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Government remote access to data on PCs (and phones?)
Only the other day, I mentioned that the European Union's interventions in areas of technology should be restricted to consumer and competition issues, as it patently doesn't understand the subtleties of computing and communications.
The Register has a great example of European inadequacies and worrying authoritarianism. State authorities installing trojans on peoples' PCs to enable remote searches. I presume that the same philosophy would be applied to smartphones as well.
Luckily, the concept fails on so many practical and technical levels, we probably don't need to get too worked up about it just yet - although continued vigilance against creeping State invasion of data privacy is pretty important.
Some obvious flaws in the concept:
- How this software is installed on PCs in the first place
- PC security software
- Separate hardware firewalls (eg in corporate networks - I can just imagine them being reprogrammed to allow external agents to peer inside PCs on the LAN)
- Threat of these trojans being subverted by other malicious users
- How this would work with roaming users - would the government have the right to snoop on visiting Chinese users' PCs? Or would your PC's data continue to be visible when you were outside Europe?
According to El Reg, it is the Germans who are most keen on this approach. Of course, here in the UK, if the government wants to know what's on your PC or BlackBerry, (for example if you're an opposition MP receiving embarassing leaks), it's much easier just to take a leaf out of Robert Mugabe's book and arrest them and physically seize their computers and phones.
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The mobile industry buzzword of 2009 will be......
OFFLOAD
This year has been all about mobile broadband revenue and traffic growth. Dongles, iPhones, embedded PCs, Android, consumer BlackBerries, Nokia E/N series.
But there is a mismatch. While operator data revenues might have risen 50% or 100%, 3G traffic has gone up by 500% or 1000%.
Until now this has, largely, been absorbing existing 3G/HSDPA capacity that has been lying dormant up since original deployment. Clearly, this has been perceived as beneficial - generating at least some revenue from data is better than nothing, and there are also signs of additional upside in using mobile broadband as a retention tool.
But the storm clouds are gathering, in my view. Not everywhere - some operators, and some parts of their networks, are more exposed than others. In the US, traffic is being driven more by the iPhone and other "superphones", while in Europe it's consumer user of 3G dongles. Given variations in population density, cellsite locations (and planning process), spectrum allocations, speed of backhaul upgrade & numerous other factors, it's certainly unlikely that the whole industry will grind to a congested halt.
But while some networks will be more robust than others, that doesn't mask a simple fact - the macrocell capacity of 3G - or even WiMAX or LTE - is not unlimited. While it can be tweaked and optimised, with more spectrum and MIMO and improved coding and otheer tricks, the laws of physics start to intervene.
Put simply, I reckon that the theoretical, mid-term, aggregate capacity of all operators' macrocell mobile broadband in a given urban location is in the range of 1-3Gbit/s per square kilometre. In other words, all the mobile capacity in that area equates to a single fibre used for current-generation metro ethernet.
Yes, that's quite a lot of traffic. But it would get absorbed very quickly if used for real "heavy lifting" applications like corporate data, HD TV, mass use of P2P and so on. The growing availability of HSPA and WiMAX devices with good browsers and big screens represents an ideal breeding ground for the next "viral" application after social networking.
It's not just the radio network that's a future bottleneck either. It's also the backhaul transport, the core & gateway elements like SGSN and GGSN, any ancillaries like DNS servers and so on. The usual steady onward march of mobile technology generations is impressive: HSPA+, LTE, SAE etc - but it's not quite up to scaling at growth rates more generally expected of fixed-line ISPs.
The only answer I can see is this is offload. Take the traffic off the macro network, and off the existing backhaul and core as far and as fast as possible.
There are various solutions to this:
- Femtocells - these are the most visible heros of the offload strategy, but I'm not convinced they'll ride in for the rescue quite quickly enough. There's also not enough emphasis on local breakout onto the Internet - the mobile industry still wants to funnel everything through the femto gateway & GGSN to retain control.
- WiFi and dual-mode devices are due a resurgence - both in homes/offices and in public locations. There's a lot out there already that can be exploited: hence AT&T's acquisition of Wayport
- Flattened IP cores, bypassing the SGSN. Ericsson and Nokia-Siemens Networks have already been deploying these for certain carriers.
- Optimised backhaul - there are various strategies here, including shunting all the Internet-destined traffic onto higher-bandwidth / lower-QoS / lower-cost connections, keeping voice and other priority traffic separate.
- Smarter and ultimately software-defined radios that can choose less-congested frequencies or technologies, or operate in shared spectrum like white spaces.
- Content delivery networks (CDNs) can also spare the operator core network the pain of dealing with some of the real high-volume traffic - although these don't yet delivery rich media like video direct to the base station. As we move towards IP-based RANs, that should also improve.
Of course, all these are very network-centric approaches. My expectation is that device, OS and application vendors will also take matters into their own hands, and develop their own offload approaches. There will be a rise of smarter connection managers and APIs, that will allow the apps to pick the appropriate bearer and adjust their traffic profile to suit it. They'll monitor congestion, latency and packet loss. They'll actively look for their own offload channels, especially via WiFi. The bottom line - 2009 will be about "offload" from a network viewpoint, and "connection optimisation" from an app/handset viewpoint. Much of the time the strategies will be aligned, but there will also be some conflicts.
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Inside-out deployment of LTE using femtocells
There's been a lot said and written recently about the concept of rolling out LTE in homes or hotspots first with femtocells, rather than deploying a full macro network.
I've been calling this an "inside-out network" approach.
On the face of it, I can see a lot of positives - it potentially reduces the overall capex requirement needed for network rollout, and solves a lot of issues about indoor coverage for markets where LTE is most likely to be deployed in the 2.6GHz band.
But I'm a bit wary about some of the assumptions being made. Particularly comments like "In 2013, 60% of mobile data usage will be indoors".
Maybe. Maybe not. It's a brave person who'll pre-judge what applications will be used, on what devices, in what contexts, five years out. A year or so ago, nobody was expecting the use of Google Maps on handsets to be one of the prime drivers of macrocellular 3G traffic. Although I'm perennially skeptical, maybe someone will have finally worked out a way to get people to consume mobile TV. Nokia's been talking up the idea of a sort of augmented-reality overlay, superimposing extra information on a view of the "real world". Maybe we'll all have Bluetooth head-up displays, showing streamed video adverts on what we'd normally see as blank walls.
Are operators going to be happy about possibly being held hostage to future application innovation? Someone comes up with a great revenue-earning new service - but it's used outdoors, so it can't be deployed on an inside-out network.
And in any case.... assuming that a lot of that mobile data use is indeed indoors, what % will be on devices that also have WiFi in them? PCs, iPhone, most high-end smartphones (Blackberry Storm excluded, obviously...). Over 90%, perhaps 99% of that indoor data could be offloaded to WiFi.
And I certainly don't believe all the femto hype about substituting for WiFi, especially in markets with 4-5 competing LTE operators and no national roaming, so you'd need an array of separate operator-specific femtos. Yes, there might be the odd single-person household or combined family-plan home that could work for, but they'll be the exceptions, not the rule. And you'd definitely need to support all operators in public hotspots.
Then there's backhaul. Putting an LTE femto on a 2Mbit/s ADSL line isn't going to be tenable, especially if it's from a third-party ISP which decides to throttle IPsec traffic at busy periods, as one example in Europe apparently does. You'd need high-end cable or VDSL or fibre to do justice to LTE. And outside Japan, I don't see much ubiquitous nationwide FTTH any time soon, given the economic outlook.
Last of all, there's the voice issue to consider. The current crop of early femto deployments from Sprint and Starhub tend to have heavily voice-centric homezone-type components to their business model. And yet, the question of LTE handset availability pivots on deciding what the LTE voice service looks like. Clearly, it needs to be some sort of VoIP - but what, exactly?
Overall, despite the attractions of the inside-out model, I'm not yet convinced it's truly the answer to LTE. I'm reminded of the words of a Nokia radio networks guy I talked to at 3GSM about 3 years ago, asking about femtos and picos. He said (in a gruff Finnish accent):
"Outside-in, always wins"
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Mobile broadband business models: free dongles as retention tools for voice contracts
The comment from a reader called Thomas on this post of mine tallies with other anecdotes I'd heard and seen.
Some operators in the UK are now heavily discounting 3G USB dongles and monthly contracts - or after rebates, actually giving them away to existing voice/phone customers. In other words, they're using them as customer retention tools to reduce churn. Buy one contract, get one free.
He reports on Vodafone giving him a free HSUPA dongle, and discounted £7.50 / month connectivity, offset with a £75 bill credit. I also regularly see adverts in the window of my local 3 UK shop offering half-price dongles to phone customers, and I guess some hard negotiation could yield some sort of extra rebate as well.
My view is that not only are these type of deals commoditising mobile broadband pricing still further, they make some of the other business models look really inflexible and old. I think that the "traditional" 12/18/24 month standalone monthly contract for mobile broadband will become a minority option - whether it's for a dongle or an embedded-3G PC.
At the moment, I estimate that these traditional post-paid monthly billing models account for about 80% of all mobile broadband subscriptions. But by the end of 2010, that will have fallen to 50%. And further out beyond that, I expect to see various new options, like 3rd-party sponsored "free mobile broadband", to reduce the monthly-bill segment to below 20% of users by 2014.
Anyone who is working on basic "per month" revenue models for their mobile broadband services needs to rethink them. The term "subscriber" will swiftly become meaningless, as most 3G users won't have classical subscriptions for their PC connectivity.
My new Disruptive Analysis report, Mobile Broadband Computing, has full forecasts for these different business models, broken out by 3G vs. WiMAX, and for dongles, embedded notebooks and MIDs. It is published this week. Please email information AT disruptive-analysis DOT com for more details.
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EU intervention in mobile - a double-edged sword
The European Commission's involvement in the mobile industry, through the commissioner Viviane Reding, seems to be really bipolar.
On the one hand, it introduces consumer-centric legislation on competition which is broadly positive. Termination and roaming fees are in many cases egregiously high, and ordinary competition largely fails to bring them down to realistic levels. This is because despite retail-level choice for consumers, there is an effective monopoly by your service provider on interconnecting calls/messages to a given number.
And it's not like the industry isn't given enough warnings, so the recent moves to cap intra-European SMS and data roaming at ?0.11 per message and ?1.00 per MB can't come soon enough. In fact, there's probably a good argument for dropping another zero or two from the data roaming threshold, but it's a good start at least.
(Actually, the whole notion of "roaming" access for data is ludicrous - why is the 95%+ of Internet-destined 3G data traffic backhauled all the way via your home network anyway, rather than broken out onto the Internet locally in the visited country for pennies?).
So that's the good side of the European Commission. Competition, free trade, international tariffs and so on. It has also gone a long way to ensure that Internet connectivity is a basic right of citizens.
The downside comes when it tries to intervene in actual technology decisions or attempts to harmonise laws and regulatory regimes in a heavy-handed fashion. The recent "Telecoms Package" included many onerous, and in some cases frankly authoritarian, demands. Luckily the EU Council of Telecom Ministers has thrown out some of the more ridiculous aspects, including the suggestion of an EU-wide super-regulator and centralised spectrum policies.
While the original GSM Directive which mandated both technology and frequency choice has indeed, in hindsight, been a major success, the EC needs to recognise that the world has moved on. In particular, it misses the fundamental move from a vertically-integrated and voice-centric telecoms industry, to one which is layered, data/Internet-driven and intimately entwined with IT and entertainment industries, and increasingly various others as well.
Now, attempts to impose external legal requirements on particular layers of technology has a huge potential for introducing extra cost, delay or outright market failure. We have already seen pointless and wasteful intervention in the market for Mobile TV, where the insistence on DVB-H was completely in contradiction to the spectrum policy moves towards "technology neutrality" for wireless access.
The latest efforts by the commission to meddle in the market have been around supposed harmonisation of spectrum policy. In theory, that's a laudable aim which could help scale economies for suppliers, but in reality each European market is very different in terms of market structure, technology preferences, customer psychology and national government stance on key issues. The notion of an unaccountable Brussels-based authority that could veto specific national ideas is completely anathema to most observers.
Some of the thinking around "net neutrality" seems pretty woolly as well, especially given the likely emergence of innovative business models in some of the most competitive markets. There's nothing wrong with non-neutral models if people are easily able to switch providers. That said, legislation on openness and transparency about non-neutrality would be welcome, which is a very important distinction.
In my view the whole argument about the necessity of EU legislation to protect the relevance of the overall "European telecoms industry" in a global context misses the point. Why should accidental geographical contiguity of 27 countries determine information technology policy anyway? Why shouldn't Romania be able to adopt the spectrum policies of China if it chooses? Why should a country with high population density and lots of fibre have the same mobile vs. broadcast frequency allocations as one with sparse population? Why should a future libertarian government in the UK be forced to apply the same data-retention laws as those in France or elsewhere?
In my view, the European Commission and Viviane Reding should generally stick to issues impacting consumer protection and competition. And it needs to be especially wary of consultants that make huge sums through trying to steer EU-wide policy towards specific technologies or applications.
And I'm sorry Ajit, but I reckon that Reding's latest hobby-horse is another guarantee of failure "We must make sure that Web 3.0 is made and used in Europe". Frankly, that's the scariest and most megalomaniac statement I've heard from a bureaucrat in a long time (well, about technology at least), and an almost certain guarantee that nothing of the sort will occur. The only "main step that Europe has to take to respond to the next wave of the Information Revolution" is to get out of the way, and leave innovation to the innovators.
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