How will TV transform in the next 8 years?

Fast forward to 2020. What will “watching TV” be like then? How will we consume television content – what devices will be best suited for consuming TV 8 years from now? And what might the commercial business models for TV content production, distribution, consumption and interactivity look like? Are we heading towards a scenario where almost all content becomes on-demand, and the concept of channel surfing becomes obsolete?

In order to get a better feel for the future direction of TV, let’s first align our understanding of TV of the past.

Past TV Models & Consumption

The experience of watching moving pictures with audio on a small box in our living rooms has evolved from a basis of using different analogue frequencies to separate content types across several channels. We “tuned in” to discover these new channels and content, and in so doing became socially conditioned to believe that the concept of using channels was the most efficient way to bundle similar content and cater for the tastes of a diverse market of demographics.

In this linear-broadcast world, we timed our lives around the network’s broadcast schedules. In the 80’s and 90’s, prior to the advent of the Internet and other media consumption devices, “plain old TV” could command nearly 100% of our evening attention-spans. Channel surfing offered an escape to “lean back”, flick through what was showing until you landed on a channel worth watching. Advertisers had a captive audience – the only way you could escape the clutches of an in-programme commercial was to leave the room, change or mute the channel – there were no alternative distractions available. In these times, advertisers made the absolute most of our attention spans to cram as many commercials into the additional 9 minutes for a 30-minute TV show, or 18 minutes for a 1hour TV show. Everyone remembers their favourite TV adverts from the 80’s and 90’s.

VCR’s provided the first magical experience of controlled time-delay and a sense of “content ownership” to consumers. People found that using a VCR allowed them to bend the rules of how networks dictated their TV-viewing schedules. The home video entertainment market took off as consumers bought into the convenience of watching movies in their own time while at home. VCR’s eventually gave way to improved technologies such as DVD and Blu-Ray, whilst PVR’s have provided an even greater flexibility to re-arrange their TV consumption habits to suit the evolving changes in their recreational lifestyles.

In essence, through the 80’s, 90’s and 00’s, the general TV-consuming public has evolved with technological advances around the TV broadcast model (VCR’s, DVD, PVR, Blu-Ray, Home Media Extenders), whereas the TV broadcast model has arguably remained static: one-way, linear delivery of TV content on the broadcast network’s terms.

The Changing Habits of TV Today

But somewhere between 2007 and 2009 we passed a threshold that, in hindsight, has been the catalyst for dramatic change in the accessibility, storability and usability of high-quality digital media content. In that window of time, the following 5 technology streams converged:

  • PCs: became more available and more affordable with enough core central processing power to be able to transcode high quality source video in manageable amounts of time
  • Storage: increased at a phenomenal rate. 40GB hard-drives soon gave way to 80GB, 120GB, 160GB, 320GB and 500GB drives. Nowadays, buyers only really look at a minimum of 2TB drives as being useful, with 4TB drives now emerging.
  • Telecommunications Networks: continue to get faster, both in terms of mobile & fixed technologies, with high or unlimited monthly data quotas and high-speed throughputs, combined with increasingly affordable data tariffs.
  • Open-Source and Social: has revolutionised the “reach”: the sharability and distribution of content through social media communities and p2p technologies continues to rise exponentially, with forums and software development groups constantly releasing tools to manipulate digital media.
  • Devices: between smartphones, tablets, game consoles and connected TVs, the ability to share and consume media across multiple formats and devices is easier than ever before: desktops, laptops, connected TVs, smartphones, tablets and game consoles.

The intersection of these five areas unleashed an intensely disruptive wave across the TV and entertainment industries, insofar as empowering consumers to be more selective over the content they want to view, share, store or discard. Irrespective of whether TV content is accessed and consumed through commercial media streaming services (e.g. Netflix, Hulu), or whether TV content is accessed and distributed through alternative legal or illegal means, i.e. community-driven, self-organised peer-to-peer groups, the demands are the same: consumers want greater control over their content consumption habits.

Take the HBO-exclusive TV series “Game of Thrones” (GoT) as an example: currently the most downloaded TV series outside of the US, with a figure of 3.9m downloads vs. 4.2m TV viewers on HBO (Source: TorrentFreak, May 2012). An incredible ratio to comprehend; one could argue on the one hand why HBO hasn’t explored means of monetising the obvious demand for their product that exists beyond their cable TV subscription, while on the other hand it may be precisely because of the exclusivity that the pent-up demand outside of the US exists in the first place. The GoT example is a strong representation of how the rest of the world demands and consumes US-centric TV and digital entertainment content vs. how US networks still continue to hold control over domestic accessibility.

A major consequence of the US’s control over domestic TV & entertainment content has an indirect influence over the changing TV habits of the international audience. While US audiences may still have the “privilege” to be the first to watch a new TV episode of a series, the downside of that privilege is that because new episodes only air once a week, there is a 7-day waiting period between episodes, and the live episodes are punctuated with TV commercials. The typical US pay-TV consumer has thus become accustomed to “multi-tasking” their TV consumption by watching several different shows in parallel. US TV Networks continue to push this model as a means to hold onto the legacy social conditioning from the channelised days of analogue TV.

By contrast, the international audience has increasingly become accustomed to consuming TV series a “season” at a time. The main drivers for this change of viewing habit has come from the availability of TV series as DVD “box-sets” as well as the availability of entire seasons of TV in high-quality HD format. It is more engaging to devote one’s limited time to consuming an entire 24-episode season of a TV series in a weekend, or during weeknights over a period 1-2 weeks, than having to spread one’s attention across multiple TV series simultaneously and constantly recap on the plots. Many local pay-TV satellite providers offer “On-Demand” or “Catch-Up” TV functionality with their PVRs. Many consumers concur that episodic TV series content is better suited towards watching on-demand than to be broadcast on a weekly basis.

So what content is left and still has a place for live broadcasts? Only two categories: live sport, and live, breaking news.  And it has to be live, breaking news that demands immediate, “stop-what-you’re-doing” attention: natural disasters or events that affect national security for example. All other news, by the time it is broadcast in an evening news show, is already outdated. Twitter has already seen to that. How many people have the time to sit down at 7pm every night to watch a news broadcast that recaps the day’s Twitter feed?

These two categories of live sport and live breaking news share a commonality in that they both lend themselves towards people “sharing an experience” of watching something together. Whereas a TV series, a movie or a documentary might be better suited towards the personal experience, watching live sport or watching live breaking news alone can be somewhat isolating. For movies and TV series, the shared experience is better in the pre-watching or post-watching phase of media consumption, whereas for live sport and live breaking news, the shared experience is better during the consumption – fundamental human nature.

This has an implication for how TV networks and content creators need to think about distributing their media in future. Smartphones and iPads are ideal mediums for consumers to catch up on TV series content, movies, documentaries, music videos in their own time. This multi-screen aspect of content consumption is commonplace: being able to consume TV media content in multiple contexts: from the TV in the living room, to an iPad in the bedroom, to a smartphone on a bus or train. The combination of broadcast, streaming, side-loading and mirroring of content across an ecosystem of multiple consumer devices creates a challenging number of new scenarios for TV content and producers to exploit.

Future Trends of TV & Entertainment

Several important trends continue to intersect and are likely to create further disruptions to the TV landscape in the medium term:

  • Connected TVs: HD LCD and LED widescreen TVs continue to infiltrate top-end markets and filter down to middle-income markets as well. A “connected TV” comes with built-in Ethernet ports, WLAN support and USB connectivity, many of them with up to 1GB of storage for downloading and installing applications: Samsung and LG are leading the way here. Connected TVs allow streaming of media over local home networks offering a convenient way to bypass broadcast network channels. With little effort, one’s entire home media library can be organised and categorised with full metadata. Again, all this activity is currently happening at the “network edge”, but the opportunity for TV networks really lies in the network itself…
  • Self-Organised Communities: are currently organising and cataloguing the world’s media library. If one knows where to look, it is possible to source almost every movie and TV episode that has ever been broadcast in the history of broadcasting. Media communities are so well organised, that the experience of sourcing content “illegally” is more user-friendly than the legal options available. This disparity, where content is collected at the network’s edge, indicates a market ripe for radical disruption. What Apple’s iTunes did for organising the world’s music is what is needed now for the world’s film and TV content. TV networks are sitting on a goldmine of back-catalogue content that can be organised into accessible on-demand libraries and made available for streaming access to an international audience. Content that is 20-30 years old should be as accessible and on-demand as content broadcast in the past 20-30 minutes. Networks themselves must transform to become the giant cloud-based PVR’s of the world’s content.
  • Moving Beyond Channel Bundles: the concept of seperate “channels” is prehistoric. Separate channels made sense when technological limitations meant that simultaneous broadcasting of content was the only means of distribution. The advent of time-shifting PVR’s and online, on-demand streaming media have made the simultaneous aspect of broadcasting obsolete. Of all the TV content on all the available channels, how much content is actually relevant to each individual consumer? TV networks cannot afford to only push content into wide demographic blocks, or channels, any longer. In future, consumers will dictate what content they want, when they want it, and on what device they will consume it. TV network ratings assigned to television series will need to factor in many other variables beyond simple channel selection in order to get the true visibility of a TV show’s popularity. Social TV, and real-time Twitter interaction during TV content consumption using apps such as IntoNow, will emerge as the true measure of a shows popularity.
  • Advertising Must Entertain: in the days when TV broadcast networks could hold TV audiences captive during their linear broadcasts, consumers had no option but to sit and endure through TV commercials. Today, it is likely that less than 50% of kids under the age of 10 even know what a live TV commercial looks like – because they’ve never seen one. The TV viewing environments in their households are most likely setup with a combination of PVRs, Blu-Ray players, Game Consoles and Media Streaming Extenders that effectively mean almost all the content is consumed on-demand. Advertisers that still target ad insertion into primetime TV are increasingly missing out on target demographics. The most effective response for advertisers is to shift their messages into the on-demand realm, but to do this, the target demographic must want to watch the commercial. And as we’ve learnt, for that to happen, the TV commercial needs to go “viral”, i.e. spread across social networks, so that it reaches its audience across a multi-screen environment. And that only happens when the TV ad offers entertainment value.
  • Content Creation Decentralises: some of the best creativity in film and TV content creation today is happening on the Internet: big studios are seeing intrusion from the art of crowd-sourcing and online distribution. Typically, studios make TV and film content and then look for a distributor, however this traditional model is being upstaged by the community-driven approach of the Internet. Movies can now be made on lower budgets, and post-production skills are being in-sourced on demand to handle the video, audio, effects, editing and distribution. Advertising models are shifting from being “inserted” into content to becoming the “wrappers” around content distribution. The power of content creation, distribution and consumption is shifting to the consumer, especially in the area of independent filmmaking. It is likely that the “big name” studios will still dominate the “summer blockbuster”, high-profile, effects-intensive space, however will see far more competition in story-oriented drama feature films from the independent communities.

Looking ahead, at least for the rest of the decade, expect a wave of radical innovations to appear in this space. The question is whether those big players currently in the game are ready to reinvent their business models to fit the new demands of consumption, or face irrelevance by the time the decade is out.

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Are mobile network operators losing the battle for subscriber ownership?

Is the network operator-owned SIM card the final frontier in the battle for ownership of the subscriber relationship before we will see a truly globalised network of virtual network operators (VNOs) emerge? Just what is the potential impact of the combination of handset manufacturers, application ecosystems and alternative network options on the traditional network operator business model? And how might mobile network operators (MNOs) change course as a result? This post looks at a few key trends that are defining an interesting future scenario in the mobile telecommunications space.

A future of communications choices for subscribers

In previous posts I touched on the impact of some core trends in the mobile telecommunications industry, particularly in the areas of smartphone penetration, pervasive application downloads and the rise of VNOs. Now, those trends are even more prevalent, especially since we’ve seen more VNOs enter the global market, greater advances made in smartphones, and a maturity of the global application ecosystems around iOS and Android.

A quick look back in time: 10 years ago, circuit-switched voice was the main reason for having a mobile device and fixed networks were unfashionable. Since then, packet-switched mobile data has seen tremendous growth both in terms of coverage and throughput, but since the introduction of the Wi-Fi feature in smartphones, mobile networks have also experienced an increasing amount of data traffic being offloaded to Wi-Fi access points. Fixed networks with Wi-Fi last-mile connectivity are now back in fashion, often handling the full mobile device data requirements for a family household, a coffee shop full of customers, or a hotel full of guests. When a subscriber’s mobile voice and mobile messaging needs are handled more efficiently and cheaply by a fixed-network operator, a significant market disruption has occurred.

With so many additional options for connectivity and communications beyond just the mobile network operator, there is a fierce battle going on for subscriber ownership. And one that, if current strategic directions are still followed, looks to be a losing one for mobile network operators, unless they can find ways to disrupt their own business models before it’s too late.

Communications service providers don’t need to own physical networks

By communications service provider I refer to any entity that enables communications: be it an application or a network. The trend for subscribers to use alternative voice service providers, downloaded as smartphone apps is more compelling than ever before. The computing power of today’s latest devices, coupled with constant improvements in voice codec efficiencies, means that a user choosing to use a mobile VoIP service provider instead of a mobile network operator’s equivalent voice option receives close to the same quality of service for a far cheaper price. This is a foundational premise: networks will always get faster, and VoIP quality will always get better. Where does that leave a mobile network operator’s traditional application bundle of circuit-switched voice and SMS?

Think about a device such as an iPod Touch. Essentially, with a VoIP client loaded on it, this device is simply a SIM-less mobile phone with full voice calling (Skype, amongst other options), video calling (Facetime) and text-messaging (iMessage, Whatsapp) capabilities. In future, there will be countless other Wi-Fi-only smart devices out there that will have the ability to communicate without the need to source connectivity directly from a MNO. There are already examples of innovative start-ups that have identified this gap: VNOs such as Republic Wireless in the USA is an example of an early market mover that offers “unlimited” communications services using a network of Wi-Fi access points. When out of Wi-Fi coverage, the Republic Wireless device “falls back” to Sprint, but this is not transparent to the average subscriber, and doesn’t need to be. These types of VNO services are an early signal of a future where a communications service provider brand and its underlying network technology may one day be two separate commercial entities.

Shifting the MNO brand to mobile – the first step

MNOs that have not already released mobile applications that encapsulate their offerings risk losing touch with their customers, or worse still, losing their customers completely.  And beyond just applications, the bigger, longer-term picture is that MNOs will have to re-invent their offerings as a VNO: offering a cloud-based equivalent of their services, manifested as a branded smartphone application experience. To remain relevant in future, the MNO must also able to follow their customers around where ever they may roam in the world, and at a price point that makes them more competitive than the over-the-top alternatives.

Without at least having a smartphone app front-end to a holistic set of cloud-based communications services, the network operator’s brand risks being forever attached, or associated by perception, to its physical infrastructure. In effect, this roots the brand’s influence to a limited geography, and worse still, a subset of SIM-card based subscribers within that geography. Meanwhile, the cloud-based communications services that MNOs today are competing with have no such territorial limitations. It hardly seems a fair playing ground, but it is the reality. The situation looks even more ominous for MNOs if the current trajectory of device manufacturer brands becomes even more powerful

Device manufacturer brands are defining the customer experience and choice

So strong are these brands, that today the typical thought process for a subscriber deciding on a new device probably goes along these lines:

Device brand/OS/apps eco-system  –> Pricing Plans –> Network Operator

Today, it is the device brand, OS and apps eco-system that are top of mind as the main criteria a subscriber considers before purchasing a new mobile communications contract. This selection process is as a result of the incredible real-time reach of the brand marketing, product launch anticipation and product awareness of the major device manufacturers, particularly Apple & Samsung. So powerful are the global influences of these brands, coupled with their application eco-systems (iOS Appstore & Android/Google Play), that individual operator brands are simply dwarfed in comparison.

The only decision criteria left to consider by the time the choice of network operator is reached is the price/subsidisation of the handset, the price of the services, and then the coverage/quality/care aspects of the particular network operator. Even the “two-year” contract with handset subsidy is under threat, as device manufacturers shift into annual updates of their most popular handsets and tablets. These product refreshes build to such stratospheric levels of hype, that many subscribers are prepared to pay cash to upgrade their handsets before their two-year network contract is even completed.

Will Apple & Google become the “least cost data routers” for the world’s data traffic?

Consider the following scenario:

What if the major device manufacturers became so dominant and powerful that users of their products started to refer to themselves “Apple subscribers”, “Samsung subscribers” or “Android subscribers”. Device manufacturers with such efficient application eco-systems, already hooked into user payment reconciliation systems, with accessibility from any network anywhere in the world, puts them in a position to bypass network operators and build on the direct commercial relationships with subscribers. The next wave of devices could “opt-out” of using the SIM card, and just generically connect to the device manufacturer’s service portal (similar to the Amazon Kindle model). The end user then selects a voice/data tariff plan and simply buys it from the app store, irrespective of what network the device is connected to.

What if they then start acting as “least cost data traffic routers” for their customers? In other words, the device manufacturers take on the role of a “data intermediary” or “mediation broker”, buying airtime and data access bundles in bulk from global network operators and selling these as products through their appstores? End users would be spoilt for choice, able to select the best airtime deal for an immediate upcoming call, or an unlimited data bundle for the next two hours, or a monthly iMessage package, and not have to care about which network provider’s infrastructure they are connected to.

In a world where the mesh between Wi-Fi, GSM, 3G, HSPA+, Wimax, LTE and LTE-Advanced is increasingly more interconnected, this model not only removes the complexity of network selection from the end user, but promises a highly competitive marketplace. A wholesale auction engine could be constantly selecting the best network service deals for users, in the background, in real-time. In future, these auctions will be automatically negotiated by artificially intelligent representatives from each network operator bidding to provide the best services and the best prices at the best places to customers all over the world.

“ARPE” is the new ARPU

What are two implications for MNOs faced with this scenario?

MNOs might have to give in to the realisation that users with communications devices are not their exclusive territory anymore. This leads to the first key realisation that their revenue stream from their subscribers, traditionally measured as ARPU, will need to be supplemented by revenue streams from eco-systems, measured by “ARPE”. ARPE, or Average Revenue Per Eco-system, will in future represent the wholesale revenue of an operator’s circuit-switched voice airtime and packet-switched voice, messaging and data bundles made from sales through the eco-systems of the world’s major device manufacturer application stores.

Secondly, MNOs will be forced into a situation of extreme focus: either services (cloud-services) or infrastructure (bit-pipes). Offering both will be limited only to a few multinationals with the resources to control both services and access services, but for the majority of MNOs, the route to long-term survival starts with being the best at coverage and data capacity in order to win the real-time bidding wars that future eco-system owners will run on a global scale.

See how ConnectedFutures can help your organisation develop scenario plans by expanding on the thoughts and ideas put forward in this blog post. Visit the ConnectedFutures website.

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How much longer until you can download your preferred Mobile Network operator from an App Store?

It’s not as far-fetched as it sounds… downloading your preferred Mobile Network operator as an application is closer than you think.

Over the past 5 years alone we’ve witnessed an incredible shift in intelligence from networks to devices; a shift in the “VAS Intelligence Curve” if you will, from networks with legacy Value Added Service enablers towards smartphones with incredible display technologies, processing power and storage.

Once, the mobile network was the WHOLE phone. Now, at most it is simply a “phone” or “call” icon lost amongst hundreds of other icons on the phone’s desktop. Smartphones have ruptured the classic VAS applications from mobile networks – effectively detaching them from the mobile network and placing them on the desktop of the device.

The basics remain the same:   voice & text messaging are still the most-used mobile apps, however applications that once needed the classic bearer technologies (GSM digital circuit-switching and SMS via the signalling channel) are now replaced with applications running over a meshed IP network topology, a mix of 3G, HSPA, fixed & WiFi networks, providing a vastly improved customer experience for end-users.

The majority of end-users are not overly concerned with the underlying technology of the network they are connected to – they are only interested in the service experience, i.e. the network must simply work, it must be fast enough for the application that needs the network connection, and it must be affordable.

Mobile Network Operators must make their brands relevant in the mobile space

With application competition fiercest at the device layer, i.e. at the smartphone OS,  mobile network operators are yet to make a major play in terms of retaining their status as the preferred provider of messaging & VAS services, by packaging their services into a hybrid, downloadable smartphone application, with all traditional VAS services provided over IP through the client application.

The effect of smartphones is so drastic that the mobile network operator’s entire applications offering of 5 years ago (Text Messaging, Multimedia Messaging, Voicemail, Internet Browsing & Search, Location Services) which traditionally would have been provided by VAS platforms located in the operator’s network, has now been replaced by a single downloadable application client, typically under 1MB in size.

IP-based text messaging through BBM, Fring, Skype, Whatsapp allow end-users to send a far higher number of conversational-mode messages over IP at a much lower cost than SMS. Photo sharing, video clip sharing, audio clip sharing and location sharing is integrated into the IP messaging client, and provides first-time delivery as opposed to a typical inter-operator MMS experience. Advances in the processing power of end-user devices and improved network speeds have all but written off the need for standalone network-centric internet gateways. Search engines offer downloadable desktop clients. Voicemail messages are now captured and stored locally on the device. Combinations of GPS & A-GPS as standard features in smartphones have sparked a number of innovative cross-network location client apps that would not otherwise have had the same service uptake if limited to simply one mobile network operator environment. VoIP over mobile data networks using SIP-based or p2p voice clients have reached a maturity level in terms of QoS that makes it acceptable for most end-user requirements.

A Mobile Network Operator’s competitor’s subscribers are now reachable: Over-the-Top

The bottom line is clear: mobile networks operators no longer have exclusive ownership of their subscribers. The good news is that this means that neither does their competition – effectively opening up an opportunity for any mobile network operator to target it’s competitor’s subscribers with its own over-the-top services.

For example,  a downloadable mobile network-branded application that incorporates a VoIP telephony client and IP messaging suite and gives the end-user preferred/personalised roaming data tariffs could potentially be offered not only at a mobile network operator’s own subscribers, but to any end-user. A supreme customer experience could be achieved if the application also included network discovery – removing the need for the end-user to search for and authenticate on any available GSM, 3G or WiFi network – let the app do that in the background and charge the user for the service only.

Network operators are in a position to innovate in the area of charges and tariffs related to network usage – all other internet and cloud-based OTT service providers make network discovery the end-user’s problem.

We now start to get into an interesting area – if it is possible for network operators to encapsulate their entire communications service portfolio into a single, downloadable client, then it’s a logical next step for network operators to go completely virtual, and not be limited to the coverage, speed and quality of their own physical networks. This is a radical shift in thinking and might only gain traction within the next decade, but all the signs point to a world of completely virtualised MVNOs offering network and geographically-independent communications and entertainment services.

SIM cards will not bind end-users to their network providers forever

If an end-user can select & download their choice of over-the-top voice and text messaging providers, then understandably they should be able to go the whole way and download their choice of network provider as well – depending on their needs, be it based on roaming location, preferred messaging features, tariff models or any other criteria. In other words, the geographic location of an end-user should no longer be a limiting factor in their choice of network provider.

The question is HOW would this work, in a world that’s dominated by one key aspect: the SIM card.

An end-user’s SIM card currently binds that user to a fixed physical mobile network, effectively tying that user down to a contract with that network operator, complete with all the frills of bundled circuit-switched minutes, SMS text messages, Itemised Billing and the like. Smart smartphone users currently feel shackled by these constraints, looking for any opportunity to break free into an open-networked world, where choice isn’t limited to a 1 or 2-year phone upgrade cycle dictated by their network operator.

In the future, a SIM card is not going to be enough to bind an end-user to a physical network. We see it already happening today: smartphones and tablets can connect to WiFi networks without SIM card identification, it’s simply a matter of time before software-based SIMs and SIM-less devices become ubiquitous – the first step towards liberating end-users from being tied down to a physical network.

Understanding that this change is on the horizon is critical for mobile network operators to understand TODAY… and take pre-emptive strategic actions to ensure their sustainability well into the next decade.

Competition and service differentiation moves to the cloud

In a future world where telecommunications end-users have free will, customer experience is king. Most end-users only ever have contact with the UI of the services they consume, with the complexity of the networks hidden below the IP layer.

Today’s smartphone end-users are realising that there are services and applications on offer from Internet-based companies that stretch far beyond what their mobile network service providers currently offer, and this trend is set to continue strengthening as more smartphone devices and tablets penetrate the high-end markets and filter down to the low-end markets.

In order to meet the needs of this next generation of end-user demands in a world full of OTT providers,  traditionally-organised mobile network operators will start detaching their services business unit from their network and engineering units, effectively becoming MVNOs on their own networks.

This is simply the first step towards expanding the applications & services offered by an MVNO to a target market beyond simply their SIM-based subscribers. A true cloud-based MVNO will deliver services and applications independent of the network that the end-user is on  – even if the end-user is on a competitor network – the makings of a mobile network-centric OTT business model.

In this new world, brand loyalty and the best deals of the day will reign, consumers will go for trusted brands and services, and expect to select from an array of communications deals on a monthly (if not weekly , daily or even hourly) basis.

Physical networks become commoditised, as OPEX optimisation drives efficiency

Building and rolling out mobile networks continues at a relentless pace, but as more and more mobile networks services units detach and become MVNOs, the physical network layer opcos will start to consolidate and mesh together in a connected series of interoperable data connectivity agreements.  The network operators functioning in the physical layer will play a crucial role in carrying the massive amounts of data generated by the MNOs that have moved to the cloud-based services layer to become MVNOs.

The result will be a mash-up of fixed & mobile access networks, comprising of WiFi, GSM, 3G, HSPA, LTE, fixed ADSL, fibre and cable networks  being managed by a conglomeration of mobile network operations units and telecoms vendors. The physical network operators will become pure (but happy) bit pipes, looking to differentiate from other physical network operators in a B2B context in areas of network coverage, data throughput, network latency and QoS.

A B2B relationship between the physical network operators and the cloud-based MVNO’s will emerge, with the transactional usage of end-users being reconciled from the MVNO’s towards the physical network operators. End-users will have a B2C billing relationship with the MVNOs, while the MVNOs themselves will have a B2B billing relationship with the physical network operators.

Some MVNO’s might tie up in exclusive partnerships, leveraging their unique differentiators such as content partners, or perhaps local, regional or community-based specialised services.

Future versions of the work that the Wholesale Applications Community (WAC) is pioneering could evolve to become the standard API between the physical layer network mesh and the cloud-based MVNOs.  It is a positive cycle – the more operator services units detach into the cloud and become independent of their physical networks, the more physical networks there are to consolidate into the mesh, the more choice & network quality becomes available to end-users of the growing number of MVNO’s in the cloud.

Apps will be the frontends for cloud-based MVNOs

When an MVNO operates in the cloud, and with a vastly improved choice of network connectivity options available end-users, the focus is purely on the user’s interface to the applications and services, which can only lead to a superior customer experience. Consider the impact on end-user experience when no matter what network that user connects to, be it local or foreign, they pay the same price per megabyte, or even better – the user is charged for the value of the service package, irrespective of the data usage.

In order to get maximum reach to the user’s device desktop, MVNOs will need to distribute themselves through the existing App Stores. Imagine, as an end-user, arriving at Heathrow Airport and then browsing through a catalogue of MVNOs on the Android Market, Apple App Store, Nokia Ovi/Services Store or a WAC front-end store, shopping for the best VoIP/IP messaging airtime bundle on offer from an MVNO for your week’s stay in London?

Downloading an MVNO as an app on an end-users smartphone achieves two things:

1)      It places the MVNO’s brand right next to the icons of all the other OTT providers, including other MVNOs, that are already on the user’s smartphone desktop;

2)      It opens up a communications channel directly to the end-user, which, if used correctly, will become an incredibly powerful marketing and mobile advertising tool for the MVNO

Mobile network operators could go as far as creating special bundles, e.g. special discounted packages such as “100 minutes of VoIP” , upload it to the app stores and then use notifications services and push technologies to invoke the MVNO app on the smartphone desktop to promote the bundle to the end-user. This could spark a new level of hyper-competition between network operators with the battleground taking place at the App Store level and the smartphone’s desktop.

Exclusive time-window or territory-based partnerships between MVNOs and content providers will enable MVNOs to differentiate their offerings and tie in communications and entertainment options into attractive service bundles.  Similarly, some MVNOs could tie up exclusive QoS or priority data-shaping agreements with the physical network operators to offer to end-users at a premium rate.

Customer Experience Management in the new world of multiple MVNOs

With end-users spoilt for choice, MVNOs can expect customer churn rates to increase exponentially. “Partial Churn” will become an industry catch-phrase, used to describe end-users that source their voice services from one brand of MVNO, their messaging services from another brand and their media & entertainment services from an array of OTT content providers. While multiple subscribers will churn out of an MVNO’s service offering on a daily basis, so too will multiple subscribers churn in.

The typical customer lifecycle of Awareness, Buy/Try, Use and then Care will rapidly compress from the order of a couple of years to months to weeks to days.  End-users will constantly dip in and out of multiple MVNO offerings, always on the lookout for the best deals to be had – and all of this activity will take place at the network’s edge: the smartphone.

The winners in this new world of multiple cloud-based MVNOs competing with OTT players will be those that can adapt their business processes fast enough to keep up with the needs of this new breed of subscriber in terms of service package flexibility & payment, customer self-care clients, roaming service selection and exclusive content partner deals, to name a few areas of differentiation.

One thing is clear: the end-user’s power to choose continues to grow unabatedly with the proliferation of smart devices, the question is whether the entire telecommunications industry is ready to adapt to the new rules of the game.

Posted in Applications, Convergence | Tagged , , , , , , , , , , , | 9 Comments

First-hand Experiences of watching a FIFA World Cup Game in 3D

Having attended some live World Cup games at the Moses Mabhida Stadium in Durban last month, I was intrigued to see several of the eight FIFA 3D cameras and equipment placed at various points around the pitch. These first-generation 3D cameras appear to be much larger and wider than the normal HD cameras, most notably to house the stereoscopic 3D lenses. Most interestingly, the 3D cameras were placed at very unusual locations, typically not where you’d expect them to be, so it got me wondering what it might be like to actually watch a full 90-minute game in 3D.  It was an easy decision therefore to take the opportunity over the weekend to view a live 3D broadcast of the Germany vs Argentina World Cup Quarter Final at a Ster Kinekor movie theatre in Pretoria.

Here are some first-hand observations of that experience and some thoughts on where the future of Live 3D Sport Broadcasts could be headed:

The main 3D camera angle is lower and closer to the field

The football-viewing public expect to watch a game from a certain camera-angle height from the midpoint of the field, as we have become mentally conditioned to this angle over many years of 2D football broadcasts. 3D changes that. The first thing you notice in the 3D broadcast is that the camera angle is MUCH lower to the field of play.  It’s as if you are sitting just above the tunnel, right behind the player dugouts. This immediately brings you closer to the action, making the whole experience much more intimate.

The game moves from a distanced viewing experience to an immersive, participative experience

I could count six pitch-level 3D camera angles: two either side of the goals on both ends, and one each between the halfway line and each corner flag. I assume the other two cameras are in the grandstand. The ground-level angles were frequently used, the net effect of this is being that it places you straight into the action, as if you are a player – as if you are actually running on the field yourself. The realism is phenomenal, there were times that you felt it possible to actually reach out and touch the players, or even worse – touch the ball (although this seems acceptable given the last-minute antics of the Uruguay vs Ghana game). In 3D, you can even notice the undulations of the pitch – for example, when watching a long pass between two players at ground level, you notice the rise and fall of the ball as it disappears over the grass – an incredible sense of immersion. In one moment when the field-level camera was in use, Diego Maradona rushed into the Argentinean technical area and it stood right in front of the 3D camera; it felt natural for the entire viewing audience to bend their heads around him to follow the action on the pitch behind.

It feels like you’ve watched a different game than to the one on normal TV

Since the 3D broadcast uses different cameras positioned at different locations to that of the 2D broadcast, you come away from the experience with the feeling that you’ve actually been AT the stadium. It’s as if you’ve almost watched a different game – like when you watch a game live at a stadium and then see the TV highlights, it always the ‘live moments’ that you remember better.

Overlay Screen Graphics are used with striking 3D effects

In 3D, the standard graphic overlays suddenly come to life, but without being intrusive. The graphics for the team line-ups, substitutions and the score bug in the top left of the screen hover neatly in front of you in crystal clear clarity, and coupled with the long-distance shots of the stadium and Table Mountain in the background, provide a striking sense of depth to the experience.

However, there were one or two issues that still highlighted that this is a technology in progress. Not showstoppers, but improvements are needed nonetheless:

Fast camera-panning doesn’t look good in 3D

Fast-paced action, especially when the main 3D camera view is required to do a fast cross-field pan to follow the ball, creates a distracting jerkiness and stuttering to the visuals. As soon as the camera stops moving however, the jagged edges disappear and the visuals settle again. Somewhat off-putting at first, however not enough to detract from the overall experience. But frame-rate and stability are definitely an area still to be refined it would seem. In fact, some of the most enjoyable 3D moments were the set-pieces and free-kicks, when a wide-angle static 3D shot was used to capture the action in its entirety, with very minimal zoom or frame cuts, giving the viewer full control in deciding what part of the action to focus on. These moments, when practically 21 out of 22 players were in the same frame at the same time, made for great 3D sport.

Audio commentary feed is not the same as 2D

Perhaps just a minor point, but the commentary for the 3D game is not the same as for the 2D game. Although the commentator was very competent, it was immediately clear that he was only commentating for the 3D audience when he made mention of this fact several times during the game. Not sure exactly what the reason is for having a separate 3D commentator – could have had something to do with the rights to re-broadcast the live feed, however this was not a significant problem during the game.

Visuals are slightly darker than normal 2D

Probably as a result of the polarised glasses needed to experience present-day 3D video, the net effect of watching the live game in 3D is a somewhat darker image than normal. This is noticeable at first, but your eyes quickly adjust and you are soon pulled into the action. Perhaps the 3D live feed brightness level could be boosted slightly further before the broadcast goes out.

So having experienced a full 90-minutes of football in 3D, there is certainly a massive potential in this technology for future live sport broadcasts. Football is a superb match for 3D technology, and I can imagine that so too could tennis, golf, rugby, motor-racing and cricket all provide a sense of absolute immersion into the sport.

But what might 3D sport look like in the future? Here are some ideas:

Viewer-selected 3D Cams – as of today there are apparently eight 3D cameras used per FIFA match, which already provide an outstanding immersive experience. However, the nature of a 3D broadcast means that only 1 of the 8 camera feeds are in use at any one time. With network and broadcast capacity increasing all the time, it won’t be long before some innovative hybrid TV/telecoms operators start offering choices of ‘camera channels’ to their subscribers, giving them full control of what part of the game they want to focus on.

Beyond that, supplementary 3D feeds from the game can be offloaded to an IPTV network and delivered in parallel to peripheral devices such as high-res smartphones and iPads, providing a fully augmented 3D viewing experience. Subscribers will have fully individualised live sport experiences unique to their own viewing preferences.

Meshed 3D – it won’t be long before 3D camera costs fall and more cameras can be deployed around a stadium. Imagine twenty 3D cameras placed around the field. Or even fifty. Taking the viewer-selected 3D cams a step further – technology already exists today to mesh multiple camera feeds in real-time into a ‘mash-up’ of the sporting event, which then allows a virtual camera to fly, pan and zoom around the mashed-up stream in multiple possible angles and dimensions. Players are simply ‘clicked on’ and the virtual camera automatically zooms to follow that player around the field.

Extrapolate this level of control to the telecoms world and subscribers will soon be able to use their touch-screen devices to personalise their own meshed 3D live sport experiences.

Player POV 3D Cams – imagine when 3D cameras become so small that they are integrated into the front-facing belts or shorts of key players on the field? Imagine a Messi-cam, or a Ronaldo-cam, or a POV goalkeeper cam with the German strikers running towards your goal at high-speed… then add these POV 3D cam views into the Meshed 3D experience and live sport will never be the same again.

With only 4 games left of the 2010 World Cup, it effectively means only 4 chances still available to experience a LIVE 3D sporting experience of this magnitude – I can highly recommend taking the opportunity to go and see the future of sport broadcasting.

Posted in Entertainment | 2 Comments

A Look Back at How Apps Have Shifted from Networks to Phones

Been giving some thought recently to how the proliferation of packet-based mobile networks coupled with increasing levels of capability on mobile phones has resulted in the balance of power shifting from telco networks to end-user devices. This is certainly not the end-point though, but merely a stepping-stone towards the future, where, one day, an end-user will not be able to tell where an application actually resides – whether it is on the user’s device, on the telco network, or in an Internet cloud will be irrelevant and incidental.

“From networks to phones to…“

As an illustration of this change, consider the following broad view of the past 15 years of evolution in the telecommunications world: in the 90’s the ‘intelligence’ on first generation mobile phones was very limited (weak CPU power, mono-displays, limited storage, no multimedia capabilities), and the ‘basic communications applications‘ (short text messaging, internet browsing, voicemail, etc) were provided by standardised industry solutions, where the platforms for these apps were hosted “in the network” i.e. the telecommunications service provider hosted SMSC’s, MMSC’s, WAP gateways on their premises.

During this time, phones were just ‘phones’ and ‘applications intelligence’ was fully controlled by telecommunications network operators. Then, during 2002 – 2007 the Internet arrived on mobile phones and with the advent of packet data networks, usage started to grow, showing a consistently increasing exponential curve as the network effect took hold. But what many of us missed was that during this phase, ‘applications intelligence’ was shifting from the network to the devices, i.e. as phones became ‘smarter’, end-user applications were moving off the telecommunications network and onto the devices themselves. It is now quite common for end-users to have hundreds, if not thousands of applications installed on their phones, covering a multitude of different uses. These applications make full use of the rich-media user interfaces of modern smartphones, leveraging fast CPU’s, expansive memory and rich multimedia.

“There’s an App for that….“

The biggest impetus and industry driver for this trend came with the release of the iPhone and iTunes App store in 2007 – a well-known story and one can review the stats and numbers behind this, but the fact is that the operator community underestimated this potential of a slick UI and open apps development environment, and soon multiple device manufacturers were scrambling to leverage on this success with their own offerings (Nokia Ovi, RIM/Blackberry Store, Samsung bada, HTC, even Google Android Market etc). With this shift, the basic ‘enabler apps’ of SMS, MMS and Browsing are still important for coverage of the mass market of handsets out there, but text messaging & media sharing on smartphones are now mostly served by social networking Internet equivalents. Even with this offloading of p2p messaging traffic, there is still strong evidence of SMS & MMS messaging growth across the world’s GSM networks, as the use cases for these application enablers are still valid.

In parallel we’ve also seen strong momentum in the “Web 2.0” apps development space, with websites like offering thousands of open API’s for web development communities to plug into and immediately create mash-up application propositions. But the biggest difference between web 2.0 apps and Appstore/client apps, is that end-users seem more willing to pay for quality, UI-rich client apps that can be downloaded and owned (this appears to be the tangible difference between client apps and ‘cloud’ apps at the moment).


So the challenge for network operators at the moment stretches across multiple dimensions:

  • Protection of the revenue streams still coming from legacy application VAS equipment investment
  • Modernising these platforms and architectures to simplify maintenance and achieve some scale of consolidation and opex reduction
  • Not giving away too much subscriber value to Internet players, but at the same time providing a quality IP network experience for these apps to run, whilst also managing the increasing network signalling/polling loads created by smartphones
  • Looking for ways to enhance, simplify and augment their subscribers’ applications user experiences and interactions with App Stores, possibly by becoming the ‘mobile shopping mall’ for these application stores, and using existing telco assets (trusted billing/charging environments & identity security) to add value
  • Taking some of the most successful high-end smartphone application concepts and expanding their reach to the mass market of lower-spec handsets, as an example consider how a telecomms network operator might successfully offer an ‘Augmented Reality’ app, that is designed to run on a smartphone with a camera, to a user on a legacy handset? This is where operators can differentiate with partnerships with local developers for applications specific to their subscribers and locations.

With much of the applications functionality of today and the near future looking to reside at the network’s edge (i.e. as client apps on devices), the important question facing telecommunications network operators today is how to capitalise on and monetise their subscriber’s willingness to pay for these quality applications provided from entities OUTSIDE of their telecomms environment.

There IS an answer.

Posted in Applications | Leave a comment

Foreseeing the impact of “Super-Convergence”

Imagine a world, perhaps as soon as 15-20 years from today, in which the Internet, Telecommunications, and Cybernetic Research industries have converged. This is “Super-Convergence”: convergence across industries that will unleash forms of communication that are unimaginable in today’s terms. Here’s a brief vision of this future:

The Internet will have evolved from a majority text-based information and storage medium to a multimedia-rich collection of virtual worlds, inhabited by communities of real and virtual people that prefer to live alternate virtual lives. Interacting with virtual avatars in three-dimensional worlds will not be uncommon; whilst robotic artificial intelligence will transcend the physical world into this virtual world as well.

Telecommunications networks, both fixed and mobile, will have evolved to such an extent that radio access bandwidth is no longer a constraint; multiple forms of devices and terminals will remain permanently connected through the Internet to these virtual alternate realities. Mobile phones as we know them today will cease to exist, as the miniaturisation of technology and advances in nano- and atomic-level research will mean that the speech, audio and video functionalities of phones become integrated directly into the human body.

Cybernetic Research will have advanced to such an extent that neural interfaces between communications chipsets and the human central nervous system will become commonplace. Advanced communications chipsets will be able to interface directly to the brain by converting telecommunications IP signals to neural signals that the question of “What is real?” will become definitive. A cyborg super-race of humans that communicate simply through thoughts will emerge, simultaneously co-existing in a physical world and a virtual communications world.

“Thinking beyond the 21st Century…”

In the super-converged world of the future, communications will know no physical boundaries. What does that mean, exactly? It means that, in future, wherever your location may be in the world, is of no consequence to how you choose to communicate. The convergence of the Internet, Telecommunications and Cybernetics industries will establish a globally connected virtual communications grid to which everyone, or at least those who choose to be, will be neurally connected. This will have a profound impact on multiple vertical industries that exist today – transportation, entertainment, travel and financial, to name a few. Extrapolating this scenario further, and particularly considering the advances still to be made in areas such as nano-technology, DNA research and cloning – the world beyond the 21st Century is going to be fundamentally different to that of today.

Three areas that form the subject of many science-fiction movies – Time Travel, Teleportation and even Immortality – won’t be just fiction beyond the 21st Century.

Think about the advances being made in data storage technology: even in today’s primitive world, it is possible to store Gigabytes of multimedia information on a card smaller than a fingernail. In less than 10 years from now, we’ll be talking about the number of Terabytes or Exabytes that can be stored on cards even smaller than fingernails. So just imagine the amount of data storage space available to a super-converged network 50 to 100 years from now! There will be so much storage available in fact, that it is not unrealistic to believe that every moment of every person’s life can be stored for future virtual playback. It will be possible to go back in time and re-live your most favourite memories, or someone else’s memories, for that matter. In a globally-connected virtual world, with every passing moment continually being recorded and stored, there will be no escaping the past. This will be the basic premise of travelling back in time in future.

Teleportation can and will be achieved. Remember, when the human brain is neurally connected to an alternate reality, it will believe it exists in this reality. That reality can be anything – an ideal world where peace reigns, or another planet, or simply a mirror image of the current physical world that we all happen to incidentally inhabit today. So, with this in mind (no pun intended), a virtual user can travel to a destination as fast as an IP packet can route itself there. But here’s the crunch – taking the advances made in physical DNA cloning and applying it 100 years into the future, it might be possible then for a human conscience to ‘download’ into a temporary human cloned host of yourself at separate physical locations, as a re-entry point back to the physical world. The basics of teleportation?

Finally, breakthroughs in teleportation would lead logically to breakthroughs in Immortality. This of course raises all kinds of moral and religious debates, but thinking about it technically, the separation of one’s conscience from one’s physical being for eternal storage in a virtual world might not be impossible 100 years from now. Imagine the day of realisation that one’s human state is simply a carrier for one’s digital virtual state (much like a physical CD or DVD is simply a carrier for a digital music track). It’s simply a matter of time before the human race figures out a way to rip a human conscience and memories into a universal online storage network for eternity… and ultimate immortality?

Posted in Convergence | 3 Comments

Hi and Welcome to this blog!

Firstly, thank you for taking the time to visit this site, which I hope might become an active forum for like-minded telecommunications futurists to share some radical thoughts, ideas and views of where we are headed.

And it’s not just the short-term, “next 5 years” stuff, that we’re interested in. It’s the long-term view; it’s looking at what telecommunications might be in the year 2050, or at the turn of the next century, i.e. 2100 and beyond.

If the future of telecommunications is headed where I think it’s headed, we might just be able to stick around and see if it pans out…!

With that introduction, I invite you to read my first posting – Foreseeing the impact of “Super-Convergence”.  Look forward to your comments!

Posted in General | 1 Comment