WirelessDesignAsia writes…The cellular industry took 12 years to reach 1 billion connections, three years to reach 2 billion connections, and is on target to reach 3 billion connections in just over two years, which will be towards the end of 2007, according to Wireless Intelligence, a JV between Ovum and the GSM Association. I believe this will be the most important telecom milestone of 2007—half the humanity covered by the telephone. It goes to the credit of wireless designers and developers that they have been able to make communications affordable for the common man in developing countries. Half the growth of the world cellular market now comes from emerging markets. The top 10 countries for volume connections were China, India, Russia, US, Pakistan, Ukraine, Brazil, Indonesia, Nigeria, and Indonesia. A quarter of the growth came from China and India. China and India will continue to be the star performers in cellular growth in 2007.
Sub-$30 handset
Mobile telephone designers and manufacturers have been working on a sub-$30 handset, and are said to be on the verge of coming out with one. This should mark yet another telecom milestone in 2007. However, designers should note that even this price is unaffordable to a large number of people. In South Asia, extreme poverty, defined as an earning of $1 or less a day, dropped from 40.9 percent in 1990 to 28.4 percent now; yet, the number of such people is still the second highest in the world after Sub-Saharan Africa. (Figures from ILO.) Of the total worker population, the share of those living on $1 a day in East Asia and South-East Asia is 13.4 percent and 11.4 percent respectively, while in South Asia it is as high 34.2 percent. Poverty line is defined as a daily earning of $2. Of the total worker population in East Asia and South-East Asia, those earning $2 comprise 46.5 percent and 57.6 percent respectively, while in South Asia (which includes India), the figure is as high as 83.9 percent. To such a large number of people below the poverty and extreme poverty lines, even the sub-$30 handset will be an unaffordable luxury. So the challenge for handset designers and developers does not end when they reach the target of sub-$30 handset.
While the handset cost falls, can communication costs too move down? I think yes. The shift to networks designed to carry a range of high bandwidth services provides an opportunity to make person-to-person talk call charges almost nil. On such networks voice is just one of the many applications. However, it is the only application that people near the poverty line will generally use. The cost incurred in building and maintaining the networks can be recovered from broadband services rather than from voice. The year 2007 should see pressure on traditional telecom operators growing from operators rolling out alternative networks (fixed, mobile, or other wireless technologies) direct to the customer; from DSL operators using copper loops; from third-party VoIPs utilizing broadband services provided by others; and from companies such as Google, AOL, MSN, eBay/Skype, and Yahoo, offering VoIP services.
VoIP
VoIP has been around for long, but has still to come into its own. While cost competitiveness is its USP, there are barriers holding it back, such as inconvenient end-devices, network fragmentation, and security risks. I don’t see these barriers being demolished in 2007, yet I see VoIP advancing significantly. There are two reasons. First, VoIP phones failed to attract customers, but their re-branding as “digital phones? is making them acceptable. Second, Internet portals such as eBay/Skype and Google are integrating VoIP services and clients into the services already used by their existing customers. The two portals are said to be working on interoperability between their two services towards end-2007.
VoIP services today exist in fragmented pockets. This concept is not acceptable to telephone consumers, who have been used to any-to-any connectivity. This interoperability will be yet another milestone of 2007. Designers and developers working on interoperability will face a major problem in there being no universally accepted protocols. Standardization of protocols has never been a simple affair. It has always led to long battles. Profitability of VoIP companies is another important issue of the year. In the nearly four years that Vonage Holdings, the biggest Internet phone company in the US, has been offering services, it has not been able to make profit. In spite of its immense popularity, the Company has accumulated losses of $310 million. While new subscribers are signing in, some old customers are leaving. The most common reason for people to leave is the complexity and poor reliability of VoIP service. Echoes, delays in transmissions, and higher dropped-call rates are common. While these are interesting technological challenges for designers, I believe the communication model that Vonage uses—relying on Internet lines it does not control, and being at the mercy of cable companies and traditional phone companies to provide good quality Internet connections—is a yet-to-betested model. The year could be an interesting study on whether a financially struggling phone company that relies on the Internet instead of its own network to provide phone services can win investor confidence, as Vonage prepares to go public and raise up to $250 million. Meanwhile, WDD Asia wishes its readers and advertisers a happy and prosperous New Year! We are glad to say that to serve our readers and advertisers better, we are increasing the frequency of the magazine from a quarterly to a bimonthly. We believe that this is the best way in which we can express our gratitude for the support they have been giving us ever since the magazine came out in July 2005.
