A week in mobile


The mobile industry has been extremely active over the last few days, with several major announcements coming from CTIA in San Francisco and 3GSM Asia in Singapore. Before we get into the specifics of some of these annoucements, it is worth noting a general observation that mobile is an increasingly dominant theme, not just in the mainstream technology press, but in wider international news coverage. This is a result of the mobile experience expanding to touch many more lives than it has previously and in more ways than it ever has before. Explosive growth in emerging markets, closer integration with existing consumer electronics products in developed markets and increasing demand for mobile media and mobile payment services – all of these factors are combining to raise awareness of the mobile experience.

One of the most significant news items of the last couple of days concerns the GSM Association’s Emerging Markets Handsets Initiative (EMH). Unveiled at 3GSM in February 2005, the Association this week updated the industry on the progress it has made in the last 7 months.

There are now 10 emerging markets operators participating actively in the Association’s handset procurement process, which aggregates demand and then puts the request to tender among the global handset manufacturing community. Motorola won the initial deal in February to supply handsets at a sub-USD 40 pricepoint and it has again won the contract to supply a further 6m handsets at sub-USD 30.

The Association’s involvement allows operators to collaborate on defining the specifications of the handset and provides Motorola with the guaranteed manufacturing volumes it needs to make the investment in designing the product. The handset, C113a, will have a monobloc form factor and boasts 450 minutes of talk time and 330 hours of standby – crucial stats in rural areas where frequent access to recharging facilities cannot be taken for granted.

In addition to its work on handset cost, the GSMA has also produced a report on the effect of taxation on mobile adoption in developing markets. According to the report, taxation accounts for more than 20 percent of the total cost of owning a mobile phone in 16 of the 50 developing countries surveyed.

The GSMA is urging governments to review their taxation policies, pointing to previous research which indicates mobile telephony adoption can have a material impact on economic growth. The London Business School found that a rise of 10 percent in the proportion of a country’s population with a mobile phone lifts annual growth in gross domestic product per capita by 0.6 percent.

Punitive taxation also has the negative effect of encouraging the emergence of a black market, leading to a loss in tax revenue. In 2004, an estimated 39 percent of all handsets sold were distributed via the black market representing a loss of USD 2.7 billion tax revenue in the 50 markets examined.

The GSMA should be commended for its efforts in this area. The unique position and structure of the organisation enables it to play a co-ordinating role, catalysing all of the elements required to extend to the mobile experience to a new category of customers in the developing world. The commercial benefits of doing so are clear – on a macro level, all of the industry’s major operators and manufacturers have already recognised the huge potential in these markets. By taking early action, the GSMA is giving the process of emerging market expansion a strucure, direction and economy which was absent from initial mobile telephony deployments in the developed world.

Switching to the other side of the globe, CTIA in San Francisco was the venue for numerous announcements reflecting the next phase in expansion of mobile technology in first world economies – more segmentation to drive higher ARPU. With penetration levels rising past 100 percent in many countries, mobile is becoming more and more about capturing additional wallet share from existing subscribers through better targeting than winning new customers.

ESPN Mobile, the virtual network operator from the eponymous sports network and Sprint PCS, has been one of the most anticipated launches of 2005. At CTIA the company revealed plans for its commercial release in Q1 2006, indicating that it would offer a fully branded and customised handset manufactured by Sanyo and access to a range of information services, games and media clips from its sporting coverage.

Another trend very evident from the newsflow at CTIA was the increasing interest from companies outside the operator community in establishing independent channels for mobile distribution. Bango, the global payment platform provider, signed a deal with Sun Microsystems to power the mobile transactions behind Java.com. This will allow users to browse one of the most extensive mobile application catalogues and download direct to their handset. Payments can be made on the user’s monthly operator bill through Bango’s existing operator partnerships, by Paypal or credit card.

Motorola and July systems also made an interesting announcement in this area. July is a Motorola-funded start-up founded in 2001 which has developed a mobile market place architecture. The technology allows content providers, retailers, operators and manufacturers to create tailored mobile storefronts offering a range of mobile media with a set of easy-to-use graphical tools.

The architecture supports payment models such as subscriptions, rentals, pay-per-use and
try-before-you-buy, along with personalised real-time promotions. It addresses one of the big challenges of creating an overall mobile experience: connecting the various players in the value chain within a collaborative mechanism.


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  1. 1
    Stella

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