Wireless Federation

Global capital expenditure on mobile communications continues to rise due to greater emphasis on new data services, increased traffic load, and preparation for 4G deployments, a report from ABI Research said.

With the US economy’s uncertain outlook in 2008, ABI Research expects North America’s capex to remain flat this year, while other regions will increase their capex commitments for new 2G/3G deployments or expansions, all-IP service discovery platform upgrades, SoftSwitch unified core systems, and preparations for 4G.

ABI Research calculates that capex investment in 2007 exceeded €83 billion (US$131 billion), and will reach €101 billion (US$163.5 billion) in 2013.

The Asia-Pacific and North American regions are estimated to be the biggest spenders, according to research analyst Hwai Lin Khor.

“Mobile industry spending in the Asia-Pacific area is primarily driven by the emerging markets that are expanding current 2G network footprints and new 3G rollouts; many nations in this region have yet to release their 3G licenses. Mature markets such as Japan, Korea, Taiwan, and Hong Kong will be spending on service delivery platforms.”

Most current capex is still directed to voice services and 2G networks expansion, as the majority of subscriber net adds in recent years are coming from emerging markets that are fairly contented with simple voice calls and messaging services. However, there is also increased awareness of the need for early investment to ensure that networks are ready to support the capacity demanded by higher bandwidth data services.

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The WiMax Forum has certified the first Mobile WiMax products, announcing this week that four base stations and four data cards have received the Forum seal. Though the first “official” Mobile WiMax products in the market, they are targeted solely on the South Korean market where Korea Telecom has been operating a pre-WiMax network for two years.

The first wave of WiMax testing essentially certifies Samsung and its partners, who have pushed for its WiBro technology’s inclusion into the WiMax standard. Based on the same IEEE 802.16e as traditional mobile WiMax, WiBro uses unique frequencies (2.3 GHz) and odd channel sizes (9 MHz), and the equipment can only be sold in Korea. The gear is also probably the only WiMax line that will not include support for multiple input-multiple output (MIMO) smart antenna technologies.

That’s all fine by Korea Telecom, which immediately stated it would begin using the new certified products in its now-WiMax network. KT first launched commercial service in 2005 using Samsung gear and has signed up 100,000 subscribers and sold a variety of devices from laptop dongles to miniature computers.

While the certification of Wave 1 products for Korea is a mainly a milestone, the forum said it signals the ramping up of its interoperability and compliance testing throughout its global lab network. With the first wave under its belt, the forum will now move ahead much more quickly in its certification efforts for North American and global products, said Ron Resnick, WiMax Forum president.

“Stay tuned,” Resnick said in a statement. “We expect this momentum to continue throughout the year when the first products for the 2.5 GHz frequency achieve certification in the coming months.”

The 2.5 GHz licenses are owned by Sprint and Clearwire in the US, and Wave 2 certification is expected to produce the first base stations, home gateway and PC card products for their networks. While Resnick gave no exact date for those first products to appear, they will likely coincide with or shortly follow Sprint’s commercial launch of Xohm this quarter.

The forum also has a lot of other profiles on its plate. Global 3.5 GHz frequencies have also been identified as optimal for WiMax and have spawned numerous trials in Europe as well as small-scale commercial rollouts. The forum has also said it would certify gear at 700 MHz to support the networks of the recent auction winners.

The forum’s certification priorities, however, follow the interests of its large operator and vendor membership closely. KT was the first WiMax operator to launch, thus WiBro was the first profile certified. Sprint is next, and therefore its 2.5 GHz MIMO profile is the next to hit the labs. As more major operators make their 4G network decisions, the forum as well as its vendor membership will likely fall in lockstep.

BT has been contemplating expanding its WiFi wireless strategy to the wide area network using WiMax and is likely to participate in the upcoming 2.6 GHz auction in the UK. Japan has also become a hotspot for WiMax as the consortium UQ communications plans a nationwide rollout covering 90% of the population by 2012, using the same 2.5 GHz spectrum allocated in the US. However, UQ member KDDI is reportedly considering following in fellow CDMA operators Verizon’s footsteps in pursuing Long Term Evolution. India is another big market, having recently produced not one but two major operators pursuing large-scale broadband access plans using WiMax, one also at 2.5 GHz, the other at 3.3 GHz.

With all of the interest in 2.5 GHz, the next wave of certification will be a highly active one. The forum expects hundreds of products to be certified by the end of the year, the majority of them Wave 2, as opposed to the eight that came out of Wave 1. Most vendors opted to skip Wave 1 entirely since Samsung has a lock on the KT contract. All four vendors participating—Samsung, Posdata, Runcom and Sequans–had base stations certified. Sequans Communications won approval for a reference design built around its base-station chip, a clear indication it’s seeking OEM agreements with other manufacturers to get into the Korean WiMax business.

At the WiMax World Congress in Singapore this week, Motorola also unveiled a new compact base station, though it did not get it certified by the forum. The WAP 450 is a variant of its traditional Moto Wi4 Diversity base station, except it has a more powerful radio frequency module at the tower top. The RF module receives direct power, thus enhancing its capacity and coverage without directly boosting power consumption. Traditional ground base stations shed half of their power funneling their signals through cables to the antenna.

Motorola and UTStarcom also announced they have landed a joint contract with First International Telecom to build out a WiMax network in northern Taiwan. The deal is Motorola’s third in Taiwan in eight months.

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A fingernail-sized chip that stores subscriber information is set to change South Korea’s mobile phone culture, allowing people to choose which handset they want to use according to their outfit and occasion. In addition, roaming fees in China are expected to be cut by up to 70 percent starting next month.
Korea’s second-largest mobile carrier said Thursday that it will lift the “lock-in” function on its universal subscriber identity module (USIM) cards starting next month.

The announcement was made by KTF president Cho Young-chu during a ceremony marking the one-year anniversary of the company’s Show third-generation mobile service.

Market leader SK Telecom also plans to lift the lock-in function for its T Live third-generation service starting March 27.

Subscribers to 3G services are currently not allowed to use their USIM card, which stores their subscriber information, in different handsets. That means if a subscriber wants to change mobile phones, he has to go through an authentication and opening process all over again. But starting from March customers will be able to switch from one handset to another just by swapping the USIM card into the new phone.

Customers who buy new handsets will also be spared the trouble of entering phone numbers again as their phone book is stored in their USIM. They can also use mobile payment services as well, by including a credit card function in the chip. All this means that people with more than one handset can choose which they want to use to match their clothes or occasion.

The sharing of USIM cards, however, will be limited in the early stage to handsets linked to the same service provider. Those who want to share their card among phones linked to different carriers will have to wait until the second half of this year.

LG Telecom, which uses code division multiple access (CDMA) technology, is not going to join the move. Both SK and KTF use wideband code division multiple access (WCDMA).

In addition, KTF plans to cut its roaming fees in China by up to 70 percent. Under the plan, KTF executive vice president Kim Ki-chul said Show subscribers who make local calls in China will be charged at local rates starting next month.

For this, KTF will make available to its roaming subscribers a pool of 10,000 Chinese phone numbers through a partnership with China’s top operator China Mobile. The service will be rolled out in Beijing, Shanghai and Guangdong Province before it is expanded to other regions.

KTF also plans to cut its roaming fees in Japan by forming an alliance with NTT DoCoMo, Japan’s largest cell phone company, which holds a 10 percent stake in the Korean operator.

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Korean communications provider Hanarotelecom has seen 2007 revenues go up 8.4 percent on growth in its HanaTV service, voice services and corporate services. Hanaro’s revenues totalled KRW 1.87 trillion, versus KRW 1.72 trillion in 2006, the company said in a preliminary statement. Operating profit went up 162 percent to KRW 80.94 billion, from KRW 30.84 billion, on the back of revenue growth and efficient execution of marketing expenses. Net income turned positive at KRW 7.24 billion, from a net loss of KRW 86.05 billion in 2006, owing to increased revenues and operating income.

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Scalado, which specialises in mobile imaging software solutions, has revealed that its CAPS imaging Software Development Kit (SDK) is now being used in more than 150 million mobile phone handsets.
The Swedish company currently has its software embedded in more than 50 different cameraphone models, with suppliers such as SonyEricsson and Samsung signing licensing agreements with Scalado to power its imaging applications in new camera phones. LG also became a Scalado customer during 2007. Scalado can now list four out of five of the top Tier 1 mobile phone manufacturers as its licensees, as well as several handset manufacturers in Taiwan.
End of 2007 figures place worldwide mobile telephone subscriptions at around 3.3 billion - equivalent to half the global population. Global mobile phone sales last year alone were over 900 million, with cameraphones sales in 2007 accounting for close to 750 million, or approximately 80% of the market, with this figure predicted to grow further in 2008.
As manufacturers get smarter with the number of pixels that they can offer, with many now providing 5, 6, 7 and even 8 megapixels, the need for powerful and memory efficient image processing software is evident, says Scalado. With CAPS, Scalado offers an extremely CPU and memory efficient software solution, which it says drastically decreases image processing times when capturing, viewing, and editing large images.
“As megapixels in cameraphones continue to grow, users will be taking many more images with their mobile phones, that are larger and need to be processed, manipulated and then sent quickly, so the need for fast and efficient image processing is even more vital,” says Scalado CEO, Mats Jacobson,. “Our applications have been specifically designed to bring the ultimate digital photography user experience onto a mobile device. We are working closely with the mobile industry to improve this experience all the time and finding great ways to create, browse and share pictures.”
In addition to adding new customers, Scalado also ended 2007 by expanding its global operations, launching operations in Korea, in order to be more responsive and flexible to customers in this region. These new operations will also put Scalado in close proximity to some of the emerging markets’ manufacturers, and nearer to the operators who are fast becoming leading players in their respective countries.
“The global presence that we now have in terms of handset penetration is a fantastic achievement,” adds Jacobson. “We are very proud to be working with the leading mobile phone manufacturers in the world, and we are looking forward to continuing to improve the camera phone experience even further by partnering up with key mobile platform hardware and software vendors as well as key operators.”

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Globally, mobile marketing has been regarded as a new way to monetize services and develop new sources of revenue for mobile operators. Japanese and South Korean operators are building on existing technologies and consumer preferences to pioneer this new medium. By 2012, the total value of all mobile advertising and marketing will reach $1.2 billion and $684 million in the two countries respectively. With closely-targeted marketing using demographic data from existing mobile subscribers, mobile ads over phones are effective in reaching consumers who are open to receiving commercial messages.

Senior analyst Andy Bae of ABI Research says, “Japan and South Korea have almost the same market structures, value chains, and service applications. This is because mobile operators in both countries established their own mobile ad agencies to support operators’ business models for mobile ads. The relationships between operators and the affiliated mobile ads firms are close, in order to produce desirable business results.”

One of key reasons for mobile advertising’s market growth is the well-established range of 3G and HSDPA-based handsets available in both regions. Consumers in Japan and South Korea are well accustomed to accepting rich content advertising messages.

Compared with other regions, these markets are entering a new, advanced phase. SMS-based mobile ads are still mainstream, but consumers here are quite ready to accept rich format advertising that utilizes multimedia capabilities. More important, consumers sometimes regard SMS advertising as spam, so that some consumer-related companies are changing their advertising vehicle to MMS (multimedia messaging service), instead of text-based SMS.

Bae concludes, “Mobile search and gaming will be promising sectors for the next growth phase in these regions. Mobile operators believe that search results with location-based advertising messages could generate large revenue streams with gradually increasing usage by subscribers. Google and Yahoo are already implementing their business activities in the regions by cooperating with mobile operators in Asia.”

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Korea ended September with 66.58 million telephony subscribers, up 0.5 percent from August, according to figures from the communications ministry. Of the total, 23.31 million are fixed-line users while 42.80 million people have a mobile subscription, up 0.7 percent. KT is the fixed-line market leader with 91 percent market share and 21.21 million fixed-line subscribers, followed by hanarotelecom with an 8.4 percent market share and 1.96 million fixed-line users. The country ended September with 42.80 million mobile users, led by SKT with a 50.5 percent share of the market followed by KTF with a 31.7 percent share and LGT with a17.8 percent share of the mobile market. Some 41.14 million mobile customers have mobile internet services. During the first nine months of this year, 6.79 million used mobile number portability to switch providers and 521,194 people used fixed number portability.

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China’s Shenzhen Airlines has fitted its planes with communications technology that will allow passengers to use their mobile phones to make voice calls and send email and SMS messages during flights.

The OnAir service will be installed across Shenzhen Airlines’ full fleet of Airbus A320 and Boeing 737 aircraft by mid 2009. Three “demonstrator” aircraft are also being readied for the Beijing Olympic Games in August 2008.

OnAir said its equipment will be retrospectively fitted on Shenzhen’s existing aircraft and line-fitted on new aircraft. The service is aimed at passengers with smartphones or basic handsets.

The deal with Shenzhen is the third such agreement OnAir has secured that covers an airline’s whole fleet, following a pact signed last summer with low-cost carrier Ryanair and an agreement in June this year with AirAsia. The Ryanair in-flight communications service is due to go live by the end of this year, according to an OnAir spokesman, and the AirAsia service is slated to launch in early 2009.

OnAir’s service is also being trialled by Air France, the UK’s BMI and TAP Portugal on a single aircraft in each airline’s fleet.

Benoit Debains, chief executive of OnAir — which is a joint venture between aircraft manufacturer Airbus and airline industry IT body Sita — said in a statement: “China is a significant and fast-growing aviation market and we are proud to be able to deliver our innovative services that will provide increased levels of passenger services and additional revenues.”

Shenzhen Airlines operates more than 130 routes within China and to Japan, Korea, Malaysia and Vietnam. It carried more than seven million passengers in 2006.

OnAir’s on-board equipment incorporates technology from Tenzing, the company that pioneered in-flight email, with Inmarsat providing the satellite communications.

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Korea’s LG Electronics may gradually phase out its CDMA handset business in India, reports PTI. LG will make a shift from low-end CDMA handsets to premium GSM phones. LG states that its CDMA market share was deteriorating due to the flooding of the Indian market with Chinese products. LG India managing director and LG president South West Asia Moon B Shin told PTI reporters that the company aims to increase its GSM market share from the current 1.4 percent to 8-10 percent by 2008.

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In the period 2006-2008, total worldwide investment in WiMAX network deployment is expected to reach USD 5.2 billion. According to a research from an ICT industry research institute based in Taipei, MIC (Market Intelligence Centre), CAGR (Compound Annual Growth Rate) will reach 150 percent. Regarding investment in different regions, the United States is expected to be the worldwide leader in WiMAX network investment during the aforementioned period, with investments totaling approximately USD 3.03 billion. Taiwan is second, with a forecasted investment value of USD 664 million. Taiwan is slightly ahead of Korea, which is expected to invest a total of USD 641 million. According to MIC forecasts, stimulated by the Taiwanese government’s M-Taiwan project, which involves an investment value of approximately USD 220 million, private-sector investment in Taiwan until 2010 is expected to reach USD 900 million. In this year, the share of companies using 802.16e technology is expected to reach 46 percent, while companies adopting 802.16d technology will have a share of approximately 22 percent. An analysis of the types of companies engaging in WiMAX network deployment reveals that in 2005 fixed network operators accounted for 32 percent of the total. New fixed network entrants accounted for 15 percent, and traditional telecom operators accounted for 17 percent. Fixed network operators in this year are expected to account for 49 percent, with new fixed network entrants accounting for 28 percent and traditional telecoms for 21 percent.

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