Professional Documents
Culture Documents
January/February 2010
Reality
Hits!
Mobile broadband comes down to earth as
operators struggle with margins and flat-rates
Inside:
Published By
Packet-optical convergence
Contents
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COVERSTORY
18 Reality sinks in
Mobile broadband subs and traffic may be rising, but the
wide-eyed optimism of a year ago fades as operators deal
with flat revenue growth and risky flat-rate plans
feature
TECHNOLOGY
18
ONE-TO-ONE
26
30
33
Tanner
6 Goodbye flat-rate
Operators need to reign heavy users, but any move away
from flat rates requires meaningful metrics, like a meter
widget showing data usage in real time
FORUM
www.telecomasia.net
38
36
Telecom Asia Jan/Feb 2010 1
Contents
FIRST MILE
8 Wi-Fi on trains
Kazakhstans national railway uses a Wi-Fi mesh network, linked to a
single auto-pointing VSAT on the roof, to offer free service on 1,300-km
route
INDUSTRY ANALYSIS
REGULARS
10 Insight
40 Telecom Career
42 Events Calendar
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SALES CONTACTS
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E-mail: gchan@questexasia.com
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www.telecomasia.net Highlights
ONLINE SECTIONS
Daily News
13th Annual
Telecom Asia Awards
TM
Opinion
Telecom Asias senior editors unload
on the latest technologies and
business models
www.telecomasia.net/opinion
The Wrap
Highlights of the weeks major
developments by Robert Clark
www.telecomasia.net/thewrap
BusinessWeek Online
White Papers
Vendors hold forth on latest
technology concepts
www.telecomasia.net/whitepapers
Events
This years trade shows and
conferences
www.telecomasia.net/events
IndustryView
The inside view from industry execs
www.telecomasia.net/
industryview
Bloggery
Missives on telecom trends and the
wireless future from John Tanner,
Robert Clark and more
www.telecomasia.net/blogs
www.telecomasia.net
tANNER
l John C. Tanner
first mile
owned incumbent telco Transtelecom, service provider Astel and satellite equipment
and services vendor Gilat Network Systems
(the turnkey supplier for the project).
The network consists of a Wi-Fi mesh
network in the train cars (which allows cars
to be coupled and decoupled without having
to worry about reconnecting physical network cables) linked to a single auto-pointing
VSAT on the roof that tracks the satellites
location while the train is in motion to
provide a backhaul connection of 2 Mbps
downlink and 256 kbps upstream.
The use of satellite as the backhaul for
a train may sound like an obvious solution,
but few train operators have actually used it
to enable Wi-Fi. NTT Com, for example, is
relying on a leaky coax solution a cable
running along the train route providing a
High-speed VSAT
To find a fully commercial Wi-Fi service wireless 2-Mbps connection.
Most players in the UK and Europe,
onboard a moving train anywhere near Asia,
however, are using either dedicated Wimax
youll need to go to Kazakhstan.
networks or 3G connectivity. But such soluKazakhstan Temir Zholy, the countrys
national railway company, last August intro- tions have their own challenges, from supduced Wi-Fi on the Tulpar train serving the porting high-speed handoffs to the familiar
1,300-km route between Almaty and Astana. issue of providing consistent coverage in
the rural zones where cross-country trains
The VSAT-based system the first in the
typically run and where cellular coverage is
region was put together by government-
STATSNAP
Subscribers Penetration
(million)
Year on year
growth, 2007-2008
China
325.0
25%
-7%
Japan
42.0
33%
-7%
India
37.0
3%
-4%
Vietnam
30.0
34%
4%
Indonesia
35.0
15%
-4%
South Korea
22.0
45%
71%
Taiwan
13.0
57%
0%
Pakistan
4.4
2.5%
-10%
Malaysia
4.3
15%
-2%
Hong Kong
3.7
53%
0%
www.telecomasia.net
industry ANALYSIS
ooming sales of
iPhones and the
launch of the first
Android-based
handset seem certain to shake
up the Koreas mobile market
this year.
Smartphone sales are set
to soar, driving a surge in
mobile data, while handset
subsidies are back on the
agenda.
The basic business models
of operators are being revised
with the creation of open
rather than closed app stores
and portals, and the aggressive rollout of Wi-Fi networks
by SKT and KT.
Before the launch of the
iPhone on November 28,
market leader SK Telecom
dominated the local smartphone market with around
420,000 smartphone subs for
its ten-model line up as of
December 31 (up from 90,000
a year before thanks in part
to the launch of Samsungs
Omnia2 at the end of August).
Data from last year also
show foreign models given the
cold shoulder; SKT has only
around 20,000 Blackberry
subs.
Until the arrival of the
iPhone, rival KT hadnt
even managed to double its
smartphone subs over the
year, which began the year at
50,000 subs. But that changed
rapidly and 250,000 iPhones
were sold in the first six
weeks, many at the expense of
rival operators.
SK Telecom was also
talking with Apple, and it
appeared that Koreas two
biggest cellcos might both
INSIGHT
The global IMS market is set to more than double in value to $17.3
billion over the next five years. A study from ABI Research revealed
that $8.4 billion was spent on IMS during 2009. But the growing
pace of LTE deployment is expected to help the market flourish.
Until now, LTE adoption and therefore IMS spending has been
constrained by the data-centric nature of LTE. Most operators
still earn 70% of their revenue from voice and SMS services. But
now that a group of operators and OEMs have agreed on a voice
standard for LTE, that stumbling block has been cleared. The
only remaining hurdle for IMS is the cost and complexity of the
technology.
IP Transformation
www.abiresearch.com
www.telecomasia.net
industry analysis
industry analysis
Googles China
show
Grameenphone, Orascom-owned
Banglalink and NTT DoCoMo-backed
Axiata Bangladesh will also be gunning
for 3G licenses. Bangladesh Telecom, the
second smallest operator 45% held by
Singtel is also expected to bid.
Over in Australian regulator ACMA
is also considering a spectrum auction,
mulling whether to sell off most of the
2.5-GHz band as LTE spectrum. The sale
could reap the government up to A$1
billion ($920.1 million). TA
Dylan Bushell-Embling
Unreparted in China
The news of Googles decision was widely-reported in
China. However, early reports of the hacking of activists email accounts were scrubbed, and China has not
acknowledged the breaches.
In its initial measured response, the government
claimed the internet was open in China and that it would
seek talks with Google.
But the rhetoric ratcheted up quickly, with state-controlled media accusing Google of acting in concert with
the US government. Many said the search firm was leaving the market because it trailed Baidu by a long margin.
By coincidence, Googles announcement came a day
after Baidu had gone off air because of an attack on its
US-hosted DNS server by the Iranian Cyber Army.
Baidu sued its US registrar, a move seen by some as political theatre intended to highlight that Chinese companies were also victims of hackers.
US Secretary of State Hilary Clinton called on the
Chinese government to conduct a full and transparent
investigation into the Google attacks.
Googles decision has had a direct impact on its new
Android handset business. Unicom put its Android handset launch on hold, and the future of Googles device
business in the market remains highly uncertain. TA
Robert Clark
www.telecomasia.net
industry analysis
Seoul
SK Telecom announces it will launch more
than 12 Androidpowered smartphones
in South Korea this
year, and launches its
first such device, the
Motorola MotoRoi.
Hong Kong
Hutchison Whampoa makes a $4.23b offer to take loss-making subsidiary Hutchison
Telecom International (HTIL) private. The company, which already owns 60% of
HTIL, does not intend to increase its HK$2.20 ($0.28) per share offer.
Vendors LG and
Samsung sign separate deals to embed
Skypes VoIP software
into their 2010 internet TV models, taking
advantage of Skypes
new HD video chat
functionality.
Taipei
Handset vendor HTC reports a 31% decline in Q4 profit to $175.4m. But
by December the company was back to growth, with its first year-on-year
earnings increase since July.
movements
Beijing
Search engine Baidu comes under fire from
Iranian hackers, who took the site offline for
several hours. The hackers are protesting US
intervention in Iranian affairs, with China
targeted due to its US ties.
newsmap
Asian telecoms this month
Sydney
Telstra slashes the
prices of its mobile
broadband data plans,
in the response to the
narrowing of its lead in
subscriber figures compared to competitors
Optus and Vodafone.
But the prices are still
not as attractive as the
rival offerings.
Dhaka
Indias Bharti Airtel agrees to pay $300m
for a 70% stake in Warid Telecom from sole
current owner the Dhabi Group. Warid had
2.92m subscribers and a market share of
5.9% as of November.
Nextgen Networks
and Singapore operators Matrix and NAP
make plans to build
a 2.56-Tbps subsea
cable linking Singapore and Perth. The
proposed could be
completed as soon as
November 2011.
Auckland
Trade regulator NZCC warns Telecom NZ to stop breaching New Zealand
competition law, after convicting or warning the incumbent operator eight
times over its behavior since 2003.
z Nokia wins a long-running UK legal battle with German patent licensing firm IPCom, which had been attempting to wring
$17.1b worth of GSM patent licensing fees from the handset
vendor.
Manila
Globe Telecom petitions the Philippine
court of appeals to block regulator NTC
from implementing its order forcing operators to adopt per-pulse billing.
Singapore
SingTel, Google and five other companies sign an agreement to build
what could become the worlds
largest ever cable, the Southeast
Asia Japan Cable System (SJC), with
a design capacity of 17 Tbps and
upgradable to 23 Tbps.
www.telecomasia.net
www.telecomasia.net
coverstory
coverstory
Respondent profile
The Telecom Asia-Ovum online
survey was conduced in December
and early January and had
responses from more than 320
telecom executives in 19 countries
across Asia Pacific. Almost a quarter
of those surveyed were mobile
operators, and another 18% were
integrated players. Management
accounted for 28% of respondents,
sales/marketing 28% and
engineering/operations 23%. This
was the second year the survey was
conducted.
Mobile broadband:
still growing but
realism sinks in
Better margins?
The majority of the telecom executives surveyed continue to see mobile
broadband adoption as a significant
boon to the industry, with 44% expecting mobile broadband to be a highermargin business than mobile voice.
Thats down from 52% a year ago, but
still widely optimistic based on the revenue generated compared with the required spending on capacity.
The number pf respondents thinking margins will be lower increased
from 24% last year to 32%. (See chart
1 below). Nathan Burley, an analyst
in Ovums Asia-Pacific research team,
says more realism has set in, yet this
is still a very optimistic view of the
industrys future. Another 13% said
they dont know they will increase or
fall.
Responses to this question also varied more than any other between different markets. Industry participants
doing business mostly in emerging
markets were more likely to see mobile
broadband as a higher margin service
13.6%
Higher
44.2%
The same
Lower
31.5%
Dont know
By Joseph Waring
10.7%
www.telecomasia.net
www.telecomasia.net
Chart 1
Telecom Asia Jan/Feb 2010 19
coverstory
Not sustainable
In the US a strong backlash has
flared up, with both AT&T and Verizon
declaring flat-rate unsustainable and its
days numbered as the operators move
to LTE. AT&T said in December that
it will have to get back to usage-based
pricing. Verizon said in Janauary that
LTE pricing will have to be different
from 3G pricing, likely in the form of
a basic monthly fee and usage-based
pricing for bandwidth consumed. Were
starting to hear similar concerns from
cellco execs in Asia. (See column on
The flat-rate mobile broadband backlash on page 6.)
Many operators are seeing significant network congestion in urban cent-
51.4%
Data volume-based
Quality of services/
SLA-based
18.6%
9.5%
Speed-based
7.6%
Application-based
6.6%
Time-based
6.3%
Chart 2
coverstory
coverstory
Coverage
23.2%
Quality of Service
Speed
Other
1.9%
4.4%
10.4%
19.0%
15.5%
31.9%
15.9%
PCs
48.3%
41.3%
Other
consumer
electronics
devices
8.3%
34.6%
Machine-toMachine
Audio
Other
Chart 3
Chart 4
from first last year (falling 8 percentage
points), that was a just a dip compared
to the freefall for value-added services,
which plunged from 16.5% thinking it
was a key differentiator a year ago to
only 3.7% this year.
Obviously, users are not attaching
much value to operator VAS services,
especially for big-screen devices. The
main selling point is connectivity.
Burley says niche services will be of
value in certain segments and potentially reduce churn yet they wont be key
a differentiator. He suggests that operators choose VAS investments and focus
on areas very strategically.
He says potential applications for
both big- and small-screen mobile
broadband VAS are integrated solutions
across access networks and bundled offerings, security or device management
with GPS location. In the enterprise
space, the ability for IT departments to
control mobile assets, VPNs, and roaming may add value.
Browsing remained the leading traffic generator, but its dominance dropped
from 42% of respondents seeing it as the
main traffic driver last year to 36% this
year. The big winner was video, with expectations video will be the main driver
of traffic growth increasing from 22%
last year to 32%. (See chart 4 above.)
Chart 5
None. Mobile
broadband will only
complement fixed
broadband
1.2%
Laptops/
netbooks
Handsets
P2P
Other
2.4%
Video
Location
based services
3.7%
Browsing
36.0%
20.5%
Price
VAS
We agree with the consensus, mobile broadband revenue streams will not
entirely be generated by new product
categories, but will steal revenue from
the fixed broadband market as operators compete directly, Burley said. For
many consumers, especially in emerging markets, fixed broadband will be
irrelevant.
Investment required
Due to the business models adopted, especially the common unlimited/
flat-rate plans offered by so many mobile operators, traffic has been growing
exponentially. This growth has created
a major strain on operators backhaul
and access networks.
Representing similar results to last
year, 66% of respondents believe backhaul capacity is, or will be in the next
12 months, an issue in the provisioning
of mobile services. The same number as
last year (17% reckon backhaul wont
be a restraint on mobile services. (See
chart 7 on page 24.)
The responses to this question did
differ by market. Interestingly, those in
developed markets where more likely to
see backhaul as a constraint compared
to those in emerging markets, despite
more options generally available in
those markets.
30.0%
Limited impact
Some impact with
substitution occuring
Significant impact
and substitution
Large impact in all but
small segments
Fixed broadband
is dead
Chart 6
In Malaysia, more than half of respondents stated backhaul as currently
a restraint on mobile services.
Over 59% of industry respondents
believe wireless backhaul technologies
will achieve greater growth than wired
backhaul in 2010. This result is the same
as last year.
Operators were more likely to suggest wired technologies would be deployed, with 41% selecting that option.
Capacity constraints in backhaul
are a more pressing concern than in the
access network. Burley says this differs
by market. For example, in dense areas
radio network capacity is more likely to
be an issue while in rural areas backhaul
may be the bottleneck.
Regardless, respondents still believe
access capacity is still under pressure. A
total of 65% believe radio access capacity is, or will be in the next 12 months, a
constraint on mobile services. However,
21% do not forecast radio capacity being a constraint in the foreseeable future. (See chart 8 on page 24.)
Just under half of vendor respondents saw radio access as a constraint
on network capacity in the next 12
months, significantly above the overall average. Malaysian respondents
again were also above average in seeTelecom Asia Jan/Feb 2010 23
coverstory
Currently a restraint on
mobile services
51.4%
Currently a restraint on
mobile services
Will be a restraint on
mobile services in the
next 12 months
18.6%
Will be a restraint
on mobile services
in the next 12 months
Wont be a restraint on
mobile services for the
foreseeable future
7.6%
Wont be a restraint
on mobile services
for the foreseable future
Dont know
9.5%
Dont know
Chart 7
12.6%
41.0%
18.9%
21.8%
Other
Chart 9
19.0%
20.5%
3.7%
31.2%
Chart 8
Other traffic management techniques, such as throttling and use of
policy control, as well as new charging
schemes also received strong support
from respondents as solutions to traffic
growth.
Burley says there is no silver bullet
to dealing with traffic growth and numerous solutions to manage capacity
need to be used.
Bridgewaters Sharpley agrees. Its
not an either-or situation. Operators
will need to deploy a toolkit of strategies to manage explosive mobile data
traffic growth, including policy control,
data traffic offload, and migration to 3G
and 4G.
Research from Chetan Sharma Consulting (sponsored by Bridgewater Systems) shows that by deploying a combination of these strategies, operators can
reduce costs by more than 60% over the
next three years with savings of 20-25%
from data offload to Wi-Fi or femtocells, and over 10% from policy control
alone.
Sharpley also sees opportunities to
combine data offload and policy control. For example, operators can use
policy control to surgically offload
certain applications to another access
network or apply policies that offload
traffic based on network conditions or
a subscribers location. TA
www.telecomasia.net
technology
technology
By John C Tanner
Bringing packets
into the light
Telcos want to flatten their packet and optical network layers,
but the right solution depends on how optical-centric or
packet-centric your vendor is
technology
Optical-centric or packetcentric
A minor war is already brewing
over just how much money telcos can
save depending on whose solution they
choose or rather, how focused their
convergence strategy is on bringing the
packet layer to DWDM or the other way
around.
There is a difference, says Ceuppens of Juniper and one that tends to
be defined by the core expertise of the
vendor.
You have players in the optical
world and the packet world and theyll
each approach this new product in their
own way, he says. Optical-centric vendors will develop optical transport with
some packet capabilities, and packetcentric vendors will develop packet-oriented gear with some optics integrated
into it.
Perhaps unsurprisingly, Juniper says
the latter approach will ultimately save
telcos more money in the long run.
A cost analysis from Juniper reckons
that that a packet-centric integration
solution (i.e. MPLS-based with OTN
switching) would cost 65% less than a
traditional optical network, while an
optical-centric solution (i.e. hybrid
router and MPLS/OTN switching)
would save just under 50%.
That said, Ceuppens admits the cost
model makes specific assumptions that
wont apply uniformly to different networks.
Which is as well, since operator decisions on a packet-optical convergence
strategy will be determined by the ar-
INSIGHT ROundtable
INSIGHT Roundtable
ew government licenses
for spectrum have created a flood of new players
in the mobile broadband
space. In a short time, the
cost of devices and services has come
down tremendously, fueling uptake,
traffic and a search for new pricing and
business models.
Competition has never been fiercer,
making economies of scale more critical than ever at every point in the value
chain. With network and device costs
tumbling, attention is shifting to applications that will drive usage and profitability.
For operators to move seriously
into applications and sharing revenue
they need to be able to target attractive customer segments and partner in
new ways. This means sharing customer
data with partners that bring more traffic and help you build customer relationships.
These were he key messages at Telecom Asias Insight Roundtable, held
in Kuala Lumpur last month, which
pulled together a handful of operators
and analysts to discuss Capitalizing on
the growth of mobile broadband. Participating in the event, hosted by Intec,
were P1 CEO Michael Lai, GM for Celcoms broadband division Harcharan
Singh, Frost & Sullivans director of
ICT practice for Malaysia Delesh Kumar, MD of Value Partners Hong Kong
Jenny Ng and Damian Harte, Intecs
senior strategist for content innovation and initiatives, group editor Jospeh
Waring was the moderator.
The mobile broadband market is in
hyper drive across much of Southeast
Asia. The industry had been playing out
30 Jan/Feb 2010 Telecom Asia
Michael Lai, P1
in similar fashion to the traditional mobile ecosystem, with two to three operators in most countries serving 20 to 30
million subscribers.
But that changed when governments
started offering spectrum to new players to boost competition in an attempt
to expand broadband penetration. The
industry has seen new technologies like
Wimax as well as a flood of new players.
There are 12 players in Malaysia and a
staggering 18 in Indonesia.
Weve never seen this level of competition, said Kumar from Frost & Sullivan. The issue moving forward is many
dont have the scale to optimize ebitda
margins, bargain with CPE and equipment vendors, and leverage backhaul assets. He noted that at every point in the
value chain economies of scale matters.
Celcoms Singh doesnt see scale as
the overriding issue. Of course we all
wish there were fewer players [laughter]. But the cost of dongles and base
stations have dropped sharply and IP
transit is more affordable.
He said that while ebitda margins
are much lower than voice, they are still
positive. Were now looking at what
other services we can sell on this pipe to
boost revenue.
He said penetration in Malaysia isnt
increasing at a significant rate new
adds are customers of other operators,
so theres a lot of cannibalization.
There are some issues with backhaul, since the cost of putting in fiber is
huge, but our bigger challenge is radio
access, especially transmission, Singh
said.
He said Celcom has learned a
number of lessons since 2007. When
we started, there was a lot of congestion
in the core. We fixed that, then there
www.telecomasia.net
INSIGHT Roundtable
Delesh Kumar,
Frost & Sullivan Malaysia
Fixed-line replacement
It comes down to perception of
value. He said Frost & Sullivan did a focus group and found that among people who use the internet but dont have
a broadband subscription, the main
reason was they dont use it enough to
justify a subscription. There is a large
segment of consumers who arent heavy
users.
He said the entry of new players
has encouraged people to evaluate
their options and to consider mobile
broadband as a replacement for fixed
service.
But right now they are willing to
wait. In the next one to two years, when
the overall value improves pricing and
quality of service become more compelling youll start to see low-volume users move to mobile broadband, because
it offers flexibility. Youll see pay as you
use packages.
He said operators need to go to the
15-20% users who are happy to use the
internet only at work and give them a
reason to sign up at home. TA
www.telecomasia.net
Telepresence panel
telepresence panel
THE CAST
Stephen Chau,
SmarTone Vodafone CTO
Christian Daigneault,
CSL CTO
Jayesh Easwaramony,
Frost & Sullivans director of ICT
consulting and head of telecom
research
Anthony Goonan,
Telstras director of
wireless fundamental planning
Lam Hon Kit,
Tata Communications senior
director of IP product management
and development, global IP and
VPN services
Tim Mark,
Cisco Systems senior manager of
strategy planning and business
operation, Asia Pacific service
provider operations
CD: Well, we have HSPA+ and allIP to the cell sites, and if you have fiber
or high-capacity microwave, theres
no bottleneck with the radio access or
backhaul. For the core, at this stage it
has been a bit easier to grow the capacity. There will come a point where you
want to simplify your core, but I dont
think the complexity is at this level today.
SC: I agree. In Hong Kong, theres
not as much concern about network
loading because weve already been
building up the network to accommodate the traffic to meet the broadband
need, not just the mobile usage.
AG: One thing that we found in
Telstra, because weve got a common
core for our 3G network and HSPA+
network, as we went through the speed
evolution, we would find parts of our IP
network that were in fact causing bottlenecks, and they werent exposed until the air interface speeds went up. So
there are bottlenecks within your core
that you just dont know are there, and
we need to look at how we can identify
those and remove those in a cost-effective manner.
Given all that, just how urgent is it for
mobile operators to migrate to a flatIP architecture with LTE?
CD: I think its a question of volume and throughput. And right now at
21-Mbps, I dont see it as a bottleneck.
There is the claim that with flat IP or
LTE, well get better 10-20 millisecond
latency vs the over-100-millisecond latency we have now. That would make
a big difference, but I think a lot of it
is due also to the LTE radio access and
NodeB.
AG: No ones going to pay the engineers to make it flat for the sake of bewww.telecomasia.net
you have to make sure those three different needs get aligned, and its a real
challenge.
Christian, does your CFO get the
economics?
CD: Yeah. [laughter] We have a CFO
and a CEO who is also a previous CFO,
so hes very focused on the dollars and
the business case. Our challenge on the
technology side is that we need to reduce
the costs, because thats the only thing
in our control. We increased our traffic
by 18 times in the last year, maintaining
the same backhaul. So we have reduced
our cost by 18 times for the backhaul. It
also means very strong negotiation with
our vendors. Vendors are coming with
all those claims of reducing costs by doing it this way. Very often you dont see
the cost savings. So you really need to
understand the economics of your network costs to be able to drive the costs
down.
SC: This is why, as a CTO now, I always call myself the most non-technical
guy in the company [laughter]. The reason is that I want to be even more upfront on the overall cost structure rather
than just focus on the technology, because theres a lot of factors that affect
the whole cost structure, not just the
stuff were buying. Its the whole value
chain and how we work together with
the international bandwidth provider,
the domestic leased-line provider they
have their own costs they need to adjust
as well. But my job is to make sure when
we build anything, we understand the
business rationale. TA
Telecom Asia Jan/Feb 2010 35
one-to-one
Beyond mobile
SK Telecom CTO Lee Myung Sung articulates his companys vision
for innovation and its pursuit to change the game
by Chee Sing Chan
Telecom Asia: Regarding SK Telecoms
commitment to what it refers to as
Blue Ocean strategies how is this
being developed and what specific
goals does SK Telecom have in this
regard?
Lee Myung Sung: SK Telecom was
one of the earliest players to introduce
music and financial payment services
and LBS. However, while these services
have not achieved the target financial
accomplishments that we had targeted,
we strongly believe that this is an industry that it is very promising with much
more potential.
What our CEO refers to as Blue
Ocean strategy is not only the convergence theme that we have always pursued but other areas as well. We believe
that telecommunications, especially
mobile, can contribute to enhance the
productivity of other industries as well.
SKT believe that by applying and utilizing its ICT infrastructure in Korea we
can enhance the productivity of businesses in various sectors.
Our new focus is not only to use our
mobile industry infrastructure but also
to seek areas that can enhanced the productivity of the businesses of a wide variety of areas and to use it actively, when
we go global.
How exactly does SK Telecom leverage
its ICT to drive further developments,
and within SKT what characteristics
are required to continually drive the
ability to innovate?
What really drives us is firstly to
maintain our leadership in our core
business which is the mobile business.
On top of that we must fully understand
our customer base as they demand difwww.telecomasia.net
increase our interaction with consumers. We are keen to use consumer interests and insight to incorporate into our
product development process.
I think were a very consumer-oriented company and to have succeeded
in this industry for this many years we
have definitely had to be effective in
listening to customers and have them
participate in the operations and development of the products.
If you look ahead to the next two
three years within your industry, what
do you predict to be the best game
changing shift? Is it going to be at
device or operating system level?
I honestly think in the immediate
future, concepts like Facebook we call
this direct e-commerce will have huge
influence on consumers especially in
the way we consume media and content.
Facebook users produce and consume
the way they want so that e-companies
like Verizon may have less impact and
less influence on the direction of services they must provide increasingly it is
the consumer that will decide and have
most impact on profits. TA
Telecom Asia Jan/Feb 2010 33
Cloud Computing
cloud computing
Cloud evolution
Nowadays, many of us use our email
archives as a primary record-keeping
mechanism, and our historical email
files are an important resource.
But what happens if the email files
are not backed up regularly? Whether
your primary email is a part of a corporate network or simply your personal
copy, odds are good that you have your
email set to delete the messages from the
36 Jan/Feb 2010 Telecom Asia
Tonsetic isnt alone in advising companies to tread lightly into the cloud security risks are created when companies
move sensitive information beyond the
limits of their own data centers. And, as
proven by a number of recent high-profile outages of cloud services provided by
Google, Microsoft and others, availability is a real concern.
Look at your portfolio of applications and services and decide which are
commodities, not core competencies,
Forresters Staten advises. Those are
your candidates for cloud.
hinas SaaS market is expected to grow at 56% next year to reach $171 million in revenues by the end of 2010.
A report from Springboard Research showed that demand for SaaS will
increase in the next two to three years and the growth rate will far exceed
that of the traditional IT industry, including the on-premise software market.
Springboards survey of Chinese enterprises indicated that three out of four respondents interviewed are already subscribing to SaaS solutions, while out of the
remaining, more than half are likely to subscribe to SaaS in the next 12 months. Also,
almost 100% of respondents in China reported being aware of the SaaS concept,
compared to only 52% last year. In terms of vertical industries, SMBs in retail, logistics, manufacturing, services and circulation report higher SaaS adoption.
The appeal and growth of SaaS in China are based on the advantages of SaaS
applications compared to traditional software such as lower upfront costs, easier
maintenance and quick roll-outs, said Devin Wang, business analyst for emerging
software at Springboard Research. We see aggressive demand for SaaS in China in
the coming months, as corporate IT budgets continue to be under tighter scrutiny and
enterprises look to hire fewer technical staff, he added. TA
Forum
l Charles Moon
Key drivers
For governments and regulators, issuing 3G licenses provides an opportunity to increase competition. The combination of providing greater broadband
coverage along with standard voice and
messaging services is enticing given that
it addresses two issues prevalent in most
emerging markets: low fixed-line broadband penetration and inefficient mobile
market competition.
In addition, allowing mobile operators to provide internet access services
through 3G networks immediately boosts
competitive pressure on incumbents,
since the trend toward fixed-mobile substitution can be leveraged with wireless
mobile broadband packages to provide
attractive bundles.
Furthermore, spectrum is used by governments to create new revenue sources
another major driver behind 3G licensing.
As 3G technology is repositioned from being suitable mainly for data-centric multimedia in developed markets to also being
appropriate for low-end subscribers and
mass-market business models, the value
of licenses in emerging markets will rise.
From an economic point of view, two
things are working in unison to lower operating expenses for carriers rolling out
3G networks. First, greater demand for
3G infrastructure is driving down prices,
particularly as global vendors work to
keep up with the price erosion caused by
Chinese vendors ZTE and Huawei. The
outcome is that depreciation costs decrease for operators, positively affecting
bottom lines.
38 Jan/Feb 2010 Telecom Asia
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2006A 2007A 2008A 2009E 2010E
telecomcareer
Contacting TelecomCareer
Advertising: Gigi Chan
Tel: 852 2589 1338 Fax: 852 2559 7002
E-mail: gigic@telecomasia.net
Editorial: Fiona Chau
Tel: 852 2589 1333 Fax: 852 2559 7002
E-mail: fchau@telecomasia.net
www.telecomasia.net
eventscalendar
Networking opportunities
across Asia
Date
Event
Location
Barcelona, Spain
Barcelona, Spain
Femtocells Asia
Singapore
Bangkok, Thailand
Bangkok, Thailand
Singapore
Singapore
CTIA Wireless
Convergence India
Singapore
Manila, Philippines
Taipei, Taiwan
Singapore
Beijing, China
Singapore
Singapore
Singapore
Hanoi, Vietnam
Music Matters
CommunicAsia/ EnterpriseIT
AppsXchange Asia
Singapore
Hong Kong SAR, China
Singapore
Singapore
For full details of the events, visit www.telecomasia.net To list an event, contact Candace Ho at cho@telecomasia.net
42 Jan/Feb 2010 Telecom Asia
www.telecomasia.net
PREshow
Turning vision
into action
ew technologies and
emerging developments
in the wireless world
are not the only focus of
this years Mobile World
Congress, as the event will also highlight
the benefits that the mobile space lends
to both society and the environment.
Adopting the theme Vision in Action, the 2010 MWC will have some
of the most sought-after experts in the
wireless industry discuss topics as diverse and specific as embedded mobile
broadband, LTE, femtocells and cloud
computing, side by side with more
sweeping issues such as new business
strategies and growth opportunities
driven by mobile.
Other key issues to be discussed in
the four-day conference and exhibition,
which will take place on February 15-18
in Barcelona, include new mobile applications, services and content, associated
business models and channels to market, as well as the benefits of mobile on
society and the environment.
Speaking at the conference are industry stalwarts Ben Verwaayen, CEO of
Alcatel-Lucent; Chang Xiaobing, chair-
www.telecomasia.net
man and CEO of China Unicom; Hans Vestberg, president and CEO of Ericsson;
Eric Schmidt, chairman and
CEO of Google; Guo Ping;
chairman of Huawei Communications; Tadashi Onodera, president and chairman
of KDDI Corporation; Csar
Alierta, executive chairman and
CEO of Telefnica; and Vittorio
Colao, chief executive of Vodafone.
The conference will allow
participants to hear what these
experts have to say about the
new device marketplace, mobile entertainment and lifestyle, mobile security, nextgeneration networks, mobile
advertising, m-health applications for universal healthcare,
and the move toward a sustainable green future.
To ensure that the mobile
industry will have a brighter
future, issues such as segmentation and pricing, compelling
customer service, mergers and
acquisitions, and network management and shared services
will also be discussed.
Event participants will be
treated not only to keynote sessions, but
also to more than two dozen conference
sessions spanning various technology
and business topics and led by industry
experts from all over the globe.
Apart from the conference, the 2010
MWC also features an exhibition of
more than 1,300 companies that will
display the latest products and technologies seen defining the mobile landscape of the future.
An awards ceremony will likewise be
held to recognize the industrys best.
insideline
l Robert Clark
Complex
Google learnt this last month
when it decided to sell its new Nexus
One phone directly to customers. The
reason for that is clear enough; Google
doesnt want to share the end-user with
anyone else. After that debacle Google
must decide whether it builds its own
customer care platform or works with a
partner that has one.
Smartphones are complex and
increasingly new customers are going
to need help. Apple has indeed been
fortunate in that cellcos are willing
to share their service revenues while
bearing the brunt of the customer care;
operators should be billing their partners
for providing that service.
Telcos keep missing these
opportunities and the reason they do
is because of the way they think about
their business. Theyre too focused on
networks and technologies. How much
senior management time is taken up
with talking about HSPA, LTE and
network operations?
Over the years theyve ridden fresh
waves of technology from voice to text
to mobile broadband and today theyre
still expecting some big new concept to
turn up that will ward off the dreaded
dumb pipe.
The concept operators really need to
embrace is the customer. That doesnt
mean reading the results of a focus
group. It means a business culture of
spending 24/7 in the customers shoes
and seeing the world that they see.
Telecom operators in the 21st
century are still structured around their
engineering operations just as they were
in the 20th century. Its time to offload
those networks and start focusing
creatively on the customer. TA
backpage
briefing
SpinVoxs crash to earth
In a rapid fall from grace, UK-based mobile software developer SpinVox was
this month sold for just $102.5 million to rival US firm Nuance, having been
valued at $500 million in 2008.
The brainchild of high-profile executives Christina Domecq and Daniel
Doulton, SpinVoxs claim to fame was that it had developed software for converting
voice mail messages to text or email.
Or had it?
In an embarrassing admission, Domecq was forced to reveal recently that SpinVoxs
system was only 85%-90% automated. Yes, in some instances, SpinVox was using people
in call centers to convert the voice-to-text messages!
Double Ouch. TA
Thais at it again
to launch Thaicom 6.
Oh, and while its at it, it says
it will launch Thaicom 6 only if its
current concession is extended by 15
years from 2021.
Such is the bureaucratic red
tape weve come to expect from
Thailand. TA
www.telecomasia.net