Services for UMTS: Creating Killer Applications in 3G / Edition 1 available in Hardcover
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UMTS is not about Technology, it is about Services... The UMTS or 3G environment is the ultimate convergence of fixed and mobile, voice and data, content and delivery. The result will be the largest and most complex communications system that man has designed. If you want a challenge then this is the industry to be in. Services for UMTS (Universal Mobile Telecommunication System) or 3G (3rd Generation mobile networks) is a book about the near future, where UMTS allows mobile phones and other devices for communication, entertainment, personalised services, utility and fun to be used in new ways. While it is difficult to predict the potential of UMTS in the future in a precise way, broad categories and general service ideas are emerging. This book looks at over 200 of these possible applications and provides more detailed scenarios for over 100 of them. It explores these ideas in depth, with suggestions on how to create exciting and viable services for a new world. This book intends to answer many of the current UMTS service questions as well as introduce new ideas and concepts to enable operators to create a winning UMTS services strategy. * What should the focus of service creation be to ensure early time to profit in UMTS? * What are the key market segments that should be addressed with UMTS services? * Is there a killer application or applications that will revolutionise the industry? * What are the differentiating factors that will separate the leaders from the UMTS pack? * 15 aspects of the business analyzed by value chains and business models * The 5 M's of successful UMTS Service Definition Written for the non-technical reader and with a strong business focus, Services for UMTS is a "must-read" for anybody wanting to enter the UMTS environment, make money in it, or to understand it.
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About the Author
Tomi is an independent consultant on 3G strategy. Previously he set up and headed Nokia's Global 3G Business Consultancy department. Earlier he worked for three operators/carriers in Finland and New York, creating the world's first fixed-mobile service bundle, and setting a world record for challenger operator market share, as well as participating in telecoms standardization. He started work as a controller on Wall Street. Tomi holds an MBA from St John's University New York. Joe has been in the telecommunications industry since 1979 when he joined BT. He has worked in the mobile telecommunications arena since 1985 where he worked in the emerging European mobile phone market. He has been with Nokia for over 10 years holding various positions in sales, marketing and strategic areas for the mobile infrastructure business. He started his career in the Royal Navy as a radio engineer and now lives in Finland with his family.
Read an Excerpt
Services for UMTSCreating Killer Applications in 3G
John Wiley & SonsISBN: 0-471-48550-0
Chapter One'No one would ever have crossed the ocean if he could have gotten off the ship in the storm.' Charles Kettering
Intro to Services for UMTS: The Future Starts Here
Joe Barrett and Tomi T Ahonen
Kotler, Porter and other eminent marketing gurus have preached that the first step in the marketing cycle is to segment your market. From there you position your product and then target the audience with the right messages. Traditionally this was done by social groupings, A, B, C1:C2:C3 or other demographic methods. Since those early days marketers have been seeking and developing new segmentation strategies and many have been used to good effect, but the global trend is towards ever smaller and more precise segments, approaching the ideal segment of one. A segment of one means that a marketer can target each individual on a one-to-one basis and has the greatest opportunity to take the potential customer through the buying cycle: Awareness, Interest, Decision, Action.
Previously on a practical level it has been almost impossible to segment your target audience in this way, primarily because of cost reasons. Today this is changing with the Internet, where target advertising can be used with reasonable results. If you are accessing a golf page for example you are more likely to see a banner advert that is golf or maybe sport related. However in UMTS(Universal Mobile Telecommunications System) networks this will change. In the near future, ever tighter segments and more precision in market messages becomes not only possible, but necessary for successful profits.
We are all individuals. We come in different sizes, shapes, colours. We have different needs, desires, wants. We all do things in our own unique way. It is the fact that we are all unique and different that unites us. Once we recognise this we can start to exploit it in our marketing. As soon as we can build an individual relationship with our customers, when we know what they want, what they need, how they do things, run their work life, personal life and how they manage their relationships we can show them how they can make their lives easier, more profitable and more fun. Sounds too good to be true? Not if you are a mobile phone operator. Voice has already gone wireless and data is the new frontier.
1.1 Enriching the experience. From ears to eyes
At the heart of this UMTS experience will be the terminal and a new way of using the phone. The mobile subscriber will not just talk, they will be able to view multimedia images, watch video clips, listen to music, shop, book a restaurant table and surf the net. And, since they will always be connected to the network, they will receive important and timely information.
The strong growth in mobile voice will continue in mobile data. There were around 630 million mobile phone users in 2000 and this number is expected to grow to 1 billion by the end of 2002. For comparison there are less than 300 million personal computers in the world, connected to the Internet. The UMTS terminal will become a service platform, capable of multiple radio access modes and compliant with open standards and operating systems to enable Mobile Internet and mobile Multimedia Messaging Services.
Current mobile networks are feeling the pressure of exceeding their design specifications. Nobody expected 70% of the population to have and use mobile phones when the current mobile technologies were standardised some two decades ago. The new UMTS environment is designed not only for large numbers of users, but also for varying types of services on the network. New UMTS services are enabled with a QoS (Quality of Service) model for the terminal as defined in 3GPP global standards. This model has several service classes ensuring that the radio connection is capable of supporting various types of applications:
conversational real time traffic, such as multimedia conferencing
real time streaming traffic, such as online audio/video reception
interactive traffic, such as Internet browsing
background traffic, such as downloading of mail
Operators will be able to define the QoS level for each UMTS service depending on the price the customer is willing to pay. For services with a higher QoS, like video streaming, customers will be willing to pay more. Services that are not delay sensitive like e-mail can use the background traffic QoS class but will be charged at a lower rate than premium delay sensitive services.
The mobile phone is already the preferred voice device for hundreds of millions of users. Why? Because it is personal. It is the only device that is in our possession 24 h a day. It can contain all our important phone numbers, with names so they are easy to remember and find. It can be our diary, our notepad and now our access to the Internet and information that we need while moving around. Yet there is still one thing that many people fail to appreciate about the mobile phone. It is not just about voice or data or accessing people or content. It is how the mobile phone can reflect individual personalities, lifestyles and our moods The popularity, and operator profits of personalised ring tones are a clear indication of this. Here we are experiencing the first signs that consumers and business users in the near future will expect and demand unique and personalised products and services. The companies who recognise and act on this knowledge will be the undisputed leaders in their respective markets.
Now it is necessary for us to state the obvious. UMTS will be about services not technology. Even more than that, UMTS will be about management of our time and content. Technology such as WCDMA (Wideband Code Division Multiple Access) and IP (Internet Protocol) are only the enablers for the Mobile Internet. We all know that, but what does it mean? Basically if you do not get your act together and create what we call 'invoiceable' and personal services you will be a has-been in the Mobile Internet. The winners will be those companies that can create a multitude of user friendly services that people will pay for. Unlike the Internet community where 'free' is the byword for service, mobile users pay for their communication. They pay for voice since they value it. They are willing to pay for text messaging because it is seen as superior in so many situations where for example a fast, short answer is needed. Mobile subscribers pay for WAP (Wireless Application Protocol) access if it provides good content and for many WAP is a valuable service that they are willing to pay for. It is relatively simple to extrapolate this to a situation where users are willing to pay for new value creating UMTS mobile services that are individually personalised.
This is where the arguments start. Or should we say the interactive discussions begin. Users will not, and in fact they can not pay indefinitely for more and more content. We all have a limit to the amount of disposable income we have for our personal communications. But this view will change. Lets consider how much of our allowance we spent on telecommunications when we were teenagers. If you are over 25 like we are, then the answer is zero. Maybe a few calls to the girlfriend or boyfriend from a payphone, but mostly our 'telecoms spend' when we were teenagers, were calls from our parents' phone at home.
Teenagers today in Finland spend up to 90% of their allowance on their mobile phone bill. Over 50% of this bill can be SMS (Short Message Service) text messaging. This group of society are spending less on clothes, cinema and eating out. They are using text messaging for chatting, sending jokes, sharing simple pictures, providing information on what, where, who and how to their friends and even dating over SMS. The youth market do not leave voice mail messages since this is too time intensive. Its not instant. They send a text message. It is faster and more simple. We are now more likely to send work related text messages since it is less intrusive when people are in a meeting. Yes we admit that we are sending more and more text messages, but don't tell our kids.
We think the trend for UMTS is becoming clear. In the early 90's when GSM (Global System for Mobile communications) started it was the business user who was the target customer. In those days there was no youth market. No pre-paid. No text messaging. No mobile access to e-mail. Who even had reliable e-mail back then? Penetration rates for mobile phones of 30% of population were considered futuristic, for the dreamers, unthinkable. How we re-learn and re-evaluate our opinions. What is certain is that any UMTS operators who ignore any market segment do so at their peril. We believe that all operators have to be ready to target multiple markets from the beginning and be prepared for the mass market take-up for any service from day one. It will be the mass market that generates the revenue growth. The mass market is where the greatest potential is. The mass market will be the early adopters. Kotler will have to re-write Marketing Management.
1.2 Fixed internets, second generations, and UMTS
The services developed for UMTS networks will be products of the most complex, interconnected and intelligent machine man has created. It is at the heart of the convergence of fixed and mobile networks, voice and data, the existing fixed and emerging mobile Internets, and the convergence of digital content and wireless delivery. These various trends that relate to the overall convergence in telecommunications will have a great deal of impact on the UMTS environment. It is not the purpose of this book to go into depth regarding these networks. Chapter 14 briefly covers the technical side of the UMTS network but readers who want to learn more should refer to the book 'WCDMA for UMTS' by Holma and Toskala, also published by John Wiley & Sons.
How browsers changed the internet
From its birth in the 1960's the Internet looked and felt basically the same until the early 1990's. Techno-elitist researchers, mostly from America with a few West-Europeans, primarily using mainframe computers with Internet connection to different forms of person to person(s) communication and the exchange of files. Nobody had heard of the 'Worldwide Web' or WWW. All that changed when Mosaic was launched as the first WWW-browser and the Internet was never the same again.
Still in the early 1990s the Internet had its own decentralised information sharing system called Gopher. Many universities and organisations which had Internet connection in those days had their own Gopher homepages. It was university students who started to experiment with the Internet and became the first users of non-academic services, like checking the daily menu of their university cafeteria from Gopher just like they can do now on the WWW.
Even after seeing Mosaic and WWW, there were many devoted Gopher users who believed that the WWW was nothing more than a facelift of Gopher. It had a nice graphical interface that could display online pictures and it had a hypertext-structure which made page creation easier. The early thinking was that the WWW could never replace Gopher. Gopher already had a huge amount information and nobody would convert it to WWW-format. Gopher had logical hierarchical structures while the WWW was an incomprehensible mess of hypertext. Creating content for the WWW would be too difficult for typical end-users because it required a new mark-up-language while Gopher worked mostly with text-files. And besides, 'all users' knew how to use Gopher already.
How wrong those predictions were. Remember that these were near unanimous opinions by the best Internet experts and users of that time. As we move towards the world of mobile data services those lessons should be remembered. In only a few short months the WWW had more information than Gopher had built up in a decade. Its graphical interface and hypertext-structure provided excellent usability and end-users quickly learned to create new content. The Internet was transferred from mainframes to PCs. It became a mass-market service. It became commercial. The scope of its services widened. Today hardly anybody bothers to think of how a web page might seem to a mainframe user, but every content provider tests pages on the current WWW-browsers, Internet Explorer and Netscape.
How mobility will change the fixed internet
A similar transformation will happen in the UMTS future when content migrates from the fixed Internet to the Mobile Internet. It may seem like heresy to the hundreds of millions of users of personal computers, but already mobile phones outnumber personal computers by a factor of 3:1. Very soon most of the mobile phones will be Internet-enabled. The transformation is inevitable.
The Internet will be accessed by a multitude of different devices; it will become more international; its business-logic will change and it will have new or at least enhanced services. The predominant Internet access device will change from the PC used today to the mobile phone in only a few short years. The content producers will write their primary content to be delivered by the most prevalent device - and that will be the UMTS mobile terminal. Most content will migrate from the fixed Internet to the mobile world faster than the transformation from Gopher to the WWW.
From client-servers to clients-profiler-servers
Currently most of the Internet users access the Internet only from one device: a PC (Personal Computer) either at work, in the home or at school. Some people use other means such as Internet cafés and libraries but this is still a small percentage of total usage. Several new technologies are being introduced to allow Internet access via other devices like digital TV over satellite. There are also small pocket size devices including PIMs (Personal Information Managers), PDAs (Personal Digital Assistants) some combined or integrated with mobile phones that allow Internet access.
In a few short years it will be common to use multiple devices to access and receive mobile content and browse information that has until now been primarily available via the fixed Internet. Many people will of course use their PC or similar devices at work as their preferred device to access the Internet, then, on the way home their cars will connect their navigation and information systems to the Internet. At home people will be consuming content via the digital television which will download various types of content from the Internet like pay-per-view movies.
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Table of Contents
Foreword (Hadden). Acknowledgements (Ahonen and Barrett). Intro to UMTS services - The Future Starts Here (Barrett and Ahonen). Attributes of Services for UMTS - What Makes for Desirable Services (Ahonen and Barrett). The 5M's of UMTS services - Killer Wanted (Ahonen and Barrett). Services to Address Movement Needs - Escaping the Fixed Place (Keskinen et al). Services to Address Moment Needs - Expanding the Concept of Time (Keskinen et al). Services to Address the "Me" Needs - Extending Me and My Community (Anderson et al). Services to Address Money Needs - Expending Financial Resources (Ahonen and Barrett). Services to Address Machine Needs - Empowering Gadgets and Devices (Barrett and Ahonen). Types of UMTS Services - Categorising the Future (Barrett et al). Marketing UMTS Services - Segment, Segment, Segment! (Rastas et al). Competitiveness in UMTS - The Winner Takes It All (Barrett et al). Partnering in UMTS - When you cannot do all of it alone (Ereth et al). Business Case for UMTS - Revenues, Costs and Profitability (Ahonen and Barrett). Technical Primer to UMTS - WCDMA Technology for the Layman (Holma and Toskala). Postscript - Final Thoughts (Ahonen and Barrett). Service Vignettes (throughout the book) (Ahonen). Abbreviations. Bibliography. Useful Websites. Services Index.
What People are Saying About This
"It is a good resource for operators and business managers, and will also serve as a convenient tutorial for new 3G service providers." (Computing Reviews.com, January 19, 2004)
"Essentially anyone keen to take advantage of the undoubted business opportunities presented by 3G will find this book an inspiring and compelling read." (www.mformobile.com, 30 May 2002)
"...another excellent book...one of those 'if you only read one book about 3G read this one' books..." (www.tomhume.org, 3 July 2002)
"...comphrehensive, accurate, well documented, clear and logically structured..." (EBU Technical Review, 20 December 2002)