Mobile World Congress Report

E&T picks out some highlights from the recent GSMA Mobile World Congress in Barcelona.

Mobile phones are "a basic necessity" around the world and should enjoy persistent strong demand throughout an economic downturn, a United Nations agency said in a report published as the Congress opened.

"With or without a recession," millions of people in India, China, Nigeria and other emerging markets will seek out mobile phones, according to the International Telecommuni-cation Union (ITU).

Increasingly cost-conscious households in Europe and North America are also expected to keep up their mobile use, and many will drop their fixed-line telephones to save money, the ITU says in the report, entitled 'Confronting the Crisis'.

"Once a user gets a mobile phone, it is difficult to give up, and in many countries mobile phones have become a necessity," it declares.

"Many communication technologies including mobile telephony and broadband still offer huge growth potential, with or without a recession," the authors say. "With its strong growth potential, mobile telephony can help facilitate economic recovery."

There were four billion mobile subscriptions worldwide at the end of 2008, the result of an average 24 per cent annual growth since 2000. Take-up rates are above 100 per cent in Singapore and Hong Kong, compared with 30 per cent in Nigeria and just over a quarter in India, two of the fastest expanding mobile markets.

The ITU says people in developing countries are increasingly reliant on mobiles for voice and information services. Farmers and fishermen use SMS for information about commodity prices and the weather.

The popularity of mobiles in developing markets such as China, Pakistan, Malaysia, Thailand and Bangladesh could create an opportunity for these countries to shortcut the technological development path of other nations by providing Internet services through handsets, rather than PCs.

In richer markets, such as western Europe and North America, the ITU says mobile operators may be better placed than fixed-line telephone providers because the investments required to maintain cellular networks can be less onerous.

Many developed-world customers are likely to favour their mobiles over their home lines as a result of a downturn, but may be more careful about their spending and delay purchases of handsets, according to the report, signalling trouble for telecom equipment makers.

Pre-paid and flat-rate packages could also become more popular.

"There is some evidence that consumers are already postponing plans to upgrade their mobile and have become more cost-conscious when making calls," the ITU says.

"Operators will find it harder to promote value-added services to wary consumers, and the adoption of new services (such as mobile TV) will certainly be impacted."

Tight credit could cause telecom operators to reduce their investments, and may encourage industry consolidation, the report says, noting that cost-saving outsourcing may also grow.

The ITU urges governments to include investments in telecoms in economic stimulus packages now being developed.

"Investing in high-quality, affordable information infrastructure, education and knowledge may be the best way to innovate out of this crisis, especially for developing countries ... Investing in broader access to knowledge becomes even more important during times of crisis, rather than less so."

Broadband proves costly for operators

As mobile broadband becomes a mass-market business, the cost of supporting customers is threatening the profitability of the operators, according to a Finnish consultancy.

Figures from Omnitele suggest that operators could face bills of up to €1,000 per subscriber for the capital infrastructure needed to support the mobile broadband data traffic they generate, mainly because of the high cost of network equipment.

The problem, according to Omintele, is that network infrastructure prices are linked to traffic volumes, and revenue per subscriber is mostly flat.

"Mobile broadband services are the mainstay of many leading mobile operators, as voice revenues continue to be under pressure," said Pal Zarandy of Omnitele. "If mobile broadband is to become the new cash cow, much stronger and fiercer capital expenditure cost analysis and controls need to be installed."

Omnitele suggests a number of measures that could help to control costs.

"It is very important to control the peak traffic of heavy users, as this traffic load often dictates the size and therefore cost of the network. We also strongly advocate a reassessment of the pricing schemes proposed by network vendors, as well as having a critical look at the retail pricing of existing data service packages," said Antonios Drossos, vice president of Omnitele.

Some mobile broadband users are already consuming 10GB per month. Volumes are expected to follow overall Internet trends and grow exponentially.

Universal phone charger on way

Life could get simpler for mobile phone users if an industry initiative becomes established in the mainstream.

The GSMA and 17 leading mobile operators and manufacturers used the Mobile World Congress to announce that they want to create a universal charger standard for new mobile phones.

The energy-efficient chargers would draw about half the standby power of those in use today, and stop the waste incurred when users get a new charger with every new phone, The GSMA reckons this could add up to 51,000t of duplicate chargers.

The group wants the universal chargers to be available by 2012, using Micro-USB as the universal interface. It says that by 1 January 2012, most new mobile phones should support a universal charging connector and most chargers should meet the efficiency targets set out by the Open Mobile Terminal Platform (OMTP), the industry body that developed the technical requirements behind the universal charger.

"The mobile industry has a pivotal role to play in tackling environmental issues, and this programme is an important step that could lead to huge savings in resources, not to mention convenience for consumers," said Rob Conway, CEO and member of the board of the GSMA. "There is enormous potential in mobiles to help people live and work in an eco-friendly way. With the backing of some or the biggest names in the industry, this initiative will lead the way."

A universal charger will also simplify life for consumers, who will be able to use the same charger for future handsets and use any charger for their mobiles.

The operators and manufacturers who have partnered with the GSMA to launch this initiative are working with the OMTP to meet the 2012 targets. The initiative will also work with other operators and manufacturers to widen participation.

The initial partners include 3 Group, AT&T, KTF, LG, Mobilkom Austria, Motorola, Nokia, Orange, Qualcomm, Samsung, Sony Ericsson, Telecom Italia, Telefónica, Telenor, Telstra, T-Mobile and Vodafone.

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