Mobil Europe 1.5

"DATA IS ON LTE AND VOICE ON 3G.
THAT'S FINE"
NFC PAYMENTS & APPS

Mobile Europe Insight Report explores current and future business cases for mobile NFC applications
MOBILE
EUROPE
ALSO INSIDE:
NETWORK OPTIMISATION
EUROPES WIRELESS MAGAZINE S issue no. 212 S October/November 2010 S www.mobileeurope.co.uk
> Broadband challenge
Do operators face specific issues as they upgrade to HSPA+?
SERVICE PLATFORMS
> Broking change
in the mobile service creation and delivery environment.
LTE LAUNCHES
> Elisa, A1 and DT
all speak about their plans for launching LTE services in Europe.
P28
Step forward
P31
NFC PAYMENTS
your time is now
P7
Contents
October/November 2010
Location intelligence could protect high value targets
INSIGHT REPORT
INTRO: WHY NFC?
11 12
The lack of proven business models for NFC made it an obvious contender for an Insight Report, says Keith Dyer.
NFC: THE OPTIMISM RETURNS

The industry may have wasted a couple of years, but now it is back on track - despite a lack of handsets and evidence of slowing consumer enthusiasm.
WHAT IS NFC?
Yes, its a short range RFID technology. But what is the context for NFC, and what meaning will it have for mobile network operators?
14
Video now accounting for 35% of all mobile data bandwidth, one report says
REGULARS
EDITORIAL
Case studies from across Europe: mobile payments; public transport;domiciliary care; sports stadia, concerts and events, parking.
16 20
NFC IN THE REAL WORLD
THE TRUSTED SERVICE MANAGER

A neutral trusted service manager could increase the power of the NFC device by opening up the entire mobile commerce economy.
04 06
Keith Dyer says that when operators are up against it, they need to make sure they execute first time.
NEWS
Governments push for high accuracy location; Operators high up in "most trusted" list; Elisa targets 2012 for LTE1800 launch; NFC trial brings commercial launch nearer; Operators, OS and browser companies join WAC; Sony Ericsson raises margins on lower sales; App stores' empty stats damaging investment; Video fills the radio network; Movidius launches 3D chip for mobile devices; A1 ready to launch LTE immediately in Austria.
BUSINESS MODELS AND ECOSYSTEM

Can MNOs, service providers and device vendors agree that there is sufficient advantage to themselves in working together for a communal benefit?
21
NFC BRIDGING TECHNOLOGIES

Bridging technologies add NFC to devices without the need for integrated chipsets. They could yet drive overall adoption of NFC, including chipset-based models.
23
DIARY
34
The events and conferences coming up in the weeks ahead and a quick look at the Stephen Fry effect.
FEATURES
THE SMS FUTURE
25 28 31
Operators are devaluing a crucial service one that could not only drive revenues, but create efficiencies.
NETWORK OPTIMSATION
With a host of HSPA+ networks being rolled out, are operators facing challenges that threaten revenues?
Movidius launches 3D chip for mobile devices and urges operators to spot the opportunity to differentiate
SERVICE PLATFORMS?
The view of the service platform has changed as operators business models have developed.
go to www.mobileeurope.co.uk for the latest information on mobile
Mobile Europe | 3
Comment
editor: keith dyer
Operators need the right sort of change to confound the doubters Recently there was a post by an industry blogger that turned into a rant about how operators have no right to be in the services space, how everything they have ever touched has turned to dust, how MNO execs slaughter their first born on the waxing moon. All the usual stuff. The worrying thing was that instead of a bunch of commentators making counter-arguments that operators have created the whole damn industry, taken the debt burden, paid back investors, attracted new investors, the comments section was full of Yeah, stick it to the Man type comments. I know, its only one blog - but these were industry professionals lining up to have a go at the very right of operators to be involved in service creation and delivery. The worrying thing was, they had enough disasters to point at to make any operator uncomfortable. And in fact this is not an isolated example attend any industry event and you will hear and see a steady stream of comments (or Twitter posts) about how XX says the operators are the problem, Operators should deliver the bits and be quiet etc etc Therefore, it seems apposite to point out that when an operator does launch a service, they better get it right. The list of people willing to jump on any evidence of failure is just too long. That is why I accord full weight, in terms of PR, to the efforts of the Wholesale Applications Community Microsoft appears to have to develop an operator-based model for confounded those odds by delivering mobile applications (yes, I know that is a simplification, but that is generating a broadly positive essentially what WAC is). Its not that I response to the launch of WM7. think that apps are the be all and end all How did it do this? of mobile, but that this is a high profile operator-led venture that will have many predicting failure before giving it a try. In that respect, in terms of turning round expectations based on perceptions of past performance, its a bit like Microsoft and Windows Mobile. And heres the good news. Microsoft appears to have confounded those odds by generating a broadly positive response to the launch of WM7. How did it do this? Well, at least in terms of its messaging, by throwing away its previous positioning and approach, by embracing the clear messages it was getting from its customers, but also by remaining recognisably itself. WM7 looks like something Microsoft might do. Its not a pale imitation of others. Finally it does well what Microsoft does well. Theres a lesson there for operators. To take WAC as an example, its of note that it has persuaded industry players from outside the operator sphere to join in its latest round of membership. That suggests that WAC is not merely by the operator, for the operator, about the operator. Instead it is looking to how the mobile market actually works and responding to that. Yes, its technical specifications might be based on JIL, which was the environment that V360 was based on. And so the easy line is that because V360 struggled, WAC will struggle too. But WAC will not be V360 write large, were already seeing that. If operators revisit their past failures in a genuine attempt to change, then they can be successful. And this applies in a whole range of fields, from advertising to the subject of this issues Insight Report - mobile payments.
MOBILE
EUROPE
Editor: Keith Dyer keith.dyer@stjohnpatrick.com Direct tel: +44 (0) 7788 923601 Web editor: Robert Riggs robert.riggs@stjohnpatrick.com Production Manager: Tania King Sales Manager: Shahid Ramzan shahid.ramzan@mobileeurope.co.uk Direct tel: +44 (0) 20 7933 8980 Commercial Director: Justyn Gidley justyn.gidley@stjohnpatrick.com Direct tel: +44 (0) 20 7933 8979 Publishing director: Chris Cooke ISSN: 1350 7362 Free Subscriptions Mobile Europe is a controlled circulation monthly magazine available free to selected personnel at the publishers discretion. If you wish to apply for regular free copies then please write to: Database Services St John Patrick Publishing Ltd PO Box 6009, Thatcham, Berkshire, RG19 4TT. Tel: +44 (0) 1635 879361 Email: mobileeurope@circdata.com or register free online at: www.mobileeurope.co.uk Paid Subscriptions Readers who fall outside the strict terms of control may purchase an annual subscription . UK 1 Year - 96. International 1 Year - 120. Subscription enquiries should be sent to: Saint John Patrick Publishers PO Box 6009, Thatcham, Berkshire RG19 4TT United Kingdom Tel: +44 (0)1635 879361 Fax: +44 (0) 1635 868594 Email: mobileeurope@circdata.com Web: wwwmobileeurope.co.uk
Printed by Pensord Printers
The views expressed in Mobile Europe are not necessarily those of the editor or the publisher. Mobile Europe is published by Saint John Patrick Publishers Ltd, 6 Laurence Pountney Hill, London EC4R 0BL.
4 | Mobile Europe
News
LOCATION INTELLIGENCE l OPERATOR ADVERTISING l TRUE 4G
GOVERNMENTS PUSH FOR HIGH ACCURACY LOCATION

Governments are increasingly requiring mobile operators to install high accuracy location technology and intelligence to enable authorities to track users and protect borders and specific facilities, according to one technology provider. Brian Varano, CMO of TruePosition, a location technology company, told Mobile Europe that Government agencies are increasingly asking mobile operators to install advanced location technology, allied to network intelligence software, to combat crime and terrorism. Using a variety of location techniques and software, operators can trace call locations to high accuracies, but also track caller networks, when SIMs are swapped, when non-authorised users enter certain areas, and so on. Publicly, the location companies speak of 50m location accuracies, but the truth is that they can be a lot more accurate even than that. We tend to stick to talking about 50m in public, Varano, said. TruePosition markets a solution based on U-TDOA (Uplink Time Difference of Arrival) that measures the time taken for signals to arrive from a phone to cell sites. It requires receivers in the base stations in the areas the operator requires coverage, and can provide highly accurate location information even in urban or tough indoor environments. All of TruePositions annual $200 million revenues now come directly from the Government sector, head of marketing Brian Varano said, but the company still needs to reach out to the telco sector itself to sweeten the deal for the installation of the equipment and technology. Varano said that the company is in discussion with certain agencies about deploying such advanced
I The ITU's Radiocommunication Sector (ITU-R) has reported that two technologies, "LTE-Advanced" and "WirelessMAN-Advanced" are being accorded the official designation of IMTAdvanced, qualifying them as true 4G technologies. Location tracking can protect high value targets
Operators second only to family in "most trusted" list; MMS preferred to SMS
Research has suggested that subscribers trust mobile operators almost as much as they do their own friends and family. The IAB the trade body for mobile and online advertising and the DMA the trade association for direct marketing investigated attitudes towards messaging-based advertising. They found that operators are very well paced to provide a trusted place for advertisers to send their messages to new customers. Consumers' trust of operators was second only to friends and family, according the survey response. Amongst those opted in to operator databases and exposed to messaging campaigns, it was the MMS ads that had the most impact. Clare Messenger, head of commercial development for mobile messaging for Orange, said that this was because consumers prefer the richer, more creative experience that MMS can offer. Whilst both SMS and MMS to opted in operator databases drove an increased awareness and recall of the brand, MMS recall rate amongst the opted in operator databases was over three times that of the SMS. Perhaps less surprising was the finding that consumers are far more likely to be more positive (246% more positive, to be precise) about mobile advertising when they are opted in to an operator database. The study found 5 main barriers to getting consumers to opt-in to mobile messages from brands. 1. Awareness: 32% of consumers did not know about this type of service. 2. Perceived cost: 71% of respondents were wary of any costs that may be associated. 3. Relevance: 71% saw unwanted messages from brands as a real barrier to opting-in. 4. Control: 70% of respondents were concerned about having no control over what was sent to their phone, whilst 61% were worried about not be able to opt-out. 5. Privacy: 64% of those surveyed did not want to opt-in because they thought they may have to share personal details.
systems in time for the London 2012 Olympics. Operators need to know this isnt going to have any adverse impact on their networks, or affect users in any other way, he said. Where a commercial discussion is necessary, they can also be made aware that there may be commercial opportunities for them in having such high accuracy location technologies available. Varano said that the operator could sell accurate location as a premium emergency service for instance customers willing to spend a couple of dollars a month would know that in the event of their calling 911/112 they would be located as accurately as possible. Or the operator could sell back to Government agencies information about users either on a per-use or subscription basis. Another application could be to provide high accuracy location information for vulnerable users, such as those with dementia or autism, Varano said. This could defray or justify the cost of investment in the equipment.
In an ITU-R Report, which will be published shortly LTE-Advanced and WirelessMAN-Advanced technologies were determined to have successfully met all of the criteria established by ITU-R for the first release of IMT-Advanced. The report will be approved in late November, 2010.
6 | Mobile Europe
News
LTE IN FINLAND l SITGES NFC TRIAL
ELISA TARGETS 2012 FOR LTE1800MHZ LAUNCH: VENDOR SELECTION ONGOING

Finnish operator Elisa expects to be re-using its 1800MHz spectrum for LTE by 2012, according to its head of Access Networks, Dr Eetu Prieur. The operator recently won a licence at 2.6GHz, but also holds permission from the regulator to use 1800MHz for LTE. Prieur said that LTE at 1800MHz would double the 5.8km2 coverage per site that could be achieved at 2.6GHz, and also allow the operator to reuse its existing antenna lines. 1800MHz is also easier to re-farm than 900MHz, he said, as there are more frequencies in the band and less GSM traffic. Elisa would also be able to re-use the site plans they have for GSM1800 and UMTS2100 services, he said, meaning sites and masts could be reused. The only delay would be brought about by the lack of devices that have 1800MHz capability, he added. But he expects 1800MHz devices to be available 6-12 months behind other modes, which he regarded as not a big hurdle. As for vendors, Nokia Siemens Networks has the existing contract providing Elisa's pilot network, but the operator is carrying out vendor selection right now for LTE, Prieur said. Nokia Siemens has the existing contract but that could change. Vendor selection is still ongoing, he added. With the principal advantage of 1800MHz LTE being coverage, what about capacity does Prieur see a role for small cells, or femtocells, in LTE? I think operators will squeeze the macro network and ony then go to more expensive solutions like using small cells. Adding a small cell means you need fibre to go to the femtocell for backhaul, he said. Nor does Prieur appear to think that voice over LTE is any kind of issue to be worrying about soon. We're completely satisfied that data is on LTE and voice on 3G. Dropping back to 3G for voice, that's fine. Its probably not going to be fine for ever but it seems too early for us to think about that [VoLTE], he added. Prieur also appeared to pour cold water on one plank of Nokia Siemens' marketing around LTE. Speaking at an event to demo LTE technology in London, Christian Fredrikson, head of sales for Network Systems, NSN, had said that the vendor has 20,000 LTE-ready Flexi base stations installed with customers. This would enable those customers to switch from WCMDA radio to LTE, merely by a software upgrade. We are the only ones who can do a complete software swap from W-CDMA to LTE in under 20 minutes, Fredrikson said.
Elisa is using NSN for its pilot network, but vendor selection is still up for grabs
But Prieur said that the ability to move to LTE through a software upgrade would be extremely rare. I regard LTE as a hardware upgrade, he said, because it is a new radio module. That is normal. Prieur's view is that to be able to move to LTE, an operator will need to have the latest base stations as well as be able to re-use the same frequency bands they are using for their 3G or 2G services. That will be a very small selection of operators, he said.
NFC trial brings commercial launch nearer - 2012 Olympics targeted

London will be the first city in Europe to have a mass market, NFC-based, mobile payments system, according to Pablo Montesano, Telefonicas Director of Mobile Financial Services. Montesano said that the 2012 Olympics would push the introduction of the technology into the London market, making it the first mass market deployment outside of Japan and Korea. He added that the elements required to make NFC a success are coming together, with standards forming, handset makers set to accept NFC into a wider range of devices, and consumer awareness driven by contactless transport and card applications. I expect there to be a lot of activity in this space in London before the Olympics, with a significant push from several players, Montesano said. The reality is no-one knows when this will take off, but we are moving closer than ever to the tipping point, he added. Visa is, of course, a major sponsor of the 2012 Olympics. Telefonica is currently trialling an NFC mobile payments scheme in the resort town of Sitges, just south of Barcelona. The trial is a joint effort between Telefonica, Visa and La Caixa. 1,500 users have been signed up to the live commercial trial, and 500 merchants in the town equipped with NFC-capable point of sale terminals. The trial started in May and will run to November of this year. At this point, the participating companies insist, the trial is purely designed to see how merchants and users take to the technology, assessing ease of use, acceptance, and ironing out any technical kinks. Full Story: www.mobileeurope.co.uk/news/ news-anaylsis/8123
go to www.mobileeurope.co.uk for the latest mobile news
Mobile Europe | 7
News
WAC MEMBERS l SONY ERICSSON l ACQUISITION NEWS
OPERATORS, OS AND BROWSER COMPANIES JOIN WAC

The Wholesale Applications Community has announced that a further 11 operators have joined the applications development community, with 21 new companies also joining as board level, sponsor or associate members - bringing overall membership to 48. There are some significant names in the list of new members. The body has also announced that the WAC 1.0 specification is now available, following the completion of the WAC and JIL merger. The community that we are committed to working with them to create cross-platform applications that will benefit the entire mobile communications ecosystem said Peters Suh, CEO of WAC. WAC 1.0 is based upon JIL 1.2.2. One name that will spark interest in the list of new joiners is the LiMo Foundation - which is developing a Linux based operating system for mobile phones. It is the first open OS body to sign up to WAC as a member. LiMo is committed to promoting consolidation and co-operation amongst industry stakeholders around a common set of technologies in order to accelerate the delivery of innovative applications, said Morgan Gillis, executive director of LiMo Foundation. One of the key objectives of WAC is to drive web technology across multiple platforms by providing a consistent widget runtime and specifying a broad range of device and network APIs, added Suh. We are delighted to welcome LiMo Foundation and look forward to working together to bring universal availability of WAC apps a step closer. Another "first" in the list of new joiners is Opera Software - the first browser vendor to join
Opera: believes in the browser as the most important application platform.
"FOR YEARS, WE HAVE SAID THAT THE WEB IS THE MOST IMPORTANT APPLICATION PLATFORM THERE IS
organisation WAC announced the completion of the purchase of the JIL assets on 1st October 2010. The completion of the acquisition is the final stage of the process to combine JIL with WAC, and enables WAC to provide the WAC 1.0 specification to the developer community. The availability of the WAC 1.0 specification sends out a strong message to the developer
WAC. "For years, we have said that the Web is the most important application platform there is," said Lars Boilesen, CEO, Opera Software. "Now we have the opportunity to collaborate with global operators to make the Web the common platform for mobile applications. This will ensure mobile applications will be available for almost everyone with a mobile phone, not limited to those with smartphones or a particular OS." Opera products already support the initial WAC 1.0 standard as it already suopported the original Joint Innovation Lab (JIL) 1.2.2 standard. Last but not least - there are some pretty major operators joining the body. The addition of China Unicom means that China Mobile and China Unicom are both represented, bringing a potentially vast market together for WAC developers.
I IMImobile has completed its 100% acquisition of mobile content and services company WIN. The resulting company, with a global workforce of over 600, will power a broad range of managed services to more than 100 operator and blue-chip enterprise customers in 70 countries. I The two millionth radio base station has been delivered by Ericsson, themillionth radio base station has been delivered by Ericsson, themillionth radio base station has been delivered by Ericsson, the I NewNet Communication Technologies, a specialist in mobile messaging and network signaling solutions for wireless, IP, and wireline networks, has completed the acquisition of 3ple-Media. 3ple-Media provides multi-media messaging solutions to wireless carriers worldwide.
Sony Ericsson raises margins, profits on lower sales

Sony Ericsson continued to post better financial numbers in 3Q 2010, reporting third quarter income before taxes of 62 million and an improved operating margin, despite selling fewer devices. In the third quarter if 2010, Sony Ericsson generated a net income of 49million, whereas in the same quarter of 2009 it lost 164 million. Its average selling price also took a hike over the same period, from 114 to 154, and its operating margin moved from 12% to 4%. The numbers also show sequential improvement on 2Q 2010. Units shipped in the quarter were 10.4 million, a decrease of 26% year-on-year and down 5% sequentially. Average selling price (ASP) in the quarter remained at a high level of Euro 154, a 34% increase year-on-year and a decrease of 4% sequentially, due to product and geographical mix. As a result, sales for the quarter were Euro 1,603 million, essentially flat year-on-year and a 9% decrease sequentially. Bert Nordberg, President & CEO of Sony Ericsson commented, Our third consecutive quarter of profitable results illustrates that Sony Ericsson's overall performance is stabilising. Our strategy to focus on the smartphone segment is succeeding and smartphones now comprise more than 50% of our total sales. During the quarter, we launched our Android-based Xperia models in new markets, such as China and the U.S., and it is our ambition to become the global number one handset provider on the Android platform.
8 | Mobile Europe
News
APP STATS l TRAFFIC STATS l MUSIC STATS
App stores' empty stats damaging investment potential opportunity for operators?
App store owners are forcing developers and their clients to operate without the information they need to decide which platform to develop on, according to one mobile agency Michael Tomlins, managing director of InfoMedia Services, said that his agency has had customers who have delayed developing applications because they can't get access to any stats beyond volumes of overall downloads. Nokia and Blackberry might both claim they have 2 million downloads a day, but potential developers are left with little else upon which to make investment decisions. Tomlins said that the overall downloads per day is an "empty" stat. "What is the proportion of premium downloads? How much do end users spend inside the apps? How many apps are downloaded per customer? How long is an app held on a device before it is discarded? How many updates are downloaded? Without answers to these questions, developers and brands have no idea of the real reach and engagement of a mobile strategy, he said. So why aren't app stores sharing the knowledge? Perhaps its a question of "no news" = "bad news". I think they don't want to stick their heads above the parapet," Tomlins said. "The non-Apple platforms are potentially struggling in terms of premium sales because they don't have a sophisticated retail network in place, like iTunes. So could operators perhaps benefit from this reluctance to share data, stealing a march in terms of openness, as they build out their own app strategies? "Certainly," Tomlins said. "If, for instance, Vodafone360 had some great stats on in-app purchases, on their users' tendency to buy, how long a user keeps an app before deleting it, average app revenues - and I'm not saying that this would be the case - but if they shared that then that would be a real bonus for our clients."
VIDEO FILLS THE RADIO NETWORK BANDWIDTH

YouTube now accounts for 13% of the total global mobile data bandwidth, according to data collected by the Allot MobileTrends Report. Usage of the video site grew 123% in the first half of 2010, having grown 90% in the second half of 2009. The site now accounts for 40% of all video streamed globally over mobile and contributed to mobile video topping the list of applications globally. 35% of all mobile data bandwidth is taken up by video, with web browsing at 29%. Http downloads account for 16% and P2P15%. VoIP and IM account for 3% and all other apps a combined 2%. In terms of growth, VoIP was the second fastest application after video, growing 84% over the six months. Skype held on to its ranking as the top mobile VoIP application in terms of usage accounting for 83% of global mobile data bandwidth usage. Yahoo Messenger was the top-used IM application, with a 29% share in terms of bandwidth usage. Other applications showed even faster growth rates. Twitter usage grew 310% in terms of bandwidth usage, although it remains a tiny proportion of overall mobile bandwidth. Facebook grew 200%. Overall global mobile data bandwidth grew 68% during the first half of 2010. Addressing the video load, Bytemobile has announced the general availability of its new Unison Mobile Internet Platform. The latest Unison release which includes new media caching capabilities reflects the changing nature of data traffic on mobile networks and provides operators with a single unified platform to manage the explosive growth of mobile video traffic effectively. The latest release of the Unison platform solidifies our leadership in the video optimization space, said Joel Brand, vice president of Product Management at Bytemobile. This release was designed specifically to balance on-the-fly video optimisation with offline optimisation of cached video content. As a result, operators are able to achieve the highest level of bandwidth management across their networks while serving the best possible mobile video experience to their customers. Recent Bytemobile video optimisation deployments show that nearly half of all videos requested on wireless networks are repeat downloads. On average, within a seven-day period, the most popular YouTube videos are downloaded more than 600 times, and the top video advertisements are downloaded over 5,000 times. As a result, a considerable amount of duplicate video content is traversing wireless networks and stressing the entire mobile content delivery supply chain.
operators market share, ARPU and churn. By partnering exclusively with an existing player rather than building their own service, fast-moving operators can realise these gains quickly while shutting out competitors, it says. The study estimates that an operator with 20 million customers could generate revenues of EUR77.7 million in 2011 alone from partnering with a streaming service.
Video is reponsible for recent traffic growth I Large mobile operators could add millions of euros to their bottom line by partnering with a music streaming service, according to the findings of a research project between Informa Telecoms & Media and Spotify. Rapid smartphone uptake combined with the recent rise of streaming services like Spotify have for the first time enabled music to make a substantial impact on
go to www.mobileeurope.co.uk for the latest mobile news
Mobile Europe | 9
News
3D CHIP FOR MOBILE l AUSTRIAN LTE l WIRELESS CHARGERS
MOVIDIUS LAUNCHES 3D CHIP FOR MOBILE DEVICES

Mobile operators looking for the next differentiator in the device market could drive the adoption of 3D displays on phones, according to Bob Tait, Director of Marketing of chip developer Movidius. Speaking as Movidius launched its MA1133 chip a chip that enables the live capture and conversion of images in and into 3D Tait said that having devices in their portfolios that could offer a 3D experience could prove a strong differentiator for operators. Movidius chip uses auto-stereoscopic display technology which means converging two captured images to give a 3D effect without the user needing wear glasses. Phones that have the chip would also require two cameras placed about 6.5cm apart on the device (about the average distance between the middle of the eyes on a person). Mobile Europe saw a demo of the technology, using an Android UI and a screen playing back video captured, as well as 3D conversion of existing 2D content. The experience isnt perfect and will require the user to adapt to how and where to hold the phone, but it certainly produced a visible 3D effect, which is particularly impressive in the live conversion of 2D video and video capture. Tait said it would enable operators to exploit their existing content catalogues for 3D conversion, addressing one of the issues for the adoption of 3D so far - the paucity of content. Movidius technology overcomes that by allowing on the fly conversion of 2D content, a YouTube video say, on the device into 3D. The experience brings watching a video to a different level, which drives more traffic for the operator; the right kind of traffic too billable traffic, Tait said. Tait said that although there is an increase in the bill of materials for including the extra sensor and the power it requires, as well as the chip itself, the exact amount would depend on the quality and functionality the device manufacturer wanted to achieve. As well as viewing videos and images, Tait identified augmented reality (AR) apps and gaming as two other areas that could benefit from the introduction of 3D.
Wireless charger market to charge ahead

The market for wireless chargers could be worth $4.3 billion in total revenue by 2014, if projections released today by InStat are proved correct. In-Stat has based its numbers on a consumer survey that showed that 40% of consumers would be willing to pay an extra $50 for a wireless charging solution. It added that 44% of consumers find current solutions "an annoyance". Qualcomm is one company to address the wireless charging opportunity with its eZone product. Sony and Samsung have also developed the idea. But In-Stat warned that the lack of compatibility could hold the market back. "Widespread adoption of wireless charging technology will be difficult without standardization since users do not want to carry multiple chargers, wired or wireless, to plug in their phones while traveling," a note from the company said. Few device vendors have the power to drive their own standards and build their own ecosystem, says Jim McGregor, Chief Technology Strategist. Sony, Apple, Qualcomm, and Samsung are perhaps the only players with the strength, breadth of product line, and customer loyalty to create an environment capable of supporting a proprietary wireless charging technology. The research by In-Stat found the following: T 28.3% of survey respondents indicated lack of standards as the most annoying issue in charging mobile devices. T Early adopters of wireless charging will be users of niche devices. T As with other technologies, prices are expected to degrade rapidly to about half of current pricing by 2014. T Tightly coupled inductive charging systems are expected to be the early market leader. T Of the integrated charging solutions, over two thirds are expected to be in cars.
A1 ready to launch LTE immediately in Austria

Austrian telecoms regulator RTR has concluded the auction of 140MHz of paired spectrum and 50MHz of unpaired spectrum in the 2.6GHz band raising 39.5 million from the four incumbent operators Telkom, Hutchison, T-Mobile and Orange. A1 Telekom Austria acquired 2x20 MHz in the paired band and 25 MHz in the unpaired band, while Hutchison 3G Austria received 2x20 MHz in the paired band and 25 MHz in the unpaired band. Orange Austria Telecommunication GmbH acquired 2x10 MHz in the paired band, and T-Mobile Austria GmbH was assigned 2x20 MHz, likewise in the paired band. A total of 14 paired and 9 unpaired frequency blocks were offered in this auction which had a total minimum bid value of 7.4 million. A1 said that it has acquired four paired frequency blocks with a bandwidth of 2x5 MHz each and five unpaired frequency blocks with a bandwidth of 1x5 MHz for a total of 13.2 million. The operator said it would become the first Austrian provider to commercially launch LTE. We will be able to start commercial launch immediately after the grant of the license. said Hannes Ametsreiter, CEO.
10 | Mobile Europe
MOBILE EUROPE
INSIGHT REPORT
NFC: PAYMENTS potential & priorities

I was in Sitges, Spain, recently to have a look at an NFC payments trial that Visa, Telefonica and La Caixa are just bringing to an end. The trial had 1500 registered users, of whom about 80% have used it at least once. It had 500 merchants signed up, and users were equipped with a slightly shonky Samsung Star phone to use. Consumer reaction to the service was positive - according to trial partners. David Urbano, Director of Mobile at participating bank, e-la Caixa, said that 70% of participants rated the experience as at least an 8 out of 10. 65% said they would definitely keep using the service if they could, and 25% said they probably would. But what of the commercial element - who got what between the operator, who installed and distributed the app and handsets, the payment services provider and the bank? Well, we dont know, because this was not a trial that involved such commercial realities. We are still not much wiser as to how the business model for m-payments will be established. So what are the elements required to bring this business model together? Are there any other technologies that may open up the mobile payments market? And what other lessons can be learnt from real world applications of m-payments and mobile money. These are the questions we asked our latest Insight Report authors to answer, and Im glad to say that David Birch and his team at Consult Hyperion took on our challenge at full tilt. The result is an indispensable romp through the mobile money markets that has lasting value for anyone interested in investing in, or operating in, this field. Keith Dyer Editor, Mobile Europe
INSIGHT REPORT CONTENTS:

P12 NFC: the optimism returns P14 What is NFC? P16 NFC in the real world P20 The trusted service manager P21 Business models P23 NFC bridging technologies
REPORT AUTHORS:
LEAD AUTHOR David Birch, Director, Consult Hyperion CONTRIBUTING AUTHORS: Dick Clark, John Elliot, Raymond Lee, Nick Norman (all Consult Hyperion) www.chyp.com Consult Hyperion is an IT Consultancy that has spent two decades advising leading organisations, including telecoms operators, to exploit new technology for payments, identity management, ticketing and other electronic transaction services.
????????
INSIGHT REPORT
NFC: THE OPTIMISM RETURNS

THE INDUSTRY MAY HAVE WASTED A COUPLE OF YEARS, BUT NOW IT IS BACK ON TRACK
In the June 2010 Digital Transactions [1], John Stewart says that optimism about Near Field Communications (NFC) is starting to spread despite the deadlock between banks and mobile operators. This deadlock, which Mohammed Khan of terminal manufacturer Vivotech says has wasted three years, means that mobile operators never specified NFC in their device profiles and handset manufacturers never added it to their device roadmaps. The result: no handsets in the shops at all and, at the time of writing (pre-C7), not a single NFC device in the Nokia product catalogue. Whats more, Javelin Strategy & Research say that fewer consumers are interested in mobile proximity payments (one of the key use-cases for NFC) than they were a year ago! his may seem odd to observers, given the consistently highly positive consumer feedback on NFC technology (discussed further on pages 21-22) in the mobile space. In the London trials that we were involved in, approximately two thirds of consumers said that they would change mobile operators in order to get a handset capable of touch and go payment, and around nine in ten consumers said that they would change operators to get a handset capable of oyster payment (the touch and go system used for buses and trains in London). These figures are not unusual and tally with similar results coming from the Netherlands, France and elsewhere. In Japan, where some 60 million mobile phones are already equipped for proximity payments, one in six mobile phone users already use their
NFC phone being presented to retail payment reader
devices for this purpose. So it seems clear, whatever opinion polls might say, that once consumers have experienced the convenience of mobile proximity payments whether delivered through NFC, a bridging technology or similar wireless interfaces, they prefer it to other payment mechanisms. Whats more, rational analysis of stakeholder drivers suggests that NFC is the best way forward for a coming generation of mass market consumer payments [2]. Banks, operators, schemes and suppliers have therefore seen for some time that the consumer proposition is not a barrier to see deployment of the technology. With the wisdom of hindsight it is possible to see now that the structure of the proposed ecosystem central to the Trusted Service Manager (TSM) model (discussed further on page 20 and the complexity of that ecosystem (discussed further on page 21). In real businesses trying to work together in real markets, the complexity meant that it was never possible to get something off the ground because too many stakeholders, systems and interfaces needed to be in place in order to effect the first transaction. But perhaps, as Patrick Gauthier has observed [3], there may be another factor: that banks and operators have found it very difficult to cooperate for institutional and cultural reasons, not for business reasons. The pressures were obvious a decade ago, when observers began to speculate on whether banks and operators might
actually merge in order to combine mobile and financial services effectively [4]. This hasn't happened and one can't help but observe that Vodafones most successful mobile payment service, in fact, probably the worlds most successful mobile payment service, M-PESA, doesnt involve banks at all except as a secure repository of funds. All of our experience over the last few years has shown to us that its much harder for banks and operators to work together than either of them might think.
Therefore The onus is on the mobile operators to decide whether they want to make NFC happen (as they have done in France) or whether they are happy to be pipes carrying other peoples NFC transactions
Perhaps the coming years may see radical changes here as they do find effective ways to co-operate. Then there is the issue of the devices themselves. It is of course rather superficial to observe that the lack of handsets hasnt helped, but one can surely argue that had the ecosystem come together more quickly, then the operators would have been more prepared to go ahead and order the handsets. Right now, though,
12 | Mobile Europe Insight Report
INSIGHT REPORT
Figure 1. How long before we can buy a coffee with our iPhones?
this is a major problem for operators. There is a paucity of NFC-enabled handsets on the market, and those which are capable of using the Single Wire Protocol (SWP) are almost non-existent. The availability of NFC handsets isnt something like the weather, which the operators just have to put up with. They are part of this ecosystem: they could have gone to the handset manufacturers and added NFC to their purchasing roadmap. Had they committed to the extra $1 per handset, then the manufacturers would have a go ahead. As it is now, it's not at all clear whether the operators have given away their position in NFC permanently or whether avoiding the SIM and SWP in favour of stickers or SD cards is just a temporary fad. I firmly believe that other handset manufacturers will produce SWP handsets in 2011: but will the operators order them? So with no ecosystem and no handsets, what has changed to trigger optimism? One thing is the positive response to the bridging technologies (discussed further on page 23) that include NFC stickers that can be attached to mobile phones (or, in fact, anything else), micro SD cards, iPhone attachments and other clear demonstrations of the consumer desire for the technology. Another factor is the shift to smartphones (55m shipped worldwide in 1Q10), seen as more effective carriers for mobile wallets. Nokia's recent announcement that it would add NFC to all of its smartphones in 2011 will further fuel this renewed optimism, because surveys show that smartphone users are much more likely to use mobile financial services than non-smartphone users which may or may not be a guide to mobile payment proclivity and expect
more and more of their services to be delivered on this platform. All Nokia smartphones introduced starting in 2011 will have NFC as standard. Is this enough though? Just because Nokia will make these handsets available doesn't mean that operators will order and certainly doesnt mean that operators will order non-SWP version to please other stakeholders who don't want the operators to be gatekeepers. This leads us into the discussion about the business model. Now that mobile operators fantasies about collecting a transaction tax have been laid to rest, I think the real business models are becoming clearer. As we have always said, the value-added services are the key to the business model. NFC will exist on the handset as part of some kind of mobile wallet. If the mobile wallet allows the retailers to get the right offer to the right customer at the right time and reduce the barrier to a transaction taking place as much as possible, then this is what the retailers will pay handsomely for and you may as well give them the payments for nothing. I should say that the existence of mobile wallets will not, by itself, lead to disruption in the payments value chain. This is for two reasons. The first is that, generally speaking, the payment instruments that are being stored in the mobile wallet are existing and conventional payment instruments. The second is that the truly disruptive aspects of mobile payments, which applies in the case of mobile proximity payments just as it does in the case of mobile remote payments, is that the mobile functions as a payment terminal as much as it does a payment card. In other words, it is not the ability to
pay with a mobile phone that is disruptive, but the ability to be paid. Which leads me to the main point: it will be the people who control the data who make the money, and right now it looks as if the US market will go not to banks or mobile operators but to Apple and Amazon, Paypal and Blippy. Therefore, the onus is on the mobile operators to decide whether they want to make NFC happen (as they have done in France) or whether they are happy to be pipes carrying other peoples NFC transactions. The US operators appear to have decided to go on the offensivewith the recent announcement of the AT&T and Verizon initiative with Discover and Barclays USA [5]joining some of the Asian operators such as SKT and DoCoMo in driving a mass market for payments, tickets, events, authentication, integrated physical access and all sorts of other applications. Surely European operators must gamble in the same direction.
REFERENCES
[1] J. Stewart. Delayed launch in Digital Transactions (Jun. 2010). [2] J. Ondrus and Y. Pigneur. Near field communication: an assessment for future payment systems in Information Systems and E-Business Management 6 (Online First), (2008). [3] P. Gauthier. NFC Past, Present and Future. at (16th Feb. 2010). [4] W. Rosingh, A. Seale and D. Osborn. Why banks and telecoms must merge to surge in strategy+business (2nd Quarter 2001). [5] P. Eichenbaum and M. Collins. AT&T, Verizon to target Visa, MasterCard with smartphones. at http://www.bloomberg.com/news/201008-02/at-t-verizon-said-to-target-visamastercard-with-smartphones.html (2nd Aug. 2010).
Mobile Europe Insight Report | 13
INSIGHT REPORT
WHAT IS NFC?
n today's fast-paced world, it seems absurd that people are still queuing up to buy paper train tickets, hunting for coins to pay for their newspapers, and trekking over to clunky old payment machines in order to get out of a car park especially when the latest technology can offer much more convenient solutions. NFC communication is enabled by bringing two NFC-compatible devices within a few centimetres of one another, which is why its often called tap n go technology. Customers love the idea of being able to wave their phone to get on the Tube, buy a coffee, or to pay for their parking. The benefits are equally compelling for service providers, vendors and other stakeholders: they have less cash to manage, reduced risk of theft, more information coming back from points of access, as well as an interactive channel to communicate directly with customers. You might ask why is this a big deal? When it comes to using NFC phones in "the real world", people often ask: couldn't we just use 2D barcodes on our mobile phone screen instead? The simple answer is yes, it's possible, but the truth is that NFC works much better, it's easier, and it's faster. In our experience, customers will often try to wave their phone in front of a scanner when trying to scan a 2D barcode, but nearly all barcode systems require both the phone and scanner to remain stationary. By comparison, the motion of simply tapping an NFC reader with a mobile phone is a much more natural human gesture. As such, the combination of NFC at the point-of-sale (POS), ticket machine, or time and attendance register and the mobile phone as a carrier looks pretty promising. At is very simplest NFC is a short range wireless Radio Frequency Identification
By creating this secure environment on the SIM card, the Mobile Operator can use this to create a revenue model to allow other applications to reside on the SIM card that need to access these secure elements.
(RFID) technology that makes use of interacting electromagnetic radio fields instead of the typical direct radio transmissions used by technologies such as Bluetooth. This is of course a description that has no meaning unless it is then put into context and shown how it is going to be applicable to Mobile Network Operators (MNOs). The most common use of NFC we see
Above: Contactless payments are already on the high street as seen here with Boots' Contactless payment terminal
used today is with Contactless payment cards, such as Visa PayWave and Mastercard PayPass. Widely issued by Barclays in the UK (8 million cards at the end of 2009) this is slowly becoming an accepted form of payment with new retailers signing up to accept them for payments. But NFC, especially Mobile NFC, is far more than just a card replacement. It is a new way of developing and delivering services to your customers across all segments. For the MNO, NFC offers a much wider opportunity to develop new applications and uses for both corporate and consumer customers. Applications such as payment services, Time and Attendance, Asset Management, Ticketing, Coupons, Identity Management, Social Media and many others are all either developed or being developed by the mobile industry. Consumers feel very comfortable using the handset as a payment device (as shown in the very successful O2/Oyster/Barclaycard
INSIGHT REPORT
trial) and are far less likely to leave the device at home over their purse or wallet. For the Enterprise, applications around Health, Time and Attendance, Payments etc are all of huge interest as ways of addressing issues that exist today that require multiple devices to be carried, when an NFC enabled phone could address them all. The key to making NFC work for MNOs in the GSMA model is using the SIM for trusted services. By using the SIM, mobile operators can maintain security, privacy and the required immediacy. It can re-use proven authentication and, with increased memory of SIMs, allow more secure NFC
applications to be stored on the card using Over The Air Management to ensure they are kept up to date and secure. By creating this secure environment on the SIM card, the Mobile Operator can use this to create a revenue model to allow other applications to reside on the SIM card that need to access these secure elements. While NFC supports and enables multiple applications on handsets, the first phase of its adoption is already seeing NFC being utilised for payment and ticketing in the transport sector. Pilots and trials have proved successful around the world, and increasingly innovative and
compelling services are being designed to exploit the connectivity it enables. With more and more NFC compatible devices being launched by device manufacturers, mobile operators and service providers need to work closely to put in place the infrastructure that will facilitate and drive rollout of the technology.
Above: NFC enabled phone Below: NFC, Oyster enabled Mobile phone being used on London Underground during London O2 Wallet trials
????????
INSIGHT REPORT
"CONTACTLESS" TECHNOLOGY IS FINALLY READY FOR THE MASS MARKET
NFC IN THE REAL WORLD: PAYMENTS

CASE STUDY: AEPM
he AEPM (Association Europenne Payez Mobile) was set up in 2008 to promote and accelerate the deployment of contactless mobile payment in Europe through the development and publication of supporting specifications, which are published in three "sets": T Set 1 are freely available from the association website and cover the functional and technical aspects. T Set 2 (security guidelines and configurations) and Set 3 (specifics for Visa and MasterCard implementations) are available under license. The Association comprises eleven group members (all French) including four mobile operators and seven banks (only operators or banks may join) and has ambitions for its specifications to be adopted more widely across Europe. This initiative is one of the first comprehensive applications of the various building-block specifications for mobile NFC payments, and defines that the Secure Element resides in the SIM (or UICC). It builds on ETSI SCP specifications, including the Single Wire Protocol and Host Controller Interface specifications, and the latest GlobalPlatform Card specifications, plus the UICC Configuration specification. It also cites EMVCo specifications, underpinning its support of Visa and MasterCard specifications. These specifications tackle some potential usability problems of mobile NFC payments through their adoption of GlobalPlatform concepts. Issues related to application priority and selection are addressed using the Contactless Registry Service (CRS) concept which, together Right: Payments in with the Contactless Registry Event action in Visas trial Listener (CREL), implements Payez in Sitges, Spain Mobiles logic of allowing only one
application to be active on the contactless interface at any time. The concept of a companion application to a payment application is introduced, whereby the companion provides the interface to the payment application from the outside world. Seemingly, this is to allow existing Visa and MasterCard contactless payment applications to work with Payez Mobile,
The concept of a companion application to a payment application is introduced. Seemingly, this is to allow existing Visa and MasterCard payment applications to work with Payez Mobile, limiting the effort required for re-work.
limiting the effort required for re-work and re-certification. Another interesting aspect of the specifications is the architecture models for provisioning and management and how these map onto the evolving view of what a Trusted Service Manager (TSM) is. The much discussed GSMA model for mobile payments sees a single TSM acting between a bank and an operator. The AEPM architectures break out the range of possible TSM responsibilities into several roles which are split across the bank and operator domains, enabling multi-TSM implementations. This is a more pragmatic option than the single TSM model. Looking ahead, it will be interesting to see whether the companion application model survives, or whether the payment schemes will close the gaps between their existing payment application specifications and what is required to make mobile NFC payments work, and to see whether the AEPM specifications manage to break out of France.
INSIGHT REPORT
NFC IN THE REAL WORLD: PUBLIC TRANSPORT TICKETING

CASE STUDY: NoWcard in northwest England
FC can be used to support paperless ticketing for public transport to help reduce the production and distribution costs connected with traditional paper-based ticketing channels for public transport, and can also increase customer convenience by providing new, secure and simpler ways to purchase tickets. The UK Department for Transport (DfT) is currently considering various strategies for smart and integrated ticketing schemes. Since the required technology already exists, the DfT is keen to pursue the use of e-ticketing not only to help passengers, but also to reduce congestion, pollution, improve the local environment, and to help plan more effective local transport systems.
In 2010, Consult Hyperion published a report based on an 18-month research project on The use of Near Field Communication technology in mobile phones for public transport ticketing.
The study included a six-month trial of e-tickets held on NFC mobiles on NoWcard buses in northwest England, using the phones as tickets in order to show the potential for NFC as an alternative to traditional printed tickets. Not only did the NFC technology work extremely well during the trial, but the majority of users were very positive with their overall feedback. As a result, the study concluded that NFC technology is entirely suitable for use as NFC customer media right now. Even more interesting, the same trial also included a bench test to show other uses of NFC, including the ability to top-up tickets "over the air" and the possibility of using NFC phones as inexpensive ticket inspection devices.
Above: Screenshot of NoWcard e-ticket on mobile phone Left: Using NFC phones as payment readers, or inspection devices brings many benefits and cost savings as well as opening up the possibility for peer-to-peer payments
MANAGING DOMICILIARY CARE AND ITS PAYMENT SCHEME

FC enabled phones could play a crucial role for Domiciliary Care Workers, who traditionally get their daily schedule through a number of mechanisms such as emails and secure portals. Their days are divided into visits which usually comprise a small number of activities in small time boxes usually of about fifteen or twenty minutes. A visit often includes actions such as; arrive and gain entry, agree with the occupant the full list of activities to be done, complete the agreed activities, complete the documentation and get sign off, leave, then get information for the next visit of the day. At the end of a shift the completed documentation including timesheet and
expenses log (if any) is reviewed, tidied, completed and prepared for onward sending to the workers employer for appropriate invoices to be raised on the Local Authority. Inevitably, this whole process is time consuming and means that fewer visits per day can be made, plus as information is completed manually, often in a hurry in-between visits, errors can occur which require extensive effort to resolve which means less time is spent by the Domiciliary Care Workers in providing front line services and the costs incurred by the employer are passed onto the Local Authority. By using technology such as NFC to automate as much of the process as possible, linking it to back-office systems to
give staff live information and updates, countless hours will be saved each day from administrative duties and the reduced number of errors. In addition, reporting, and the raising of any issues can be done much faster in real time. In particular, the real time nature of the reporting provides greater responsiveness and flexibility to accommodate any changes that might arise during a visit. Being able to automatically report back that, for example, a visit had to be extended for any reason would enable the back-office staff to automatically reschedule later visits that day for the carer and if necessary to schedule other staff to take over some of the carers visits so that all essential visits were completed on the day.
????????
INSIGHT REPORT
NFC IN THE REAL WORLD: CONCERTS AND SPORTING EVENTS

CASE STUDY: Sports, events and festivals
s anyone who uses an Oyster Card can tell you, electronic ticketing already offers a number of important benefits for commuters, and yet this technology remains largely untapped when it comes with other types of tickets. The initial rollout costs and security concerns often discourage stadium managers and other event organisers from adopting this approach. So, when the City of Manchester Stadium became the first all-smart card stadium in the UK, it was a major step on the road to next generation event and venue management. People had been talking about smart cards for years, but it took the arrival of new contactless smart cards and a bit of vision to make the technology work quickly, reliably and safely in a stadium environment. If a contactless transaction like Oyster were to be applied to a stadium setting, for example, a consumer would simply need to tap his ticket to a contactless terminal to gain entry. At that stage, the ticket and the reader in the terminal would establish a wireless link, and then simply transfer the information required to
Cashlessness is only the beginning though, as This capability also gives event organisers new ways to differentiate their particular offering
complete the transaction in much the same way as a traditional ticket with a magnetic stripe would. Shifting away from paper tickets to contactless smart tickets opens up a whole new world of costs and benefits, not only anti-counterfeiting and revenue management on the ticketing side. Contactless cards, or an NFC enabled mobile phone, are secure enough to replace cash, for example. Cash-free venues, for example, are a great proposition for all stakeholders and the results from the Ricoh Arena, the home of Coventry City FC, bear this out. Before they went cashless, the average half-time transaction time was 63 seconds and it is now down to an average of 22 seconds, which means supporters receive their food and drinks quicker. The number of transactions as a percentage of the attendance has increased from 47 per cent to 57 per cent and the average spend has gone up as well. Cashlessness is only the beginning though, as this capability also gives event organisers new ways to differentiate their particular offering by allowing them to create and distribute branded NFC
Right: Coventry City's Ricoh Arena Far Right: Manchester City's contactless CityCard
"tokens" such as a football-shaped key fob that features their team's logo and colours in place of a traditional printed ticket. As more and more venues move over to contactless systems (and LiveNation have announced they want to move to contactless for music venues as well), the ability to deliver value-added services through mobile phones will become a win-win: the simplicity and security of contactless combined with the ease of use and connectivity of the mobile phone. Ever in the forefront, in fact, Manchester City ran a pilot using Nokia handsets three years ago and discovered that fans loved it. So much so that Duncan Martin, then their Head of Retail, said that we believe that eventually more mobile phones will be used to gain entry to the stadium than smart cards. NFC can also offer enormous operational benefits in terms of both speed and accuracy, speeding up the admission process and also combating fraud at the same time. Our experiences with NFC for Barclays and TfL, for the O2 Wireless festival, for London Fashion Week have been the same. Customers loved being able to just wave their phone to get on the Tube or buy a coffee, using phones instead of expensive gates to read fans wristbands worked perfectly and using phones to pick up information on clothes by simply touching displays was quick, easy and appreciated. The benefits are just as great for the service providers, vendors and other stakeholders: more information coming back from points of access and sale, interactive channels to customers, real-time data.
INSIGHT REPORT
COULD THE HUNT FOR LOOSE CHANGE BE COMING TO AN END AT LAST?
NFC IN THE REAL WORLD: PARKING

n today's fast-moving world, it seems absurd that people are still waiting for tickets, hunting for coins and trekking over to clunky old payment machines when they need to park especially when the latest technology can offer much more attractive solutions. NFC technology can offer a userfriendly way of paying parking fees without coins, tickets, phone calls or SMS. Instead, drivers could touch an NFC windshield tag with their NFC phone, and then touch the NFC tag located at the car park entrance or on the parking meter. Parking fees could then simply be charged to the user's normal mobile phone bill or on a credit card. In addition, NFC enabled phones can handle local payments and remote payment through the same application: so you tap your phone on the machine to pay for parking, then later in the day you could top up the parking remotely. Alternatively, credits could be purchased in advance, to support a Pay As You Go prepayment model instead. Either way, by using NFC in this way, parking operators can eliminate queues at payment machines and even develop smart parking meters that can communicate with drivers wirelessly. Plus, service providers, vendors and other stakeholders have less cash to manage, a reduced risk of theft, more information coming back from points of access, as well as an interactive channel to communicate directly with customers to alert them, for example, that a particular car park is full.
StoLPaN intends to turn NFC enabled mobile handsets into multifunction terminals with bi-directional interaction between the wireless NFC interface and mobile channels
Initiatives like the StoLPaN project are helping to bring projects like this to the masses. A pan-European consortium supported by the European Commissions Information Society Technologies (IST) programme, StoLPaN intends to turn NFC enabled mobile handsets into multifunction terminals with bi-directional interaction between the wireless NFC interface and mobile communication channels. Its chief aim is to demonstrate the use of this technology within the retail logistical value chain, as well as in mobile payment, ticketing, and other uses. Thanks to initiatives like these, consumers will increasingly be able to use NFC-enabled mobile phones to pay for their parking and many other things quickly and easily, without having to carry cash (or even credit cards) everywhere they go. It is a modern solution for a modern world, and one that could eliminate the dreaded hunt for loose change under the car seat, at last.
Above: No more scrabbling for change under the seat Left: Your reports author points out the benefits
????????
INSIGHT REPORT
THE TRUSTED SERVICE MANAGER (TSM)

s we see NFC being more widely deployed and the ecosystem starting to develop (which will be discussed in the next article), there is a very clear role for what is defined as the TSM. The TSMs role is to: T Act as the single point of contact for the service providers to access their customer base through the MNOs (Mobile Network Operators). T Manage the secure download and lifecycle management of the mobile NFC application on behalf of the service provider. In business terms the TSM needs to fulfil certain requirements, in particular:
by independent Trusted Third Parties. The number of operating TSMs in one market will depend on the national market needs and circumstances. The TSM, amongst other things, provides a simpler interface through which all parties can communicate with each other, allowing many relationships to exist in the deployment of NFC. The TSM addresses both the operational and business requirements that need to be in place for a successful NFC Mobile Payments deployment. This approach, which is endorsed by the GSMA and is now being widely implemented, albeit in different ways, is seen as having the advantage of being highly and rapidly scalable, which is vital as more users come onto the system and new parties start to become involved. The main role for the TSM in an NFC deployment is to allow the interested service providers to securely distribute and manage contactless services for their customers, using the networks of the mobile operators. However, the TSM does not participate in actual contactless transactions using any of the NFC devices. These transactions are processed normally in whatever system the service provider and its merchant partners have already put in place. In addition, the role of the TSM is being expanded to act as a commercial intermediary that facilitates contractual arrangements and other aspects of ongoing business relationships between service providers and mobile operators. In the GSMA model, the TSM needs to have a number of key capabilities that break down into four broad areas of activities, each being independent of the other. They include: T MNO Management T OTA (Over The Air) Provisioning /Handset Management T Service Provider Application Management T Service Provider Management As the role of the TSM has become better defined, a number of companies are
Source: GSMA http://www.m obilemoneyexc hange.org/wik i/trustedservicemanager
T The ability to contract with and support a high number of partners T A good business reputation in handling services securely T Being seen as a trusted partner in the ecosystem The TSM does not participate in the transaction stage of the service, thus ensuring that the service providers existing business model is not disrupted. Depending on the national market needs and situations, the TSM can be managed by one MNO, a consortium of MNOs, or
now starting to provide these as a product offering. Whilst some are well established companies that have been involved within the Credit Card manufacturing industry or payment processing industries, Companies such as Gemalto, Venyon (part of G&D), Cassis and Vivotech all offer TSM services with differing company backgrounds. Venyon and Cassis both have strong backgrounds in Telcos, Gemalto with Financial Services and Vivotech with retail merchants and acquiring banks. None have a lead on any of the others with so few deployments so far, but each has its own view of how they should be deployed when compared to others. This clearly shows that the role of the TSM covers two distinct areas the Mobile Operator and the Card Issuer or Bank, and each clearly needs to maintain its own information relating to the user. Whilst this segmented model is one that is becoming the preferred model throughout Europe, with one or two exceptions, it is not without risk as both parties seek to control the key relationships with the end-user. Whether this model is correct or not and which model of TSM use becomes the norm is yet to be decided. However, what is clear is that the TSM should be neutral from the mobile operator and the card provider or bank. We are starting to see organisations enter the market that have a trusted history within the mobile and banking environment that are able to offer this neutrality to the market. The neutral TSM opens the entire mobile commerce economy to everyone and allows all parties to offer additional services to both the mobile operator and the issuer with no impact on each party. The power of the NFC device can be increased via more applications such as advertising, couponing, ticketing etc. This model can best be described as a partner driven TSM, and potentially offers the greatest scope for a critical mass of consumer, service provider and merchant activity that would draw other participants into the TSM environment.
INSIGHT REPORT
BUSINESS MODELS MOBILE NFC ECOSYSTEM

he concept of extending the use of mobile phones into the realm of contactless services has now been under discussion for several years aiming to replicate the successes of the Japanese experience into other markets. Many trials & pilots have been run with the aims of testing technologies and providing feedback to determine how best to launch such services to mass market users. Two organisations at the heart of the specification of mobile NFC have put forward their own interpretation of the ecosystem: the GSMA in its NFC white paper on NFC (and more recently with the European Payments Council (EPC )) and the NFC Forum in its white paper focused on the NFC Ecosystem itself. Most ecosystem descriptions refer to a common set of participants derived from the initial GSMA analysis. Here the key participant roles are:
membership to cooperate when its in their best interests and as such their descriptions of the NFC ecosystems closely follow existing business roles, in most examples adding to the current deployment models for existing contactless card ecosystems. This would seem a reasonable approach for card emulation applications, but may have limitations as a model for potentially more disruptive applications.
MNOs, service providers and device vendors do not necessarily agree that there is sufficient advantage to themselves within any perceived communal benefit
In attempting to address this limitation, our approach to analyse the business ecosystem is to derive the key ecosystem roles from a lifecycle model of mobile NFC services, such that the relationships over the life of NFC services can be more readily recognised. This starts from the management of the supply chain for mobile NFC devices, through trusted mobile NFC application provisioning and trusted application product provisioning, to acceptance and the management of the services accessed by the NFC application. We apply the following classification of participant roles, respectively: device manager, domain manager, data manager and service manager; as illustrated right. One of the best definitions to describe what a business ecosystem is, and one that seems to apply particularly well to the mobile NFC ecosystem, is provided by James F. Moore who introduced the term in the mid-1990s; business ecosystems are intentional communities of economic actors whose individual business activities share in some large
T Customers, mobile NFC users; T MNOs providing authenticated data connectivity for users mobile NFC devices; T Service Providers, enabling users to undertake contactless transactions at acceptance infrastructure by providing users with appropriate mobile NFC applications and acceptance networks allowing applications to be used. Example service providers are retail banks currently issuing contactless payment cards and transit operators issuing contactless tickets; T TSMs, providing trusted third party functions linking multiple service providers with multiple MNOs in order to securely provision service provider applications onto managed secure areas (security domains) within MNO network authenticated mobile NFC devices; T Mobile NFC Device Vendors, providing Secure Elements (SEs) and NFC-capable mobile handsets. As associations, the GSMA, EPC & NFC Forum enable their (often competing)
measure the fate of the whole community. It is reasonable to say that the difficulty for NFC has been that, outside some specific markets, the MNOs, service providers and device vendors do not necessarily agree that there is sufficient advantage to themselves within any perceived communal benefit. Luckily, interest in NFC has remained strong because of the overwhelmingly positive consumer response. Simplicity and convenience are the key components of the value proposition for mobile NFC contactless transactions: simplicity as the transaction is initiated by a tap of an NFC device against another; convenience as consumers carry their mobile phones in preference to all other devices, including payment and transit cards. The commercial drivers for the NFC ecosystem combine the simplicity and convenience of the consumer proposition with useable security provided by a trusted environment (the secure element)
Left: Mobile NFC Ecosystem Roles
????????
INSIGHT REPORT
Right: . Potential Deployment Models
O2 WALLET TRIAL: Successful collaboration between MNO (O2), Bank (Barclaycard), Card supplier (Visa), Handset Manufacturer (Nokia, Transport operator (TfLs Oyster) and retailers (e.g., Coffee Republic, EAT, Krispy Kreme
T Nine out of ten trialists were happy using NFC technology on a mobile phone T 78% said they would be interested in using contactless services OYSTER T 89% said they wanted Oyster on their phones T 22% using Pay as You Go Oyster reported that they increased the number of journeys they made on public transport during the trial T 67% said that they found it more convenient to use than a standard Oyster card T 87% said that availability of Oyster service would be likely to influence their purchase of a new mobile phone. PAYMENTS T Two-thirds said they would be interested in having the Barclaycard Visa payWave feature T 47% stated that being able to use their mobile to make payments would influence their choice of handset in the future.
deployed in the mobile NFC handset. The business case drivers are based on: more consumer transactions with services, more efficient service delivery (such as better information for risk management), more mobile service consumer loyalty and new propositions that change current business practice. For this latter case, examples include: new interfaces for an NFC mobile to other consumer devices (the most widespread currently being contactless cards), and enhanced security for a mobile application in association with non-mobile channels. If the consumer proposition is so strong and the drivers for the business case positive, why the lack of progress? Now that technology standardisation is starting to mature (for example, the incorporation of elements of the Association Francais du Sans Contact Mobile (AFSCM) specifications into GlobalPlatform ), probably the main barrier to deployment remains the complexity of the ecosystem. Companies in both the mobile and payments sectors have tended to innovate through services that involve a very small number of (or no) other organisations and tend to first approve services with a single demonstrable and understandable killer app. Propositions which require intentional communities, or can act to change existing business relationships
and disrupt current approaches, are not often top of the approvals list. The mobile NFC ecosystem requires a committed device provider to source appropriate devices from handset manufacturers and secure element vendors. In most markets, for the consumer supply chain, this is likely to be the MNO, although other organisations (such as the handset manufacturers themselves) can provide devices to a sizeable niche. When modelled on a spreadsheet, the MNO may have the weakest perceived prospect in the ecosystem. How does the MNO cover the costs of supporting customers using NFC, when all pilot services suggest that consumers will ring their MNO first if there they have a problem? How does the MNO expand out of a business model based on service loyalty (i.e. churn reduction) when NFC proves to be successful? Some MNOs have acted, in the short-term at least, to establish a wider role in the ecosystem by mandating co-branded payment products or owning the exclusive TSM for the ecosystem. Other MNOs , believing in the stickiness of the opportunity (mostly notably in France with the Cityzi project now starting in Nice), have retained the collaborative approach with multiple participants in all roles, working to gain buy-in from service providers and acceptance infrastructure providers over a
considerable period of time. Common across all models is that the customer has a direct mobile NFC service relationship with the service provider. The service provider has a business relationship with the device manager, either directly or through a TSM. Within the ecosystem, individual habitats (including, for example, payments, transit, coupons & vouchers, retail loyalty, advertising, person-toperson, rights management, access control, authentication services, etc) have their own individual requirements. Overlaying an analysis of the supply chain, application provisioning, application product provisioning and service acceptance onto the device, domain, data and service manager model allows a ready assessment of the business relationships for any habitat. This approach helps to highlight where mobile NFC enhances service efficiency, introduces additional complexity or provides for additional opportunity.
INSIGHT REPORT
WITH A LACK OF HANDSETS IN THE MARKET, ORGANISATIONS ARE LOOKING TO OTHER NFC IMPLEMENTATIONS
NFC: BRIDGING TECHNOLOGIES

hat are bridging technologies? They are the technologies for adding NFC capabilities to consumer equipment without having NFC chipsets integrated into that equipment. The general term has taken on a very specific meaning in the context of mobile proximity applications, where it means technologies other than the SWP/UICC combination set out by the GSMA (since so few handsets are available and the ecosystem is still forming) for adding NFC interfaces plus SEs to devices that lack them. The Mobey Forum (an industry association that includes banks, device manufacturers and mobile service providers) recently published a very detailed White Paper on this topic , recognising that many financial institutions and other service providers had become frustrated with the slow progress towards mass-market handsets incorporating NFC in the face of clear consumer demand. We will use a similar categorisation to the Mobey Forum to explore the technologies, which they divide into stickers (active and passive), secure Micro SD (SD) cards, embedded secure elements (eSEs) and what they call the trusted mobile base but what we will call the Trusted Processor (TP). STICKERS The idea of taking chips with contactless interfaces and simply sticking them to other objects goes back some time (certainly to experiments with the Dexit payment system in Canada some years ago), and it has always been clear that when it comes to consumer payments, the mobile phone has already been the preferred object. The most straighforward implementation is to simply take the NFC chip and its antenna
and combine them in a self-adhesive sticker, as shown in the photograph below. Such stickers are produced in the millions and place no demands on the MNO so they are easy to deploy. They are called passive because they have no power source. Nor do they have any connection to the phone processor, the UICC or the network. Therefore their functionality is limited: there is no way
Stickers are already mass market. First Data shipped halfa-million pre-paid stickers last year. Their average user is paying with the sticker 2.5 times per month and the average reload is $93
for the service provider to access their applications over-the-air and applications on the phone cannot access the applications in the sticker (so, for example, if the sticker contains a prepaid payment card, there is no way for a phone application to interrogate this card to find the remaining balance: this must be done OTA). Passive stickers are already mass market. First Data shipped half-a-million "Go-Tag" pre-paid stickers last year. Their average user is paying with the sticker 2.5 times per month and the average reload is $93. In addition, Bling as been shipping stickers to community banks for local payment schemes (and recently hooked up with PayPal) and Citi has just announced a large scale launch of stickers as well. Customers clearly like waving and paying with their phones,
and stickers are an easy way to help them to do this. The market is not only about payments. Stickers are already being used by merchants, an indication of their acceptability, for value-added services such as loyalty schemes. Business Week highlighted one example in Indiana: at the Rochester Dairy Queen, more than 350 customers can wave stickers fixed to the backs of their phones at a scanner in the store, thereby banking loyalty points and qualifying for free cones and Blizzard sundaes. Customers have come back to the store more frequently as a result, helping sale rise more than 3% in the past year (the only thing that retailers care about!). On a larger scale, the French children's clothing retailer Tape l'oeil has rolled out a 300,000 sticker loyalty programme across all its stores.
Above: David Birch from Consult Hyperion shows us the MasterCard sticker on the back of his phone.
????????
INSIGHT REPORT
because it means that the service providers can use the MNOs as a pipe to communicate with the SE but do not need to deal with the MNOs. And consumers can use the same SD card when they swap handsets or even when they swap devices. This kind of implementation opens up a variety of business models, ranging from banks perhaps giving SD SE cards to their customers, or the SD SE cards coming bundled with devices or perhaps even third-party specialists distributing and managing the SD SEs on behalf of banks and retailers. Visa has just announced a large-scale pilot of the technology with Bank of America but it is fair to note that another service provider (RFinity, which focuses on campus solutions) has just abandoned its SD pilot to use passive stickers instead. EMBEDDED SECURE ELEMENTS The first NFC mobile phones (such as the Nokia 3220) used embedded SEs. That is, the handset contained two smart card chips: the removable UICC (the SIM) and an additional one built-in to the handset and controlling the NFC interface. eSEs add a small premium to the Bill of Material (BOM) of the handsets, depending on the technical capabilities of the eSE and whether they are purely payment focused or offer a greater multi-application support and provided they are standard Multos or JavaCard chips they are straightforward to access. The concept of eSEs is very close to the UICC SE model as they can use a TSM (although one of the joys of the 3220 was that you could use applications through the NFC interface as well) and leverage the same core provisioning technology. The integration of eSEs has limited or no impact at all on the phone design in terms of hard- and software. There is a subclass of eSEs that are not built in to the handset but are added to the handset with an interface that sits between the handset and the UICC: these are known as SIM overlay eSEs. They generally comprise a thin connector that fits between the handset and the SIM contacts, attached to an SE. The idea is that the consumer removes the SIM, adds the SIM overlay and then replaces the SIM. Whether consumers want their cards tied to their SIM or to their handset remains to be seen. The idea of shipping handsets with open eSEs (ie, eSEs that allow anyone to create new secure partitions within the SE) is certainly appealing and might well provide a better platform for innovation. TRUSTED PROCESSOR Trusted Processors (TPs) are promising upcoming solutions which may help take the fragmentation out of the mobile ecosystem through an integrative solution. The TP is designed into the Central Processing Unit (CPU) of the mobile devices. Being part of the CPU means natural distribution to a wide consumer base. TPs are not mutually exclusive to other SEs. A key role of the TP is to add security. Current mobile phones run in untrusted modes, so it is possible for malware to sit between the SE and the elements of the phone that it needs to connect to: the keyboard, the screen and perhaps other interfaces. The TP means that when customers enter their PIN into their mobile phone, they can be sure it is the payment application that reads it and not a hacker. Similarly, customers can trust what they see on the phone display when they run their payment application. Even if the TP does not contain its own eSE, they can support and enhance UICC SEs, active stickers and eSEs cand ombine these into integrated solutions with much higher levels of security than might be obtained with SEs alone. TECHNOLOGY TRAJECTORY It is simply not possible to identify a clear trajectory for these bridging technologies, but it does seem as if one reasonable approximation might be the use of stickers with handsets to introduce consumers to both mobile proximity tap and go functionality for payments, ticketing, events and perhaps access control as well. As these users groups scale, they will become a factor in the potential business model for operators, who will then be incentivised into ordering NFC handsets from the manufacturers.
Above: Using bridging technologies in the real world to pay for things with iPhone sticker
Other companies are working on types of active sticker. An active sticker has power and can connect with the UICC either through the phone using Bluetooth or wifi. This connection means that the SE can be reached OTA, but it also means that (since the SE is now in a powered environment) phone applications can use the full range of NFC interface possibilities (including peer-to-peer). Active stickers are in limited trials right now, although there are as yet no largescale commercial deployments. MICRO SD CARDS Mobile users are generally familiar with SD Cards in mobile phones. 40% of all mobile device holders are active SD Card users. In 2009, 90% of all shipped Handsets that included memory cards had SD Cards slots, and these are increasingly slots for SD cards (these were in two-thirds of all mobile devices shipped last year). Since 2000, 2.5 billion SD cards have been shipped making it the de facto standard for removable media. Thus, SD card with an embedded chip for the SE are a potential way to extend the security level and service offerings on mobile devices. It has to be said that financial services are well-suited to this packaging,
Operator strategies
DONT WRITE OFF TEXT

The industry is devaluing a crucial service, and is threatening a key potential generator of future revenues by doing so, argues Stewart Easby.
the mobile industry devalues text because it is such a simple, low-tech idea. However, subscribers do not have the same dismissive view, and despite increasingly having access to alternative on-phone communication channels such as IM and email, are sending ever-greater volumes of text messages. The different channels seem not to be cannibalising each other. Subscribers treat each medium differently and use them for different purposes. Its said that the average time taken for a recipient to read an email is 48 hours, while for a text messages its four minutes. Nonetheless, text messaging has become a commodity, and one subject to the price pressures of the market. In one European country there are three competing operators. The operator with the smallest number of subscribers offered 1000 minutes of voice plus 1000 text messages for 10 per month. Just two days later one of the other operators offered the same deal for 9 per month. The third operator hit back a day later by offering the same for just 1 pm. The other two quickly matched the price. Between them, and in less than a week, the three operators threw away tens of millions of Euros in revenue and ended up in the same competitive situation they started out in. The first operator recognised the differentiating power of text messaging, but set about using it in the wrong way. Rather than competing on price, they should have competed by rolling out innovative new text services. With minimal extra investment, they would have seen a beneficial impact on recruitment and retention, plus won the bonus of new revenue streams from services for which subscribers were willing to pay a premium. There are multiple reasons why text has the potential to return substantially greater revenues. All handsets can send and receive text, whereas only a small percentage support mobile data. Text is a push service, has low battery impact and provides an instant receipt. It is also
hen the industry discusses its future, I am always struck by how most of the talk is of high-speed data services, and about related technologies. It is not surprising that vendors should promote whatever technology or service they have to offer put a group of technologists in a room together and its almost inevitable that they are going to end up breathing their own fumes. However, I am surprised that the industry makes so very little acknowledgement of what subscribers actually want. To me, it points up the persistent disconnect that exists between phone users and much of the mobile industry. WAP, IM, MMS and video have all been heavily promoted, yet subscribers in the main have ignored them and simply got on with the business of talk and texting. After an agonisingly slow start, MMS is now growing and, says Portio Research, could be generating $51 billion globally by 2014; but in the same year, Portio says, subscribers will send over 11 trillion text messages to generate revenues of $124 billion. It is almost as if, in spite of the astonishing revenues,
Whilst basic SMS is being discounted, advanced SMS services and A2P and P2A text could drive revenues and operating efficiencies.
In one European country there are three competing operators. Between them, and in less than a week, the three operators threw away tens of millions of Euros in revenue and ended up in the same competitive situation they started out in.
Mobile Europe | 25
Operator strategies
a service with which subscribers are demonstrably comfortable, one that is firmly embedded in youth culture globally and which has propagated through the age classes as yesterdays teenagers become todays businessmen and women, parents and grandparents. Operators that avoid the trap of competing on price and instead use smart text services as a route to achieving differentiation will leverage these factors. Some operators have already embarked on the first wave of such a programme by deploying generic smart text services such as divert to another handset, copy to another handset, archive in network, anti-bullying and auto-reply. The first operators to do this have created temporary first-mover advantage, but to consolidate their lead they must drive forward with a second wave that adds fully custom services, targeting multiple customer segments with text-based applications that appeal directly to special interests. Perhaps the strongest wins from smart text services are likely to come in the area of application to person (A2P) services and not always directly from the generation of new revenues. Cutting of operational expenditure can add just as emphatically to the bottom line as the creation of a new revenue stream. Customer care costs mobile operators millions. By providing automated text-based customer care services to subscribers, operators can take pressure off of call centres, while enabling phone users to self-service their commonly asked queries. Telefonicas Movistar brand in Spain has been doing just this since 2005 when it deployed a natural language query engine with an SMS interface alongside IVRs and agents to handle an increasing range of routine how do I queries. The solution lets people ask questions by text messaging in any language and idiom they choose, and responds instantly by text with appropriate answers. Text messaging enables phone users to get answers at any time and place they choose, with the added benefit that the answer to their query is saved on their handset for later reference. In its latest release, the language engine supports quicker and easier creation of services that combine text and voice, and Movistar has been quick to exploit the new functionality with an application that automatically send subscribers a text message satisfaction survey immediately upon completion of a voice call with customer care agents. In addition to its customer care role, the solution also lets subscribers interact by text messaging with seasonal and rolling promotions, and the flagship Lend Me 4 Euros service which lets pre-pay phone users text for an instant balance top-up. At sister company O2 UK, the same natural language text technology is giving millions of pre-pay customers self service control over O2 Rewards, the award-winning loyalty programme that gives free credit worth 10% of the previous quarters top-ups, up to a maximum value. Customers can either send a text message or make a
26 | Mobile Europe
O2 Rewards operates with a common business back end for both text and voice.
In many markets A2P and P2A text access to social networking has huge potential.
ABOUT THE AUTHOR Stewart Easby is Head of Product Marketing, Telsis.
voice call to the system which automatically responds via their choice of channel. Through a common business back-end, it enables them to join the scheme, check their points balance, claim Reward talk time, or opt-out. The success or otherwise of any new service depends to a large degree on how easily subscribers are able to understand and control it. There is a pivotal point in service discovery at which a subscriber typically behaves in one of two ways, either going on to become a regular user, or abandoning the service in frustration. Sympathetic service design clearly has a crucial role to play, but many subscribers will still need guiding through the setup process. A natural language text question and answer system of the type deployed by Movistar and O2 UK can do this, far more cost-effectively than a call centre, while helping to ensure maximum take-up. The global volume of P2P text traffic was eight times that of A2P in 2009. That ratio can be confidently expected to change as the value of text interaction with subscribers becomes clearer for small to medium-sized businesses as well as banks, call centres, and brands. There is a tendency in the West to discount text in this context, but in countries where Internet access is poor, and smart handsets rare, text A2P applications are a practical route to reaching much of the population. Social networking presents the mobile industry with a remarkable text-based opportunity. If operators want to be relegated to the role of dumb bit-pipes, they need only sit back and watch as social networking sites drive data volumes ever higher. However, with a low percentage of handsets globally having data access, and perhaps many millions of handset users around the world having no access to fixed line Internet, the market for A2P and P2A text access to social networking has huge potential. If they grasp the opportunity, operators are in prime position to monetise social networking in a way that other players in the field cannot.
Network Optimisation
GETTING THE MOST FROM HSPA+

HSPA+ adoption is fairly widespread, but more is yet to come as operators look to squeeze all they can from networks before they take on a hardware upgrade. Keith Dyer asks how operators can make sure they are extracting the maximum performance from HSPA+ networks.
heres no doubt that HSPA+ is now common currency as mobile operators look to cash in on the opportunities offered by mobile broadband networks. But there is evidence that unless operators keep a close eye on the performance of these networks, especially as more HSPA+ devices are adopted by consumers, then they may not be able to deliver the full benefits of HSPA+ to their users. But first, the success story. The Global Mobile Suppliers says that there are now 356 commercial HSPA networks in 150 countries. Where HSPA leads, of course, HSPA+ tends to follow, and there are now 127 HSPA+ network commitments in 59 countries, with 73 HSPA+ commercial networks, according to the GSA report. With widespread market acceptance of dongles, PCs with embedded HSPA connectivity, and smartphones, data consumption is being driven to unprecedented levels. Operators hope that HSPA+ systems will meet these challenging requirements and enable them to deliver an improved user experience with higher data capacities and user throughput, and reduced latency at lower cost. Importantly, they can also use HSPA+ as a means to defer LTE investment, as it requires to extra spectrum or licenses. The GSA reports that 60 commercial HSPA+ networks support a peak downlink data speed of 21 Mbps, with eight commercial networks stretching that peak downlink data speed to28 Mbps. There are five commercial HSPA+ networks which have deployed two 5 MHz carriers (DC-HSPA+). At least another 25 operators have committed to deploy 42 Mbps. Some operators have already committed to deploy 84 Mbps as a further evolution step. The GSMAs research arm, Wireless Intelligence, backs up the GSAs stats on HSPA+ adoption. It tells Mobile Europe that there are currently 66 live HSPA+ networks in service in 38 countries delivering peak data rates in excess of 21 Mb/s. Europe is the centre of this evolution, with 51 of the 66 commercially live HSPA+ networks to be found in EMEA. Wireless Intelligence also adds a couple of operators to the GSAs dual-carrier HSPA list reporting that there are seven dual carrier HSPA+ networks that currently deliver above 42Mb/s
28 | Mobile Europe
Telstras HSPA+ modem
Telstra (Australia), Orange (Austria), Etisalat (Egypt), PCCW (Hong Kong), Indosat (Indonesia), EMOBILE (Japan), Movistar (Spain) and du (UAE). Interestingly, this is the same number as there are live LTE networks today Deutsche Telekom in Germany, TeliaSonera in Sweden and Norway, Ucell and MTS in Uzbekistan, Aero2/CenterNet Mobile in Poland, and MetroPCS in the US. This number of live launches of high bandwidth mobile data networks shows that operators need a solution to their traffic demands. But there is evidence that operators need to address the issues mobile broadband, and HSPA+ raises. Fabio Martinez of Aircom says that Aircom is working with a customer that has deployed a few sites in central London. To me thats a surprise because I thought after 21Mbps they would go directly to LTE because of the hassle of adding second antennas and another carrier. But spectrum restrictions means they have no other alternative to do 28Mbps with MIMO, or 41Mbps dual-carrier. Spirents Nigel Wright says that moving to dualcarrier is a way to get to higher data rates without having to implement MIMO on he receiver and base station. Telstra, for instance, went from 64QAM R7 HSPA getting to 42Mbps using dual carrier HSPA+. However, Wright points out that due to such a highly complex modulation scheme carries greater sensitivity to signal to noise ratio, meaning data rates can soon drop off when users are mobile. We did some drive tests in Australia, and found that in our hotel room opposite the base station, we could get near to the theoretical peak. But once we got mobile, that dropped off the 3-4Mbs, he says. He does add, however, that that is an improvement on HSPA. It is a warning note for operators keen to trumpet their headline rates, however. There is a challenge for operators as to what to do on the network side to optimise all the scheduling algorithms to maximize the user experience, he says. Martinez says that there are some technical issues with HSPA+ that could affect performance if operators were not aware of them. He cites an issue with possible misconfiguration on the iuB interface due to a lack of co-ordination between teams responsible for the iuB interface and the RAN which can disable the benefits of HSPA+.
Network Optimisation
Additionally, although this applies not only to HSPA+, operators may be going into a third carrier at 900UMTS, and that has presented challenges when finding the topology of a network as the relationship to neighbouring sites is very different to deployment at 2.1GHz. Theyve started to get HSPA coverage inbuilding that they didnt have in the past, Martinez points out. Allied to these specific issues are the all-round issues that a new radio technology can bring. One of the main issues with HSPA was that some operators were unprepared for the rollout on an end-to-end basis principally in terms of how they structured their backhaul. Its still too early to tell if that will be the case with HSPA+, he says, based on limited handset and device penetration to date, but the issues will be the same. Speaking of devices, Martinez foresees another issue here. Operators will have R99, HSPA and HSPA+ terminals all sharing the same resources. Knowing more about the distribution of traffic, where its generated, which devices are generating it, will have a huge impact on optimising the network, he says. Mike Flanagan, CTO of network optimisation company Arieso, echoes that point, adding that one issue with broadband data in general is that it cannot be mapped to network optimisation plans designed for voice use. People are aware of the shift in the network busy hour, but voice maps are also much more spread out in terms of location. Data has a different distribution, and the locations that data bandwidth is most driven from is a much smaller range. Operators need to slice their data to give them a heat map of where their HSPA+ users are, their highest concentration of users. This subscriber-centric view of customer experience can help them target their investments, he says. Another way operators can optimise HSPA+ is to take a different approach to the network data their elements produce. Actix recently released an HSPA+ Optimisation solution to aid operators in optimising the performance
Jeff Atkins Nigel Wright
Operators have struggled to clean up RF problems due to challenges in accessing the data required to understand the problems
and capacity of new HSPA+ network upgrades. Working with operators that have deployed HSPA+, Actix has determined (echoing Martinez and Wrights points from earlier in this article) that the RF environment is the most common cause of major performance and capacity issues post-launch. It also finds that RF problems related to coverage, interference and neighbours are the most common underlying causes of data service issues such as degraded capacity, low throughput and dropped connections. However, Actix claims that operators have struggled to clean up RF problems that impact data services due to challenges in accessing the data required to understand and fix the problems. Unlike voice networks, where the detection of quality issues such as dropped calls and failed initiations is relatively straightforward, data networks deliver a variety of services, each requiring measurement of multiple quality metrics such as connection failures, throughput and latency. Furthermore, quality metrics and RF data are typically stored across multiple data silos, including network performance statistics, subscriber trace databases and drive survey logs. These data silos can accumulate at a rate of terabytes/day in large networks, further complicating the issue. ActixOne allows the operator to use network performance statistics such the Channel Quality Indicator (CQI), which are based on measurements reported by the subscribers device, to quickly determine which areas in the network may have degraded data services. Jeff Atkins, Vice President of Product Management at Actix, says, Theres no silver bullet when it comes to optimising HSPA+ networks, but one key element will be the ability to use an ever increasing number of data sources to streamline and automate optimisation processes. Atkins points out that operators often have their networks adequately optimised for voice coverage, tolerating a given level of interference. But with HSPA+ there is a much higher signal to noise ration, meaning that where a radio environment has not previously been a cause of service degradation, it now may be. Being able to drill down into network data can show this, and allow an operator to really look hard at the propogation of each cell and what benefits they can squeeze by doing that.
Mobile Europe | 29
Service strategies
BROKING A FUTURE
Has the service broker any relevance still, as operators struggle to launch new services to the market?
ervice providers have been working towards developing a service delivery architecture that enables the fast, efficient and profitable introduction of services. Much of the drive in recent times has been to find a way to harness the innovation of web-based applications and content providers to the strengths of the communications network. By mashing together the rich service creation environment of the web with the strengths of the network the IN, presence, location, billing and customer-relationship operators hoped to be able to have the best of both worlds. Operators would extract value from customers where customers saw fit to pay for a service. And if it was a service that a customer valued but would not be willing to pay for (usually because they are used to consuming such services for free on the web) then the operator would strike a revenue share or transaction deal with the content or application provider. However, this two-sided business model, or Telco2.0, or mash-up approach (take your pick depending on what year you want to live in), was criticised by some for ignoring the potential of existing revenue-producing applications residing on legacy networks. In too many cases, it proved easier for consumers to adopt services and applications over the top. These ran over the networks, but added little value for the operator. There was an additional problem. The customer had become a moving target. Operators were tasked with delivering a service across a number of networks bringing a great deal of complexity of dealing with different platforms and protocols. Yes, IMS was meant to fix this, and provided the underpinning for the vision,
but IMS has not happened and operators still need an answer. This much is now well understood, and so increasingly there was acceptance that the ability to spread existing revenue-producing applications into new, cross-platform service bundles had often been underestimated or overlooked. The issue is how to do this, and also retain the longterm goal of moving to the NGN/IMS architecture that would enable the true two-sided model that offers operators a route out of the bit pipe cul-de-sac? One proposal was the Service Broker. Service Providers have found that as they move to advanced IP based architectures, they require a flexible, cost effective application connectivity model. Service Brokers may meet this need by providing a real-time horizontal service delivery and control layer, allowing for mediation and orchestration of services over a range of networks and application platforms, including both legacy and nextgeneration. As a result, the Service Broker has emerged as a critical network element. This isnt just idle speculation.The Service Broker Forum, admittedly an interested party, conducted a poll during a recent webinar hosted by Service Broker Forum founding members; Amdocs/jNetX, Metaswitch Networks, OpenCloud and Oracle. Those participating produced results that seem to point to the continued growth of the Service Broker as a means to manage network transformation. Key findings include:
Operators can invoke a mediation layer between a range of platforms and networks
T Nearly 86% of the global operators are seriously considering Service Brokers as a key part of their ongoing network transformation strategy. T The ability to leverage a Service Broker to easily and efficiently introduce service innovation was viewed as the highest priority goal when asked to consider network transformation strategic objectives. T Utilising a Service Broker to leverage existing services and network assets was also cited as a primary requirement when moving from traditional to more IP centric architectures.
For operators to introduce a new service to a cross-section of subscribers they must negotiate a labyrinth of protocols, switches and service domains. It is against this backdrop that Service Brokers are beginning to gain traction
Mobile Europe | 31
Service strategies
These results are not surprising, comments Current Analysis principal analyst, Joe McGarvey. In my most recent report from Current Analysis Service Broker Update: Key Transformation Component Comes of Age, I discuss that for operators to introduce a new service to a cross-section of subscribers they must negotiate a labyrinth of protocols, switches and service domains. It is against this backdrop that Service Brokers are beginning to gain traction as mechanisms for equalizing the service creation and delivery agility of operators and Web-based service providers. One company that has been banging the service broker drum is OpenCloud. Existing partner Nokia Siemens Networks seems to have bought into the concept too, investing 4 million of a recent 5 million investment round in the company in September. In addition to the investment by NSN, OpenCloud secured an OEM agreement that will see OpenClouds Rhino Telecom Application Server and Service Interaction Server becoming integrated into NSNs charge@once unified product suite. OpenCloud is keen to point out the opportunities for the Service Broker approach. It says that demand for its Service Broker products is increasing, leading to a tripling of revenues year-on-year and the acquisition of 13 customers in the last year among them BT, Vodafone, and T Mobiles. We are continuing with our quest to open up the telecoms service layer, to provide compelling technology to the expanding community of telecoms software developers and deliver better value and increased innovation says Jeff Gordon, CEO of OpenCloud. onverged Charging opportunities in the market. This investment will allow NSN to address the considerable Converged Charging and Service Delivery Platform opportunities in the market, says Rick Centeno, head of Charging, Billing and Care, Nokia Siemens Networks. We will be able to better provide our customers with an integrated offering to fit their end-toend needs around service development, delivery, control and charging. Although OpenCloud has attracted an investment and OEM deal from NSN, it has seen its founder members in the Service Broker Forum be acquired one by one, another indication that this is an element the large players want to be a part of to enable service providers to launch innovative new services that blend legacy and IP networks with the IT domain, and consolidate service and charging platforms across multiple network types. jNetX went to Amdoc a year ago, Oracle acquired Convergin in February 2010, and MetaSwitch acquired AppTrigger in March 2010. One player that has stood alone is Aepona, although it too has received a strategic investment from an industry giant, in this case SAP. Aepona says that one of the most common problems in traditional networks is that IN
32 | Mobile Europe
Users can benefit from an integrated experience
trigger conflicts prevent many value-added services from being offered to pre-paid customers. Aeponas Service Broker is a network element that provides a service interaction capability allowing multiple services to be invoked from the same IN trigger, solving aproblem that prevents network operators from creating flexible service bundles that can be matched closely to subscribers' needs. Service Broker proponents also claim that the element can be used to move forward to the IP domain. Within SIP networks, the Service Broker fulfils the functions of the SCIM and IM-SSF functions as defined within the IMS architecture. The SCIM (Service Capability Interaction Management) allows the creation of services that leverage the capabilities provided within SIP networks and the emerging IMS. The IM-SSF features allow services developed for SS7 IN (CAMEL or INAP) to be carried forward into SIP networks without having to re-build the applications. In addition, the Service Broker offers an IM-SCF function, enabling new SIP based services to interwork with traditional CAMEL or INAP interfaces. So what kinds of services are we talking about? Typical operator use cases for the Service Broker might be adding pre-paid to IN services such as VPNs, or blending together a number of IN services such as Home Zone with VPNs. Another set of use cases are where packet switched and circuit switched networks co-exist, and here operators might want to be able to eliminate inefficiencies with tromboning of calls between packet and circuit switched network. Service brokers can also be used to allow ondemand provision of mobile data services - creating selfprovisioning for customers by informing a subscriber by text message of service activation and any key parameters they may need. Further benefits to the operator, say the Service Broker platform providers, are that they can achieve fast legacyto-IP network migration while maintaining control of capabilities across multiple networks. They can also drive the cost-effective consolidation of existing IN platforms for delivery across multiple network types.
MOBILE
EUROPE
EXCLUSIVE WEBINAR SERIES 2010
REGISTER TO ATTEND TODAY www1.gotomeeting.com/register/171622993
Applications Performance Monitoring in LTE networks:

Get the maximum from your LTE investments
T H U R S D AY 9 T H D E C E M B E R 2 0 1 0 , 2 P M G M T
As operators plan for and deploy LTE networks the overall motivation is to achieve a lower cost per bit of delivered data, and to drive up revenues by delivering more and richer applications. But those goals are threatened by the ability of operators to gain a full view of the customer experience in an LTE environment potentially resulting in dissatisfied customers, increased care costs and churn. In a multi-protocol network, conventional assurance products lack the ability to provide comprehensive visibility into both the customer experience (the user plane) and data transmission (the control plane). Yet an end to end view across multiple domains is critical if operators are to ensure customer expectations of next generation mobile broadband services are met. This exclusive webinar will allow you to; Find out: T If legacy systems are designed with the flexibility and scalability to provide a complete network view with the data, reports and alarms required to proactively manage multi-technology, multi-protocol networks? T How to track a single transaction or session across multiple domains, resolving issues that impact on QoE, and revenues. Ask: T What next generation performance monitoring looks like. T How you can maximize your LTE investment in association with For details of the European Communications Executive Webinar Series 2010, contact Justyn Gidley on +44 (0)207 933 8979
Diary & Notes

October/November 2010
FT WORLD TELECOMS CONFERENCE
16-17 November, London The Financial Times' highly influential World Telecoms Conference 2010 will feature a series of in-depth interviews and thoughtprovoking panel debates with global industry leaders. They will discuss how telecoms players can adapt their businesses so they thrive in this time of significant change, with discussion topics to include: regulation, reinventing next generation networks, value-added services, the new digital consumer. www.ftconferences.com/telecoms technical methods to help them deal with the surge in mobile data traffic. Interact with an elite speaker panel of experts from Vodafone, Telefonica, Virgin Media and many more at the worlds only dedicated broadband traffic management event. www.broadbandtrafficevent.com
A ROOMFUL OF HACKS IMMEDIATELY REACHES FOR TWITTER
MOBILE 2.0
22 - 24 November, Berlin Strategies for Monetizing Your Content, Services and Applications: Topics that will include: Operator strategy, success and insights; Mobile AppStores deployments and successes; Mobile advertising monetization strategies; Revenue drivers for next generation mobile content; Deployment of mPayments services and products; Cross industry partnerships opportunities www.iir-telecoms.com/event/mobile2zero
BROADBAND TRAFFIC MANAGEMENT

16-18 November, London In formulating a response to the capacity crunch, operators have many options. The reality is that most carriers will use a range of
MVNO NETWORKING CONGRESS 2010

22 - 24 November, Barcelona The purpose of this forum is to bring together the MVNO ecosystem for an intensive two days of networking and knowledge sharing. Identify how mobile operators are developing exclusive MVNA partnerships in order to cost-effectively launch multiple niche and smaller brands; Hear about the latest developments in MVNO segmentation strategies; Scrutinise the newest MVNO business models. www.iir-telecoms.com/event/mvno
Around the mobile world in 300 words

Windows Mobile launches Windows 7 and surprises even itself by persuading Stephen Fry to come and talk lovingly about the phone OS. A roomful of hacks in London immediately reaches for Twitter. Then they go back to looking bored and already pre-briefed to the eyeballs on WM7 whilst thinking of the best negative angle they can put on Frys attendance. Everything Everywheres CEO briefly forgets the name of the phone he is at the event to promote prompting more OMG!! on Twitter. At the US event, a shonky hostess trolly carrying the WM7 phones shudders round in front of an enthusiastic Ballmer, drawing giggles from the press pack. But the OS is well-received, and Microsoft can congratulate itself on a launch job well done. And not a host your own party ad in sight. O2 launches its first location based advertising service using technology from PlaceCast. Its service is marketed as targeted, opt-in only and location based. Two customers using the service are Starbucks and LOreal. Mobile Europe seems quickly to have hit on a hitch as it knows of users who are not signed up to O2 Mores service receiving messages from Starbucks. A call to O2 is met with promises of action, but then the trail goes cold. More work required, it
seems, on meeting those primises of opt-in, targeted, relevant delivery O2 More gives to its advertisers. The first commercial LTE launch game takes another victim as Nokia Siemens has its press release headline Deutsche Telekom first to deploy LTE in digital dividend spectrum widely distributed without comment. There seems to have been a bout of collective amnesia, however, as Vodafone has been advertising LTE800 tariffs for weeks, and already has service in Germany at the frequency band. Expect more of this, across all frequency bands, as we progress. There are usually several firsts, and even some uniques with every launch. NSNs approach is a textbook example.
34 | Mobile Europe

Mobil Europe 1.5

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mobil Europe 1.5

Uploaded by

Copyright:

Available Formats

"DATA IS ON LTE AND VOICE ON 3G.

NFC PAYMENTS & APPS

EUROPES WIRELESS MAGAZINE S issue no. 212 S October/November 2010 S www.mobileeurope.co.uk

> Broadband challenge

Do operators face specific issues as they upgrade to HSPA+?

> Broking change

in the mobile service creation and delivery environment.

> Elisa, A1 and DT

NFC: THE OPTIMISM RETURNS

NFC IN THE REAL WORLD

THE TRUSTED SERVICE MANAGER

BUSINESS MODELS AND ECOSYSTEM

NFC BRIDGING TECHNOLOGIES

go to www.mobileeurope.co.uk for the latest information on mobile

Printed by Pensord Printers

GOVERNMENTS PUSH FOR HIGH ACCURACY LOCATION

ELISA TARGETS 2012 FOR LTE1800MHZ LAUNCH: VENDOR SELECTION ONGOING

NFC trial brings commercial launch nearer - 2012 Olympics targeted

go to www.mobileeurope.co.uk for the latest mobile news

OPERATORS, OS AND BROWSER COMPANIES JOIN WAC

Sony Ericsson raises margins, profits on lower sales

VIDEO FILLS THE RADIO NETWORK BANDWIDTH

go to www.mobileeurope.co.uk for the latest mobile news

MOVIDIUS LAUNCHES 3D CHIP FOR MOBILE DEVICES

Wireless charger market to charge ahead

A1 ready to launch LTE immediately in Austria

NFC: PAYMENTS potential & priorities

INSIGHT REPORT CONTENTS:

NFC: THE OPTIMISM RETURNS

NFC phone being presented to retail payment reader

12 | Mobile Europe Insight Report

Mobile Europe Insight Report | 13

14 | Mobile Europe Insight Report

Mobile Europe Insight Report | 15

"CONTACTLESS" TECHNOLOGY IS FINALLY READY FOR THE MASS MARKET

NFC IN THE REAL WORLD: PAYMENTS

NFC IN THE REAL WORLD: PUBLIC TRANSPORT TICKETING

MANAGING DOMICILIARY CARE AND ITS PAYMENT SCHEME

NFC IN THE REAL WORLD: CONCERTS AND SPORTING EVENTS

COULD THE HUNT FOR LOOSE CHANGE BE COMING TO AN END AT LAST?

NFC IN THE REAL WORLD: PARKING

Mobile Europe Insight Report | 19

THE TRUSTED SERVICE MANAGER (TSM)

Source: GSMA http://www.m obilemoneyexc hange.org/wik i/trustedservicemanager

20 | Mobile Europe Insight Report

BUSINESS MODELS MOBILE NFC ECOSYSTEM

Left: Mobile NFC Ecosystem Roles

Mobile Europe Insight Report | 21

NFC: BRIDGING TECHNOLOGIES

Mobile Europe Insight Report | 23

24 | Mobile Europe Insight Report

DONT WRITE OFF TEXT

ABOUT THE AUTHOR Stewart Easby is Head of Product Marketing, Telsis.

GETTING THE MOST FROM HSPA+

Telstras HSPA+ modem

Jeff Atkins Nigel Wright

Users can benefit from an integrated experience

Applications Performance Monitoring in LTE networks:

Diary & Notes

A ROOMFUL OF HACKS IMMEDIATELY REACHES FOR TWITTER

BROADBAND TRAFFIC MANAGEMENT

MVNO NETWORKING CONGRESS 2010

Around the mobile world in 300 words