2003 is finally going to be the year of data — and not just SMS. MMS, Java and WAP are all enabling operators to deliver cohesive and exciting service offerings to market and at last, they are doing it. Catherine Haslam reviews some of the progress made to date and the challenges ahead.
Earlier in the year, Mobile Europe received information about a new report which will remain nameless to protect the innocent. It professed to give details on levels of GPRS usage. However, it boldly stated that MMS-based traffic had been taken out of the figures to give a truer representation of GPRS traffic. What? Where have these people been for the past three years — MMS and other such customer-friendly applications are exactly what GPRS is all about. It’s like saying to get a truer picture of motorway traffic we took domestic car use out of the equation.
Fortunately, where such attitudes were once the norm, they are now consigned to retirement homes for the technology bewildered. This leaves those who understand the value of the mobile data proposition to launch services based on applications such as MMS, Java and even WAP, although remember to say it quietly so as not to scare those who still bare the scars from WAP’s early days.
Data usage may not be exploding but it is growing steadily. Vodafone Live! which combines multimedia messaging, WAP information services and game downloads in an easy-to-use, easy-to-understand proposition prompted a collective sigh of relief from the entire industry. It may not be perfect but it was a very definite pointer in the right direction.
Indeed, figures on GPRS usage to the end of March 2003 alone suggest that GPRS packet data is approaching critical mass. Nearly all new handsets launched this year are GPRS-based, MMS compatible and by the end of the year 75% of terminals will be Java-enabled. MMS handset penetration had reached in the region of 3% by March in the leading markets of Germany, Italy and the UK. It may not sound a huge amount but this has been achieved in a period of six months or less since MMS service launches began last autumn.
Vodafone Live had 240,000 subscribers in the UK at the end of March, while O2 UK claimed 530,000 MMS and Java customers by the end of Q2 and a 21% growth in GPRS usage in Q1.
Both TIM and O2 Group claim an average MMS usage of five messages per month, a figure at the top end of their expectations. In some ways it is difficult to split down usage into its basic technologies as they are tied together in service offerings. Will an O2 Active or Vodafone Live customer know whether MMS, Java or WAP is being used to deliver what they are looking for? Probably not, and that in itself is a massive achievement for an operator community whose first priority has been network transmission. Indeed, the growth in WAP usage is substantial despite, or perhaps because, users no longer see the service they are accessing as WAP but rather the latest news, sports, weather etc. For example, O2 in Germany has seen a 165% rise in WAP page impressions, year-on-year to the end of April 2003 with 66% of this travelling over GPRS.
Undeniably, two major drivers for the growth of GPRS have been the availability of a range of functional, attractive colour terminals and the advances made to support roaming and interoperability. T-Mobile claims the largest selection of GPRS roaming agreements at 35 and the rest of Europe’s major operators are not far behind. Obviously, the major groups began with their own members, not least because it was easier to maintain service continuity but now roaming agreements are being made outside of these protected environments.
To continue this growth requires the continued development and encouragement of content. One major growth area identified by Lutz Schueler, senior vice president product management and strategy, mmO2 is music. He explained that the music industry was initially uninterested in the kind of pricing levels that mobile operators were suggesting for music downloads. However, things have changed and Schueler states, “Blank CD sales now outstrip those of music CD. This has led to an increased interest in mobile music downloads from the music industry. â‚-2 per song is now appealing to them.”
O2 has been running a trial in Germany and the UK with 150 users in each country equipped with a Siemens device with integrated music player branded to O2. Due to finish as Mobile Europe went to press, the trial had seen 4000 downloads made with an average of five per user per week.
This is just one example of the many trials for new services that are being run by operators across Europe. New services are being launched for the consumer and business markets (see page 8 for the latest business service launches) and customers are beginning to find something from these ever-growing portfolios to attract their attention. The aim, of course is to increase revenue and Schueler points to a â‚-0.9 increase in ARPU from data in 2002.
It is, at last, a more positive view. There
will be services that fail but that has to be part of the data experience and it is not a sign of an operator’s failure. The key to success will be the speed with which an operator is able to identify the successful and failing services and react to that information. However, should data usage growth really take off as we hit critical mass levels, then the pressure will be felt in the radio network once again.
Having started off by talking about the need to get the service side right, it may seem strange to return to network issues so quickly. However, the financial pressure on mobile operators means that many are looking to GPRS to deliver far more over a longer period of time than was originally envisaged.
Laith Sadiq, director of marketing strategy at Motorola GTSS explains, “Two to three years ago, GPRS was just seen as a interim technology — a short stop on the way to 3G. Now, operators are looking to make the most of their 2G networks as 3G won’t be seen in anything more than major cities for many years to come.”
As has been covered in some detail in the last two issues of Mobile Europe, a great deal is being done to make the Quality of Service (QoS) delivered over GPRS more predictable and controllable. However, GPRS could increasingly be seen as the weakest link in the supply of packet data services.
Dave McGlade, ceo of O2 UK explains, “we need to find ways to get more out of GPRS; to see how we can push the boundaries. Certain amounts of spectrum are set aside for specific applications and then we manage the capacity after that. We also keep a close relationship with our sales channels so that we can see where the capacity will be needed, as well as planning headroom in the network.”
McGlade was also clear in the belief that GPRS still has a big role to play. “We have learned from our GPRS experiences. Being first is not always the best thing. It’s important to watch the bleeding edge but O2 is no longer there…For UMTS to really fly you really want enough voice and data demand to justify it. I don’t see that for a long time. It’s not the time to move to 3G. We need to get the most out of GPRS and move when we’re ready.”
McGlade is hardly preaching to the unconverted as many European operators have similar attitudes. Indeed some, such as TIM, have taken a renewed interest in EDGE. This takes the GSM base infrastructure to its limit in terms of data throughput speeds but does require a considerable investment in equipment upgrades. However, according to Sadiq, a better answer to the speed and capacity issues currently laying dormant in Europe’s GPRS networks, lies with coding schemes 3 and 4 of the GPRS specification.
Results from Motorola’s field trials of CS3/4 demonstrate that throughput when the overhead has been taken into consideration rises from 36kbit/s with CS1/2 to 64kbit/s with CS3/4. According to Sadiq, “64kbit/s is a key speed. With this type of performance GPRS can handle data requirements for the next few years…These coding schemes can help remove bottlenecks and push out the UMTS cross over point.”
these more advanced coding schemes certainly do deliver faster speeds. However, it is not necessarily the answer to every operator’s needs.
Those operators, of which there are quite a few, who have infrastructure from vendors other than Motorola face a more difficult and expensive task. Dave Williams, mmO2’s cto explains his company’s position by stating, “We did a paper study on CS3/4 but found it’s too expensive to deploy as Motorola equipment is now only a small part of our networks. In the UK, the majority is Nokia and in Ireland and Germany, it’s Nortel.”
While O2 has set its sights elsewhere, MobilKom Austria is one of six commercial networks in the Europe, Middle East and Africa region that have chosen to deploy CS3/4 and a further eight or nine are trialling the system. The interesting point about Mobilkom is that it was one of the first to deploy UMTS in Europe and yet it has still seen fit improve the capabilities of GPRS, demonstrating once again that the UMTS island concept is fast becoming the only real option for 3G deployment.
GPRS may have been introduced as a network technology in 1998 by O2 (then BT Cellnet) but it is only from the second half of 2002 that the networks were solid and handsets, applications and content came together in such a way as to drive up usage figures. It took a long time for this to happen but it could be a relatively short period before those same networks begin to struggle for speed and capacity. More performance has to be gleaned from the GPRS networks and whether it’s through advanced OSS features delivering guaranteed QoS, or basic technology enhancements such as EDGE and GPRS CS3/4, operators are starting to build plans now.