UK: Telecommunications Predictions - TMT Trends 2007 - Part Two

Last Updated: 16 January 2007
Article by Igal Brightman

Most Read Contributor in UK, August 2017
This article is part of a series: Click Telecommunications Predictions - TMT Trends 2007 - Part One for the previous article.

To read Part One of this article please Click Here

The case for innovation, not imitation, in IPTV

Fixed telecommunications operators often provide an essential ingredient – network infrastructure – that enables and delivers a growing range of convergent services. Yet when it comes to profiting from convergence, operators have too often found themselves on the outside, looking in64.

Downloaded music, video calling and social networking are just a few on the growing list of applications that are network dependent, but which generate little, if any, marginal revenue for operators65. This may be unsustainable in the long-run, particularly given ongoing and upcoming investments in next generation networks, costing tens of billions of dollars66.

Thus, to capitalize, rather than just enable convergence, fixednetwork operators need to position themselves in the value chain such that they can command a better share of revenues67. That means developing new services and business models that put broadband networks at the center of value creation, and use their existing capabilities to own and control the customer relationship. Broadband-based IPTV is one of the major opportunities for operators to put this strategy into action. For consumers, IPTV has the potential to offer a unique combination of the advantages of the Internet – global reach, a highly interactive user-interface, and a vast repository of content – with the relaxing ‘lean back’ viewing experience that has made television so popular.

Unfortunately, many IPTV services to date appear to have been little more than clones of traditional television offerings without providing consumers with anything new, compelling and, critically, unique to a two-way network, as opposed to the one-way feed of broadcast satellite or terrestrial television68.

As a result, during 2007 network operators will need to ensure that IPTV is launched as a reinvention of television, rather than a pale imitation of current services69. Otherwise it may be destined to remain a low-margin service70, with, at best, a niche following of consumers71, particularly in Europe.

Bottom line

For IPTV to be commercially viable, fixed-network operators should consider improving upon both the reach and the richness of IPTV services. Differentiation, based on high levels of interactivity, on-demand services, presence and other features that actively use the dynamics of broadband networks are likely to be essential.

IPTV’s reach is constrained by the number of people with fastenough broadband connections and the necessary hardware to receive IPTV programming, such as a set-top box or a PC linked to the television set. To address the latter point, operators may need to offer subsidies that make the initial equipment purchase more affordable, in exchange for longer term contractual commitments. Operators should ensure that costs remain under control. IPTV installations that require an engineer’s visit to the home may cost at least $36072. Consequently, user-installation may be key to the business case.

To improve IPTV’s richness, fixed-network operators could position the service as an affordable way for both traditional and non-traditional content providers to deliver content to the masses, without the broadcast-network middleman. This proposition may appeal to major media companies that want to deliver content directly to consumers in a highly targeted and affordable way.

But it might be even more attractive to niche content providers that lack the scale to use traditional mass distribution channels. The growing popularity of websites such as YouTube, which offer a wide variety of short-video content contributed by individual users and other non-traditional providers, proves that consumers are interested in this type of unconventional material73.

Reducing the barriers to entry for consumers and content providers could help create a critical mass of viewers and content for IPTV. It could also enable fixed-network operators to capitalize on their core capabilities in areas such as customer management, billing and fulfillment. These are capabilities that many content providers currently lack, and indeed, may not be able to justify. Within the context of VOD services, for example, this central position in the IPTV value chain would allow fixednetwork operators to capture a share of every transaction, and could help prevent their critical network infrastructure from becoming unnecessarily commoditized.

The kilobyte is the killer application

Size is everything. Often bigger is better. However in the telecommunications sector, the biggest revenues and the best margins have often come from services based on the smallest files and narrowest bandwidth.

One of the most successful applications in the telecommunications sector to date is text messaging, a service that generates at least three times the gross revenues of the entire global recorded music industry74. Text messages are even smaller than a kilobyte, requiring just 140 bytes75. Charged at an average of around $0.20 per message76, text messages can be extremely profitable. A megabyte of data transmitted at 20 cents per message generates over $1400 per megabyte77.

Mobile ringtones have also been a major success, with a global market value of $4.5 billion78 or more. Mobile ringtones are typically shortened, simplified versions of songs, and are rarely larger than 100 kilobytes in size. Yet the market for full-track downloads, with a file size of about two megabytes, via mobile networks is less than one twentieth the size of the ringtone market by revenue79 and generates more revenues than the entire online digital music market80.

Voice has generated trillions of dollars in revenue ever since the first commercial call was placed. Voice over the PSTN requires just 64 Kbit/s81 and just 9.6Kbit/s on mobile networks82. During peak periods, as little as 4.8 Kbit/s may be allocated per call83.

This contrasts with the revenues from, say, video downloads. Mobile voice delivers between $0.60 and $1.90 per megabyte depending on the tariff, while a three-minute, video download generates about $0.13 per megabyte84. A movie is typically at least a gigabyte in size, making timely delivery (in other words, where it takes less time to download than to watch the file) only possible when using a multi-megabit connection. A movie download typically costs a few dollars. When comparing revenue per megabyte, voice generates at least 20 times more than a downloaded movie.

The enormous revenue-generating capacity of these services is largely due to their simplicity and universality. Placing and receiving voice calls is something effectively every telecommunications customer can do. The very large majority can send and receive text messages. Hundreds of millions of people can download and use ringtones. But these are not so much ‘killer’ applications as they are appropriate applications. Each was designed specifically for its host medium, whether fixed or mobile, and each was expressly intended to make the most of the unique benefits of that medium.

Yet in 2007, much of the telecommunications industry focus is likely to remain towards high bandwidth applications based around large files, from IPTV to mobile music downloads, and as a result, many operators may overlook a larger opportunity sitting right under their noses. Great things do indeed come in small packages.

Bottom line

Some key questions that the telecommunications industry should ask when considering its product pipeline include: How can connectivity maximize value? What do customers value most from a network that can connect both individuals and groups? What is a network ill-equipped to deliver? A common thread running through the possible responses to these questions may be that bigger is not always better, at least when it comes to file size or bandwidth requirements.

Connectivity is arguably best equipped to deliver just the right information, to just the right person, at just the right time. Thus an email with 10 words of plain text may be just as valuable as the same sentence wrapped within a megabyte’s worth of formatting. Indeed the former may be even more useful if it reaches its destination more quickly due to its compact size. Some mobile email services cost the equivalent of $15 per megabyte, but each megabyte can carry thousands of individual plain text messages, each of these potentially valuable to the recipient.

By contrast, connectivity may not be best positioned to compete with the role of broadcast networks, both terrestrial and satellite-based. Operators should therefore review which network-based, kilobyte-sized applications may be of value to their customers.

For mobile operators, such services could include email headers, instant messaging, calendaring and reminders, presence-based services (presence-enabled contacts and messaging), online chat, group messaging and other simple services that in combination make the mobile device the center of gravity for all forms of communication.

For fixed operators, kilobyte services might include:

  • cross-platform messaging, integrated with mobile
  • presence-based voice, email and messaging, integrated with mobile where possible

  • integrated messaging, contact synchronization from mobile to fixed phone
  • other services that defend the position of the fixed device whilst using the power of fixed Internet connectivity.

The double-edged sword of triple play

The case for bundled offerings ebbs and flows. Currently the tide of favor is moving steadily back to triple-play, and in some cases quadruple-play offerings combining fixed and mobile communications, the Internet and television.

The prevailing view, particularly in Europe, where demand for telecommunications products is perceived as stagnant, is that extending the service portfolio is one of the best options for growth85. Furthermore, it is argued that bundles may also help to reduce churn, with a knock-on boost to customer lifetime value and profitability.

Thus in 2007, incumbent telecommunications operators that had previously split off their mobile operations may try to buy back these assets. In some cases the mobile offshoot may be in a better position to be the acquirer, having attained a higher valuation than its one-time parent. Media companies may purchase telecommunications companies, particularly fixed broadband providers, in order to grow revenue per subscriber in the short-term, and to create the option to offer VOD services in the longer term86. Private equity firms may also move to aggregate both telecommunications and media companies, in anticipation of growing demand for multiple play services87. Equipment manufacturers are bolstering their capabilities to be able to supply triple-play service providers88.

For some the stakes may rise higher still. Some telecommunications operators are planning to invest tens of billions of dollars to upgrade their fixed networks to be able to carry triple-play (and other) services89. Other telecommunications and media companies are likely to make a dash to find partners that allow them the possibility to offer triple and quadruple-play bundles90.

Some companies may use a combination of MVNO, broadband LLU, fixed voice reselling and IPTV as the basis for bundled offerings. This approach may be challenging. The MVNO model has been successful more as an exception rather than a rule; a number of MVNOs have notably failed 91 92 93. Offering broadband services through LLU can expose companies to razor-thin margins and huge technical complexity94. And IPTV remains an immature and relatively uncompetitive technology by comparison to broadcast, satellite and cable television.

Becoming a triple, or quadruple player may cause many companies to step outside their comfort zone, and some may stumble in the process. Mobile operators, used to selling to individuals, may struggle with the different dynamics of selling IPTV services to households. PSTN operators, specialized in securely conveying private conversations, may find they lack core media skills such as commissioning, scheduling and advertising95. Media companies, experienced in offering services based on mature, stable technologies, may be taken aback by the customer-support requirements for a relatively volatile platform like broadband.

Network-infrastructure owners, accustomed to being in total control of all network-related matters, may find reselling another’s network a deeply frustrating experience. Brands built around products that have taken years to nurture into core assets, may be heavily damaged by failures elsewhere in the bundle.

2007 is likely to see a raft of new triple and quadruple-play offerings taken to market, each backed by a very large marketing budget. Many companies may well use price discounting as the main competitive lever, with many more offering one element of the triple or quadruple-play bundle for ‘free’. Even before the impact of such discounting is taken into consideration, the business case for triple and quadruple-play offerings looks doubtful. Some estimates suggest that they could yield cumulative losses of $4500 per subscriber by 201096. In 2007, it is likely that operators will either have to heed such warnings, or work out how to prove them wrong.

Bottom line

Companies deploying or considering triple play should satisfy themselves that this approach will appeal to consumers and to shareholders.

Typically customers want a blend of value, quality of service and ease-of-use. Ideally, value could be added by including greater interactivity, new services and improved functionality, for example97. Possible ways of increasing value to the customer should not be limited to a discount or giveaways. If customers felt they were getting the best of all services offered, from just one provider the need for operators to offer substantial discounts may be removed 98 99.

Operators should ensure that they can deliver a consistent quality of service across all their bundled offerings. A failure in one service line could cause negative publicity for all offerings and for the overall brand100. Provisioning, CRM and technical support should all be enhanced in such a way that they can cope with all manner of requests from addressing connectivity problems to offering new mobile phones.

Ease-of-use should not be limited to offering a single bill. Services are at their most compelling when they deliver impressive functionality that is intuitive to use101. Operators should also strive to avoid the unnecessary complexity of some early deployments of integrated fixed-mobile voice102 and IPTV. The latter has been considered difficult to use by comparison with broadcast, cable and satellite television, not least because of its complex home-networking requirements103.

Operators should also be able to explain to shareholders how and why triple and quadruple-play offerings make sense to investors. The churn-reduction argument has not always been backed up by practice104. Furthermore, the argument that multiplay prevents telecommunications operators from becoming akin to a utility is countered by the fact that many utilities businesses have themselves pursued a triple and quadruple-play strategy in recent years.

The connectivity chasms deepen

The digital divide, the gulf between those with access to technology, and those without, has been well documented105. However the growing chasms between those who have varying degrees of connectivity and those who do not have, in general, had less attention, and may become of acute concern in 2007.

The first connectivity chasm is between those with a voice connection and those without. In developed countries, basic voice connectivity is widely available to the large majority of the population. In some developing countries the number of people with connectivity is growing steadily, mostly due to the growth in mobile networks. China and India alone have connected hundreds of millions of citizens in the last decade, and monthly net additions are still running at millions per month106.

A growing percentage of the world’s population is likely to fall within the range of a telephone network. At the start of 2007, 80 percent of the world’s population lived within reach of a mobile network. By 2010 that proportion should rise to 90 percent107. However, there are still up to 1.5 billion people without access to mobile voice services108 and over 800,000 villages may still lack basic connectivity109. This is not because of lack of network coverage, but due to the prohibitively high cost of service.

The second chasm is between those that have access to broadband connectivity at a speed and contention ratio sufficient to support a widening range of applications, and those without this privilege. In 2007, the gulf between these two groups is likely to deepen. Access to broadband generally confers a positive change in living standards, and also raises personal competitiveness on a number of levels. In 2007, broadband-based applications are likely to offer a range of benefits such as: e-commerce’s lower prices and greater information; VoIP’s lower tariffs; e-government’s details on planning applications and municipal developments; online encyclopedias’ information archives for students; video-based security, and telemedicine’s access to medical specialists.

At the start of 2007, there were an estimated 300 million consumer broadband connections in a world of 6.5 billion people110, less than five percent of the world’s population. Of these connections, only 20 million offered speeds of two Mbit/s or more111. Yet in 2007, 95 percent of the world’s population are forecast to have no broadband access at home. And by 2010, only a quarter of all broadband households are expected to have two Mbit/s or faster connections112. In short, this means that 2007 and the years that follow could see the emergence of a connectivity elite, while the majority of consumers fall rapidly behind.

Bottom line

Connectivity is a major driver of economic progress and individual productivity, and governments should develop policies that address the two connectivity chasms urgently. The growing connectivity chasms are clearly a challenge for telecommunications companies as well, and should be taken seriously in 2007.

But as with other large-scale, socio-economic problems, it is important to avoid the quick fix that may meet a target but otherwise provides no tangible benefit.

Schemes such as subsidized or free municipal wireless networks may sound promising in theory, but offer little benefit if citizens cannot afford computers in the first place. There is little benefit in public WiFi schemes that just make connectivity even cheaper for the better off. Research has already suggested that the cost of municipal WiFi schemes is likely to be so high that over 50 percent will fail to break even113, hence a change of approach may well be a blessing in disguise.

A more appropriate, affordable and sustainable approach may be something more akin to fractional ownership, whereby a computer and a broadband connection are owned collectively. The benefits of being connected can then be shared among a community. This approach is already yielding positive results in parts of Africa114, and has the potential to transform digital quality of life for poorer people in the developed and developing worlds alike. Government and telecommunications operator investment could also be put into Internet cafes, which offer both the opportunity for people to get online, and to have the support, advice and training of experienced users.

Governments should also move to liberalize communications markets. Competition may make telecommunications services more affordable for a larger proportion of the population. Free-market competition has already had a profound impact on a number of developing economies, bringing connectivity within reach of a substantially greater proportion of the population115. Further, governments should examine the taxes levied on connectivity. For example, in the developing world taxes are estimated to represent around 20 percent of the total cost of ownership of a mobile phone116. Reducing or removing sales taxes and other duties will likely make connectivity more affordable, increase uptake and have a net positive impact on the economy as a whole.

The rising cost of free telecommunications

The 21st Century appears to be an increasingly benevolent era, particularly for telecommunications products and services. Consumers and businesses are being offered an ever widening range of goods, for a ticket prize of zero. Or are they?

Mobile telephones are often offered for free. This is courtesy of a subsidy, sometimes as high as $1000. Subsidies were a powerful tool during the high-growth phase of the industry, but may have become an expensive and uncomfortable legacy. In major markets, the annual cost of this subsidy runs into billions of dollars annually. The cost of the subsidy is factored into the consumer’s bill via call charges and line-rental prices117. Thus a free handset is far from free but is paid for with every call made.

Broadband is increasingly being offered as a free service. But the cost of this free offer can often include the obligatory purchase of another service, or services; a charge for the privilege of being released from the free service; the cost of calling a premium rate, technical support hotline when the modem that was provided gratis proves a nightmare to install, or stops working.

Furthermore, the majority of free broadband offers may include usage caps, which limit the quantity that can be uploaded and downloaded by customers. Consumers exceeding their limit may find themselves charged a significant premium for each additional megabyte of use.

VoIP can also be perceived as free, particularly if calls are made from PC-to-PC. But there are, as ever costs involved. Fully free calls, that is calls with zero marginal costs, can only be made by those with access to a PC and a broadband connection, both of which cost money. In addition, there is the time taken to set up the call; to ensure both users are registered on the same VoIP system and have the same version of the software, and there is the impact of other users’ calls flowing over your broadband connection thanks to the peer-to-peer software being used. In total, the financial and other costs associated with making a free call can be high, which may explain why PC-to-PC VoIP remains a marginal element of the world’s voice traffic, and is likely to remain a small fragment of all traffic in 2007118.

In 2007, the use of free offers may increasingly counter strategic objectives to improve revenue and margin growth. Having set the ‘free’ precedent, telecommunications companies may have a hard job persuading consumers that their services are worth paying for.

Bottom line

Telecommunications operators should take a much more discriminating approach to ‘free’, using it selectively, carefully and with a full and realistic understanding of its potentially negative implications.

Offering products and services for free can be a powerful tool in high-growth markets, where it can translate into rapid market share growth. But in the maturing telecommunications world of 2007, the technique may be or become a liability.

This is particularly the case in the fixed broadband market. There are already numerous examples of free offers turning into public relations disasters119, and companies must carefully consider the implications of marketing ‘free’120. Most free broadband offers form part of triple-play packages. Given that the economics of triple play have been brought into serious doubt121, operators should lessen their dependence on free broadband as soon as possible. Additionally, not only are consumer groups likely to keep a close eye on the small print associated with free offers, but also competition authorities and regulators may well pay increasing attention, and could even intervene more regularly if the term free becomes either overused or misused.

Using free offers to minimize subscriber churn may hold potential in low-value segments, but only if there is a clear path to revenue growth in the future. This is likely to require far greater selectivity in relation to the tiers of service offered for free, in order to create the opportunity to up-sell to higher specification, paid-for services, and substantially greater certainty on the revenue growth prospects from other, paid-for services.

A focus on value and quality may be more sustainable than one based on giveaways. In 2007 a significant proportion of consumers are likely to remain willing to pay for quality, and by definition, these customers represent the best target for revenue growth for all telecommunications companies. This is particularly the case in the mobile segment, where in Europe, for example, 20 percent of customers typically generate 50 percent of revenues122.

The subsidy model for mobile operators may have to stay, as a free mobile phone has now become central to consumer expectations. However operators can still lessen the impact of subsidies. For example operators should encourage the migration of customers from prepaid to contract tariffs123 as customers within a contract typically yield higher revenues. There is a direct correlation between the speed of migration from prepaid to contract and growth in service revenues124, and operators should seek to exploit this fact.

VoIP operators should also distance themselves from free offers, not only because consumers and commentators are becoming increasingly aware that VoIP is not free, but also because a business model based on free services is likely to be untenable in the long-term125. The technical capabilities of VoIP lend themselves very well to premium offerings, with high-fidelity sound and robust encryption, and operators would do well to shift their focus in this direction.

About TMT

The Deloitte Touche Tohmatsu (DTT) Technology, Media & Telecommunications (TMT) Industry Group consists of the TMT practices organized in the various member firms of DTT and includes more than 5,000 member firm partners, directors and senior managers supported by thousands of other professionals dedicated to helping their clients evaluate complex issues, develop fresh approaches to problems and implement practical solutions. There are dedicated TMT member firm practices in 45 countries and centers of excellence in the Americas, EMEA and Asia Pacific. DTT’s member firms serve over 90 percent of the TMT companies in the Fortune Global 500. Clients of Deloitte’s member firms’ TMT practices include some of the world’s top software companies, computer manufacturers, wireless operators, satellite broadcasters, advertising agencies and semiconductor foundries – as well as leaders in publishing, telecommunications and peripheral equipment manufacturing.

Glossary of technical terms

3G - Third generation mobile network
CRM - Customer Relationship Management
GSM - General System for Mobile
IM - Instant Messaging
IP - Internet Protocol
IPTV - Internet Protocol Television
ISP - Internet Service Provider
LAN - Local Area Network
LLU - Local Loop Unbundling
MVNO - Mobile Virtual Network Operator
PSTN - Public Switched Telephone Network
SMS - Short Message Service
TMT - Technology, Media and Telecommunications
VOD - Video-on-Demand
VoIP - Voice-over-Internet Protocol
W-CDMA - Wideband Code Division Multiple Access
WiFi - Wireless Fidelity
WiMax - Worldwide Interoperability for Microwave Access

Footnotes

1 One petabyte is equivalent to 1,073,741,824 megabytes

2 EuroTelco Snapshot, Daiwa Institute of Research, 4 April 2006

3 Ibid

4 http://simplyted.blogspot.com/2005/12/how-to-visualize-data.html

5 One exabyte is equivalent to 1,099,511,627,776 megabytes

6 For example see: Global bandwidth prices to fall 20 percent, The Financial Express, 2 August 2005

7 Net video explosion triggers traffic jam worries, CNET News, 23 February 2006

8 Ibid

9 Bottleneck Blues, Communications News, April 1998.

10 See: http://www.internetworldstats.com/stats.htm (Data published on 18 September 2006)

11 Net video explosion triggers traffic jam worries, CNET News, 23 February 2006

12 VON: V is not just for voice any more, InfoWorld, 16 May 2006

13 EuroTelco Snapshot, Daiwa Institute of Research, 4 April 2006. (Note: VoIP services typically consume 40 Kbit/s, whereas Video-over-IP consumes over 400 Kbit/s)

14 EuroTelco Snapshot, Daiwa Institute of Research, 4 April 2006

15 Stage set for wholesale carriers, Telephony Online, 20 March 2006

16 See: AT&T Chief warns on Internet costs, Financial Times, January 31 2006, Telstra abandons broadband project, Financial Times, 6 August 2006; Deutsche Telekom to be told to open network, Financial Times, 19 August 2006;

17 What is net neutrality regulation? Precursor LLC, 2 May 2006

18 The battle for net neutrality, Consumer Affairs, 6 February 2006

19 Verizon executive calls for end to Google’s ‘free lunch’, Washington Post, 7 February 2006 20 There are exceptions to this situation. Many nations around the world force ISPs and telecoms carriers, as well as Internet search companies and others, to limit access to the contents of the Internet, for political and ideological reasons. See – Net censorship spreads worldwide, BBC News, 4 May 2006

21 Web inventor warns of ‘dark’ net, BBC News, 23 May 2006

22 Tangled web of fear, greed and Internet’s fate, The Philadelphia Inquirer, 19 June 2006

23 Verizon executive calls for end to Google’s ‘free lunch’, Washington Post, 7 February 2006

24 Web inventor warns of ‘dark’ net, BBC News, 23 May 2006

25 The net neutrality debate – you pay, you play? CIO Magazine, 15 April 2006

26 Ibid

27 EuroTelco Snapshot, Daiwa Institute of Research, 4 April 2006

28 Ibid

29 The ITU defines broadband as a "transmission capacity that is faster than primary rate Integrated Services Digital Network (ISDN) at 1.5 or 2.0 Mbit/s"

30 Global Internet Trends, Morgan Stanley, 4 July 2006

31 Partisan smackdown over net neutrality, 26 April 2006

32 EuroTelco Snapshot, Daiwa Institute of Research, 4 April 2006

33 Norwegian telco leads the way to flexible broadband services, Juniper Networks. See – http://www.juniper.net/solutions/customer_profiles/telenor/352017.pdf

34 Cerf, Part 1: Excuse me, but we don’t get a free ride at all, Battelle Media, 14 July 2006 (interview with Vince Cerf, Chief Internet Evangelist for Google, on net neutrality)

35 Opinion: Protecting net neutrality From The Neutricidal Telcos, Information Week, 26 June 2006

36 http://www.pewinternet.org/pdfs/PIP_Internet_Impact.pdf

37 The Internet in Britain, The Oxford Internet Survey, May 2005, see – http://www.oii.ox.ac.uk/research/publications.cfm

38 The Communications Market 2006, Ofcom, http://www.ofcom.org.uk/research/cm/cm06/

39 The Internet in Britain, The Oxford Internet Survey, May 2005

40 http://globaltechforum.eiu.com/index.asp?layout=rich_story&doc_id=9450

41 See: http://www.gsmworld.com/index.shtml

42 For discussion on one operator’s approach to mobile television, see interview with Dr Joo-Sook Lee, Convergence Conversations, DTT, November 2006

43 For examples of some alternative approaches, see: Planning for Mobile Television Adoption Means WiMax, New Telephony, 11 October 2006; Sling Media, Symbian to Bring Mobile TV to Smartphones, TechNewsWorld, 20 October 2006

44 This is the average size of a television screen. Sales of much larger format sets are strong world wide, but the average screen size in any given market is brought down by higher volume sales for smaller, secondary and tertiary devices (for bedrooms, kitchens and other locations).

45 The BBC created episodes of one of its hit drama series, Dr Who, specifically for mobile phones, but was disappointed with the take-up of only 3000 downloads per episode and 40,000 for the 13-week series. Source: Conference Analysis: New forms of interaction, IBC Daily, 10 September 2006 http://www.ibc.org/cgi-bin/ibc_dailynews_cms.cgi?db_ id=23620&issue=4

46 Mobile TV is coming, eventually, Silicon Republic, 6 July 2005

47 YouTube goes ‘moblogging’, CNN Money, 3 November 2006

48 Users shy clear of high 3G fees, Info World, 12 October 2006

49 The criminal costs of mobile data, ZDNet, 1 November 2006

50 See: http://telcotech.drkw.com/blog/archives/2006/04/on_mobile _data.html

51 Mobile Networks to Cover 90 percent of the World’s Population by 2010, GSM Association, 17 October 2006

52 Today some seven percent of Americans use their mobile as their primary phone, and that number should climb to 40 percent within 10 years, according to research by the Farpoint Group (T-Mobile’s Trial Balloon, BusinessWeek, 14 August 2006).

53 Voice – A Vision of the Future, Ovum, March 2006

54 Facing off on convergence, Exane BNP Paribas/Arthur D Little, February 2006

55 CTOs need to steel themselves for tough network choices, Informa Telecoms & Media, 17 July 2006

56 Voice – A Vision of the Future, Ovum, March 2006

57 3G Wireless Applications Need Better In-Building Coverage, Convergence Network Digest, 20 January 2006

58 Advantage "super-sub"? Mobile Europe, 7 January 2005

59 Vodafone Spain Launches ‘HomeZone’ service for SMEs, Current Analysis, 8 June 2006

60 Corporate VoIP and WiFi - money savers or sinks? Quocirca, 4 September 2006

61 Fixed-mobile services will lead technology convergence, Forrester Research Inc, 23 March 2006

62 Council fixed-mobile trial rings the changes, Silicon.com, 9 November 2006

63 BT batphone to be repackaged for big biz, The Register, 12 May 2006

64 Network access becoming a commodity, Silicon.com, 1 March 2005

65 The broadband incentive problem, MIT Communications Futures Program (CFP), Cambridge University Communications Research Network, September, 2005

66 The long road to IPTV, Telecom Asia, 4 November 2006

67 See: http://www.voiceanddata.com.au/feature_article/item_042006c.asp

68 The long road to IPTV, Telecom Asia, 4 November 2006

69 187 million digital TV households expected across Europe and the United States by 2010, IPTV Industry, 23 August 2006

70 IPTV – the big picture, eMarketer, September 2006

71 187 million digital TV households expected across Europe and the United States by 2010, IPTV Industry, 23 August 2006

72 Exploring IPTV lifecycle and operational costs, Yankee Group, October 2006

73 The long road to IPTV, Telecom Asia, 4 November 2006

74 Looney Zunes: What does UMG want from Microsoft?, The Register, 9 November 2006

75 See: http://www.developershome.com/sms/GSMModemIntro.asp

76 The Netsize Guide 2006, Netsize, ISBN: 2 – 9523533 – 1 – X.

77 One MB of data is equivalent to 7142 text messages. 7142 x $0.2 = $1428.40

78 Ringtones – the sound of money, CNN Money, 13 April 2006 (According to Billboard Magazine, the global ringtone industry generated revenues of $4.4 billion in 2005. Revenues are likely to have grown since then).

79 Mobile music market set to shift, MobileTech News, 2 August 2006

80 Kazaa becomes legal service, BBC News, 27 July 2006 (Global online music downloads market was worth $1.1 billion in 2005).

81 See: http://spantalk.com/FAQ/5_Technical.htm

82 Voice Compression and Communications: Principles and Applications for Fixed and Wireless Channels, University of Southampton, 1 December 1999. Excerpts available for download at: www-mobile.ecs.soton.ac.uk/ books/voice-book-sample-chaps.ps

83 Ibid

84 Consumers in a mobile world, Speech by Peter Ingram, CTO of Ofcom. FT World Mobile Communications Conference, May 2005. See – http://www.ofcom.org.uk/media/ speeches/2005/05/mobile_comms

85 The big broadband gamble, Telecommunications Online, 2 October 2006

86 For example, in October 2006, satellite TV broadcaster BSkyB purchased UK fixed broadband operator Easynet for $420 million.

87 Analyst: Beware the telecoms mini-bubble, ZDNet, 9 June 2006.

88 In February 2006, Cisco Systems paid $6.9 billion for Scientific-Atlanta, a manufacturer of set-top boxes, with the intention of extending its reach into the video market (see – Cisco closes Scientific-Atlanta buy, CNET News, 27 February 2006); In December 2005, Alcatel purchased 25 percent of 2Wire, a home gateway vendor with a leading position in the North American market (See – Alcatel buys into 2Wire, Light Reading, 2 December 2005)

89 Can triple play pay? Time, 7 January 2006

90 Quadrophonia, HSBC Global Research, February 2006

91 Promising MVNO market fails to meet expectations, E-Commerce Times, 15 August 2006

92 Easymobile to close down service, BBC News, 13 November 2006

93 ESPN pulls plug on cell operation, seeks to partner with carriers, Boston.com, 28 September 2006

94 Orange UK: struggling to give convergence away for free, Enders Analysis, 1 November 2006

95 See: interview with Julio Linares, Convergence Conversations, DTT, November 2006 96 Forrester Research: Is triple play Financial Suicide for Europe’s Incumbent Telcos? Tekrati, 19 June 2006

97 Triple play trickery – beware the buzzword bandwagon, EDN, 12 October 2006

98 Orange UK: struggling to give convergence away for free, Enders Analysis, 1 November 2006

99 See: interview with Duco Sickinghe, Convergence Conversations, DTT, November 2006

100 Orange broadband punters left stranded for weeks, The Register, 11 August 2006; Carphone swamped by broadband flood, This is Money, 6 Jun 2006

101 Simplicity should come as standard, Personal Computer World, 19 Nov 2004

102 BT’s convergence con-Fusion, ZD Net, 15 June 2005

103 Is IPTV ready for prime time? Broadband 2.0, Summer 2006

104 Orange UK: struggling to give convergence away for free, Enders Analysis, 1 November 2006

105 For example see: TMT Trends: Predictions for the Technology Sector, DTT, January 2006

106 See: interview with Sarvjit Dhillon, Convergence Conversations, DTT, November 2006

107 Up to 90 percent of the globe to have mobile coverage by 2010 – study, XFN-Asia, 18 October 2006.

108 GSM Association. See http://www.gsmworld.com/developmentfund/index.shtml

109 Digital divide becoming a vast chasm, Inter Press News Agency, 14 September 2005

110 TeleGeography Reports Global Broadband Subscribers Now Over 221 Million, TMC NET, 25 May 2006

111 IPTV – The Global Picture, eMarketer, September 2006

112 Ibid

113 Jupiter Research estimates that municipal wireless projects cost $150,000 per square mile setting a high bar for breakeven best met by private-public cooperation, Jupiter Research, 6 July 2005

114 See: interview with Pieter Uys, Convergence Conversations, DTT, November 2006

115 The real digital divide, The Economist, 10 May 2005

116 Tax and the digital divide, GSM Association, 2006. For a copy of this report, visit – http://www.gsmworld.com/TAX/

117 Outlook: mobile phone wars, The Independent, 11 March 2005

118 Voice – A vision of the future, Ovum, 16 March 2006

119 Millions unhappy at broadband service, The Evening Standard, 13 November 2006; Free broadband offer from Carphone and Orange backfires, The Independent, 14 November 2006.

120 Free broadband users ‘less happy’, BBC News, 14 November 2006

121 The Triple-Play Business Case: Financial Suicide For Europe’s Incumbent Telecoms Operators? Forrester Research Inc, 15 June 2006

122 Nokia Mobile Business Voice, a white paper published by Nokia states that in western Europe, 20 percent of mobile generate 50 percent of total mobile revenues, with average revenue per user up to three times higher than that of consumers. See – http://www.nokia.com/NOKIA_COM_1/About_Nokia/Press/White_Papers/pdf_files/ mbv_new_revenue_wp_net.pdf

123 European Mobile Outlook, CSFB, 15 January 2004

124 Ibid

125 Free VoIP might not lead to profits, Physorg.com, 29 June 2006

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