Presence and the benefits of having interconnected IM user communities and services are about to radically change the way users relate to and use their mobile phones, Neustar executives tell editor Keith Dyer.

MOBILE EUROPE:
Jeff, NeuStar recently spent $139 million acquiring IP messaging specialist Followap, which we now know as your Next Generation Messaging (NGM) business. Clearly that represents a major investment in this market. What is it about mobile instant messaging that excites you?

JEFF GANEK
The most remarkable thing is going on in the communications industry today, and here’s what’s happening. There’s a huge end user demand for mobile instant messaging (MIM), and this is in our view the largest, most material, new revenue opportunity that the mobile network operators have. And that is reflected in a fundamental change in the way end users want to use their handsets. Mobile Network Operators (MNOs) are acting now to capture this opportunity and respond to market demand. Things are happening now in the networks and within marketing programmes to change the offering operators put before the end user. And already 19 of the largest MNOs in Europe have selected NeuStar’s NGM platform to deliver this innovative new wave service. This platform has capabilities not just to deliver MIM, which has a defined demand, but the MNOs see it as fundamental network component allowing them to deliver a new wave of IP-based value added services that are the future of mobile communications.

ME: So what is driving this end user demand for MIM?

MARK FOSTER:
SMS is essentially unchanged as a 10 year old product, and yet it is the second biggest revenue earner for mobile operators, with 1.2 billion active users. In other user communities, there has been wide adoption of other messaging technologies, and this has led operators to conclude they must upgrade this critical product to introduce new services.

So, for MIM what we are really talking about is SMS 2.0. And faced with the prospect of huge growth and innovation, from a current market of $63 billion a year, mobile operators are bringing IP capabilities to mobile messaging to replace SS7 and adding new features such as presence. That means that this becomes about more than text messaging, with the platform becoming a future environment for person-to-person communications in the mobile environment – for text, video, and voice.

ME: So which operators are we seeing deploying MIM services.

SIMON BROWN:
There’s a whole spectrum of operators using it now. On our platform, the ones we can name publicly of our 19 customers include Vodafone, Wind, SFR, Turkcell, and the Hutchison Group. And operators are signing up quite quickly right at this moment.

This clearly indicates that we believe that SMS platforms will be replaced by IM. And in terms of the end user, the services are the same but with the added value of presence. The number one SMS sent is probably “Are you there?” Presence takes that out. Users can have multiple threads running at the same time and IM keeps track of all those conversations at the same time.

JG
It’s interesting too that they turn to NeuStar for this because NeuStar is a very different kind of service provider. There’s nobody else quite like us. We built and operate the physical directory, and route every telephone call made, in North America. It’s that trust and responsiveness that is key to NeuStar and the NGM platform that they must have to meet the multi billion dollar end user demand for MIM.

MF :
Certainly that’s a natural role for NeuStar, not only do we operate the master routing database for US, Canada and Taiwan, but we also provide routing capability for nearly a quarter of the world’s internet traffic through our Top Level Domains such as .org, .info, .biz and .uk, as well as the global routing directory to route interoperable GPRS services between and amongst the GSM Association’s members. So this is the sweetspot of what NS does already today, in a way that is fully interoperable.

And that’s vital to the success of MIM – it has to be interoperable at the outset. You can’t do this on an isolated basis.

ME:
So what are the challenges facing operators as they seek to establish that interoperability between user communities?
SB:
When you talk about a MIM architecture there are two basic platforms. The IMSC – the platform of operator communities – and second the media messaging gateway, connecting to the internet portal providers. So for example, in 3’s case the deal we have there is to use our platform to provide MSN to their subscribers.

The acquisition of Followap by NeuStar in that way helped us. NeuStar’s charter is to stay a neutral third party, and that means we are also a neutral third party. So the advantages now begin to stack up quite healthily.

There’s already a large community of operators who know us and work with us. It’s very simple to connect to our interconnect platform, the expertise and resources that NeuStar brings to us, and the ruggedness and QoS we can provide is going to be second to none.

JG:
The industry for all its wizardry has not yet established a standard for interoperability for IM that has historically existed for all mobile handsets for messaging. The existing IM networks are not pervasive or interoperable. Here’s what the market is crying out for: 1.2 billion users of handsets worldwide need to be able to originate and terminate IM on any of the billions of network endpoints around the world. What will change the situation for the messaging market is an infrastructure  that allows MNOs to talk to customers and say, “The handset you’ve been using for voice and SMS, use that same handset to send IM to and from any phone in the world.”

In Barcelona last February really for the first time we saw a coordinated launch of Personal IM services. And the interoperability aspect, in addition to all the enabling products and services, between and within networks and to internet portals is key to everyone’s collective success

ME:
Has the work within the standards bodies not mandated interoperability already?

SB:
There’s a range of IM platforms that operators could buy. But regardless of who you have bought your IMSC from, communities need to interconnect. For example we have connected Colibria’s product within Telefonica’s network to our platform, and it is our full intent to interconnect with other vendors.

The platform we have is able to support SIP, XMPP, or OMA/ Wireless Village, with real time protocol translation. This is how we manage to interconnect multiple communities together.
With internet portals, at the end of the day a commercial transaction has to be agreed between the operator and the portal, but the good news is that the technical and physical side is working. And as Mark said, the GSMA has an MoU with 30 signatories saying they will interconnect.

MF :
Interoperability problems between networks are often the same as problems within networks. It’s important to know how to route a service request within a network. If an IM subscriber wants to send a message to a non-IM user, how does that work in a seamless fashion? 

ME:
And what is the role and value of an interconnect platform for the industry?

JG:
Our name, NeuStar, comes from neutral. It’s such an important part of our values that we put it in our name. We will never compete with a MNO or service provider customer.  They can trust us to provide key deep infrastructure capabilities that enable network operators to deliver services from their network to any other network in the world. And there’s not another company in the world that is pledged formally and legally to act in this way.

MF :
As we talk about interoperability, we have to try and make the value of that tangible. First, look at MMS – a more recent service that is perceived largely as a failure by operators for the key reason of a lack of seamless interoperability when that service was launched. What they learnt was that initial poor experience of that interoperability soured consumer perception of the service

The value proposition we have is the ability to interconnect these disparate IM user communities today. The key to this is that this creates a clearly compelling business case and a core rationale for MNOs investing in the key element in an IMS architecture. It’s a very practical infrastructure to evolve into a true IMS next generation environment. And I think this is a very powerful value proposition.

ME:
When we talk about value, what is it about IM that you think will make it drive those next generation investments for operators?

JG:
IM has an attribute that is unlike any internet standard communications service, this is the attribute to change the way the communications users use networks. That attribute is presence, which changes the way we use communications versus SMS or traditional, conventional voice.  Once users understand that presence is in the network, then they can apply that not just to IM but all kinds of communications. This is the first wave of the IP revolution in mobile communications.

SB:
I think there will be different flavours of communications on mobile, with email on a specific client for example. People talk about IP convergence and that is indeed what IMS should enable.

But IM on mobile is on a parallel path ahead of developments on other services. It’s working without IMS and is an example of a service that subscribers have a requirement for and interest in.  We’re seeing a continued and rapid acceleration of IM traffic.

ME:
Is this a wave of IP communications that can deliver increased revenues to the operators, however? The experience in the fixed line world has not always been encouraging.

MF:
People have good reasons to be sceptical about the introduction of fundamentally new services.

But this is not a new service, mobile IM is an upgrade to the existing second generation revenue generating opportunity to operators.

JG:
There is a view that as soon as you stream IP to a handset the end users will use all the free services. What’s different in this case is that we are not talking about open access via broadband. Instant messaging is about putting into the infrastructure of MNOs an IP based capability that can  deliver services and products that customers demand and want to pay money for that they can’t deiver with their old technology. It’s not academic. It’s three to four times less costly to provide than SS7 based SMS.

MF:
In the markets where these services are going live, the average message volume increase four to six times compared to text messaging. So that’s a very compelling metric on a cost and revenue basis.

SB:
The thing to realise is that this becomes about a range of different services on top of the basic IM service. Turkcell, which is one of the most forward thinking operators in this area, have found chat particularly successful and a great revenue earner as well.
And that’s not just about a subscriber’s friends, you can join a user group or forums and chat that way. Turkcell has a package price for IM and charges subscriptions for services like – the info buddies. All the leading operators have put in detailed investigation into this, and they have not observed cannibalization of SMS. The conclusion is that is it a different behaviour and it builds on top of text messaging type of practices.

The increasing selection and availability of 3G devices is due to improved 3G network coverage, lower device costs and a focus on mobile broadband services, the study found. Dedicated data-only mobile broadband devices – such as dongles and laptop datacards – represent around 15 percent of the total devices offered by global operators.

Wireless Intelligence’s handset portfolio research was conducted in the opening quarter of the year, spanning 36 key mobile operators in 19 countries around the world. The study is based on the handsets offered by operators via their online retail stores so does not reflect unit volumes or sales to end users. Despite the rise in compatible handsets on offer, 3G still only accounts for around a third of operator connections in mature markets and one in ten in emerging markets. According to our data, total global mobile connections reached 5 billion at the beginning of the month with 3G (WCDMA) connections accounting for 11 percent (approx. 550 million) of the total.

“It’s taken a long time for 3G devices to come-of-age as they have often suffered from high prices and poor design, but generous operator subsidies and unlimited data plans have helped to boost adoption in recent years,” said Joss Gillet, Senior Analyst, Wireless Intelligence. “Our new research shows that most mobile operators around the world are now heavily promoting 3G-capable devices in order to tap into new mobile data revenues and push into mobile broadband.”

Sweden was deemed to be the world’s most advanced 3G market, the study found. Over 90 percent of the devices offered by leading Swedish operators TeliaSonera and Telenor Sweden are 3G-enabled and both operators have more than half of their total customers migrated to 3G. This is significantly higher than the 3G share of total connections in Western Europe, which stands at 36 percent. Western Europe is also leading the way in HSPA, the faster version of WCDMA typically used for mobile broadband. The faster technology now represents 46 percent of the total WCDMA (Family) connections in the region, compared to 30 percent a year ago. Our study found that, on average in mature markets, the vast majority of 3G devices offered by mobile operators are HSPA-enabled, with only 5 percent of devices supporting only standard WCDMA. Meanwhile, in many emerging markets where fixed-broadband penetration is very low, HSPA networks typically provide the first means for consumers to access the Internet.

Despite the rise in 3G devices, most operators are still supporting widely-deployed GSM/EDGE (2G) networks via more affordable EDGE devices. According to the study, EDGE-enabled GSM devices account for 25 percent of operator handset portfolios in mature markets and 36 percent in emerging markets. In many cases, EDGE is still seen as a substitute for WCDMA networks as it benefits from better network coverage.

“In order to see 3G device portfolios grow to a level close to the most-advanced Swedish benchmark, network coverage will have to improve considerably in many markets,” added Gillet. “Even though only one third of devices catalogued by operators are GSM, the 2G networks still account for around two thirds of connections in mature markets, and as much as 90 percent in many emerging markets.”

While the move to a more dynamic, IP-based infrastructure holds great technological challenges, the investment and revenue at stake is nothing short of phenomenal, as Alun Lewis explains.

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The radio spectrum, it has to be said, is becoming an increasingly crowded, complex and fought-over battleground. Just like any other finite – and fragile – natural resource, the stakes are high. What happens in the largely invisible world of wireless will decide the future of much broader issues in the communications and content sectors as companies battle to find new ways to reach out to their customers.
While core communications networks and their supporting IT systems are undergoing their own transformations, moving towards a far more open and dynamic IP-based infrastructure, dramatic changes are also underway in the radio access area. Known loosely by the convenient catch-all term of 4G, the acronym effectively covers a range of technologies that encompass both evolutions of existing cellular radio systems as well as those of the WiFi community such as WiMax and WiBRO.
The sums at stake are huge – both for the service providers themselves and for the vendors involved. Sprint – one of a growing breed of historically fixed service providers who are now looking to use WiMax to compete head on with both cellular and other fixed providers – is, according to reports, planning to spend $1.1billion this year in WiMax infrastructure, while cable operators in both the US and Europe see the technology as an essential fit into their triple play strategies. The world too is already familiar with the various plans of other fixed service providers – such as BT – using WiFi in both the home and in public areas to complement traditional cellular
According to Miguel Myhrer, Wireless Network Lead for Accenture in North America, “There’s a lot of important activity going on across a number of different parts of the radio spectrum around the world, especially in the US, Eastern Europe and Latin America. This includes bands previously assigned to satellite communications. Some existing service providers see an entry into wireless as a defensive move while other, often newer players have both aggressive business plans and available cash. Comcast, for example, currently has around $23 billion in cash to invest…”
For the cellular service provider, these initiatives present very real threats in the longer term. While voice and basic messaging remain the mainstays of the mobile sector, the world’s consumers are getting increasingly used to living, working and entertaining themselves and their friends in a DSL or WiFi-based broadband world. As the original technology agnostics, they couldn’t care less about auctions, spectral efficiencies and the usual realpolitik games of the standards and licensing bodies. They just want reliable and ever-cheaper wide area coverage – as has happened with the provision of both basic cellular and DSL services to their communities over the last few years.
For the cellular community – represented by the 3GPP –  the wireless future that they’ve been considering for the last few years is known as LTE – Long Term Evolution. As such, it fits alongside the complementary developments going on in the core network with the introduction of an all IP network, itself known as System Architecture Evolution (SAE). But what exactly is LTE and what benefits will it bring to the competition-coexistence landscape that’s currently emerging between the different service provider communities ?
Eduardo Sanchez, LTE product marketing manager at Nortel sums up a few of the main points, “LTE is intended to increase both network capacity and throughput by delivering three to four times the spectral efficiency of HSPA Release 6. Latency will also be improved, with a round trip delay time of less than 20 milliseconds – necessary for applications like VoIP and gaming.
“LTE itself is based on a new modulation technology called OFDM (Orthogonal Frequency Division Multiplex),” he adds, “and a new antenna technology known as MIMO (Multiple Input/Multiple Output. OFDM uses a bundle of adjacent narrowband carriers that are transmitted in parallel at different frequencies from the same source. Because of the narrowband nature of the sub-carriers, OFDM is highly resistant to multipath interference that imposes overheads in other technologies.
“On top of this, the orthogonal characteristics of each sub-carrrier allow OFDM sub-carriers to use up the entire allotted spectrum without significant waste, particularly for guard-bands – in contrast to the single carrier techniques specified for TDMA or CDMA systems. Finally, as the OFDM receiver system deploys well understood digital signal processing technologies, this makes it less complex to develop and less expensive to produce.
“The MIMO aspect of the technology works by creating multiple parallel data streams between multiple transmit and receive antennas and by exploiting the multi-path phenomenon to differentiate among the parallel signal paths. Through this, MIMO technology can achieve a multi-fold increase in user throughput gain as well as an aggregated increase in network capacity compared with current generation networks.”
But what of the actual expected performance and the demands that it is going to make on available spectrum? Håkan Andersson, LTE product management at Ericsson, positions LTE as being available in 2007 and says that, “With two antennas per base station and terminal, top speeds will be 144 Mbps downlink and 50 Mbps uplink on a 20 MHz carrier – while round trip time in the radio network is down to about 10 milliseconds. LTE is going to be launched on a number of frequency bands – for example on 2.6 GHz which will be licensed in the coming years. When GSM operators’ licences start to expire around 2010-2015, there should be LTE products available that suit those frequencies.
“Overall,” he adds, “LTE will have support for bandwidths ranging from 1.25 MHz to 20Mhz. The bandwidth used depends on the amount of spectrum available. For example, on the 2.6 GHz band, it will be possible to deploy 20MHz carriers and thereby exploit the full performance of LTE. On frequency bands already used by, for example, GSM, the introduction should probably be done using a 1.25 MHz carrier in the first place.”
This issue of spectrum availability is a crucial one that was also accentuated by Alastair Brydon co-author of an Analysys report.
“The full benefits of 3G LTE will only be achieved if mobile operators are able to use it in 20 MHz of bandwidth – which will require new spectrum allocations. This means that mobile operators will need to secure additional spectrum, such as the GSM extension band, and ensure that other new entrants or new technologies do not get access to this valuable spectrum. 3G LTE is being designed to minimise the cost of upgrades for mobile networks, but there are still great uncertainties over the investments that operators will have to make in terms of network infrastructure and spectrum. The 3G community will need to address these uncertainties quickly if it is to build momentum in 3G LTE,” he concludes.

CDMA community
While the 3GPP naturally represents the GSM community and its descendants, there are also the activities of the CDMA community to take into account as Paul Nerger of mobile experience management specialists, ArgoGroup, explains.
“Although the underlying technologies have been getting closer since the advent of UMTS – which the CDMA community always calls W-CDMA – the CDMA 200 world looks to 3GPP2 rather than 3GPP for future inspiration. As such, their LTE looks to the same future as IMS and UMA – but based instead on EVDO technology evolution, rather than HSXPA. 3GPP2’s LTE is identical – it is just that the faster data and higher throughput will be provided by a competing technology and this has lots of implications throughout the stack.”

But where exactly does this longer term technology fit alongside the current path for HSXPA introductions and, perhaps more importantly in the race to market, against WiMAX?
Bob Brace, director of mobile messaging at the Mobile Data Association, explores some of the implications.
“One of the disadvantages of HSXPA technology is that it is asymmetrical and only HSDPA is available right now. HSUPA provides the uplink piece, but that’s still just over the horizon. One downside will be battery life and 3.5G won’t be any better. It’s also just an interim before HSOPA – High Speed OFDM Packet Access – gets ratified and this could offer peak data rates of 100 Mbps for the uplink and 50 Mbps for the downlink.
“High speed technologies like HSXPA and WiMAX offer the carrot of ubiquitous wireless coverage and incredibly high speeds – but unfortunately neither is true,” he adds. “ The common misconception about WiMAX is 70 Mbps and 70 miles – but the truth is not both at the same time! WiMAX is however available before HSOPA so therefore it’s going to be about coverage, devices and pricing. The problem with 3G was no flat-rate pricing, but I think operators are starting to see the light in coming up with tariffs like these and allowing users outside the ‘walled garden’. While people may start talking about operators becoming that hated and despised term – the ‘bit pipe carrier’ – I think that the operators themselves are starting to see the reality facing them: they can’t control the user experience or charge huge premiums if they are going to compete and control rival technologies like WiMAX. They really need to establish usage patterns and lock in a user base before other technologies can get a foothold.”

Not seen in isolation
As always however – with anything to do with telecommunications – no part of a network can be seen in isolation to the rest and concepts like 4G and LTE are no different. For Jeremy Barnes, director of strategy solutions at Tellabs, “In a market where operator margins are declining, LTE needs to be approached in the light of how much it costs to achieve. There are, after all, no revenue guarantees – however impressive the promises may be…
“That said, LTE should have a number of important impacts on today’s networks and operators have to start planning for this now and ensure that today’s capital expenditure investments result in transport networks capable of supporting LTE. Firstly, LTE will require a significant increase in backhaul capacity in order to deliver on the capabilities of its enhanced air interface and 100 Mbps down and 50 Mbps up speeds.
“Secondly,” Barnes continues, “With RNC functionality distributed to the NodeB, LTE creates a requirement to fully meshing the NodeBs – some 10,000 to 20,000 for a mobile operator running a network in a ‘mature’ market such as a country in Western Europe. The cause is call hand-off. A call originating on the ‘anchor’ NodeB that subsequently travels across the country – as during a car or train journey – moving from NodeB to NodeB requires that each NodeB utilised will need to communicate with both the anchor NodeB (for billing etc.) and the previous and next NodeB for call hand-off. IPVPNs are likely to be the best solution for this type of meshing and, to support a mesh of this size, some degree of hierarchy is likely to be required. A hierarchical IPVPN provides an ideal migration path for LTE and the all-IP RAN.”
These implications are also highlighted by cellular backhaul specialist Celtro as CTO Shahar Gorodeisky explains.
“Many assume that 4G is going to open the door to bandwidth intensive multimedia applications – but what’s the point of spending vast sums on 4G technologies if the backhaul can’t handle it? Traditional wireline and microwave backhaul technologies cannot meet the capacity requirements of widespread HSDPA, let alone HSUPA or 4G – so making the backhaul network is one of the primary challenges facing any operator looking to deploy a next generation network.”
While the R&D engineers continue their work and the investors and finance departments decide which parts of the 4G jigsaw look like giving the maximum buck for byte, it’s time as always to signal a déjà vu-tinged note of caution. Having the best technology is no guarantee of success – as anyone with a Betamax VCR in the attic can testify. Keith Miller of switching specialist Appium sounds a final caveat.
“With all mobile operators still squeezing as much traffic as possible onto their current and very efficient circuit-switched-over-RF delivery at the cellular end, it is hard to see what will be the business case for any telco to embrace 4G soon. Packet delivery of voice is notoriously inefficient so the only real driver must be lower services and lower cost of integration.
“In some ways, IMS is helping prepare the ground for this. As yet however, there have not been many successful 3G services that need 3.5G speeds – let alone 4G. There are, however, signs that convergence is starting to take hold as a useful differentiator with triple play and quad play offerings showing good success rates in some countries. Mobile operators will be slower to grab hold of the 4G nettle – having been stung badly with their 3G rollouts that are still very much work in progress…”

The industry heads to Barcelona for the second holding of 3GSM in the city, and what do we expect to see that is different from last year? Well, last year we saw prototype handsets running early versions of mobile TV services over DVB-H and MediaFLO. This year with many trials and a small number of commercial mobile broadcast TV services around the world, expect to have seen things moved on from, “we’ve got the best technology”, to “we’ve got the best content partners and management platforms for you to manage and monetise services”. Oh, and the handsets will look better too.

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Last year we saw the GSMA launch its personal instant messaging initiative, in which operators pledged to work to interconnect all their own internal messaging communities. At the time, the question was, what about the existing IM communities out there already on AOL, MSN and Yahoo? So this year, mobile IM will be just as hot, and expect to see the GSMA announce progress on interconnection, especially in India. But there will also be a lot of discussion about the best way to interconnect the PC based IM communities to mobile users, and to each other.

Last year was really the year of HSDPA, as the industry welcomed the significant user experience benefits of the faster radio technology. Networks were going live and data card services were being made ready. This year there will be many HSDPA handsets, building on the few that were launched over the Christmas period. And the network discussions will have moved on with a vengeance to HSUPA in the near term, and Long Term Evolution in the, er, long term. But more than that, the increased capability on the uplink will open up a range of services. Expect to see much (even) more than you have done in the past around user generated content, citizen journalism, social media – anything that combines the enhanced network capacity with the web based 2.0 services.

So really what we’re talking about here, in all these examples, is the industry beginning to take on the concepts that get those that think about these things very excited – time and place (or geo) shifting. To me, that really means doing things at a time and a place that suits you, instead of being stuck on a sofa, in front of a computer, in the office, at night, in the morning, in the afternoon etc.

The challenge of such services is that they require the devices themselves to present, offer and combine services in a different way. And if you see someone who’s genuinely thinking about that and coming up with something new, then let us know…
KEITH DYER