, but evidence from current adopters suggests that device convergence with existing established data application, voice and email, is the principal individual user demand. A 2004 IDC survey [Kern04] of the growing market for converged devices such as PDAs and Blackberry terminals, suggest that the market is entering a phase of early majority adoption. Many of these users routinely carried several devices, and were keen to see services and devices that allowed them to reduce this to one device. Equally they were keen on improved battery life and screen quality over multimedia. Convergence of technology may be possible, but the adoption of new forms of communication will probably come from new markets, not the early majority of business communication users. Consumers and professionals for whom presence in social networks is important part of mobile lifestyle and who integrate PC and mobile use seamlessly into their lives are a key market of self adopters.
3.8
Music to Mobiles
FLOWS D12 [StPi03] investigated the role mobile entertainment might have in shaping the environment for the uptake of multi-standard, MIMO enabled wireless access systems. The delivery of music, video, television, game software and online gaming facilities have all be mooted and are in stages of experimentation, and all place significant demands on wireless systems. Music, sport, gaming and shopping all are key mass market activities that can have a variety of their facets moved to the personal mobile device. Publicity, marketing, selling, playing, storing, sharing, personal identify building, social network membership and many other factors can be worked into mobile applications. Ringtones have become an important part of popular music market, becoming an established format for commercialising music products alongside CDs and videos. Downloading music on mobile devices is popular in Japan and Korea, and in Europe 2004 saw the launch of a number of music services on mobiles. These have not however been heavily promoted, which suggest that they are market trials, or put in place to present as part of a bundle of new services to attract new customers to core services. It is not clear that mobile networks would be able to deliver a mass market music service with capacity of existing networks anyway. It is also not certain that it will an economic use of early 3G bandwidth, compared to developing other markets. Operators, who subsidise handset and make money from network traffic are keen to promote music services that will earn them money, and not subsidise music players for listening to music from and PC that also happen to be phones. There are three trends pushing the mobile music development. First adoption of personal digital music players, second, continued consumer peer-to-peer music sharing, third, the establishment of commercial online music stores, led by Apple iTunes. ITunes has become a key pole of attraction in this market, the first successful online music service, associated with the iconic version of the digital music player. Device makers are also promoting the integration of music and phones. Many mobile phones include that older mobile technology, an analogue radio. New phones are being marketed solid state music players (e.g. Motorola, Nokia). Motorola have licensed the iTunes system to run in their handsets. Considerable effort has been put into developing small hard drives to fit into phones as well as portable music players. Many people do not have access to computer, or able to use it to download music, so there is a strong case to say that in the age of digital music use, a personal mobile device, possibly with a phone, will become the standard way to possess and carry music recording. However the market trajectory of the MP3 player is different to the phone, and a different development arena, despite some key common firms. While it is still possible to sell consumers a music player and a mobile phone, consumer electronics firms will do so where is the sense in selling one device when they will buy two! Battery use is also a problem for combined devices when one battery runs down nothing works, so multiple devices have a considerable attraction to users. In the European market MMO2 launched a mobile music service in the UK and Germany, in partnership with MTV, Warner Music, BMG and Universal, strong brands in the selling of music related products. MMO2 sells as separate music player that music downloaded via a phone can be transferred to. This highlights the memory limitations of the phones themselves. Music can also be transferred to a PC. Vodafone has promoted a music service through their Live! Portal too19. An
19
Vodafone charge a flat rate of 1.50 a song for downloading on their 3G network in a format that cannot be transferred to any other device.
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interesting entry with a mobile music service, is Sony, a lead producer of handsets and music players, whose Network Services division have launched a mobile music service with End2End, a mobile content supply firm. This service can be sold jointly with operators (such as TeliaSonera), but equally be operator independent, especially from the perspective of end users. It relies on customers having a Symbian Series 60 or UIQ handset and a GPRS or 3G subscription [EnEn04]. Sony have in parallel launched an online music service, creating interesting possibilities for future integration of fixed and cellular delivery of music, shared between a personal mobile device and a PC. Impulse purchase is a key concept for mobile service providers (see D12), and these mobile music services explicitly state this as an aim. AT&T link cellular and fixed internet access in their mobile music service offering launched mid-2004 in the US. AT&T do not offer mobile download, but allow customers to identify music they hear via the phone with music identification software, and then purchase the music using the firms billing system without the need for a credit card. The music can then be downloaded to a PC later from the firms portal. In one respect this is a preparation for direct delivery, but also recognises that the US is a market where PC and internet connection is very common. We can see in these examples the development intense interrelation between mobile devices and PCs with fixed connections. Nonetheless there are many people who do not have a PC, or personal access to the PC: an independent music to mobile market could be developed.
3.9
Conclusions
The environment for the uptake up multi-standard devices is the entire IT and telecommunications market. This chapter reviewed some of the key areas of supply and demand, highlighting IT Services and VoIP as lead areas for evolution of voice and data services. Convergence is a multi faceted concept, with benefits coming from integration of complementary features of different systems, but also limited by technical difficulties, divergent markets and conflicting commercial interests of various supply side players. To understand the potential convergence and coexistence of radio systems, especially WLAN and 3G, we have to look at their uptake in more detail, including investment, emerging business cases, and new and emerging uses of data communications. The following chapters look at this these issues from a number of perspectives, to help build up at least a partial picture of the environment and processes of telecommunications evolution.
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4.
4.1
WLAN and UMTS market in Norway Sweden and Finland

Introduction
The Nordic countries have been in the forefront in Europe regarding Internet connectivity and mobile communication in terms of penetration in the user market. Due to the early introduction of the NMT (the Nordic Mobile Telecommunication system) mobile system, people in the Nordic countries have become accustomed to using mobile phones and the mobile device has become a part of the social life. The cellular penetration is reaching up towards 75 % of the population in the Western Europe and is still increasing, though the market is quickly reaching saturation. The same trend has been observed in the Nordic countries but in an even faster rate. Sweden recently passed the 100% adoption level for mobile phones. The number of new subscriptions for 2G is marginal and the public is now eagerly waiting for the promises of the UMTS 3G system in Norway and Finland. In Sweden the public had a first try of 3G with TeliaSonera and Vodafone Swedens 3G launch earlier this year (2004). It is expected 2 million new mobile phones will be sold in Norway in 2004. The total population of Norway is about 4,5 million where about 4 million is regarded as users of mobile services. This means a Norwegian user get a new phone on average every 2 years. Nearly all of these will be based on 2G/2.5G technology, since UMTS has still not been launched. The reasons for this new mobile acquisition are manifold e.g. age of phone and technology malfunction, subsidising and churn from various operators giving new phones away nearly for free, new attractive services and telephone functionality such as camera, show-off effects, multiple radio standards etc. The introduction of the MMS phone with camera functionality enabling still pictures and a short video clip is regarded one of the most profound driving factors for new phone acquisition especially among younger people. The type of phones acquired has become very diverse, with a multitude of device manufacturers. The most profound development is seen within new high processing, medium size screen, handheld devises that can support a wide area of services including the ability to connect to several types of radio accesses. E.g. terminals with GSM/EDGE/UMTS and WLAN. These terminals offer a wide support of possibilities to create new and personal applications. Due to the capabilities and increased bandwidth of the networks the mobile terminal is now also able to support services usually supported on fixed access lines This is especially evident in the enhanced capabilities for data applications as internet browsing and gaming is increase in popularity on mobile devices. The increased speed of mobile network is clearly one driver for this fixed to mobile substitution, if applications currently available on the Internet are transferred to mobile devices. Many users have completely substituted their fixed phone service for a mobile service subscription. This trend is expected to be reinforced when the use of UMTS and EDGE really takes off, enabling people to read e-mail on the mobile device, surf the web etc on a high bandwidth radio bearer, as the Japanese example suggests. However as WLAN becomes more widespread and multi-standard terminals become available then fixed access enhanced with WiFi in the homes and enterprises provides reasons not to abandon fixed services, although conventional switch circuit local loop telephony will certainly be under threat. This trend is already happening in small scale with the first launches of VoWLAN terminals. The increasing range of terminal types has lead to a diversification of the terminal market. The terminals are often grouped into: High-end terminals: Mid-function terminals: Low-end terminals:
High-end terminals are generally laptops and portable PCs. These have large screens, high processing capacity, and have capacity to run multiple and complex applications. Laptops are often sold with several standardised radio devices installed, and new ones, particular operator controlled modules such as GPRS/EDGE and UMTS can be added as plug in peripherals.. Even though the price level of these devices is falling they are most often marketed towards the business market, although they an important innovation for the more affluent home market too. There is a trend to increased usage of mid-function terminals. including handheld devices such as pocket PCs, PDAs, notebooks, with a form factor described as PDA+. These devices are key to the clipboard technician market, as well as conventional business persons organiser. More people will have access to more 15-11-04 Page 29
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power intensive and larger screen demanding applications also for everyday use. The increased usage of gaming, e-mail, mobile TV and MMS will demand larger screens and more power. The distinction between high end and medium end may be based on the degree of mobility and usage everywhere. Handheld devices such as small compact mobile phones are typically low-end terminals, which are first and foremost marketed towards the mass consumer market. However many of the low-end terminals will also be equipped with several radio access standards. This trend towards multi-standard terminals and higher processing capabilities, together with longer lifetime of the battery will effect how operators can utilise their infrastructure as well as the kind of services the customer can make use of. With the emerging of EDGE capable terminals and the upgrading of the GSM/GPRS system with EDGE, new services will be offered to 2G customers. EDGE has already been rolled out in the Nordic market and the technology supports the customers with an average bit rate of about 100kbit/s, which is enough to support a very large range of services with carrier grade quality. The roll out of UMTS and WLAN hot spots may nevertheless be the main drivers in the coming years as the enablers for new services to the mobile devices, as more spectrum is made available at point of use, and operators seek a return on their 3G investment. UMTS and WLAN have different characteristics and may support different markets. Nevertheless the WLAN market is emerging very rapidly with a much higher bandwidth than is possible with UMTS, and available in many private and public places that people spend time. If WiMax infrastructure is built, the bandwidth difference to UMTS is very significant, which may alter the market for UMTS services predicted just a few years ago. The growth of WLAN spots is noticeable in nearly every European market, and in Asia the growth has been even higher, reaching nearly continuous coverage in some densely populated areas.
4.2
Public WLAN market
As for cellular penetration the Nordic countries are also in the forefront in Europe regarding WLAN hot spot build out. Even if both UMTS and WLAN is being rolled out in the same markets it is not expected, in the near term at least, that the two technologies will affect each other e.g. in terms of cannibalisation of service usage.
Figure 4-1 depicts the PWLAN hot spot roll out in Norway, Sweden and Finland for the end of 2002
(series 1) and 2003(series 2).
Total number of Nordic hotspots

800 700 600
Hot spots
500 400 300 200 100 0 Norway Sweden Country Finland Series1 Series2
Figure 4-1: WLAN Hot spots end of 2002 (series 1) and 2003 (series 2)
Figure 4-2 below depicts the locations of the WLAN hot spots in the Norwegian market in percentage of the total for end of 2003. Regional in this figure means other locations. 15-11-04 Page 30
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Type of ho tspots in Norway
1% 33 %
26 % Gas s tations Hotel s Restaurants Regional Airports 33 %
7%
Figure 4-2: Distribution of WLAN hot spots on various sites As seen in Figure 4-1 and Figure 4-2 PWLAN is entering the market quite rapidly. It is presumed that the number of WLAN hot spots in most European countries may double each year for the next couple of years following a similar development and use of WLAN enabled terminals. This development will especially impact all data type of services and will presumably effect both low end and high end terminals as all terminals increase their processing capacity and screen since to enable them to process more processing demanding applications and show high resolution pictures and videos. The most prominent actors in the PWLAN market are the incumbent operators. Out of the total number of hot spots the incumbent operators own the major share with many small actors owning only a few sites.
4.3
UMTS market
The UMTS roll out in the Nordic countries, has had a rather cumbersome start. However UMTS is being rolled out and has been operative in Sweden since February 2004. The UMTS network is still not launched in Norway and Finland. UMTS would drive the market towards new 3G cell phones with enhanced functionality, and it is presumed in the industry that a large portion of the cellular users will be 3G users by the end of 2006. With 3G users it is here meant subscribers that are able to connect to the UMTS network where it is available. Video telephony, real time streaming applications as video, new clips, music videos etc, and interactive gaming with high quality is foreseen to become the applications that would drive the demand of 3G terminals. As mentioned earlier, many of the new high-end terminals will be multi-band terminals with both GSM/EDGE/UMTS and WLAN enabled. In Norway Telenor, Netcom and Hutchinson acquired UMTS licenses. Telenor and Netcom have still not launched their 3G networks, so the market is still awaiting to see how it will take off. Hutchinson will also enter the market in a later stage in Norway. TeliaSonera in Sweden opened its 3G network in March 2004. The customer ratings however have not met their expectations. The reason is claimed to be lack of 3G terminals, which is a valid claim, supported by many 3G operators. In addition to the terminal issues, the Swedish market has three 3G operators which puts pressure on each actor how to acquire customers without giving away to much e.g. in terms of terminal subsidies, to be able to recover from the license cost and CAPEX. Vodafone Sweden also launched its 3G network in Sweden in February by supplying 3G smart cards for laptops directed towards business customers. Their service Vodafone Mobile connect 3G was first launched for the business market but is by September 2004 also available for the mass 15-11-04 Page 31
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market. Vodafone is now also supporting Vodafone live on 3G networks, which will enrich the customers service experience by also including video telephony. To acquire customers on the 3G networks Vodafone Sweden is offering an attractive introduction offer including both free voice minutes and video telephony minutes as well as 20 MB free data download. The Finnish operator Sonora is planning to launch its UMTS network for public use in October 2004. Selected companies in Finland have used a pre-commercial UMTS network with over 1000 users since December 2003. The next 2-3 year years will be crucial in the development of the market in mobile services, and mobile operators will certainly focus primarily on building a market for new communications and content services using their 3G networks. Whether this is the correct strategy remains to be seen.
4.4
Conclusion
The experience of the Nordic countries, perhaps the most advanced in European for mobile telecommunications investment and use, is of continued delays in 3G/UMTS role out, and large growth in public WLAN hotspots. This helps create the conditions where WLAN access can become a powerful factor in future network access, supporting move to devices with multiple radio standards, especially as the mobile operators are dominant in PWLAN hotspot provision too. The population of Norway has adopted newer telephones with cameras and other features quickly over the last year this will help drive application and service adoption over existing 2.5G networks, but may delay much of the general consumer market adopting 3G phones or multi-standard phones until the current generation start to fail, or a clear benefit comes from a new generation of phones. This is good news for 3G-WLAN convergence, as it gives time for the technology to develop and come down in price.
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5.
5.1
Public WLAN case study: Benugo/Broadscape

Introduction
The case study describes the wireless Internet access offering provided by Broadscape Technology in benugo sandwich bars in central London, UK. The case study was selected to offer an illustration of an innovative business model for wireless Internet access, the so-called virtually free pricing model in a public place which is seeing a rapid roll-out of WLAN most aggressively from MNOs (e.g. TMobile in Starbucks) and Telcos (e.g. BT Openzone in Costa Cafe). The report starts by discussing recent development in the Public Wireless LAN (PWLAN) market in light of the proliferation of hotspots. Details are also provided of benugo and Broadscapes partnership and services, including the key motivations and visions of these companies and the challenges they perceive for the future of PWLAN. Through a socio-ethnographic study of customers of benugo and users of its wireless Internet access, a snapshot evaluation of uptake and adoption, as well as the implications for forthcoming strategic deployment are discussed. The report therefore explores the significance of such offerings in relation to other wireless service providers and technologies, from which the key implications for FLOWS are discussed.
5.2
Methods
The case study is based on a review of current trends in the WLAN market drawn from industry reports, press articles and academic journals. The empirical findings for the benugo/Broadscape case study were obtained through a telephone interview with the Director of Broadscape (Theo Platt) and the Finance Director of benugo (Tim Parfitt) conducted during July and August 2003. In addition to this, a study of the benugo outlets designated as wireless Internet hotspots was carried out in November 2003, in the form of a small scale survey (N=38) aiming to obtain some basic information on benugo customers ownership of mobile and/ or wireless technologies as well as their general awareness of Wi-Fi and the availability of a hotspot on the premises. In addition to this, socioethnographic methods such as participant observation and informal conversations with managers of the premises and Wi-Fi users were employed. Usage statistics for the hotspots were provided by benugo and have been used to provide a more coherent picture of levels and patterns of use. The case study is not intended to be representative of hotspots, rather is used to illustrate processes taking place in the deployment and use of WLAN hotspots, and to generate specific scenarios for FLOWS technology.
5.3
Public WLAN Background

Every so often a technology or product comes along that captures the imagination of both the private and corporate sectors. To do this it has to be simple, effective, popular and inexpensive. It also has to have productivity and usability advantages over the technology or process that it will ultimately replace. (Mike Lee, BT Ignite).
This statement illustrates some of the reasons for the rapid growth in Public WLAN [Dutt03]. Recent reports further suggest that this upward trend will continue, with some estimating that the PWLAN business will generate US$ 7 billion by 2006 [EETi03]. Many hotels, bars, restaurants and pubs as well as petrol stations or harbours, homes and offices are being equipped with wireless Internet access, and the technology in set to become embedded in an array of devices from cars to television sets (see for instance Intels Wi-Fi TV/computer, [News04]). The growth of the Public WLAN market in the UK has been associated with the relaxation of UK wireless regulations which since the summer of 2002 has allowed companies to offer commercial services on the 2.4 GHz spectrum setting the foundations for a new form of connectivity of the move, [PCPr03]. A number of other factors, such as the announcement of Intels Centrino chip, the lowering costs of chipsets and the earlier ratification of the IEEE 802.11b/WiFi standard, are said to have also contributed to this rise. Currently, public wireless LANs such as those found in Wi-Fi hotspots in cafes, airport lounges or hotels are very much geared towards the business traveller or nomadic worker. The focus on these users can in part be explained by the logistics of their work patterns, but also by the interrelationship between the device, space and activity (see also D06). At the moment, portable WLAN devices 15-11-04 Page 33
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include mainly PDAs and notebooks, which are used to conduct day-to-day business activities, especially between meetings in cafs or airport lounges. The ease with which hotspots can be set up has meant that the WLAN marketplace is currently occupied by larger corporations as well as smaller start-ups on the technology provider side, who agree on (global) partnerships with outlet owners (examples include T-Mobiles offerings in Starbucks and Borders, AT&T, IBM and Intel forming the network provider Cometa, which has introduced hotspots in McDonalds restaurants in the US). These partnerships and the deployment of WLAN hotspots redefine associations between branding, location, ownership, access and uses, in so far as mobile/wireless providers brands are appearing within new contexts (e.g. T-Mobile in Starbucks Coffee Shops, or BT Openzone in Costa Cafes), or the outlets own brand is being extended as a technology provider or environment (c.f. benugo). The nature of the relationship between the service provider and the outlet will impact not only on revenue sharing, but also on the technosocial construction of the space [LaSt03]. More specifically, benugo (the outlet) offers Wireless Internet access as part of its package with the actual service provider Broadscape playing at the customer end a much less prominent role. The wireless Internet service is only made available to benugo customers who make a purchase and for a maximum period of 30 minutes at a time (which can be extended with every new purchase), so that the core business of the outlet is maintained. In the Starbucks/T-Mobile model, the user might use the wireless Internet access service, but not buy a cup of coffee. In this scenario, the service defines not only the everyday practices or atmosphere in the outlet, but the ways in which the benefits are distributed. We could also generate from this service a different scenario, whereby a user chooses one outlet over another, because of the WLAN service provider, yet also make purchases from the coffee shop. In this case, the user generates revenue for both, even if the choice of hotspots is based primarily on the service provider. The operator, branding and location combine and determine therefore the users interest or ability to use the hotspot. A key point however is that the emergence of WLAN hotspots in public spaces and the need for a broadband experience in such a space, marks a socio-technical reconfiguration of these cafs as working spaces, and of working and business styles. Brown and OHara [BrOH02] note in their study of mobile workers and hotdeskers, the flexibility of relationships with the workplace, and the ways in which place changes work, but also how working in new spaces impacts on places like cafes, since the authors suggest that while offices have not become exclusively office annexes , one side effect of this in the UK has been an improvement in the number of coffee shops [BrOH02]. The extent to which such work/space reconfiguration will happen might be defined by the location itself (e.g. airport) but also the mode of payment, cost, and business model as well as the sustained growth in the number of Wi-Fi hotspots. It has been suggested by some that Wi-Fi hotspots will become as common as cash machines [ZDNe03], as the trend towards integrating Wi-Fi into devices is made easy through the technologys flexibility. The hotspot market is at the same time suffering from some difficulties in finding the right pricing model, and there is indeed a poor understanding of usage patterns, leading some to argue that the current rate of growth is at the very least as unsustainable [CuRe03]. Hotspots are relevant to FLOWS as: they are seen as increasingly likely to operate within a converged environment a component of ubiquitous mobile Internet access, a convergence of devices with the proliferation of autonomous networks and software dependency a reflection of improved and dynamic spectrum usage.
In particular, the unlicensed environment in which Wi-Fi operates offers WISPs and WLAN operators the possibility to operate without the large upfront payments incurred during the auctioning of 3G licences, especially in countries like the UK, France or Germany, and this had led many commentators to speculate on the competition between 3G and Wi-Fi. PWLAN business models are however mostly centred on the provision of straightforward vanilla data services broadband access [Ovum03], so that the richer content developed for 3G handsets are likely to offer a different type of product and user experience, not to mention the fact that users are not necessarily aware of the location of a hotspot in their vicinity. It is also frequently argued in discussions on the rivalry between these access technologies, that WLAN hotspots cannot provide consistent Quality of Service, precisely because they operate in a free, polluted frequency band, where other devices such as microwave ovens, Bluetooth devices and cordless phones produce interference and may cause lower service levels at times. [Paav01]. The user experience can also be affected by an over usage of the frequency by other users in a hotspot, and a study carried out by Apple showed how users in a 15-11-04 Page 34
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McDonald restaurant which offered Wi-Fi access were unable to download MP3 music files, when demand on the service became too great. In other words, overcrowding, interference and the availability of different service providers will increasingly call for the need for a seamless transition form one access technology to another. This means that there is a unique complementarity between WLAN and 3G cellular networks [Douf03]. It is in this environment also that MVNOs are likely to benefit by offering a unified billing for different service provisions. In short, too little attention has been paid to the ways in which 3G and WLAN could be combined. Even if there is complementarity between 3G and WLAN, it is worth noting also the development of a range of applications used in PWLAN that expand beyond the more common applications of a broadband wireless Internet access, to include the growing interest in VoIP or VoWLAN, which fixed and cellular operators are looking growingly concerned about, since this could seriously affect their revenue share [Drur03]. The aggressive move by mobile network operators such as T-Mobile to enter the hotspot market might be indicative, that the presence of a large number of cellular operators in the hotspot market suggests there is an acceptance that a proportion of mobile data will be carried over public Wi-Fi networks rather than cellular networks. (ibid). Attention should also be paid to the role of device manufacturers in impeding or otherwise the advancement of the market for VoWLAN, and the impact of manufacturers relationships with cellular operators (n.b. Motorola and Nokia have both unveiled new Wi-Fi phones, [CNe04]), which could result in vendors and carriers parting ways [Ovum03]. The cannibalisation of cellular services by PWLAN is seen by some as more hype than reality and regulatory issues are still at best ambiguous. The use and future deployment of a number of fixed wireless technologies (802.11a, g, WiMax, Bluetooth) resulting from concerns around spectrum overcrowding, data transmission rate or range, point to the coexistence and need for interoperability, as the technologies do not necessarily compete. It is important to point out also that WLAN access technologies are being deployed not only in fixed environments but in mobile ones too, and thus used together with other mobile wireless technologies, such as ICOMERAs offering on GNER trains in the UK [ThRe03], where satellite and GSM systems are used for backhaul. These systems have been successful enough in trials to be rolled out to entire fleets of trains.
5.4
UK PWLAN marketplace and B2C WISP business models

Model 1. The service is provided at a charge through a subscription, on a pay-as-you-go / per minute basis (e.g. major service providers with national roll-outs BT Openzone, The Cloud, TMobile, Eurospot Swisscom) Model 2.The service has been added or combined with the core product of the business within a particular space/place, so that users of that space can benefit from Wireless Internet access just as much as they would benefit from any other offering on the premises available to customers, such as chairs, tables, heating/air conditioning. This is the so-called virtually free model adopted by benugo. Model 3. The service is offered for free through grass-root ad hoc community networks (e.g. Consume.net in London, Pier-to-Pier in Brighton)
The UK Public WLAN market can broadly be split into three b2c models:
The business models are based on the primary even if not exclusive - focus on either the technology (m1), the space (m2) or the user (m3), which in turn determines the pricing model, the principal mode of revenue generation and beneficiary. The grass-root user focused approach is limited by the very notion that it is confined through the technology used to the geographical space in which a given community is established. Admittedly, efforts such as those of consume.net show that the expansion of a free WLAN offering could be realised through the creation of a network of ad-hoc hotspots which link one node to another. In a densely populated urban area, this could indeed prove an interesting alternative, and is being considered as a model by one London borough as part of a plan to offer blanket Wi-Fi access to local businesses and retailers in Westminster (see Westminster 4G project). The pledge by the UK e-Minister Stephen Timms to make WLAN available in every public library in the UK [WiNe03] is further evidence of alternative paths to the provision of public WLAN and importantly too of the role of WLAN in filling in the gaps for broadband provision [Dutt03]. However, such grassroots entrepreneurship remains at the moment at least, either quite localised [Mack03] or speculative, and the concerns around security might well deter individuals, who do not heavily espouse communitarian ideals, from linking into the nodes. 15-11-04 Page 35
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The UKs commercial public WLAN market is currently occupied by several major bona fide business service providers [Sili03] resulting in a divided market and a mishmash of business models [CuRe03]. While this situation might be seen as healthy competition, it does impact on consumers and users ability or interest in signing up to one provider, unless the hotspots current (and future) locations are known and match individuals usage patterns. Therefore, unless partnerships can be established between the main hotspot providers, it is likely that benugo type outfits will remain highly attractive, especially if they are located in areas visited by the prime users (business travellers, road warriors, tourists) such as in financial districts, tourist city centres, airports, service stations. The Broadscape/benugo approach is a direct rebuke to the Telcos chargeable model, one which implies that the Telcos' commercial plans to capture value through Wi-Fi may be misguided and prone to attack from retailers/restaurant owners/bookshops/etc. [Enck03] Operator BT Openzone Type Location Costa coffee shops, Welcome Breaks motorway service stations, Hilton hotels, McDonalds. Also offer hotspot in a box. Railway stations and airports Starbucks cafes Marriott hotels Benugo sandwich bars Pubs on Leisure Link estate. Bagelmania, Esquises cafs London libraries Table 5-1 UK PWLAN Overview Broadscapes offering in the benugo outlets is based on a oneoff payment and a monthly service charge to benugo. Broadscape encourages its clients to adopt a virtually free approach, although the outlet owner retains control of the pricing model that is applied to the end-user. Benugo were keen to follow this model since they did not want to be just like Starbucks. We like to be different (Tim Parfitt, interview). The free or virtually free models have also been described as important to WLAN user adoption as this type of approach could give the industry a kick-start [CuRe03]. At the same time, Cumulus also point out that the role of the bigger players is important in marketing Wi-Fi and WLAN and therefore making it more popular through recognised brands such as MacDonalds, Starbucks/Tmobile etc. At the moment this does leave sufficient room for smaller players, but it is widely argued that in the long term consolidation is likely to take place, especially for those offering a chargeable service.
Swisscom Eurospot T-Mobile STSN Broadscape The Cloud Sip and Surf /Ready to Surf Internet Exchange
5.5
5.5.1
Broadscape/Benugo: The Virtually Free for the Third Space

The Provider: Broadscape
Broadscape was formed as a start-up in 2002 in response to a gap in the Wi-Fi hotspot service provision dominated by traditional pay per minute. The perceived high charges planned by other service providers including BT and Megabeam (now part of Swisscom Eurospot) provided Broadscape the basis of their business plan. The director of Broadscape, Theo Platt, explains: We saw what others were doing and read how much they were planning to charge and thought that seemed rather high we thought that it wouldnt make us want to use the service, so we then came up with the idea that you would only really use it if it was seemingly free to use. So the service is virtually free to customers who buy a coffee or whatever from an outlet for a limited period. We then as a company charge a small weekly charge for that We 15-11-04 Page 36
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are still strongly convinced by the model, which just keeps things as simple as possible (Theo Platt) As a result of this, a successful trial was run and the core of the business model devised, based on the notion that access should be time limited and that the outlets would be charged a low monthly rental fee, which offers outlets a customised service and a product differentiator. Broadscape also noted at the time an explosion in the number of portable wireless device user groups, including gadget orientated high earners and technically equipped visitors, mobile sales executives, hotdeskers, teleworkers, and those in time critical occupations. Similarly to Internet cafs, the WLAN hotspots act as a supplement rather than replacement to Internet access in other places such as the home or office, to fill in the gaps while on the move, allowing users to stay on top, thus increasing productivity and retaining control. This, it is suggested, could also help improve work-life balance by allowing individuals to use more efficiently time away from the desk. It also points to what Hayward [Hayw03] has described as the ICTs new constructions of urgency () thus coerc[ing] us to respond rapidly on a regular basis. More specifically, Broadscape describes this in-between office and home space as a third space, and with changes in working practices and cultures [BrOH02], it is likely to become ever more central. Broadscape also believe that at the moment WLAN technology does have the upper hand on other wireless Internet access technologies, such as Bluetooth and 3G, especially in terms of bandwidth. It should be noted that Bluetooth access is also available in the benugo coffee shops yet rarely used. Broadscape do note the limitations of hotspot technologies, notably that WLAN is geographically bound so that access is limited to a given radius, and that it can be difficult for users to know where access will be available. These types of issues certainly highlight the importance of FLOWS technology, and Broadscape themselves explained how they can imagine that there will be clever devices that can choose between the access technologies. Beyond the virtually free access, Broadscape are keen to emphasise the highly customised nature of their product offerings and how they do provide the outlet with the major part of the brand of the service, so that the technology becomes associated with the place rather than with the provider. Broadscape also collate usage statistics that are sent on a weekly basis to the outlets. Broadscape currently work independently although some of their work, including sales and maintenance, is subcontracted.
5.5.2
The Outlet: Benugo
Benugo sandwich shops are described as a combination of the urban cool of New Yorks deli sandwich bars with the freshness of Italian produce which offer an innovative, ever improving menu, clean, contemporary style and impeccable customer service. Benugo has received trade awards, including best sandwich bar of the year 2002 (see www.benugo.com). The company currently runs outlets in Londons creative and new media hubs, financial districts and shopping areas. In addition to these, benugo has a number of in-house sandwich bars within the buildings of large corporate organisations based in London such as UBS, Lehman Brothers, Lowe Lintas, GlaxoSmithKline and Deutsche Bank. Benugo shops also operate a take away service, which means that many customers only spend a few moments within the store. The benugo/broadscape partnership came about early in 2003 when hotspots were set up in two of benugos sandwich bars. The key motivation for benugos interest in the scheme was the potential impact it could have on increasing sales, by encouraging repeat custom and purchases (each 30 minutes access voucher requires a purchase of minimum GBP 2.00, or GBP 4.00 during lunchtime). The wireless Internet access is also used by benugo management. Benugo management were also favourable to the simplicity of set-up, use and pricing model. Tim Parfitt explained how: we definitely did not want to be an Internet caf, thats not what we are about () we saw it as a nice add-on. I mean, we provide newspapers in a lot of our shops, people come in, sit down, have a coffee and read the paper and to a degree its an electronic extension of that really a nice add-on, which hopefully will encourage more customers to come-in and to encourage more repeat customers. Benugo have bought the hardware from Broadscape and pay a monthly charge for the service. All the maintenance is carried out by Broadscape, and staff in benugo outlets are not trained to provide support, so that their only involvement is to provide a voucher with an access code to customers who have made a purchase and request access. A user guide is provided which offers step-by-step 15-11-04 Page 37
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instructions, and any questions or logon problems are dealt with by Broadscape. The service has not been directly marketed, although benugo/Broadscape have received a reasonable amount of publicity through press coverage in national and specialist newspapers and magazines. Within the stores themselves, there is little marketing, only flyers and tabletop cards and a Wi-Fi logo on the door. Part of the reason for not using heavy marketing, is that it would indeed be seen as limited in its impact, since not everyone has a device to use it (TP, interview). There is a conscious effort on the part of benugo, it would appear, in making the service unobtrusive, since it is seen as an additional service, rather than the sole reason for peoples visit to the stores. The offering differentiates benugo from coffee/sandwich shops without WLAN, and from also from those who are offering WLAN who charge per minute or as part of a subscription. The technology is made a seamless part of its urban cool and less corporatised atmosphere (smaller chain and no monthly fee required). The product is therefore seen as much simpler than the competition, which could influence users when choosing a hotspot. Given that PWLAN access might be available in the vicinity of a benugo outlet, a pricing and lifestyle differentiator might be important in attracting users. It is worth noting that benugo do not use the service to advertise their core business, as pop-up windows are not used during the users session. This was considered but not pursed as it was felt that this was likely to deter use and impact little on customers consumption. However, the technology is entwined in the space in as much as the user guide for the WLAN offering includes a benugo menu.
5.5.3
Outlets and Users
Two benugo outlets have been offering virtually free Wi-Fi access since 2003. The first hotspot, was initially set up in Soho, a new media hub situated in Londons West-end, reputed for shopping, theatres and restaurants. Following the closure of the Soho store at the end of the summer, the hotspot was moved to another nearby Benugo shop situated in Great Portland Street, close to the shopping district of Oxford Street which attracts huge numbers of tourists and day trippers, but also occupied by a number of offices, including a number of new media companies. The second hotspot, is located in Clerkenwell, on the North West side of the City of Londons world famous financial district. Clerkenwell is considered by many one of the most important new media centres in the UK, and many leading companies in the creative industries are located in the area. The two benugo outlets offering PWLAN are therefore located in areas that serve individuals who are likely to be aware and properly equipped to use the technology. These are also areas where individuals are likely to need Internet access while on the move. During the visits to the outlets it was evident that benugo had indeed managed to make the Wi-Fi offering extremely unobtrusive, with small posters and leaflets scattered around the store: stating free Wi-Fi hotspot, and during the visits I made to the stores, there were very few users. The usage statistics provided by benugo showed that the hotspots tended to be used more in the afternoon, and that most customers only use the service once, but the highest proportion of use is attributable to customers who have used the service more than once.
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Frequency of Visits 1 2 3 4 5 6 7 8 9 10 14 21 24 43 58 Number of users 132 59 22 13 10 4 4 1 1 2 1 1 1 1 1
Table 5-2 Repeat use (Period May-November 2003, both Benugo hotspots) The hotspots are used most at lunchtime even though this includes the peak rate (customers need to spend 4.00 between 12.00 and 14,00, instead of the usual 2.00 to have access).
Figure 5-1 Number of users per two hour slot The relatively small number of users per day is perhaps to be expected in these types of public spaces, especially if we consider that a recent survey by the market research company MORI showed 15-11-04 Page 39
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that in a randomly selected representative sample of Home PC users, 7 out of 10 were unable to identify a Wi-Fi hotspot from a given list of definitions20. Similarly a survey in the US [Cybe03] found that most people have never heard of hotspots, despite the rapid growth of the sector, and that only 3.0% of Internet users have used them, and a mere 5% of those turned into subscribers. This lack of awareness by end-users in benugo outlets themselves was found in our own small and self-selected sample of customers (n=38), as 28.9% reported knowing what it was. This does not mean however that benugo customers do not make use of wireless/mobile technologies, since among this same sample, all but one has a mobile phone, and most operated on a contract. Mobile phones were frequently used on the premises by customers.
Yes % know what Wi-Fi is have access to or own Wi-Fi enabled device Own a mobile phone Contract mobile phone 28.9% 21.1.% 97.4% 73.0%
No % 71.1% 78.9% 2.6% 27.0%
Total respondents 38 38 38 37
Table 5-3 Benugo customer survey: mobile/ wireless technologies (Nov, 2003) The two outlets are used as workspaces or at least work related spaces, since it was not unusual to see meetings being held in the store as well as people working alone, although mostly in a technology free manner, simply with pen and paper. It was striking however how the location of the store did apparently impact on the type of customers, and their use of technology on the premises, since it appeared that the Clerkenwell shop brought in for instance teams of web designers who held meetings there. Yet, it is worth noting that even those types of meetings did not necessarily involve wireless Internet access even if using a laptop. Interestingly too, one of the respondents in the study commented how he did have a laptop and WLAN card, and that his office and home were both WiFied, but that he came to the coffee shop to relax so that the last thing he wanted was to logon. This brings in the question of need, exemplified also by another respondent who explained that he lived next to the shop, and that his home was equipped with a wireless network, so that he therefore did not need access in the sandwich bar. It is worth noting on the point of product marketing that this customer knew that the shop was a Wi-Fi hotspot but was unaware that wireless Internet access was available in the store also through Bluetooth despite having a Bluetooth equipped mobile phone. Benugo also reported that access through Bluetooth was almost zero. There were perhaps relatively few customers who needed this kind of third space, at least at the time when the study was carried out (November 2003). It appeared for instance that most people came to the shops to have lunch with a friend and did not have a need for wireless access. During the study, it was noted that people often came in pairs, and the Internet is more often used alone. The need for access is arguably constructed and it would be interesting to see the impact of heavier marketing and greater level of awareness both on the premises and more generally. Even those working on the premises, either did not know what Wi-Fi was, and in some cases did not know that it was indeed available. These points underline the influence on use of social constructions of technology [CaRu03]. Despite this, there is also some evidence that public WLAN spaces that apply the benugo/broadscape business model are indeed likely to be used between meetings, or by those in highly mobile jobs, who want to use the shop anyway. One Wi-Fi user explained how the combination of food and Wi-Fi was an attraction for visits to benugo:
20
The survey, conducted for Packard Bell, found that one per cent believe a 'Wi-Fi hotspot' is a 'posh hot tub', one per cent a sunbed and that two per cent of respondents believe that it is 'something smelly that had been left out in the sun for too long'. One per cent think it is a microwave ready meal and two per cent of respondents identified it as a new HiFi. [MORI03].
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I can look at emails between meetings, so I can stay on top of things its really convenient. It means that I dont have to go through lots of stuff at the end of the day . So I suppose you could say it helps my work/like balance. It might be also that particular kinds of hotspots need to exist for different types of WLAN users, since for longer sessions, the benugo/broadscape might not be the most competitive price, nor most appealing package, as places like trains or airports are offering a different kind of service to users who might have a greater dependency on the service, if only by being confined to a particular space for a given period of time. WLAN has not become the core service in benugo stores, and was never intended to be since it was clearly explained during the research that benugo is not an Internet caf. In other words, the business model and revenue stream needs to be understood and adapted to the location and reason for the customers visit (or core business) in each venue.
5.6
Conclusions: Implications for FLOWS
Three key barriers to adoption and use were identified during the course of the benugo/broadscape research. First, few customers had access to WLAN enabled devices (although almost all those interviewed owned a mobile phone). Secondly, the levels of awareness of WLAN and /or hotspot locations were often low, even if when respondents were informed about it, they seemed in many cases relatively enthusiastic at the idea that it would be possible to access the Internet wirelessly from a place like benugo. Thirdly, there appeared to be in some instances a mismatch between the space and the customers reason for visiting that space. In particular it appeared that people visited the sites to relax or indeed to grab a coffee and sandwich at lunchtime, rather than work or check emails. Nonetheless, there was also evidence of work related meetings and discussions taking place especially in the outlet located in the (new) media hub. It is worth noting the near saturation of mobile phone ownership in the sample, and indeed the visible use of voice as well as data applications (e.g. SMS) on the premises, which could become an important development as mobile phones become equipped with WLAN chips. These users could potentially then benefit from VoWLAN. This would represent an important development for FLOWS technology, since FLOWS is specifically envisaged for a future of wireless and mobile technology. Moreover, the unlicensed nature of the public WLAN spectrum does provide scope for greater competition and an increase in the number of MVNOs which it was pointed out in Deliverable 12 are likely to gain from and contribute to the increased value of FLOWS technology. The predicted stabilisation in the number of hotspots might also perhaps be a sign that a convergence manager will become of critical importance, since devices will need to choose and adapt to their given environment. Finally, the development of FLOWS and related use scenarios must take into account the role played by the device. The terminals that are most widely used to access WLAN networks currently are limited not only in terms of their relatively low level of ownership, itself largely concentrated among early adopters and business users, but also because of their form factor, on which specific types of applications might deployed. If end-users want to take full advantage of the applications that are optimised by the higher bandwidth offered by WLAN networks, these are likely to require larger screens, higher processing power, and so on. This is in turn will require more powerful and/or longer lasting batteries (particularly if the devices are used in truly mobile ways and/environments), all of which will impact of the size and weight of the device. This means that the form factor is key not only in terms of portability but also in terms of the usefulness of particular applications and access technologies. At the time of the study an important part of WLAN use was for email which does mean that other devices and access technologies, such as Blackberry operating on GPRS might be seen as a threat to WLAN and to simultaneous use. However, most mobile workers, and increasing number of office workers are equipped with a laptop. This ownership, even if the portability might not be optimal, underlines how most workers might benefit from network access anywhere, anytime. To guarantee this availability different access technologies used simultaneously would offer consistent QoS by splitting data according to the application and available bearer technology.
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6. Mobile and Wireless Applications in Education Contexts: A case study of wireless network provision and use.
6.1 Introduction
M-Learning is a key application of a converged technological environment, and since WLAN is rapidly becoming deployed on university campuses around Europe, and is itself regarded as a critical step towards m-learning, its study becomes important to understand the opportunities and constraints emerging in convergence use scenarios, such as FLOWS. A key point to note is that in order to realise the full potential of m-learning technologically and from the perspective of both pedagogy and social inclusion, it will be necessary to use a range of mobile and wireless devices, as well as several distinct applications, including SMS, MMS, IM, email, Internet browsing and so. These are seen as likely to be used simultaneously as learning and personal/environments converge, resulting in increased multi-tasking among learners. This chapter describes the potential of m-learning applications for FLOWS technology, and the characteristics and implications of wireless and mobile technologies deployment and adoption in university and other higher educational contexts. Through a case study of wireless provision at a UK university, key socio-economic aspects of wireless and mobile Internet use are discussed. The first part of the report provides some background on e- and its (expected) evolution to m-learning, and offers an overview of some of the major challenges and opportunities for both service providers (market and organisation level) and users (teachers, learners). The second part focuses more specifically on user adoption issues through a case study of WLAN at a UK university. The case study consists of an empirical investigation of WLAN deployment and use at both organisational (i.e. university) and end-user levels. This involved interviews with key individuals on the provision side, including computer services, library management, e-learning champions, and the student representative body. A small self-selected sample of MBA students was interviewed to underline the user perspectives of wireless provision in an educational context. These findings are used to assess the significance of FLOWS technology in shaping future scenarios of use in educational contexts by giving some attention in the conclusion to the (simultaneous) use of different access technologies. The FLOWS M-learning case study was selected on the basis of key findings emerging from the study of benugo/Broadscapes public WLAN hotspots. This identified three key barriers to adoption and use: low levels of access to WLAN enabled devices (although almost all of those interviewed owned a mobile phone). levels of awareness of WLAN and /or hotspot locations were often low a mismatch between the technological space and individuals reason for visiting that space.
These findings underline therefore what might be an ideal environment in which WLAN hotspots can successfully be deployed. In particular, it is believed that educational contexts such as university libraries and campuses are likely to have (and in many cases already have) a much higher level of use. This led to the assumption that a university context might provide a better understanding of processes of adoption and use for a number of reasons related to factors such as availability and affordability (many staff and students at the university are adequately equipped and WLAN use is available free of charge); need (students in particular do not generally have a fixed working space at the university, and are therefore mobile with their work moving between lecture theatres, libraries, seminar rooms, tutors offices, etc..); and knowledge, use and awareness of technology ( these are usually high among these groups, not least reflected in the early adoption of the Internet in academe). Furthermore, a number of studies (e.g. [UbDe01], [Rams03]) have established the success of mobile learning applications and technologies in universities. These are seen as likely places for wireless / mobile Internet use in so far as, in addition to being well suited to the mobile lifestyles of students, wireless access complements e-Learning and classroom based training [Tong03], even if not substituting fixed wired environments. This research therefore explores particular learning applications by focusing on understanding differences between users, whilst being set within the wider context of technological change. Mobile learning is indeed believed to be likely to benefit from the convergence and simultaneous use of a number of wireless and/or mobile access technologies, 15-11-04 Page 42
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including 3G and WLAN. This last point has become ever more central in light of T-Mobiles announcement to offer in collaboration with Cisco and Intel, mobile broadband to universities across Europe by integrating 2G, 3G and WLAN (see [TMob04]).
6.2
Background: E- and M-Learning
ICTs have become a central part of educational strategies and policies. Despite their growing importance in the learning and teaching process, difficulties remain in finding the best ways of integrating technologies into existing educational settings and systems. The term e-learning, defined as learning facilitated and supported through the use of ICT [PoKn04] has come to symbolise the potential of technological innovation in the field of education (including the proliferation of online learning resources), but also a tendency to overestimate this potential and in particular the inherent interest learners might have in digital models of delivery21. It has been argued that conceptually elearning should not be seen as something different to learning [UdYa04], even if processes and interactions might change, with for instance teachers becoming facilitators. Importantly however, elearning is seen as part of a blended" learning environment, involving a mixture of IT, traditional, work-based and distance learning to meet the diverse needs of students - rather than concentrating on wholly e-based learning. [Guar04]. This has led in recent years to the deployment of many innovative e-learning products and services at all levels of educational institutions [DuLo02]. The mobility afforded by emerging technologies combined with the high level of ownership of mobile and wireless among young people (the largest group of active learners) has brought a new dimension to e-learning: m-learning, described as offering a complex array of possibilities opened by the convergence of new mobile technologies, wireless infrastructure and e-learning developments [McLe03]. Mobility and the use of mobile/wireless technologies in education are seen as significant developments in supporting other forms of learning, because of their potential in addressing key educational obstacles faced by large numbers of young people, including poor literacy and numeracy, non-participation in conventional education and lack of access to web-enabled technologies [DaMc04] Wireless mobile technologies appear above all to have facilitated an intensification of e-learning processes and interactions, but have added a highly communicative dimension to these. IST MOBIlearn describes how: Developments in pedagogy have moved away form the transmissive modes of teaching/learning towards constructivist or socio-cognitive models that place the active learner at the heart of activities. Learning is considered to take place in a social context with the forming and reforming of concepts that not only taking place at an individual level, but also during collaborative group work and sharing knowledge with peers. So learning is perceived as much about communication as it is about content [MOBI03]. Much of the research in the field has underlined the critical role of end-users in the learning process who adapt activities and interactions as a result of technological opportunities (see especially [McLe03], [Trif03], [Soti02], [Singh03], [Syll02]). These activities are characterised by greater flexibility, collaboration and communication, which, as the FLOWS use scenarios developed in D06 and D12 point out, are interrelated to particular types of devices as well as single or multiple service and/or content providers. Table 6-1 below summarises some of these interrelationships by outlining the pedagogical and technological characteristics of m-learning.
21
The recent closure of the UKS first e-university [Guar04] offers a good example, as its collapse was blamed on a lower than expected demand for online degrees.
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LEARNING Characteristics Personalisation/Collaborative Anywhere, anytime
DEVICE
22
Technology PROVIDERS
and
content
Personal device/ dockable with shared devices Portable
Consumer product developers Commercial (e.g. educational software, online resources etc) and non-commercial content (teachers, lecturers) Outlet owners, institutional infrastructures, WISPs. Learning spaces (museums, universities, city centres).
Ambient, ubiquitous Lifelong, based Flexible collaborative, problem
Multi-standard Multi-service Multi-activity
Voice, data, entertainment
Table 6-1 m-Learning Pedagogical and Technological Characteristics It has been suggested however that the m-learning paradigm is still some way off becoming a reality, and that it remains for the moment at least, a vision with as yet 'significant pedagogical, cultural and business issues which are often under-estimated by the technologists" [McLe03]. This view is to an extent supported by findings from the earlier FLOWS PWLAN case study which highlighted some of the constraints in the use of public hotspots. M-learning is evidently at an early stage of development at the moment, and many innovative projects including IST MOBIlearn and IST Mlearning are helping address a range of obstacles by advancing knowledge as well as developing and designing products for learning with mobile and wireless devices and networks. The current 'constant battle over the control of distribution channels and control of content" [McLe03] is hampering progress towards a seamless provision of services and a closer synergy in the work of different actors is clearly needed, especially in contexts where service provision becomes much more multilayered. The convergence of different services, technologies and standards will play a key part in facilitating the development and use of m-learning applications. At the same time, the success of m-learning applications depends most importantly on learners themselves, as M-Learning is a 'human-centric' [MOBI03] form of learning. To shed some light on end-users' (potential) adoption of wireless in education, a case study of provision and use of wireless networks and devices was conducted at the University of Edinburgh in the Spring/Summer of 2004, and included in-depth interviews with MBA students identified as those most likely to be among the earlier adopters of new learning offerings. The main findings are presented in the following sections.
6.3
Wireless at the University: A vision for m-learning?
The case study is based largely on interviews (total 16) with students and staff at the university. This included semi-structured discussions and informal conversations with University of Edinburgh management staff and educationalists in computer services, library/facilities, Students Association, the School of Education, Media and Learning Technology Services, and the Management School, as well as using notes and documents from the university's e-learning strategy meetings and conference. The user perspective was obtained through in-depth interviews with MBA students (full and part-time). All interviews were carried out during the spring/summer of 2004. The University of Edinburgh was selected as a case study for a number of reasons. 1. The university has a relatively large student population and includes a Management School which offers a full and part-time MBA (Masters in Business Administration) course to students, who largely come from leading local and international companies based in Scotland. This group of users is of particular interest for the FLOWS research, since they effectively encapsulate two groups of users: (1) 'business users' often considered early adopters of technologies, who through their work have high levels of affordability; and (2) university students.
22
See FLOWS, D06 [StPi02] for full details of characteristics of device including battery life, standards etc.
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2. The University has since the spring of 2004 been offering all members of the University (including staff and students) wireless Internet access through a number of APs (Access Points) located at key sites around the University campuses. The Management School in particular has been quick to respond to the availability of the technology to make WLAN access available almost everywhere in their building. 3. The University has for some time now been working hard to promote e-learning and a recent report [Ritch03] identified the contribution of a number of e-learning champions, even if still relatively small. E-learning does however form an integral part of pedagogical debates taking place within the university. A number of innovative schemes have been set up to improve - through the use of technologies - course management, students' learning experience and their access to technological resources, including a laptop loan scheme launched at the library. 4. As noted in the introduction, universities offer an interesting ground on which to explore ideas relevant to FLOWS technology, through a combination of the availability of mobile/wireless technologies on site and the general level of skills/ expertise/ knowledge and interest in technologies. It is worth noting also the sizeable market universities represent globally, and the implications this could have for FLOWS.
6.4
Components of e- and m-learning context
Wireless enabled learning environments or m-learning application scenarios can broadly be seen as constructed around four interconnected components (see Figure 6-1). The empirical data collected at the university suggest however that not all of these components are either fully developed or evidence of their existence visible at this point in time. Nonetheless an analysis of these areas within the chosen case study is seen as useful to understand the key dimensions and stages leading to future m-learning applications or scenarios.
E-learning Strategies/Content Wireless Network/Infrastructure (WLAN / UMTS/GSM, etc)
Student s Use and Access ICT and Wireless Space/Place/Mobility
Figure 6-1. Components of m-learning environment
6.4.1
E-learning Content Strategy
The combination of the current technological context, individual departments resources, innovation and knowledge are seen as offering unique opportunities for e-learning in the university context (University E-Learning conference 2004). Despite such optimism, it has been suggested that there is a clear lack of central coordination [Rith03] and it appears that e-learning strategies and applications within the university are at the moment still rather patchy or underdeveloped. Consistent with findings of e-learning in most university settings, e-learning is limited mainly or only [to] course managements systems (principally Blackboard and WebCT), and PowerPoint lectures [ZeMa04]. Currently much of the onus for e-learning development and integration is on teachers themselves. This situation is holding back progress on implementation, as some argue that these users are unlikely to burden the process of change, with many seen as frightened of even attempting to fully integrate technological applications into teaching. There is a need then to change attitudes and perceptions of e-learning by faculty and technical staff [ZeMa04]. Such problems are seemingly more pronounced in the context of m-learning, as there is a fair degree of scepticism, even among e-learning enthusiasts, about the value of wireless for educational purposes. It also emerged during the course of the research at the university that wireless is not at all integrated into e-learning discussions, even if transformations might emerge gradually as a result of the availability of the wireless network, and from the growing level of laptop ownership among students. Despite what might appear as a passive approach to m-learning, the university has recognised the need for communication via technology as an integral part of learning. This has led to the establishment of an instant messaging (IM) group, which has recommended further developing provision and support of IM within the university. This type of resource is seen as primarily supporting 15-11-04 Page 45
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other channels of communication (e.g. SMS, email) but might encourage also collaborative work and informal learning. Some subjects at the university are more likely to benefit from the wireless offering, such as in medicine where use is already made of handheld devices to access patient notes or information databases, and also among MBA students where increasingly more emphasis is put on group work (including e- group work). Generally speaking however, it appears that most e-learning strategists at the university see wireless as using time more effectively [as] for instance students can just research whether they happen to be, rather than go to micro labs or the library. It is however likely also to bridge formal and informal learning, to accelerate the speed at which students get in touch with tutors as well as encouraging spontaneous learning.
6.4.2
Wireless Network / Infrastructure
The wireless network at the university is part of a project to offer alternative methods of access to the network and is very closely relate to the VPN project. At the time of the interview with computer services (May 2004), there were 1200 registers users for the wireless service at the university (mainly students), and that numbers have been continuously rising since the service was made available. The reasons for offering the service are manifold. First, it enables to offer an alternative to the wired network - even if not seen in any way as substitute - and thus greater flexibility of access to web services, as well as fostering P2P networking between students. It makes in this sense flexible use of space, relieving pressure on the computer rooms. Secondly, it allows making use of personal laptop ownership. Thirdly, it is used to offer access to authorised visitors who come equipped with their own machines. This point is significant, in light of current discussions ongoing about providing a European wide authentication scheme, which would allow affiliates of any European university to use the networks of host institutions. Finally, it offers reduced installation effort and costs, and can be used to extend coverage to new locations. This is particularly pertinent in old buildings such as those of the university, where restrictions exist on installing cables. A number of issues have and in some cases continue to be obstacles to a further roll-out of the service. The IT department initially suffered a culture shock which did create some resistance to the offering, especially due to concerns about security, including individuals hacking into the networks or bringing in infected machines. Publicity of the service has also been hampered, due to restrictions on placing signs to make potential users aware of the availability of the networks, especially in the landmark buildings and sites of the university.
6.4.3
Students Use of and Access to ICTs
Recent surveys at the University [Hayw04] have demonstrated significant changes in students skills, views and expectation of ICTs. More specifically, it has been noted [Hayw04] how students are generally more favourable to the use of technologies and come to university with consistently high levels of basic ICT skills. There has also been a sharp rise in the number of students who come to the university with their own portable machines (approximately 50%). Students are said to use ICTs for both work and recreational activities, and on a regular basis, although most students have rather limited experience of well-developed or sophisticated e-learning. At the same time, concerns have been voiced among students of the potential negative impact of greater use of ICT in teaching, particularly in relation to face-to-face interaction and the quality of education provided, including student/teacher contact time and the potential distraction of the availability of emails during lectures, although it should be pointed out that such fears assume a highly deterministic approach to the interrelationship between users and technology. It is evident that the high (and steadily growing) level of ownership is significant in the potential development of m-learning applications, although importantly too, the opportunities this offers have not yet been exploited. For instance, wireless is not formally part at present of student induction courses (except at the Management School) and this has implications for students ability to feel confident to sign up for the service, especially in view of the much hyped fears around security. At a more basic level, this impacts also on levels of awareness (which is compounded by the lack of publicity for the service at the university described earlier). The Student Representative explained that: Students might have the right equipment but not necessarily a clear understanding of what needs to be done in order to get access, nor really what it can do for them. Too little is done therefore by the institution to drive the service and content to make it an application not just a technology. The 15-11-04 Page 46
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Management School runs a separate induction programme and offers clear instructions on configuring machines for use of wireless and on dealing with other security concerns. This approach is seen as positive, and the school has a high percentage of registered users for the wireless.
6.4.4
Space/Place, Mobility
Mobile communications is the way things are going. People expect now that they can access information anywhere, anytime. This remark made by the IT manager at the Management School highlights a number of key transformation in the learning and teaching landscape. First, in terms of mobility, personalisation of devices but also spontaneity. Secondly the potential of P2P to shift learning/teaching methods away from top-down delivery towards communication is increased. Thirdly, wireless is seen as transforming different spaces or places into learning centred environments and significantly augments existing learning contexts. The university has up until now put relatively little thinking into developing specific content for m-learning, having focused much more on looking at wireless as a space/mobility issue. This has resulted in initiatives such as the library laptop loan scheme (run as a pilot in Spring 2004). The idea behind this scheme first came about when the University was looking at more flexible approaches to student study space. At the moment the scheme is limited and the loan of laptops is confined to the library, but if successful might be extended across the university. It is described as a synergy between computing and library services and is part of a number of ideas being explored to either facilitate students access to information anywhere, anytime (others include stand-up short stay terminals), or to use study spaces more efficiently. Students have also commented via the EUSA (Study Representative body) their interest in extending the existing wireless zones into non-academic areas within the university campuses, such as coffee shops, halls of residence, etc. This transformation of space is seen in many senses as highly appropriate since students are increasingly multitasking, switching between social or personal online activities and educational tasks, and could enhance informal learning processes by blending social and educational activities.
6.5
6.5.1
End-User Perspectives
Background
The following section describes key findings on students perceptions and use of mobile/wireless and Internet technologies especially for educational purposes, drawn from interviews carried out with MBA students (full and part-time) based at the Edinburgh Management School, University of Edinburgh. MBA students are not seen as typical or average students, especially in terms of age, career stage, disposable income or social and professional network. They are perhaps more inclined towards earlier adoption of technology, not least because many work as executives and senior managers in a range of organisations including large corporate and public services where ICTs play a pivotal role in day-to-day operations, and are often through their work provided with mobile/wireless technologies such as phones or laptops. 6.5.2
Factors influencing adoption and use of wireless
It became evident during the course of the research that work and employment played a critical part in introducing, exposing and habituating this group of users to technologies. Whilst for some this was directly related to the nature of their work in IT or technology companies, for others it was simply down to the fact they were often obliged either within their organisations or because it was expected from the market. Interestingly too, as highlighted in other research [Vasi04], knowledge of technologies at work was subsequently diffused into the realm of leisure and the home. However these conditions alone did not appear to explain whether or not individuals were likely to know about and use wireless technologies. In particular: wireless developments were seen as key for entrepreneurs and those interested in developing business ventures. The form factor of laptops often inhibited use of wireless hotpots while on the move. PDA size Page 47
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was seen as far more appropriate as it would allow quicker and more spontaneous uses. The confinement to particular places and the desire to use that time as efficiently as possible was seen to increase the use of wireless so that locations such as airports were viewed most favourably. Free availability of wireless at their place of study was an incentive for use, but for part-time students who spent relatively little time at the university, such access was of limited value. Furthermore knowledge of the technology was not sufficient for adoption: users stated that they needed to be convinced of the value/purpose of use. Many however did experiment with available technologies and a good user experience was therefore critical to further use. The novelty of WLAN meant that some individuals were curious and interested in using or testing it, but for others the novelty factor translated into a fairly high degree of uncertainty. In terms of negative conceptions, many were worried about security aspects, both in relation to hacking and physical theft of devices which would result in loss of content (including loss of sensitive data). Importantly, previous experience on the Internet (for instance for shopping and banking) did seem to be significant, so that a good experience on the Internet was seen as an indicator of what would happen in a wireless context. Interestingly too some negative themes stemmed not only from experiences of the Internet, but also from mobile telephony, with several interviewees expressing worries about health risks around the use of wireless. Individuals drew on a range of resources to choose their technologies, including specialist magazines and word of mouth. These sources were either actively sought when making purchase decisions or more passively experienced through exposure at work, etc.. The use of wireless at home was guided by a desire for innovation (seen as a gadget). Ease of set-up, space management and convenience were also factors influencing decision to go wireless. There was an apparent strong interest in a seamless integration of services and service providers. Use charged per minute was seen as an unattractive option since it was likely to deter particular uses. Cost factors were particularly important for personal use, and chargeable use would only be made in cases of emergency. Ease of access was important. Greatest use is made if / when using wireless is as easy as picking up the phone.
6.5.3
Educational uses
Although the wireless network is available to all students at the management school, it is not currently used by all23. Personal and private ownership of a laptop and amount of time spent at the management school are key factors affecting use within the school. Indeed it was found that among part-time students few even used the PC labs available there, or only occasionally, usually for printing. At the same time, it is worth noting that those who did use the wireless on their own machines within the school, and those who made use of the Internet for MBA related activities through a fixed terminal either at the school, home or at their workplace, often did so for the same activities. These included: Email: to/from fellow students for educational and socialising purposes. Communication with teaching / administrative staff. Access to the schools student portal which acts as a noticeboard and gateway to MBA related resources including teaching material, past exams papers, email, etc Peer-to-peer file sharing Instant messaging Online access to academic journals held by the University Online course content research (press, commercial / government websites, etc)
23
Around 40% of MBA students are registered to use the wireless network.
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It appears that on the provision side, little innovative applications have been developed and that most online activities relate to course management (including communication) and access to published resources. Students felt that the resources available online were generally good, but that possibilities offered by higher bandwidth and wireless access could be better exploited. For instance, one student suggested streaming and archiving more teaching materials, including video recordings of lectures which could be downloaded or viewed online via video streaming (either live or deferred). Although there was little difference in terms of the activities pursued by wired and wireless students, those who made use of the wireless network at the university did comment upon specific advantages of having access to their own personal machine, such as ready and guaranteed availability of use, instant storage of documents, access to other stored documents, archives or software. This wireless personalised device also allowed flexible use of space and time, so that emails could be checked whilst grabbing a coffee, or any area within the school could be established as a working space. The library laptop loan scheme, which as noted earlier aims among things to make flexible use of study spaces within the library, does not really address the desire of portable personalisation. One student commented how the scheme was of little appeal, since other fixed machines are available (with bigger screens/keyboards, etc). However it was suggested that if the devices on loan were far more portable and these could be used when moving around the library for instance to take notes and have these archived. 6.5.4
Defining users
The data collected from the interviews with MBA students and members of staff at the management school suggest that there are at least six categories of students, each underlining different levels of use, interest and knowledge of wireless technology. These categories are similar to the theoretical user types developed in D06 but conversely to those, these are empirically derived along four axes: (1) ownership, (2) perceived usefulness, (3) interest, and (4) knowledge. These are seen as useful categories to understand processes of adoption but also the obstacles that need to be overcome in order to create a truly mobile/wireless learning environment. The 6 types can briefly summed as: Type 1: total enthusiast, owns a number of devices to access the Internet while on the move, sees wireless Internet anywhere/ anytime as highly useful. Type 2: Interested and convinced that wireless technologies are truly useful, but does not own a device although is seriously considering getting one. Type 3: Interested, aware of technological availability but not convinced, even if owning a wireless ready device. Not fully aware of applications and has never tried it. Type 4:Not interested in even trying wireless Internet and not convinced, but has been made aware of technology through work. Type 5: ambivalent but knows that it is available predominantly through the schools induction as this user does not own a device. Type 6: Not aware of its availability. 6.5.5
Implications for m-learning
The study of MBA students demonstrates that there is fairly high degree of interest in wider uses of mobile and wireless technologies, but that at the moment this is limited to learning applications which are largely driven by students rather than teachers. Therefore there is a clear need to develop learning methods and applications that might make the use of wireless technologies more visibly useful for both teachers and learners. This would help convince the more sceptical students and foster an environment that might encourage sustained use, and allow wireless use in an educational context to reach what might be regarded as a critical mass. This point is significant, since it appears that many users reported knowing other users, whereas non-users said that they did not know anyone who used the wireless. This finding underlines the influence of peers in terms of use and also awareness. It is not evident that at the moment all students are even aware of the service. Wireless learning activities could be stretched beyond the current wide use of email, to more innovative uses 15-11-04 Page 49
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such as quizzing. Remote access to information needs to be built into the teaching experience to augment realities in given contexts (in both space and time). Related to this, is the spontaneous learning afforded by wireless / mobile Internet which could be more widely encouraged. This means that if students are even simply exposed to a concept that they do not understand they may immediately search for relevant information online. The flexibility of space also means that they can access course related work anywhere/anytime and establish study spaces anywhere, thus facilitating continuous learning. Technology is any case widely used in students day-to-day life, and such closer integrations of teaching and learning might further facilitate informal learning, either on an individual basis or between peers.
6.6
Conclusions: Implications for FLOWS
The mobile learning case study has demonstrated that, although the use of wireless applications for learning is at the present time rather limited in terms of scope and intensity, ICTs (including mobile and wireless) play a pivotal role in all aspects of the everyday life of students. This combined with the high level of ownership of personal devices underlines some of the as yet relatively unexploited possibilities for context specific wireless applications. This contextualisation of use, the personalisation of devices and applications, and the increased mobility between contexts underlines more specifically the need for an improved integration of service provision, in terms of content, applications and bearer technologies. In particular, students might be at the same time situated within a number of super-imposed spheres of activities, each bearing different provision models. For instance while on the university campus, which offers free WLAN access as part of the universitys ICT provision, students might make a voice call using their mobile phone via a telecoms service provider. This superimposition might be intensified in a range of contexts visited or inhabited by students, especially if mobile learning applications transgress personal and academic/work activities. Equally important to any integration or convergence will be the type of device that will come to be used most widely by students, and where the ownership lies, even perhaps at particular times (i.e. laptop or other device provided by organisation versus students own mobile phone and/or laptop). As it is unclear as yet how these uses and integration might be regulated at national and organisational level in terms of bearer technologies and applications, students are likely to benefit from the development of a device supporting several access technologies and applications to allow them to superimpose their activities in different contexts. FLOWS technology has an important role to play in the development of such integrated systems for mobile learners, as mobile learning reflects above all a convergence of technologies, with an increased emphasis on mobility, flexibility of space allocation and context use, and the simultaneous availabilities of several wireless access technologies (GSM, GPRS, UMTS, WLAN). In sum, mobile learning is currently a supplement to existing learning methods, but could potentially in the future do far more to enrich the learning experience of students. Most importantly the integration of devices (mobile phones with PDA functions, cameras, video, MP3 players or tablets as desktops) in which applications and bearer technologies converge, makes the world of learning more mobile, flexible and exciting. Here, the simultaneous use of available bearer technologies is key to creating more flexible techno-pedagogical environments.
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7. Innovators and Operators: A Case Study of Application Developers

7.1 Introduction
This chapter is based on the experiences of a small number of innovative technology and content companies interviewed in Scotland in August-September 2004. It looks at these firms experiences of innovation and their relationship to the mobile operators, how they see the operators affecting their business, and the development of their market, and the market for new mobile and wireless services in general. These interviews only reflect the experiences of a few firms, others may have different experiences, especially in other countries. Nonetheless, the many of the issues are those being reflected in broader discussions and comments across the industry. The individuals interviewed had all spent many years in and around the telecommunications or IT industry, and a number had actually worked for operators before setting up their own businesses, giving them insights into the operations and concerns of operators from within and from outside. There are a range of firms in Scotland working on wireless applications and other aspects of mobile and wireless technology. Some of these are members of the MX Alliance, a government-sponsored trade organisation aimed at supporting and developing wireless businesses in Scotland. The respondents were drawn from among the members of the organisation. This study also draws on contributions from other members and invited speakers who participated in a number of workshops on aspects of developing wireless business.
7.2
Company outlines
There were broadly two sort of firms interview: three with a technology product that sold that product to third party partners, such as operators or companies offering IT based services. These companies found they had to work on a global scale in order build a large enough market, and were able to due to the common standards deployed throughout the world. The other two firms developed technology, but were primarily involved in finding applications for mobile systems and platforms and adapting them for particular clients. Any work outside of Scotland was primarily because they worked for multinational clients, or had close relationship with a partner in another country. Mobiqa Mobiqa have a patented technology for sending barcodes to mobile phones in the same way as a graphic logo. They are a small, new firm, who are building a business marketing this technology to be used initially for electronic ticketing and marketing vouchers. They provide a service to integrate with existing IT systems, or sell the technology. They have a global market, and sell though partners, rather than directly. These partners include mobile operators, ticketing technology firms, and mobile content firms. The mobile phone barcode is sold as a complementary way of delivering a ticket to a customers, with some cost savings, but in certain (global) markets there has been very high uptake. End users and business customers are all familiar with the concept, and ease of use is very high. Justfone Justfone integrate existing IT systems with cellular communications, based on a number of technological building blocks they have developed. They sell services, running their own servers, and system integration. Products include remote monitoring and control and workforce management. They provide SMEs and utilities, and resell through BT. An important part of their market is public sector. One could call the end users of their systems clipboard technicians. They use SMS and GPRS as connection methods, to PDAs, Smartphones and traditional mobiles. The main value they can offer their customers is productivity gain from access to timely information, though automatic communication and tracking of staff. Projects include remote site monitoring and on-demand public transport. Purple Patch Purple Patch is a technology firm who provide and operate public hotspot systems. They primarily sell through telecoms operators who resell their product as part of value added service to their customers, 15-11-04 Page 51
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and Purple Patch operate the service. Their product is used in hotels and other public locations in the UK and elsewhere. Key to their market is a product that provides easy management and billing for hotspot services. Their hotspot base stations run both 802.11 and Bluetooth. The product was originally conceived as providing voice service, but moved to data access as this was an emerging market. As well as the hotspot technology they are moving into applications and wide area wireless networking. Elekrobit UK Elekrobit UK are the UK arm of a Finnish mobile technology firm, spun out from a University Electrical engineering department to exploit the specialised knowledge of UTRA-TDD technology in a market investing heavily in 3rd generation cellular technology. However over 3 years this market virtually disappeared, as 3G investments were slowed. The firm reinvented itself as experts in Symbian Series 60 programming, and developed a location-finding system that was independent of the location information being sold by operators. This they are developing as a technology to be commercialised by other application developers and service providers, such as Justfone, with whom they have done a development deal. Realtime Engineering Realtime Engineering is an established firm of some 100 employees across the country, with a long record of IT system engineering for data monitoring and control systems. Starting from the oil and gas industry, the firm developed expertise in moving a clients control room data onto networks, so it could be accessed from the desktop anywhere in a firm. The move to mobile and wireless technologies is the next stage of this business. They supply a range of firms, some quite large, such as airports and utilities. Wireless device enables personnel to be reduced monitoring critical systems, and makes peripatetic workers more efficient. Use of wireless has developed in partnership with these clients who are seeking productivity gains using technology, ahead of the market. They compete with firms such as IBM, EDS or Logica, as well as similarly sized firms. They are able to innovate in smaller projects ahead of the competition.
7.3
Technology Innovation and Service Innovation
Although all the firms interviewed had technology expertise as the base of their business, and several had patented technologies, they all insisted that the innovation environment was primarily about trying to get current technologies to work better, and derive benefits from exploiting synergies between wireless access and existing IT systems. The main problem is trying to discover and sell those benefits to potential customers who are trying to extract better value from their IT investments, and reduce communications costs. This may sound obvious, but for those used to selling technology expertise it marks a new environment technology is a commodity, anyone can provide technology, the problem is finding the market for it.. One firm was set up to exploit expertise in 3rd generation UTRAN-TDD, but found that within three years the interest in third generation network systems had almost vanished from the world market, and the business had to be reinvented around existing technology GPRS, and the Symbian-based smart phone. In the field of telecommunications, the lead is no longer set by engineers promising the next generation of network technology, but by those who can find ways to use this existing technology. Another firm patented a way to send a barcode via SMS in the same way as a logo or ring tone, and is commercialising it for ticketing and marketing via partner who integrate the technology with existing IT systems. Without resorting to new personal area radio technologies on the handset,, such as ZigBee or Bluetooth the system provides a simple way to distribute authenticated vouchers to the majority of the population. All the firms agreed that there was considerable business potential from exploiting the ability to connect from a mobile device to existing IT systems using existing technology of SMS and GPRS, with little need for higher bandwidth communications. The key value is real-time, ubiquitous communications. The principal drawbacks from current cellular technology were lack of decent location finding, and lack of complete dependability. The rest of the problems largely derive from artificial barriers placed by operators in the form of handicapped devices or high price and regulations, and from the lack of a very good standardised platform for developing and running applications on portable devices. The main work of most of the firms was to integrate mobile connections with existing business IT 15-11-04 Page 52
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systems, once they had managed to sell the benefits of doing so, which often demanded a demonstration or pilot phase. Clients main interest is not to buy IT systems, but to buy services that can demonstrably product benefits for organisation activities.
7.4
The Market for Mobile and Wireless applications
The firms were mostly recent start-ups, although one had been running for many years. They had a variety of experience in selling mobile integration applications, and were all very positive about the growth potential of the market, and equally scathing about the failure of the mobile operators to exploit that market. The main issues that were identified in relation to their customers were on the one hand, risk adversity to investment in new IT systems and worries over security, and on the other the way new clients are starting to identify productive new uses of mobile and wireless technologies, and save money by implementing them. The respondents said that an essential part of the marketing and innovation process is a demonstration, often followed a pilot implementation done in conjunction with the client. Although the wireless or mobile application was often seen as a incremental evolution of existing IT use, it nonetheless opens up new possibilities, new ways of working, and new areas for things to go wrong. This meant that operation managers in client organisations may be enthusiastic about the technology, but those responsible for paying for and managing the technology were more sceptical. Selling a new product or service, especially one that involves new technology is likely be regarded as rather risky by senior managers. The experience of these firms is likely to be the experience of many SMEs. It was reported that in several cases that clients operational managers were generally the first to see and calculate the benefits of wireless technology, but problems in actually selling and implanting systems came from other places in the firm. For example, one firm found that IT departments were reluctant to try and integrate the new APIs using the latest technology such as web services, with their legacy IT, and resisted the move. (Of course another of the firms interviewed made it their business to do precisely that, but still found resistance from in-house IT departments). Contracts with larger firms would be delayed since the person proposing the buy the service or system would have to right the report to get considered by managers. When the proposal came to decision makers they were likely to weight up not only the costs and benefits, but also the risks of investing in new IT, which of course can be considerable. Better to stick with what one already has, rather than risk an expensive investment not delivering. Nevertheless these firms were all optimistic about their future markets, and ability to stay in business. Mobile IT was now more and more firmly on the agenda of managers, both in operations and in IT services. In a period when IT spending has slowed, using mobile and wireless is now seen as a new area of IT investment that can bring cost saving and differentiate a business. One respondent found that he was getting more contacts from potential clients, and having to work less hard in explaining the mechanisms and benefits from integration mobile IT due to the exposure of the technology in the media. No longer does SMS have the image of kids sending pointless messages, but voting on Big Brother, texting questions to programmes, premium rate competitions etc has made business people thing what can this thing do for me? Another firm, which develops pilots of systems using wireless for existing clients, says that these clients now expect mobility, and wireless, whereas a few years ago it had to be presented as a demonstrator to convince them of the benefits. The benefits that clients focus on are, 1. Extending and enhancing the existing IT systems. 2. Benefiting from ubiquitous, real-time and on-demand access to IT systems. 3. Using this to create productivity benefits, and make efficiency savings, especially related to peripatetic employees. 4. Opening complementary channels for employees or customers to access services and systems. Saving money is a key issue, so pilot trials that demonstrate money saving, and buying in services that increase efficiency, rather than investing capital in IT systems are both important factors. A key way of saving money and increasing productivity given by the respondents was the saving of transport costs and staff time. For example, travelling to the central office to pick up instructions, 15-11-04 Page 53
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report, or enter information into computer systems, check inventory databases. Transport and time costs are easily quantifiable, relevant in both congested urban, and in rural areas, particularly in times of rising fuel costs. Security was a key theme in 2003-4 over wireless, but these developers felt that the problems and concerns had largely been met, and indeed in developing new wireless solutions they were able to offer their clients more secure systems than before. All the firms interviewed sold technology products and system integration, but an important part of their business was also running services for their clients and partners clients. While many clients would invest capital in equipment and system development, it suited them to pay for these firms to actually run the wireless/mobile service, which could be paid for as an operation cost. In the age of the internet, it is not longer necessary for these telecommunications based services to be run by an operator, or for the user organisation to invest in owning and running the servers. It is important to recognise that these services (some of which can be termed web services ) can be run by a network of smaller wireless ISPs (WISPs) or Application Service Providers, create an outsourcing route to new technology adoption. There is considerable competition in the market, not only within product categories, but for investment in a range of technologies. The operators have many technology firms attempting to sell them solutions, and so do major customers in the public and private sector. One ICT services manager in a Scottish Local Authority claimed to receive 40-50 calls a day from IT suppliers. It is therefore important to build up specific relationships. All the respondent firms had managed to find a niche in which direct competition was not harsh, offering a unique new technology or a reputation for systems integration. It appears to be very much a buyers market, with many firms able to produce technologies, and buyers able to demand convincing demonstrations up-front, and a clear business case for adoption based on direct savings, or differentiation benefit. Although in the shadow of powerful and rich operators, systems vendors and IT services companies these firms demonstrate the space is open for innovation, and there is a demand for products and services that large firms are currently not able to supply.
7.5
Operators as innovation partners and suppliers
Most of these firms provide applications and services that rely on the infrastructure and standards implemented by the network operators as a basic business resource. However they are seeking to explore the possibilities of that resource in new ways for the benefit for their customers, and their own profit. There are two main ways of developing a business based on the cellular infrastructure. First, is to develop a technology and business concept, and sell it to a network operator, who will bring it to market and promote it is one of their services. For many small, and large businesses, this is the jackpot a large and relatively rich firm, with a huge customers base seems a sure way to get rich. However, the application development market is very crowded, and network operators very selective and conservative about what technologies they adopt, and how many they can commercialise. And, as one operator representative put it Operators want technology for free, technology innovators what lots of money from operators: there is a fundamental gap in expectation. Operators do not sell technology, but a service based on technology. They want a few products they can concentrate investment on, standardise and sell to a large market for maximum economy of scale. Operators, like many large firms with a standard platformlike product, have a problem with innovation, and with supporting the community of developers and commercialisers that develop around their product. They want to stimulate use of their product, and draw on this innovative resource. Many large firms, in particular telecoms operators, have had to cut their Research and Development operations considerably in recent years, and therefore rely increasingly on suppliers, small and large. Some firms have very successfully instituted Developer Forums, but these can be used in different ways. Several of the respondents complained that the Forums they had been involved in were rather one-way organisations. They invite application developer firms, explain in details the services available, the APIs and costs, have specialist support staff, but do not appear to listen very much and give active support to innovation. From the other side, a BT manager admitted that they could do rather more to exploit this resource in building the market. BT however were praised for their ability to do joint product and service development with partners, probably due to their particular market position. Telenor too recognise this issue and are working on ways to resolve it. 15-11-04 Page 54
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Certainly operators do have a process of selecting the products of suppliers, and of commercialising on a national level certain products, and in doing this they must be selective. However for most technology firms this is a difficult and uncertain process to go though, and not clear worth the effort even for successful firms, if the product was not marketed or sold well in the end. On the other hand, for firms producing technology that extends the use of mobile services, rather than building applications for specific clients, the market is very difficult, and they cannot compete with the marketing and sales budgets of the major operators. If a firm develops a product this is competitive to a service that an operator is selling they will not be able to get support, even it they can help development the overall market. One firm with a locationfinding technology is producing something in competition to the location service being sold by the network operators, even though they claimed better accuracy, and a strong demand for location based services that is waiting to be exploited before the next generation of aGPS technology becomes available. It is clear that many innovations in use of mobile technology may actually reduce the spending of users on voice minute or text messages in the short term, for example, by using GPRS and automatic communication of instructions and data. Operators are strongly defending existing valuable sources of revenue. The interviewees were frustrated that operators were hanging onto existing business revenues, when competition was clearly reducing them anyway, and not supporting a large network of firms who spend their whole time trying to sell new ways of using the operators networks. Building a new technology or service involves testing and demonstration, but when the basic resource is airtime, this can be a very expensive process if the cost is not shared with customers or operators. Operators of course cannot support every firm wanting cheap access to networks, but their credit vetting and demand for costs upfront was felt for put up unnecessary barriers. One operator even sent a very large bill to the developer for what had been considered a joint development project, which though was eventually reduced, did not engender trust. Trust and reliability appear to be key feature of the relationships operators have with technology and service suppliers. One respondent said that operators closely scrutinise potential suppliers and are very cautious about entering into agreements, but once a partner, always a partner, hence the keenness of technology firms to get into bed with operators.
7.6
Operator Control and Conservatism
A common complaint was the way that the operators appeared to control the development of the market too much, and in particular the way the device was controlled and the pricing of communications. Another issues identified was the marketing and selling strategies and capabilities of operators. Device control was the complaint of those developing applications for Smartphones and PDA such as the XDA. This was identified in D12 as a key issue, and these interviews give some idea of how it is experienced in practice. Operators buy most of handsets used, so vendors supply what they want, and do not rock the boat by offering much better devices on the open market. Many operators would like to make this an even more controlled relationship24, such as exists in Japan [Tee03], but also benefit from marketing efforts of brand owners. They can and do buy white label phone from China and elsewhere. Other organisations, end users, MVNOs, WISPs, service supplier could also do the same thing, but few will benefit from the economies of scale and purchasing power of major operators. The main issue that the application developers had was with the disablement of certain features of the API on operator supplied devices, which made it hard to do what they wanted. In particular Bluetooth messaging and calling was considered a very interesting potential application, but generally the phones do not allow the integration of Bluetooth with existing messaging and voice calling facilities. One firm working on hotspots was frustrated in their ambition to develop Bluetooth-based VoIP service using their joint WiFi/Bluetooth hotspot system because of this. Others were keen to see SMS and Bluetooth integrated for local peer-to-peer messaging, but could not implement it.
24
For example Vodaphone and Telefnica Moviles both offer phones branded with the name of their online content operations, and sold as a package with these services.
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Lack of a standard operating system across smart phones, to allow easy development was also criticised, although Java based systems were seen as very promising. The UK mobile operators were also characterised as being unable to sell new, innovative products. Large-scale enterprises not only have to get the technology operating, but also market it and find a way to sell it through their sales force. The principal products that are sold to business and consumers alike, are connections, voice minutes and SMSs. These are products the sales force is clearly briefed to sell, and incentivised to sell. The sales staff may not have the expertise to understand how to sell other services, such as location-based, or data services, or the products of smaller partner companies. Although they have corporate backup to sell more advanced services it is not clear how well this is mobilised in real situations. This type of situations led to experience of sales force not selling new services. It was suggested that the links between strategy and research, and network departments, and the sales and commercialisation force divisions of large operators needed to be closed. High costs and lack of flexibility in running consumer services was in issue raised. One firm had pulled out of the consumer market, because although the operators could provide a billing system, they charged a great deal for it, and payment was taking weeks if not months to arrive. This make made it easier to just to focus on the business market, where payments could be made directly. As an example, a location-based service that used SMS would cost the customer 1.40, but the supplying firm would be likely to receive 50p from the operator, before their own costs. Another firm claimed that the general feeling in the mobile content market, which they were closely involved in, was that operators were not flexible enough in the pricing, and in sharing the revenue. This echoes complaints from interviews in Spain in 2003, and by other firms in the study that the operators appear to want to take too much of the revenue from premium SMS services, which makes them very difficult to operate, particular in small volume or in market start up phase. The previous example links into a general dissatisfaction with the way that data access is priced currently. Apart from SMS, which is a specially packages form for data service, general GPRS data pricing models are still relatively new, and unclear. One respondent said They are still trying to treat data like a special version of voice. In fact tariffs I think set out to confuse. Its, theyre almost designed to make it very difficult to cost a solution and thats a real problem for business where you need to What is this going to cost me on a month-by-month basis? and its very difficult to work out from existing tariff structures. [IT systems integrator] This raises an interesting question related to the mobile internet v. rich voice debate. Customers want to buy a service, and paying by the megabyte can cause problems: you shouldnt need to charge by the megabyte, it should just be a charge for using a service. If anything it should be moving on to the internet - pay for the rate but not the quantity, because quantities are almost impossible to predict in a real situation. [IT systems integrator] This is an important issue, especially in the early days of innovation. Pilots are set up, and the developers have to estimate costs to present to the client or management. Use according to plan may fall within these cost estimates, but when people are given a new technology they will experiment, and often find new uses, which can drive up the network usage costs. A system can be designed to be limited and closed, with a specific use, but this may not allow the end user innovation that is necessary to find and develop the full potential over time, and in use. The developer has to make it clear that communications costs may not fall within expected limits in the second case. Of course, introducing flat rate access could be a recipe for flooding the limited wireless networks, so data pricing bundles sensitive to the individual market. Since the market for wireless data is so varied and in such an early stage it is very hard to set a clear market driven price. However prices do appear to be reasonable for pilots to be established in applications where traffic can be reasonably well identified in advance, and it not actually very high. Bandwidths are never quite what they tell you was how one respondent described the data services that are currently on offer a feeling echoed in many other interviews in this study and elsewhere. However this was not seen as a particular problem, just a factor that need to be tested in the field to find out the reality of the service compared to the promises. Since in general the applications they were developing did not rely on a great deal of bandwidth being available is was not a pressing problem. Nonetheless, it meant that care had to be taken in choosing what is the important information to be made available and transmit. Again, as with the question of cost, the developers 15-11-04 Page 56
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may create a system for a particular use, but when users start to find new uses they may put unexpected demands on the network, and not get the performance they were expecting. Moving to greater bandwidth with new 2.5 or 3G systems is not key to creating the applications, from the user perspectives, but as with wired broadband, it allows for experimentation and nice to have features. Respondents noted that larger organisations in the private and public sector generally had existing contracts with mobile providers, in which they could negotiate very good deals, and develop a relationship to integration and provide new services. When supplying these firms, the respondents would rely on the client to negotiate any new telecommunications needs based on implementing new systems and services. Large organisations would also have the expertise to configure systems and terminals themselves, and manage these. Smaller firms would not have these relationships, or the in house expertise. Operators could not be relied on to configure terminals correctly, so the supplying firms would arrange the network contracts, and configure terminals for them. One firm complained that although they managed and represented the telecommunications contracts of a large number of firms, this was not reflected in their relationship with certain operators, who just saw the individual firms as the clients, not recognising formally the role of the intermediary firm.
7.7
Other Relationships
As well as relations with mobile operators the firms spoke of the importance of other firms as partners in innovation and commercialisation. Those firms who had a product or ran a service did not have the resources or expertise to market directly to end users, but had to find a place for themselves within a supply chain. This was particularly so for international business. To this end they made partnerships with other firms to resell their service, normally as part of a package, adding to the existing portfolio of services of the reseller. Purple Patch, the hotspot system developer, had sold to a range of organisations, such as hotels, but as fixed and mobile operators entered the business this became the more important business. In particular fixed operators wanted an off the shelf product for hot sport management and charging that they could offer to the existing and new customers as part of a package of services. Mobiqa, a very small firm, works with larger mobile content firms, with operators, and with ticketing service companies around the world. The resellers are important, since they have the knowledge and resources to sell into particular markets. These firms are not only resellers, but innovation partners, who work together to integrate technologies and find new uses. All the respondents said that finding partners was not difficult, especially among smaller firms with complementary resources. Numerous trade associations, developer networks and trade shows, and a very open business environment provided many opportunities to do business. In general these firms did not have much to do with the telecommunications regulator, who tend to be focused on those firms that actually run radio networks. However, several of the firms had been invited to attend and had attended meetings run by telecoms regulators, but felt it was a waste of time the large operators were the only ones with influence. There remains the attitude that BT still control the regulator in many aspects of telecommunications, by dint of being the old incumbents. Nonetheless, in the UK, changes in regulations over public hot spots was driven by smaller firms, against the wishes of some of the larger operators. This case raises some interesting questions about the place in the market that the regulators can stimulate innovation in the application domain, and the degree with which they have to support the large scale investments of wireless and fixed-line operators.
7.8
Opinions and attitudes towards convergent systems
The interviewees were asked their opinions of convergence of network access systems and simultaneous use. Those that were developing applications for mobile workers or mobile phone customers see this as rather irrelevant in the current market. The cellular platform could deliver all they needed, and is in many ways an underused resource that could be used as-is. Several firms pointed towards Bluetooth(PAN)-Cellular integration as a potentially important move. This is probably since these technologies already exist on mobile phones, and offer opportunities to exploit networking on local level. This supports the argument that for many situations convergence of radio systems is not particularly important. One firm had actually implemented a system for a client that used both GPRS and WLAN: Ferry boats that had traditionally used expensive marine radio systems were equipped with WLAN and GPRS 15-11-04 Page 57
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system for data communication with the shore when out at sea and in port. This was seen as a cheap alternative to using an expensive satellite system. The same firm sees possibilities for their clients to use both systems but are waiting for operators to offer joint tariff, and single billing options, something this is now becoming available. Another area of potential interest for multi-radio systems was in standalone machinery, that could automatically configure itself to the radio environment. Having several radios available could also offer some improved dependability, a characteristic lacking in existing radio services. In general, radio access issues were not as important as creating an open application platform for developing and rolling out mobile applications, and allowing seamless integration of application access across different sorts of devices
7.9
Mobile Internet and Rich Voice
Some of the key questions about the shape of wireless development over the next few years is encapsulated in the mobile internet v. rich voice plus arguments. These cases give some evidence of what customers want, and what under what regime application and market innovation is possible. Crudely, this debate was about wireless being used to provide a link to the internet and the device being an open platform for development, against a vision of a service around voice and simple messaging on a mobile phone, with benefits of ubiquitous coverage, protected handset, ease of setup and use, and growth coming from location, and multimedia messaging. The developers see the key benefit of cellular systems were standards, ubiquity of use and coverage, hotspots were not relevant to much of their work. However they want a simple data connection using Internet Protocol, and devices that would be able to connect with any application protocol their client need. High bandwidth is not so important, but reliability and controllable costs are. The existing dominant data protocol SMS, was seen as useful in particular cases, but in general too expensive, compared to the information they could exchange over GPRS or UMTS. However the standard phone handset with voice and SMS dominates the market, and this brings several advantages. For many applications SMS is a well understood by users, and simple to use, as long as not too many messages are sent. Has the advantage to being able to communicate with any handset, no need for special software or integration. A very cheap mass market handset, easily replaceable, is important for users who could easily damage or use, or where investment in new devices is too expensive. It is easier to sell to businesses and consumer it a current set of technologies and services is used. If location information were a standard commodity service on mobile phones it would aid business development greatly. However the pricing and introduction of new services by operators may be aimed at different markets to those the developers operate in. For example, a new service may be set with a premium price for a particular market, when their customers would like to experiment with the service, and may not be willing to pay the premium. It would appear that there are arguments for both models in this study, but unsurprisingly, since most of the applications are based on extending access to intranets and IT services, the mobile internet model is that which would appear to most suit the developers and their clients. Only when it comes to offering a standardised product to the mass market does it become important to have absolute standardisation of application technology, such as SMS.
7.10
Summary
The market for mobile applications is dynamic, with increased understanding of the possibilities among potential end users. Many services are not standardised, and the existing mobile infrastructure is underexploited to a large degree. Long term investment plans, and the need to focus on large customers leaves space of a range of innovative companies developing technology, integration systems, and running services. The only new network service that they see as being very important is location information, which they can use to provide many useful features for their clients, but is still not accurate or cheap enough in many situations. The network technology is primarily being put at the service of existing IT systems, providing intranet access to clipboard professionals and technicians, rather than person-to-person communications or internet access for mobile desktop workers. While developers and their clients benefit from the highly standardised terminals and network services, they also find the way new services are supplied and sold constraining, as are the ways the devices are specified by the operators who pay for them. While simultaneously finding new ways for operators to 15-11-04 Page 58
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sell their primary asset, a mobile communications network, they are also working on some of the points where the operators draw key market strength, control of the mass market terminals, and the ability to price value-added services separately. This case suggests that in the short to medium term the demand for multi-standard devices and systems for simultaneous use of standards are not relevant in the markets that these firms are working in. Except for location information, the case suggests that most of the existing technology for developing a large number of applications, and extracting economic and social benefit are in place. The return on investment and running cost of existing applications and network services is good for applications when they are established, especially around saving time travelling. The demand on network operators is not for more bandwidth, or multi-standard radio systems, but cheaper, simpler data access, and a free environment for creating and experimenting with applications. The move to service provision rather than technology provision, run by specialised companies, could be a key factor in understanding the way the demand for new access technology neutral network services is driven.
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8.
8.1
Use of MMS in occupational groups

Introduction
The previous section introduced ideas and evidence about how professional users of mobile communications are adopting new mobile services, or how their firms were obliging them to adopt it. This case looks at the ways that people in three different occupations found of using MMS themselves. It is relevant to FLOWS because it illustrates new markets for mobile applications, in this case mobile messaging that might in future create the demand for devices with multiple radio access. Without significant markets for these applications in professions that are willing to pay, and have mobility between offices or workshops and public spaces then there is no incentive to invest in convergent devices. It also highlights importance of ease of use, and need to create data applications that are generic and allow end user experimentation. After the tremendous growth and success of SMS the prospects of MMS has been skyrocketing. Compared to SMS MMS has a much larger expressive content. With MMS one cannot only write longer text messages but also create, send and receive graphics, video clips, photographs and sound files. MMS opens up for a new way of communication enhancing the plain text with visual and audible effects for intercommunication creating a much richer communication experience. MMS is still a new technology, in the sense that the growth of telephones with MMS features has just reached the market. MMS will not be widely adopted before more people have acquired a MMS phone whether by network externalities effects, or more likely, it becomes a standard feature on all new handsets, many given away by operators. Most operators have tried to increase the uptake of MMS by launching free MMS during weekends, during summer holidays and other social events in addition to subsidising MMS telephones. However, still limited research has been conducted about how people actually will use MMS privately as well as in connection with their occupation.
8.2
Research
In Norway [LiJu04] conducted a field trial investigation focusing on the use of MMS in relation to various occupations. The project followed 3 occupational groups during a period of 6 months. During this period the employees got free MMS telephones with free usage. At the end of the study the project examined the rate of MMS usage together with the type of usage for each occupational group. The occupational groups studied were: 1) a team of carpenters 2) a group of mobile salespeople for a soft drink company and 3) a group of real estate sales- representatives Even if the groups were small, all groups was connected with a dense internal communication network, where they communicated from various locations back to the main office or to other people not located on the same geographical site. For each of the occupation groups the usage of MMS was divided into categories as: 1) documentation, 2) visualisation, 3) snap shots, 4) postcards and greetings, 5) and chain messages.
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Soft drink sales
Real estate
Carpenters
Figure 8-1 Distribution of daily use of MMS by various occupations The results from the field trial showed that the different occupation groups adopted MMS differently. Also the type of usage of MMS varied between the occupational groups. The main aspects regarding the uptake of MMS was: 1) The ability to transfer the experience and use of communication from previous communication systems to MMS. 2) Motivation, and needs from the respective occupation 3) The relative advantage of MMS related to other medias available. Soft drink sales people: The soft drink sales people had a high usage of MMS in their occupation. They used MMS mainly for documentation (photographs) of the placements of soft drinks in the coolers. Photographs of the cooler and the content of soft drinks was sent to the head quarters where they checked that the location in the cooler was according to the agreed contract. Violation could result in penalties for the shop. They also used it for visualisation of the placement of coolers for marketing effect and for general team interaction (cultivation of team ethos). Carpenters: Carpenters used MMS moderately and most in the form of visualisation of concrete situations. They could send a photo of a construction problem to a manager not located on the construction site who could give his opinion of how to do a certain job. Or it could be a problem of what kind of material should be use to construct a certain task e.g. what kind of skirting boards to use. In this sort of job picture is worth a 1000 words, it is said, and the carpenters found that MMS could help them in doing these kinds of things25. They also used it to send jokes and interactions with colleagues. Real estate sales people: Real estate sales people had a low usage of MMS in their occupation. They had low interaction with other professionals within their own occupation. The main issue for not using MMS in their occupation was that the quality of the photograph from the mobile phone is not good enough for the purpose of purchasing real estate and send photos of buildings and rooms.
8.3
Conclusion
This study highlights the importance of user innovation in use, a process that occurs after the end user has been given a technology which they can find a use for according to their own needs. It also
25
Of course in other situations, words can say as much as 1000 images!
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shows the way that multimedia can be used in occupations where power and surveillance are important, and in technical jobs dealing with the physical world, as opposed to the informational world of the dominant group of business users of technology. These clipboard technicians, people who work with lists of tasks, forms, drawings, and report, in a mobile or workshop environment have been a very important part of the mobile phone market, and will be important in future development. They also need to be given freedom to innovate, and not just given highly packaged and cut down systems from employers. Clear benefits can be drawn from use of images that are not high quality, but are easy to taken and send. The development of digital imaging, and its diffusion on the mobile phone will have a profound effect on the use of images by individuals and in society as we learn that once images are free and immediate they can be used in many ways previously restricted to specialist professions. Free is a critical concept, as this case illustrates, and will be an important factor expectations of future mobile based communications. Images can be send for free via an internet connection, and phone calls and text messages are increasing included in flat rate subscriptions. Images sending must be priced in a similar way.
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9. Business opportunities Convergence manager (CM)

9.1 Introduction
for
the
use
of
the
FLOWS
The FLOWS project has been studying the possibility of deploying several radio standards simultaneously e.g. GSM, UMTS and WiFi technologies, to support a communication session. The session may e.g. be between peers or between a person and a server. It may even be deployed on communication streams between servers. One major goal of the project is to investigate convergence as a mean to utilise the scarce radio resources more efficiently and also being able to give the users the best service experience for the lowest possibly price. In the FLOWS perspective of convergence one could foresee for example, that a multimedia session may be initiated between a server and a user by deploying GSM for the voice component, UMTS for the video component and WiFi for the data component. The goal is that functionality in the terminal equipment together with functionality in the network or at the server may split the communication streams into separate media streams and send them onto different radio access technologies. The functionality in the terminal and in the network or server must also be able to merge the media streams belonging to the same session to resemble the communication as a multimedia application. This functionality demands various technological challenges as conducting synchronisation and tagging of the media stream to encompass the total multimedia application. In FLOWS the entity supporting this splitting/merging of medias in a communication session is denoted a converge manager (CM). The terminal equipment will always have a CM if it is able to use two or more radio technologies simultaneously. On the network side the CM may have different locations in the network. It may be located between PLMNs (Public Land Mobile Network) domains so it may be able to support media splitting/ merging to/from several independent operators networks. It may alternatively be located within one PLMN operators domain. Other locations may also be feasible. Nevertheless, the business case for each of the locations will differ and needs to be analysed separately as to determine if any actor would take on the role of operating an CM. The overall goal is to use the access network that is most optimal to transport a certain type of media under current conditions, to facilitate an always best connected service. This is in essence the value proposition of the CM regardless of the location, i.e. to support the customers with the cheapest and best access network for their specific communication requirements. However, since the users are a diverse group with different requirements and preferences the selection of access networks may be based on personal preference. A user that is willing to pay a lot for a communications session may use a network that is well equipped with QoS functionality even if this is not the most optimal network seen from the operators perspective for the general support of this media type.
9.2
Benefits to End Users
From a customer point of view it would sound like an attractive idea to be able to shop for radio resources and always being able to choose the optimal network wherever he/she is. The customer would be able to run the session on the network with specific characteristics to handle special types of data, giving the customer a good service experience for the lowest possible charge. What technologies are used is not important for the customer. Hence- the customer should be unaware of technology choices. Unfortunately shopping for radio resources and network connections based on them is almost certain to introduce more user complexity, at least in early implementations. However, for customers, the price differences of service usage would be the main differentiating factor between operators when comparing similar technologies/standards. Some operators have no monthly fees. The only cost, except the initial subscriber cost, is the cost of usage through telephone calls, SMS, WAP etc. Investigation has showed that price is the by far most important factor when choosing operator, especially for the mass-market, and churn rates are closely linked to the price levels of wireless services between operators. Number portability has made it easy for a customer to change operator. Deployment of basically the same type of equipment across all operators and having nearly the same coverage has reduced other differentiating factors than price level. However, if the price difference is very small, grade of QoS, security level, coverage, service portfolio etc would eventually become the differentiating factors. 15-11-04 Page 63
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One barrier for easily linking services of several operators is the binding agreements we have today. The binding agreements can last for a year, 10 months or any other time period when buying a new telephone for a subsidised price. This binding period has been discussed as a means to reduce competition. Hence, trends are pointing in the direction of shorter binding periods. Nevertheless binding periods is estimated to be an important issue for operators still for many years. Binding periods will presumably differ for mass market and large companies who could have company agreements with an operator. This however could lead to more expensive handsets for the customers. On the other hand it could increase the market for more shopping of wireless services, which is an important aspects for the business potential of a CM actor.
9.3
Alternative locations for the CM
As described above the different locations of the convergence manager may result in different business models. There are many possible locations for the CM which is described more thoroughly in deliverable D15 Convergence Manager: Mapping Services to Standards. In this analysis however we will look into two possible locations that will result in totally different business models and thereby also illustrate the potential of the concept. We will first look into the case where the CM is located in the terminal and as a network node connected on the backbone network interfacing several independent PLMNs (Public Land Mobile Network) operators. The traffic streams are sent thought a CM that may split the communication session into different medias (e.g. voice, video and data) and potentially send separate media to different operators PLMN Gateways. This requires that traffic to different operators use the same backbone network transport and that the actor operating the CM has access to the traffic on the backbone network. Hence there has to be an agreement between the actor operating the CM and the backbone infrastructure owner. The other case we will discuss is when the CM is located within one operators PLMN domain. The CM is then located in the operators core network or at the operators Gateway, and will direct the medias to different radio standards belonging to the same operator. One alternative described in D15 is to collocate the CM with the GGSN (Gateway GPRS Support Node) that interfaces GPRS and UMTS, and the PDG ( Package Data Gateway) that will interface WLAN. The business analysis will be qualitative, based on the following business aspects: What market situation would give the CM actor sufficient incentives to start up business? What potential barriers would the CM actor experience? Could revenues from the CM operation justify and override costs? Is there an overall business potential for this case?
For many years there is likely to be separation between the circuit switched and the packet switched domains. Introducing a CM that would be able to handle both IP based and circuit switched traffic would introduce more complexity than only considering IP based networks. This would be the case since the CM would need to receive and send traffic from/to different types of networks. In the following discussion this grade of complexity is not elaborated further.
9.4
CM interfacing several operators' PLMN domains
In this case the CM is located as depicted in Figure 9-1, in the traffic stream on the backbone network. The CM is envisioned to incorporate functionality to be able to receive a communication stream e.g. from a remote party and split the communication streams into separate medias and forward them onto the best network available. A corresponding convergence manager will be located in the terminal equipment being able to split the communication stream into separate media and send them onto different radio standards in the same way as the CM in the network, but in the opposite direction. The selection of access network may as described above depend on several aspects, such as the receiver or senders personal preferences due to e.g. price, QoS, security, operator choice, location etc. Hence- what functionality and information the convergence manger needs to fulfil its task depends on the business model of the convergence manager, i.e. what criteria the CM would use to differentiate the infrastructure operator towards the customer.
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Operator 1 WLAN WLAN, GSM GSM, Operator 3 UMTS Operator 2 TE CM Operator 4 WLAN, UMTS
Backbone network
CM
TE
Figure 9-1 CM placed outside the border of different operators domain Two business models for the CM could be: 1. Spot market MVNO 2. PLMN selector only In the first option the customer has a subscription with the MVNO in the same manner as today. The user is a customer to one virtual operator that directs the traffic onto different operators access networks. The CM has agreements with several operators to use their access networks. In the second option PLMN selector only the user has a multi operator subscription, and can receive and send traffic onto several operators networks simultaneously. The user has an agreement with the CM to direct the traffic streams onto the best access network possibly to different operators having different networks in the same coverage area. In this case the CM is only a broker that selects the best access network for the customer. This broker functionality should be able to work in both directions. This would demand functionality in the terminal equipment that is able to direct the streams onto different standards from different operators. Since the CM is located on a common network part all streams would go through the CM in both directions. These methods offer different technical challenges that may make their implementation very different in cost.
9.4.1
Spot market MVNO
In this case the CM/MVNO has its own database (HLR) with customers. The customers register at the CM/MVNO and the CM/MVNO has agreements with up to several network infrastructure owners to use their networks as transport. The network infrastructure owners may own several types of networks, and several of them may own the same type of network (Figure 9-2).
Backbone network
Operator 1 Operator 2 TE CM Operator 3 Operator 4
WLAN WLAN, GSM GSM, UMTS WLAN, UMTS
DB CM/ MVNO
TE
Customer relation
Figure 9-2: CM acting as a MVNO with its own customer database
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The scenario is quite similar to todays operation of an MVNO where the MVNO owns and operates its own HLR with customer subscriptions. However, today in the cellular network cases an MVNO ha agreements with only one single infrastructure owner. With the emerging of WiFi spots however MVNO may have agreements with up to several hot spot operators. In this analysis the CM/MVNO may have agreements with many infrastructures owners. Hence- the CM/MVNO is not bound to one operators infrastructure, coverage area and network functionality, but may shop resources from different operators. However, the infrastructure owners have control over the critical resources, which are the radio resources. By regulatory authorities they are however ordered to open their infrastructure (especially for cellular networks as GSM and UMTS) for other actors. The CM/MVNO will have the same rights as an ordinary MVNO and acquire access to radio resources. However the infrastructure owners may acquire their own customers and the CM/MVNO must compete with operators and other MVNOs. The most likely situation however is that an incumbent operator or an already established MVNO takes on the role of a CM/MVNO. These actors already have a customer base. The customer of the MVNO may range from the mass-market private customer to business people or machine-to-machine networks with company agreements. The low-end mass market and SMEs is presumed to represent the main customer segment. The main point is the price sensitivity of the customers and the reduced possibility (or knowledge) to keep a continuous eye on the market situation to be able to shop the cheapest network resources. The CM/MVNO would offer this customer this watcher service and thereby represent the value for the customer. The customer will not have any obligations or require knowledge of the network operators that supports the traffic. The CM/MVNO may handle all the formalities so the user is entitle to register and use various operators infrastructure. To be allowed to connect to different networks the customer must be registered to each potential network in the location area. Thus the terminal and network must be able to know what networks are available. This would however generate much signalling traffic to networks that potentially never would be used due to the selection criterias of preferred networks. The concept of a CM/MVNO may look appealing for many users. However to start business as a CM/MVNO there has to be clear market incentives to do that. At the bottom line the income of operations must exceed the cost of operation. Some markets incentives would be: Many infrastructure owners in the market. Failure of existing providers to adequately address particular user markets. Differentiating factors between the operators e.g. differences in price of radio resources, different grade of QoS, different coverage etc Diverse user groups with varied requirements e.g. regarding QoS, security, mobility, etc Limited cost for the customers to be able to interface different network owners and standards e.g. cost of multi-standard terminals. Limited cost for the CM/MVNO to have agreements to several access operators. In case of cellular networks this would be a new market situation. Market position: Uncertainty over whether there would be a first mover advantage.
The CM/MVNO concept as described above has not been commercialised. The concept may not be commercialised for many years due to many market barriers. Some of these barriers would be: Critical mass of customers: The CM/MVNO is dependent on a critical mass of customers to make profit and justify the investment cost and run time cost. It needs an existing brand and customer base. It could be a major IT services company, a retail brand, fixed line operator, broadcaster etc. Price variation: If the price difference between the operators networks is very little, the customer of infrastructure owners may not bother to switch to the CM/MVNO to direct the traffic streams to specific networks and thereby acquire a lower price. Assuming that price is the most important factor. Rental fees to the network infrastructure owners: If the rental fee for the CM/MVNO to use access capacity is high it would be costly to have agreements with many infrastructure Page 66
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owners again depends on the mix of networks. Market competition: The CM/MVNO would have to compete with the MVNOs operating today. or itself be an MVNO operating today. Technological and management/control: There would be barriers to acquire the needed information to track customers, select possible networks and conduct charging and billing for each customer when deploying several network infrastructure owners networks. Depends on the technology provided by technology firms, and the standard of interworking. Coverage, and network functionality as QoS, security: If the coverage and network functionality is similar across the infrastructure owners there would be limited differentiating factors for the MVNO and the customers would have small incentives to have a subscription with the CM/MVNO. Radio resource scarcity: If the radio resources are scarce the competition between infrastructure owners to get customers are less important. Again depends in what band may be strong incentive to offload traffic onto a WLAN network Terminal cost: Terminals could be more expensive, perhaps larger and more power consuming when having multiple standards interface. Except when the alternative is a lowpower local wireless connection, but even then computer network based standards may not be very power efficient. Network location: The MVNO must be located as to efficiently interface several Infrastructure owners. Security risk of having an intermediate node that may be able to sniffs all traffic and be able to split/reassemble traffic streams to/from a connection
To initiate a business as a CM/MVNO would demand upgrades of the subscriber terminal equipment to interface several networks and operators. If the MVNO subsidises terminals to acquire customers this cost would run on the CM/MVNO in the same way as operators today subsidise terminals. The CM/MVNO would have to buy its own HLR with customer control and maintenance software together with all other software as AAA, and billing system. The hardware for the CM functionality is presumed to be quite expensive, together with the switching functionality to direct the media streams to the selected networks. The total cost of commercialising the CM/MVNO is estimated to remain high for many years. In the case of the CM/MVNO already operating as a MVNO it already has most of the control and management system in place in addition to having a customer database. The main new investment will be the hardware and software needed to perform the task of a convergence manager. The business of operating a CM is again dependent upon the potential added revenue of utilising different networks to support the customers. However adding smaller networks, such as a WLAN hotspot network could be relatively cheap, and may have to be included as a basic part of the bundle of services needed to attract subscribers. Due to the cost and upgrades of terminal functionality in addition to the hardware and software for the CM/MVNO, the business case does not look very appealing except for major operators in the medium term. Hardware functionality to split/ reassembles the traffic streams into/from separate medias is needed which are expected to become quite expensive. All management and control including the customer databases will also become great investments for the MVNO. As opposed to the MVNOs today the investments in HW is regarded the main obstacle beside the traffic aspect and security of introducing an intermediate node in the traffic stream. The potential barriers for commercialisation are very important. However trends point toward a more diverse picture of multiple operators and shorter binding agreement time to one single operator. Subscription fees and fixed monthly fees are being reduced. However, since the price of usage is very similar across networks today clear differentiating parameters are need between operators to justify a CM/MVNO located in the backbone network. These differentiating parameters are not evident today. This scenario could, however, be business profitable in the future when a more diverse selection of networks would be available to the public, incorporating different characteristics, so the diversity of functionality is more evident. Different forms of brokers/aggregators are emerging to deal with roaming and billing purposes. In these cases the CM/MVNO would represent a kind of aggregator by interfacing several access operators. 15-11-04 Page 67
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One of the key areas of business however is the integration of private and public networks so that devices can roam seamlessly from a private wireless network to a public network. There are already initiatives and lots of research to supports handover between public cellular systems and private WiFi hot spots as discussed earlier
9.4.2
PLMN selector only

Cus tomer relation DB DB
..
Backbone Network
Operator 1
WLAN WLAN, GSM GSM, UMTS WLAN, UMTS
DB
TE CM
. .
Operator 4
PLMN selector
TE
Custom er relation
Figure 9-3: Both infrastructure owners and the PLMN selector have customer relations. In this case both the CM and the network operator owns a customer database. The customers may be customers to several network providers and at the same time have a relation to the CM that may act as access network selector to select the best network on behalf of the customer. The customer pays the broker e.g. a fixed yearly amount of money for the service. The user has a subscription with several operators simultaneously and each access operator charge the customer according to resources used on their network. The most important differentiating factor is, as in the previous case, the price for network usage. Hence it is important that the user feels that the value of paying the broker to shop for radio resources is worth it in terms of lower total communication cost. Again cost is a key factor. As for the previous case there are both incentives to start up business and also barriers that need to be overcome before any actor enters the market as a PLMN selector. These incentives and barriers are quite similar for both cases. However, the two cases are quite different in terms of customer handling and the relationship with the access providers. In the CM/MVNO case the customers only has a relationship with one actor i.e. the CM/MVNO. In the second case with the PLMN selector the customer is a customer to several operators simultaneously and only use the CM functionality to select the best network at the time of communications. The business model for the PLMN selector and the CM/MVNO is therefore quite different even if the incentives and the barriers are quite similar. The investment cost and cost of operation may be cheaper for the PLMN selector case than the CM/MVNO case. The PLMN selector would not need large investments in subscriber control handling besides the physical convergence functionality to direct the data streams to the selected network. It must keep track of price information, location information and configure the customers network selection criterias as to direct the medias to the right network. The customer information is relatively static. However hardware functionality to split/reassembles the traffic streams into/from separate medias is needed. This hardware can be based on common router technology or be a specific network node. In the latter case the CM could become quite expensive. In the former the hardware could be common of the shelf equipment with only minor added software to be able to tag and redirect the traffic streams to the correct network. In this case the CM would not be so very expensive and it would be a lower barrier to enter the market based on initial costs (CAPEX). The PLMN sector case is dependent ultimately on the differentiated factors between the access operators. Since it most probably will be paid a fixed sum to select networks this service has to be valued quite high from the users to justify the cost of HW and SW needed to split/reassemble the traffic streams. Hence- due to the cost and upgrades of terminal and network functionality, the business case does not look very appealing, at lest for many years. If there is a change towards a more dynamic and diverse pricing scheme including an increase in a variety of networks the PLMN 15-11-04 Page 68
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selector only could justify its service towards the customers. This functionality could however become a part of public-private roaming service, that can then used for simultaneous use.
9.5
CM in the domain of one multi-network operator.
This scenario has been depicted in D15 with a technical evaluation of the feasibility of the CM as interfacing EDGE nodes of different radio systems owned by the same access operator. In D15 it was evaluated in connection with the on going work in 3GPP for UMTS-WLAN interworking. Results from D15 stated that it would be feasible to interface the CM to the GGSN and PDG. Communication streams crossing the operators border could be directed to the CM which would split the communication stream into various medias and forward them onto the best suited network within coverage range of the customer.
One operators domain
DB
WLAN UMTS TE CM GSM xDSL CM
TE
Figure 9-4: CM in intra domain for one operator As for the other cases the CM is used to select the optimal access network for a specific communication media. However, in this case it is used internally in one operators domain. The most obvious actor to take on the role of the CM is the operator itself. As stated in D15 it could be integrated into the EDGE nodes of different standards. The value of the CM would be seen from the operators perspective to support it customers with a better service and at the same time use its networks most optimally. The incentives would be based on what the operator thinks would benefit himself to invest in the HW and SW that is needed to conduct the task of network selection. With the emerging of hot spots the operator does not have to own all the networks to take advantage of the CM functionality. Mobile operators now offer white-label access to other peoples hotspot networks integrating private and public networks. In house roaming i.e. entering a private WiFi zone seamlessly from a public wireless standard is emerging and is expected to become common in the future. Market incentives for the operator to buy the equipment and start up business with a CM could be. If the use of the networks are different e.g. during a day or a week, load sharing would be beneficial. Being able to direct certain medias to specific standards could also support different market segments with varied service demands. E.g. Low-end customer would like to have a cheap service and wont put so much emphasis on QoS or security. Business people would like better QoS and security and would acquire a more sophisticated network supporting these demands. the operator could offer to dynamically upgrade quality, for a price The state of the networks. The operator relies on using other networks as backup in case of network failure. This may reduce investments cost and scooping benefits, by deploying a common subscriber DB and service control platform.
The operator owns network with substituting characteristics. With only slightly difference in characteristics one could take advantage of the similarity and direct traffic onto the network with lowest load and best QoS for the certain usage of the resources. For example, if two systems work together, but one offers better low latency performance at speed, then when someone starts to move, then the low latency parts of the session could be transferred to that system, but the other left where they are. Or maybe hand over of Voice or video is not very good, so that remains on one system, while data part of session is handed over to a quite similar network e.g. using GSM and UMTS as 15-11-04 Page 69
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substituting technologies to dynamically support similar services. An incumbent operator could also meet barriers to invest in a CM. These could be linked to: Regulatory issues: the regulatory authorities could try to hinder an incumbent operator that owns several standards to take advantage of its large-scale benefits and scooping benefits. The differences in the characteristics of the standards are limited. If the differences are big it is easy to know when to use one network or another for a certain type of communication so the best network is used to support a media stream. Coverage is very different. For the case with real simultaneous use and without several networks on the same spot it would be less interesting Technological barriers: This aspect will impact all cases and may include issues as barriers as multiple antennas in the terminal, battery capacity, multiple subscriptions, functionality to split traffic streams, security risks etc.
Investing in a CM would demand new HW and SW and upgrades of the existing systems managements and control system in addition to upgrades of terminals. Splitting traffic onto different standards would demand more enhanced billing routines. These issues are not presumed to be so very expensive, though the hardware of splitting communication streams could be quite expensive. Special control software is needed to direct the traffic streams to the right networks. The income for the operator is first a foremost linked to more efficient usage of radio resources. If the operator has excess capacity in all networks the value of the CM would be limited.
9.6
Conclusion
If the CM could aid in utilising radio resources more efficiently this business case could be profitable. If the investments in a CM also could give scooping benefits and common usage of service platforms this could justify the extra HW and SW cost of the CM. A general problem issue with all cases of convergence is how the payment of resources should be conducted. Since the calling party does not know what kind of network the peer entity is connected on, the price of the call may be unexpected for the caller. The charging split and knowledge of the terminating network may be needed for the customers if e.g. the price differs much between networks. The general focus is that the customer should as far as possible be unaware of the networks used. However for the charging aspects this assumption should be investigated further. This is discussed further in the next chapter.
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10.
10.1
Discussion
Introduction
This paper has looked a whole range of arenas and social actors involved in shaping the evolution of ICTs, around the 5 main technological visions or poles of attraction: the wireless world, interoperability, interconnection, ubiquitous computing and the personal device. Figure 10-1 includes the main actors identified. We have picked out mobile operators, fixed network operators, IT services companies, firms adopting mobile extensions to their IT systems, and students and peripatetic workers in the cases. This section discusses a number of the issues: 1. It reviews trends under the five technological vision; 2. considers a number of pathways to the uptake of multi-standard access systems; 3. it looks at the key user market for mobile telecommunications industrial IT integration 4. considers a number of uses of simultaneous use; 5. introduces some problems in billing and termination charging in multi-standard systems; and 6. suggests that operator control of the device could be removed by disallowing device subsidy by network operator, and passing it to application firms.
Figure 10-1 Social Actors shaping Multi-standard Access
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The Wireless World pole of attraction is still very strong, with mobile phone ownership reaching saturation levels, many firms investing in extending IT systems to include mobile terminals, and WLAN investment very strong. MNOs are still in a strong position was owners of cellular networks, but are under threat from new investors in BWA, and ubiquitous WLAN. Competition in cellular communications is helping drive down prices and service innovation and adoption, but it is still unclear where in the value chain the mobile operators will lie. The development of wholesale market to MVNOs may be the main way that MNOs end up selling to enterprises. Many vendors are now promoting multi-standard wireless devices, for both enterprise and consumer market, but technical problems still remain, and falling cost of cellular telephony are far from making it a sure bet for adoption for voice. Data communications linking 3G and WLAN is being commercialised, but again it is far from clear how WLAN hotspot provision and pricing will balance 3G pricing and uptake. Interoperability is continuing, with new wireless technologies being developed as complements to existing systems, and network firms promoting integrated messaging systems, but Interconnection remains an issue, especially as MNOs try and maintain a grip over mobile data communications and limit the capabilities of handsets. The education case also highlighted the different regimes under which users pay for and have access to different networks which creates barriers to integration of personal voice and messaging with organisational communications systems. As voice and various data communications systems converge network mangers will have to make decisions about what sort of traffic they can allow on their networks, such as allowing students to make phone calls on While certain operators are able to interconnect WLAN and cellular networks into one package, the proliferation of cheap and free hotspots makes puts up barriers to operators controlling this market, although the emergence of brokers could be an important development. Ubiquitous computing is supported by the findings of the application developer study: wireless investment is about taking computing mobile, allowing access to centralised systems. However there are still some limits on the development of mobile device as an easy and open development platform that will allow peer-to-peer messaging. In many cases a key feature of the mobile device comes from being standardised and very cheap: sophisticated terminals can still cause more problems than they are worth. The Personal Device is strongly supported by developments in consumer and business market. It is clear that people want simple devices that they can connect, but differences in the market evolution for various versions of personal devices phones, handheld computers, music devices etc, may mean divergence development trajectories for a while. There is also a tension between the move to peer-to-peer messaging facilities on terminals with considerable processor and memory, driven by technology and IT firms, and the desire of content and operators to control and price communications between end users. The personal device also creates many problems of security, dependability and reliability that increasing sophistication of technology risks exacerbating as much as solving, and could have a crucial effect of slowing actual user uptake.
10.2
Innovation Process
Examination of various scenarios produced by the industry (e.g. D12) suggests that there are a number ways convergence can occur, and degrees to which end users and non-operator firms may be able to control and configure their network access. The finally environment will certainly be heterogeneous, with convergence systems put to use to serve different business models: for example, by operators to provide a full service, with transparent load balancing between networks; User devices that automatically switch access systems according to personal preferences and information available to them through open APIs; and MNVOs and brokers that tie together various access systems via contractual agreements with network owners. Key to how this will become available is in the evolution not only of proprietary technologies, but also the standards that allow interworking. Standards give power to those firms that can control a particular part of the network by controlling the key information that can be passed to other parts of the system or end users. It is control of information to allow optimised choice or integration that is central to convergence. We see this is the case with the way that operators, who buy the majority of cellular devices, deliberately restrict the type of information that developers can access, and limit APIs, even those that are standardised. The work of other FLOWS workpackages on standard enhancement is similarly about making certain information, about channels for example, available to other network layers, in order to optimise the simultaneous use of standards. The release of information can be controlled to maintain a market position, but can be made available on a selective basis, normally 15-11-04 Page 72
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under controlled contractual terms. Therefore an MVNO maybe able to have access to information to run a multi-access system at a price. Introduction of new network features is a key way of producing value-added products in a competitive market. This can be with a standards extension based approach, where a technology firm or operator can choose to provide extra features or facilities within standards, but at cost of implementation, or with a proprietary approach, outside the standard. Depending on the speed of standardisation, the type of technology, and the customer, the proprietary stage can be more important. Standardisation, de facto or de jure, is mainly driven by large firms who use standards to as a way of ensuring large markets, and economies of scale. Small firms can either adopt existing standards, or create propriety solutions. This is where we see actions of innovative smaller players, such as the application developers, who are able to react to demand from particular customers who see a benefit from early adoption, before mass standardisation. We therefore see a path of innovation and adoption of multi-standard radio access technology. First, by individual firms offering proprietary solutions to particular markets. The sophistication of this will vary, but is it likely to be very basic from large firms attempting to sell a simple product, and more complex from small firms trying to add considerable value for a individual customers with specific needs, who pay for the up-front development work. The examples illustrated in this report are Tmobile and Vodafone offering a simple Dashboard to switch between network access from a laptop, and the application developer firms integrating wireless access to existing IT systems. However, implementations developed on an ad hoc basis will seldom be able to incorporate network information from lower layer, especially that related to radio channel, that would be used the full implementation of a convergence manager, and will include workarounds and fixes from the outside rather than inside. The next stage of innovation will be the creation on standardised products by large firms that will take them to market and to the standards process. They may obtain the technology from in house development or purchasing (from) an innovating company. This usually takes longer than smaller firms work, as a largely finished technology has to be developed, it has to find a place with in the firms overall strategy, and a mechanism to market and sell it on a corporate scale has to be developed. At this stage the technology will be implemented by a major user, looking to differentiate their service, and probably will be done in a close partnership with the supplier(s). Final standardisation process will rely on the main players coming to agreement on IPR that may be a drawn out process, and does not assure the uptake of that standard extension. This might occur if the market does not develop, or access to particular IPR needed for its implementation is seen as too expensive or benefiting a particular firm. Of course this is only one possible innovation pathway. Sometimes standards are created well before a market is develop, but then risk being left behind by more market driven processes in other standards making arenas. This does not seem to be the case for multi-standard convergence. Occasionally a smaller firm can start a standardisation process in a pre-market stage, for example 802.20 and Flarion, but risks pressure from major industrial players. Again this is unlikely to be the general case for multi-standard convergence, although some firms claim patents already of certain aspects, such as GSM-WiFi handover for example, than must be taken into the process. Multistandard access systems are not a simple technology, with one solution. Several standards-making processes are involved, and it involves different, markets, which are at different stages of maturity, and evolving with different dynamics. Implementation is likely to follow this path from local innovation through standardisation and commercialisation by major technology firms, IT Services companies and operators. There are therefore a number of different routes to take the work done in FLOWS further: 1. Partnership with innovative companies that have developed complementary technologies, and case by case implementations. This approach would move quickly to implementation, but not necessarily to overall uptake. 2. Partnership with large firms producing IP network technology to push access technology independent network in market and standards. Aim to get a product to be sold to MNO or MVNOs. 3. Partnership with IT Services firms MNOs or MVNOs with a convergence strategy to implement and push standards. These are technology user firms who may want to be part of early implementation to push multi-standard access as a service differentiator
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4. Partnership with Wireless system technology firms to develop standards, and value added technology for sale to MNOs.
10.3
Organisational users - clipboard technicians and professionals
The main focus of developing the market for wireless and mobile connection is in the business and enterprise market, including of course, the public sector, which is entering a massive phase of informatisation. Many of the organisations that employ clipboard technicians and professionals are not businesses, but governmental or state employers: local authorities, health services, transport and public safety etc. Efficiency savings and quality of service are key issues in the public service, but to do this generally involves changing work practices, and negotiating how deployment of new technology will occur. In the public sector these are likely to be significant hurdles to adoption and change, which may make adoption very slow. Wireless mobility is not about providing Internet access, but intranet access, access to databases, messaging systems, remote monitoring or equipment or people, integration with front and back office systems. Often this involves clearly quantifiable productivity gains or efficiency savings, such as savings on transport costs and time, or number of employees needed, as well as qualitative improvements in quality of service that can be provided. This type of use can rather more easily b e justified for many employees than simple internet access for web and email access that are relevant to a particular type of job function. Smaller firms in the application developer study all made a significant part of their business based on running services for clients, and partners clients, as well as selling technology or technology or technology integration skills. In the world of the internet, this sort of business is easy, and attract to businesses who only have to invest capital for the integration up front, the service, being paid as on operation expenditure Integration with mobile can be done on in-house systems, and the actual mobile access outsourced, but IT Services firms providing IT systems will increasingly have to offer this as a basic component of their service. This can be done in partnership with operators, or smaller mobile service providers. With increase in access neutral thinking about IT services, then these firms will be important in implementing system convergence, and demanding it from telecommunications suppliers. While many telecommunications innovations have been supply led, technologies looking for a market, implementation of the Convergence Manager could be demand-led in this scenario. Certain technicians and professionals, such as those working in the construction industry rely heavily on images in their activities, as well as usual business tools. These markets, as they mature may drive demand for higher bandwidth services and more real-time communication. Other professions and activities may not traditionally use images and multimedia, but given the tools may start to find important uses in communication. As the chapter on MMS use it is not easy to predict in advance for which people and activities multimedia communication, note taking or reporting might come to be important. Commercialisers of mobile and wireless systems have to look for new markets for their services, way from the existing voice and basic messaging services. Ubiquitous data services that allow multimedia communication between professionals and allow them access to organisational and e-commerce systems will be a key market. This includes many people who are not main stream mobile business users, but come from a huge range of occupations what are only just being touched by IT services.
10.4
Simultaneous use
This section reviews some of the ways that simultaneous use of standards could be used, and why it might be adopted.
10.4.1 Handover between standards

It is clear that low latency services, in particular voice, present more difficulties in seamless handover between standards than many data sessions. Voice is also sold and controlled, and is used to being consumed in a rather different market to existing non-voice internet communications. Therefore there is a place to develop a system that allows data sessions to be moved between bearers, but not voice, 15-11-04 Page 74
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resulting in a simultaneous use situation.
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For example, one place for simultaneous use could be the handover of the data part of session from a GSM/3G service to a WLAN, while the voice servic stays on the cellular bearer. In this case, the relative cost of the voice call plays an important part in investing in the equipment. When the voice calling is largely flat rate or low cost, then it does not make much sense to hand over to a private WLAN, even if it is possible. In fact, if the addition cost of data components is no greater to maintain on the cellular bearer, then no handover is necessary until the cellular service quality is reduced to poor levels (e.g. inside a building), and a non-seamless handover would be acceptable. In general, the handover from one bearer to the other will depend on a combination of quality of service, bandwidth, and marginal cost of data being carried for the rest of the session. In a fragmented market, where each service is priced differently, and ability to handle different services varies, then the optimal handover point will be different for each network service thus creating the situation where two bearer standards will be used in parallel or simultaneously. In some circumstances, a particular new network service demanded in an already current session on one bearer will only be available on another bearer. Here a decision will have to be made as to switching the whole session, or just one part of it.
10.4.2 Reliability and dependability

Dependability and reliability are issues raised by users of IT and communications systems, and these are features that wireless systems do not generally deliver. One possible benefit of simultaneous use capabilities is in maximising wireless pathways that a device can connect with, ensuring increased reliability. In safety critical systems then this could be one way to ensure a dependable connection. This is just as likely to be offered by a broker service as a wireless operator, by negotiating connection over a range of wireless networks, including multiple cellular and BWA systems as well as local wireless connections.
10.4.3 Linking Separate Communication Regimes

When there is no integration of wireless systems at the operator level, then simultaneous use of standards becomes important if end users wish to connect with multi-service communications, and have contracts with different service providers. This can be foreseen in linking low latency services, such as voice and video or real-time environments, with other data applications such as document sharing. Again, this could be negotiated by end user organisations with a number of network supply contracts, providing a convergence manager in their own network, or more likely by an IT services firm.
10.4.4 Forwarding communications

As end users are likely to continue to have several devices, with mixed radio links, then one of the most important applications of simultaneous use will be forwarding radio traffic from one device through a local link between devices, and then to external network. For example, a Bluetooth enabled phone can make a call via a laptop with Bluetooth and a Wi-Fi or Wi-Max modem, or a 3G-Wifi phone can become the node for a local hotspot linking a number of WiFi enabled devices.
10.4.5 Maximising bandwidth

An alternative to this reasons for simultaneous use it the use of two bearer systems simultaneously to increase available bandwidth. In the case of existing 2.5G or early 3G systems and broadband WLAN systems this may not make sense, since one channel offers much higher bandwidths, but there are some circumstances where this might be appropriate. 1. When congestion on one bearer, especially a WLAN connection operating in a congested environment, gets to a level that some of the traffic could be switched to the cellular connection. 2. When both bearers only offer relatively low bandwidths. This could well be the case with a local Bluetooth connection, which provides less than 1Mbit/s connection, and a 3G connection 15-11-04 Page 75
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of similar capacity or less. In this situation, it may well be appropriate to split a session over the two bearers, for example, the upstream and downstream traffic. Since we see Bluetooth and the Bluephone as services being brought to market, future research could focus on Bluetooth as one of the bearers in a simultaneous use system. 3. The same argument cold be applied to a cellular WWAN (e.g. 802.16) pairing, where bearers with not dissimilar characteristics are linked together. An example may occur when a network operator manages to obtain the licences for several narrow separate spectrum slices, and then use a system for simultaneous use of all of them to provide a service as if they were using a larger slice of spectrum. We therefore suggest that future research on simultaneous use of standards be expanded to include other radio standards that are now being deployed in the market, in particular 802.16 and Bluetooth.
10.5
Costs, pricing and termination
Having multiple bear systems can have odd consequences, especially in terms of billing, and cost sharing between communicating peers. This raises many issues about who we pay for connection to networks and for the individual services we use. Rational switching based on pricing and costs presents problems. An example occurs when the use of a bearer service, for example a hotspot, or any network facility, is offered in a flat-rate, pay in advance scheme. Here there are few circumstances where a system can automatically calculate the likely cost of using the current bearer to do a particular task, and then decide if it is worth paying the upfront fee on another system. Here there will usually have to be user intervention. For example, entering a flat rate zone from pay for traffic would usually be the trigger to conduct intensive network communication, such as downloading or uploading emails, or connecting to a high bandwidth data application. Of course, some threshold and set of rules of likely use can be put into place to semiautomate the process: if the normal cost of a particular use session on one bearer came to the same cost as the upfront charge for a flat rate bearer, then it makes sense to switch, even if the particular session would have cost less by not switching. When an operator offers a multi-bearer product a consistent price to the user, independent of bearer, then, the operator can charge termination of calls/sessions at rate hidden to that subscriber. As in the case suggested by the BT Bluephone, the caller always pays the rate for a call with mobile termination, even if calling a fixed line. However switching between bearers with different price regimes, which will be the situation between private and public networks, or in a customer-focused market (rather than an operator focused market), there are arise interesting questions over who pays the termination. For example, a user calling with a Voice over WLAN, switching to GSM voice call. Caller is using a VoIP system over an internet connection. The caller will initially connect to the receiving party over the internet using VoIP, both connected on a pre-paid flat-rate system each user pays the local connection themselves. When the receiver session switches to GSM or UMTS at a per min or per bit rate then who pays, and how are users alerted to changes in charging regimes? This problem may be resolved in different ways according to local custom (such as difference in paying for mobility in US and Europe), by contract, or by elimination of price difference between calling fixed or mobile device by competition or regulation. The key question is : What is the value of mobility?. While the market can provide solutions that can be chosen by customers according to their wishes for example, flat rate, pay to a limit, pay per use etc, in peer to peer communications the choices of one user may conflict for cause confusion for another user. Users are currently used to opaque charging systems, and complex sets of options on the price of calls to different people and places, and we may well accept increased complexity, but this is certainly at odds with most of the rhetoric that is pronounced on how future communications will work.
10.6
Control of the handset
One of the distorting features of mobile market in many companies is the subsidy that operators give for the terminal, and the subsequent way they configure them, or disfigure them, to restrict a number of ways they can be users, especially in the implementation of SIP. Should the operators be stopped from subsidising handsets, as is the case in Finland. The consumer would pay the whole price, or other firms selling content or applications would subsidise. There would be no power to limit functionality of devices, opening up space for innovation. 15-11-04 Page 76
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Basic handsets are now very cheap, and arguably do not need a subsidy, as almost everyone can afford them. Call charges should fall as a result of operators not having to over costs of subsidy. What is the social benefit of allowing this control? One argument is that it makes more sophisticated handsets available to the larger market earlier than otherwise might be the case. However it is far from clear that the functionality is socially beneficial. Other firms could step into the subsidy gap just as the makers of games machines do, profiting from software sales. Gaming devices can be subsidised by the handset vendors or software firms; music playing devices by online music retailers as the user terminal for their service; IT services firms specify and supply terminals, fixed or mobile, to their customers; However, why should operators not be allowed to subsidise the handset customers after all want a reliable managed service, and the handset is only a small part of the overall technology that they buy into using. From an industrial policy perspective a free market approach would suggest allowing subsidy, but telecoms is regulated in almost every dimensions, so there is plenty of precedent.
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11.
Summary and Conclusions
This document reports on research done in WP7 Activity 2 on the processes of uptake of multistandard radio access systems. Since these devices and the services they make possible do not yet exist, it has been necessary to look for other sorts of evidence on which to base assessments of the prospects of this technology. The report therefore includes a range of empirical studies of existing adoption and innovation arenas, and analysis of recent trends and developments in convergent technology and markets, from which we can begin to make more robust assessments. It investigated some of the layers of actors that are involved in the process of shaping and adopting new ICTs, and the convergence of telecommunications with IT and media technology. In particular it focused on arenas and processes of technology uptake and innovation. A number of conclusions can be drawn: 1) There is considerable movement towards convergence of previously separate systems at the level of networks, data applications, and between telecommunications and IT systems 2) WLAN and cellular services are being offered as a package by increasing number of operators, but independent private and semi-public WLAN provision is dominating WLAN access installation. 3) The MVNO is recognised as a key market actor in converged systems with network access neutral approach to service provision. 4) Integration of mobile telecommunications with IT systems is a key innovation process attracting user organisations, technology innovators and systems integrators of all sizes, and mobile operators. In particular it appears to offer many practical, economic benefits. 5) User organisations, from operators to SMEs, are laden with legacy systems, and lack expertise in adoption of new technologies, which demands a great deal of piece by piece innovation and integration work, rather than buying off the shelf services. 6) End users demand reliability, simplicity and low, or at least controllable usage costs. Juggling multiple devices, with multiple logins and access standards is unacceptable for most users and potential users 7) End user organisations are increasingly in favour of purchasing services, rather than investing in IT systems. Web services, the Internet, all IP networks, and standardised mobile devices make it much easier to do this, and provides more opportunities for large and small IT services companies. 8) IT Services firms will play a key role in creating demand for simultaneous use capabilities, either implementing it themselves, or more likely developing it as a product in partnership with mobile operators. 9) Regulators have a difficult job in balancing the need to support investment in new wireless infrastructure by operators, and to stimulate investment in applications and ad hoc local wireless systems which may actually provide greater social and economic benefit. 10) A number of smaller firms, such as Calypso, Norwood Systems and Conmil have developed convergence manager-like systems to allow telephony handsets to connect to local and cellular bearer systems, and roam between them. IP infrastructure technology firms such as Cisco have developed traffic management systems to balance loads to various edge connection of IP networks. 11) Devices with multiple radios offering alternative radio access will be trialled in the market over the coming year. While broadband internet access linking 3G and WLAN may well succeed, voice services such as the Bluephone depend to a great degree on being able to maintain a significant end user cost difference from 2G or 3G services. It is far from clear that this can be achieved. 12) VoIP and unified messaging, perhaps driven in both the corporate and consumer market by instant messaging, will be key factors in application and use convergence. These will push demand for integration of bearer standards that offer different benefits. The degree to which different systems are integrated depends on the ability of WLAN and 3G networks to actually 15-11-04 Page 78
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deliver quality services that end users want in voice and data. The prospects for such integrated services is still unknown. 13) Convergence Manager and simple integrated multi-standard access are likely to be controlled and implemented by mobile operators and MVNOs for specific markets in the next 3 years, but many barriers still exist. 14) With many new radio systems being launched, bandwidth limitations are not generally going to be an important issue. This may reduce the operators incentive to introduce more sophisticated integration of networks. 15) The operators key asset is the radio network, and their ability to control certain information in it. They attempt to extend this control to the devices that connect to that network. They will attempt to control key information, such as channel quality that could be used by external network integrators, just as they control the communications services available in the hand set. For this reason changes in standards and implementation are likely to be controlled by operators, and the CM deployed by operators rather than brokers. 16) Some of the prevalent industry assumptions about demand for new services has been simplistic and unhelpful. Flat-rate access, or prepaid to a usual level of access, is becoming the de facto way that more sophisticated end users want network access. Poorer users just want cheaper basic services. 17) The personal device is the focus of many different industry strategies, and different configurations, such as the phone, games player, handheld computer or music player are evolving in different markets with different cycles of spending and product innovation. Convergence of devices is practically possible. However a diverse range of often incompatible devices will continue to exist. 18) End user innovation is key to evolving demand, and future investment: as end users are given devices and more sophisticated services, then we will see novel uses emerge. The way that we use images in everyday life, and the desire for more sophisticated telepresence will be key trends. The study suggests that the convergence manager concept will certainly be in demand, and is indeed already on the market. Key factors shaping uptake are the integration of IT services with mobile telecommunications, and the role of IT services companies in controlling this market. Strategies of the operators to maintain control in the mobile market are clearly a defence against this, and may have to be tackled. Development of VoIP, and integrated messaging are key factors in the convergence of telecommunications and IT systems, and there appears to be a market for this, albeit one that may develop slowly. WLAN development in public and private spaces is a central part of this evolution. The evolving environment for the Uptake of FLOWS is dependent on decisions that are difficult to predict, such as that by BT to move their networks to an all IP system, and to integrate operations as an MVNO, with capabilities in fixed network and IT services. This move has set an important lead, and the response of customers and other network operators to this is crucial. The research undertaken raises a number crucial of issues, such as the way that mobility is valued, how billing is conducted in a multi-standard environment, and whether mobile operators should be limited in the way they control and sell devices. It also suggests a number of paths for taking forward the development of simultaneous use of standards technology to demonstrator and market status. Simultaneous use systems will certainly have a market, although there are many uncertainties. Continued technical research and demonstration should continue, in partnership with operators, telecoms vendors, IP network technology firms and IS services companies. Continued research on development of VoIP market, and regulatory issues, WLAN uptake, end user innovation, and the development of IT services industry will complement this research.
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12.
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FLOWS

Deliverable Number: D17

Deliverable Number: D17

Date 18-1004 1-11-04

Comment Early draft

Complete draft assembled with all contributions Minor corrections

Reformating and additions

Amended according to Reviewers comments

Lee, Stewart, Eskedal

Name of Reviewer 1st Reviewer 2nd Reviewer Luis M. Correia

Date Reviewed 2004/11/12

Deliverable Number: D17

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2.1 2.2 2.3 2.4

CURRENT TRENDS AND ISSUES ..................................................................................17

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9

WLAN AND UMTS MARKET IN NORWAY SWEDEN AND FINLAND..........................29

4.1 4.2 4.3 4.4

PUBLIC WLAN CASE STUDY: BENUGO/BROADSCAPE............................................33

5.1 5.2 5.3 5.4 5.5 5.6

6.1 6.2 6.3 6.4

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End-User Perspectives........................................................................................................... 47 Conclusions: Implications for FLOWS .................................................................................... 50

INNOVATORS AND OPERATORS: A CASE STUDY OF APPLICATION DEVELOPERS ..................................................................................................................51

USE OF MMS IN OCCUPATIONAL GROUPS ................................................................60

8.1 8.2 8.3

9.1 9.2 9.3 9.4 9.5 9.6

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11. SUMMARY AND CONCLUSIONS ...................................................................................78 12. REFERENCES ..................................................................................................................80

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HIPERLAN/2 High Performance Radio Local Area Network Type 2

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Review of concepts from FLOWS D12

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Five Driving Visions

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Mobile Internet v. Rich Voice Plus

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Other Key Issues

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Current Trends and Issues

Wireless Standards and Intrastructures

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Figure 3-1 Paths to the Convergence and Coexistence of Standards?

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Fixed-mobile convergence agenda

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BT 21st Century Network

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IT Services and VoIP

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IT Services for consumer products

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User factors, Applications and Devices

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