Delivering the Platform for Next-Generation Mobile Communications Services With new services and platforms, Microsoft is helping operators thrive in the new communications era By: Pieter Knook, senior vice president, Mobile and Embedded Devices Division, Microsoft The communications industry is experiencing an exciting transformation. Convergence of content and services and the widespread adoption of 3G and broadband are collapsing the barriers between fixed and mobile communication systems, creating both opportunities and threats. What is powering these dramatic shifts in the industry? Software. In this converged arena, traditional operator services such as voice and data meet the innovative web services that have driven the Internet explosion of the last several years. Social networking, music distribution and VoIP have been success stories of the Internet era so far, but for operators they can represent competition as they take away traffic - and therefore revenue - outside the network. Disruptive business models threaten to disaggregate operators altogether. We need not look far for examples of what happens to traditional service providers in this new era. Companies like Skype, YouTube and MySpace are encroaching into the telecoms space and these ‘new’ service providers can create virtual networks without the need to maintain complex legacy infrastructures and support systems. The impact of these disruptive technologies is not limited to the world of consumer services. Businesses large and small are adopting technologies to ensure their increasingly mobile workforces stay connected to people and information as more work gets done outside the office. To date, mobile messaging has presented new data revenue opportunities for operators. As business mobility moves beyond e-mail, it is critical for operators to partner with technology companies that keep them deeply engaged with businesses, instead of siphoning revenue away. Given the right software platform, operators are extremely well-positioned to redefine their role and lead next-generation communications. Strategies for a Services World The mobile telecoms industry has embarked on a services strategy with an underlying theme of connecting services to create new experiences that allow access to people, information and entertainment whenever customers want, wherever they are. The key to success of this strategy will be identifying what the portfolio of winning services will be. This no easy task when we look back at the flurry of ‘killer apps’ such as WAP, which has so far failed to grasp the public’s imagination. At Microsoft, we see the most forward-looking operators as those who aim to deliver multiple services to appeal to different segments of the subscriber base. Furthermore, it’s about delivering value today. With billions of dollars spent on building out 3G and IP networks, shareholders are awaiting a healthy return, and customers expect content rich experiences in their homes, at work and on the go. At this year's 3GSM World Congress, in addition to launching the Windows Mobile ® 6 platform, Microsoft is showing how the integration of Windows Live™ onto Windows Mobile devices enables on-the-go access to services such as e-mail, messenger and search, giving operators the opportunity to build relationships with more than 240 million unique monthly users within the Windows Live network. Orange recently launched the first convergent PC and mobile instant messaging service called ‘Orange Messenger by Windows Live.’ Microsoft and Sprint have announced a strategic alliance to enable Sprint customers to use Windows Live Search on their mobile phones to conveniently search location-based content from the internet, such as nearby stores and restaurants, as well as Sprint’s catalogue of ring tones,
games, screen savers and related services. The Kelsey Group predicts mobile search advertising will become a $3.7 billion market by 2010 – something that all operators should be looking to get their teeth into. Telco 2.0 and Connected Experiences The rapidly evolving telecoms industry, or ‘Telco 2.0,’ now includes traditional operators as well as new entrants such as Skype, Google and Yahoo! The pace of innovation in this new competitive environment demands a fast response from operators and the ability to develop and deploy new, connected services quickly and cost-effectively. Driving Telco 2.0 is the ability to connect two (or more) disparate web services that result in a new, unique service, commonly known in the industry as ‘mashups.' For example, the combination of a location-based application, a directory service, and a mapping service together with SMS and voice recognition technology would enable an “I’m Lost” service for mobile phone customers to reach for directions from their current location to their final destination via text message or e-mail. Microsoft is providing the world's leading operators with the foundation to deliver these new types of services today. Telecoms rely on Microsoft's powerful service delivery platform, Connected Services Framework, to rapidly create and roll out services and its mobile operating system, Windows Mobile, to ensure those services deliver the best possible end user experience on a device. There is a broad array of services available today that operators can deploy to entice all of their target segments, from enterprise customers to consumers. Technologies that are shaping the future of the communications industry include: mobile messaging and collaboration, mobile line of business applications, mobile TV, mobile search, and VoIP, to name but a few. According to Informa, 20 to 30 percent of mobile phone owners in Europe will use mobile TV services by 2015. This presents a huge opportunity in advertising revenue, an industry predicted to be worth almost $4.4 billion by 2011. At 3GSM 2006, the Windows Mobile-based Lobster 700TV with BT Movio Digital TV service from Virgin, was announced. This was the first mobile phone to offer a real-time broadcast mobile TV service and since becoming available in September 2006, the service has attracted thousands of subscribers. Operators like AT&T, BT, Deutsche Telekom, Swisscom and T-Online France have all recently commercially launched their IPTV services. Today, IPTV is associated with fixed-line operators. In the future, we will see ‘continuity’ services that allow viewers to transfer programming to their mobile device should they wish to take their content with them outside of the home. Mobile e-mail is reaching a tipping point and fulfilling its potential as the killer app for the enterprise market. According to Strategy Analytics, the mobile e-mail market will be worth roughly $7 billion worldwide by 2010. The growing demand for e-mail on the go is driving usage of data services, which is vital in increasing ARPU. While uptake has been most prolific within enterprises, there is still huge potential to extend the market for mobile e-mail beyond large corporations. The small and medium-sized business market (SMB) is, for example, under served by operators beyond providing broadband and devices. There is enormous revenue generating potential for operators to offer a hosted model to address the SMB market. T-Mobile Netherlands and Vodafone Germany are already offering professional e-mail packages to their small business customers as a hosted service, in this case using the Microsoft Solution for Hosted Messaging and Collaboration as well as Windows Mobile devices. The next phase of mobility for business will go considerably beyond e-mail. Businesses need their employees to access from their phones the same line of business applications they access from their PC today. Mobile workers should be able to search their network for information just like they do from their office PCs and IT administrators need to know they
can securely manage mobile devices on the network in the same way they manage PCs today. All of these advancements will promote a deeper partnership between businesses and operators who offer these new types of services and mobile devices. Powering a New Generation of Mobile Devices - Windows Mobile 6 The demands of the services explosion and an increasingly mobile business culture require a new generation of powerful devices. Mobile phones are becoming enormously powerful and feature-rich, with built-in capabilities for user-generated content, music, games and video, and a host of business-related features. Smartphones today are more powerful than the PC of 10 years ago. Windows Mobile is embedded as the OS of choice on many of the new smartphones delivered by the world's leading operators, including Cingular, China Mobile and Vodafone. These partnerships are sure to strengthen as Microsoft releases innovative software that helps operators decrease operational costs while improving services to customers. At 3GSM Microsoft is unveiling a significant enhancement to the Windows Mobile platform, Windows Mobile 6, which will deliver advanced mobile communications, increased mobile productivity and integrated mobile business performance, with a consistent and familiar Microsoft software experience. With a wide range of form factors and functionality such as mobile e-mail, Internet browsing Mobile versions of Microsoft Office, Windows Mobile has helped operators drive usage of data services which is vital in increasing average revenue per user (ARPU). This is especially important in a world of declining voice revenues. By delivering more features that users want, including Windows Live integration and the ability to remotely reach deeper into corporate networks, Windows Mobile 6 will broaden the smartphone’s value proposition to a larger audience. Operators will welcome this trend, given the increased data revenue opportunities that smartphones represent. Survival of the Fittest Convergence has long been discussed in the industry and we’re now seeing it in action. Competition from new entrants may well be squeezing telecom operators, but the nimble ones are quickly turning this threat into an opportunity and reinvigorating their business. In the new telecoms world powered by software, Microsoft is in partnership with operators across the entire value chain - from service delivery platforms to services to mobile operating systems - to enable them to deliver next-generation services while increasing revenue. ----------------------------------------------------------------------------------------------------------------------------