Tech Untangled - Information at the intersection of Technology and Business

Imagine meeting someone new or a friend a colleague after a long time and you decide to exchange phone numbers with that person. Exchanging a phone number the usual way would mean asking the other person for his/her contact information, typing in his/her name and phone number, storing it in the phone’s address book, calling the other person, and then having the person type in your name and storing your information.

Now there’s a better way. Bump Technologies has developed a new iPhone app, called “Bump,” that transfers data from one iPhone to another iPhone (or an iPod Touch) by bumping each other.

Here’s how it works - While one person holds an iPhone, that person “bumps” hands with another user holding her iPhone. But first, both users need to have the free Bump application on their iPhones/iPod (did I mention it is free!). To share contact information, each user has to fill out a Bump contact card. When a bump occurs, the Bump contact information is transferred to the other user’s address book, and vice versa. A user can share detailed contact information or just select data, such as a phone number. Both parties need to confirm the transaction before the information is transferred. The company says information is exchanged in less than 10 seconds.

The idea for ‘bump’ started waay back in 2005 when one of the co-founders was at a breakfast meeting with some new colleagues.  While exchanging phone numbers, he had realized that there must be a better way - a way to automate the exchange of phone number. However, at that time the technology wasn’t readily available. What made it possible is the accelerometer on the iPhone, which I believe is the first phone with an accelerometer.

The Bump application monitors the accelerometer in the phone and when the accelerometer detects a sudden, specific jerk (I suspect the algorithm can differentiate between a bump and dropping the phone on the floor), the application communicates with a server in the cloud. A smart matching algorithm in the cloud matches up any two phones in the world that bump each other.

Apparently, people are bumping all over the world (and I mean that in a iPhone-esque way!). So the next time you meet someone you want to exchange numbers with, don’t forget to download the free bump app to your iphone and start bumping!

This is a simple, intuitive application - very cool!

A Boston-based company called MobileSphere has just announced a service called Slydial to send a voicemail to any mobile phone in the U.S. without having the risk of the called party answering the call. Anyone can send a voicemail by calling 267-SLYDIAL (267-759-3425) and entering the phone number of any U.S. mobile subscriber. The service is free, but you have to listen to a 10-second audio advertisement.

What MobileSphere has done is to figure out a way to connect you directly with different U.S. cell phone providers voicemail systems.

So why would anyone want to use this? MobileSphere is marketing Slydial as a way to avoid unpleasant conversations, annoying people, or any situation where you might have to take responsibility for something.

Here are some reasons to use Slydial:
* Calling someone you know is busy or at a meeting and doesn’t want to be disturbed
* Calling an annoying person who likes to talk too much
* Calling someone to dump them or to quit a job (rather than end up having an unpleasant conversation)
* Sending a quick message to a friend
* Leaving a quick message for your spouse when you are too busy or dont really want to talk (think about it….do you really want to call ‘honey’ at home just to get chores assigned to you.. as in “hey honey, can you pick up a milk on the way home”)

However, this capability already exists - many, if not all, wireless carriers provide a voicemail access number where one can leave a message in another subscriber’s voicemail box. For example, with Sprint, you can dial the NPA-NXX-6245 (area-code and exchange followed by 6245), and send a message to a Sprint mobile number without having to enter a password. Other providers have a similar voicemail access numbers. I tried this from one of my Verizon Wireless phones to another Verizon Wireless mobile number and it works perfectly.

Basically, Slydial have figured out a way to enable a hardly-known feature, thrown advertising with it to make money, and are marketing it  …SLY….really SLY!!!

Ericsson Chief Marketing Officer Johan Bergendahl is predicting that as Mobile Broadband takes off (and it is growing faster than mobile or fixed telephony ever did), Wi-Fi hotspots will become as obsolete as telephone booths. The reasoning is simple - As more and more cellular subscribers start using wireless broadband otherwise known as Wireless WAN (WWAN) technologies (e.g CDMA2000 EV-DO, HSPA/HSDPA/HSUPA, WiMAX, LTE) and it becomes available in many areas, WiFi hot spots will no longer be needed. In fact, Bergendahl says that “Hotspots at places like Starbucks are becoming the telephone boxes of the broadband era”.

This is driven by a couple of factors:
1) Availability of devices - More and more wireless broadband devices are becoming available. There are WWAN PCMCIA cards that fit in laptops, WWAN routers, and even WWAN embedded in laptops. Apparently, Ericsson recently signed a deal to put HSPA in some Lenovo notebooks, but HP and Dell already offer laptops with CDMA2000 (e.g. for Verizon Wireless service) and HSDPA (e.g. for AT&T service) built-in.
2) Declining prices and cost - the price and costs of wireless broadband is still high compared to WiFi, but is decreasing. Bergendahl says that in countries such as Austria, Denmark, and Sweden, the average price for a mobile broadband subscription is only €20 ($31) per month. Also, PCMCIA WWAN cards are pretty cheap now, and broadband built into computers will likely go the same route as they become more popular.
3) Coverage - coverage is becoming pretty good - in the U.S., both Sprint Nextel and Verizon Wireless already cover more than 300 million pops with their EV-DO broadband network and AT&T covers more than 160 cities. Indoor coverage issues can be resolved through femtocells.

There are still some issues to be resolved: “Industry will have to solve the international roaming issue,” Bergendahl said. Another problem is that competing cellular carriers use a different technologies. Verizon Wireless, Sprint Nextel, Alltel and U.S. Cellular use cdma2000 EV-DO while AT&T uses W-CDMA (e.g. HSPA/HSDPA/HSUPA), and then there’s WiMAX as well. In contrast, WiFi is a unified standard.

What’s most interesting here is that this is not just a prediction. It is a subtle attempt to manipulate - See WiFi and mobile broadband compete against each other to a large extent in the sense that they both provide IP transport or Internet Access. Ericsson doesn’t have a strong position in WiFi, but has a very strong position in mobile broadband, especially in HSPA/HSDPA/HSUPA, so it tends to benefit immensely when WiFi is no more and cellular broadband covers the world. This is largely a self-serving, hope-filled prediction.

Like any technology, one day WiFi will fade away. Especially when we move from today’s 3G mobile broadband to 4G mobile broadband (e.g. LTE). Till then WiFi will continue to be just fine, thriving in its niche market. Take this prediction with a grain of salt.

T-Mobile USA has launched a wired phone service for $10 a month, plus taxes and fees, to its wireless subscribers in the Seattle and Dallas-Fort Worth areas. The service, called “Talk Forever Home Phone”, comes with unlimited local and domestic long distance calls. This is a VoIP service that runs over a broadband connection, and in that sense, it is similar to VoIP offerings from the likes of Vonage. Talk Forever Home Phone will likely be available nationally in a few months. It works via a special Wi-Fi wireless router that you must buy, with a two-year contract, for a $50 one-time fee . The router has two phone jacks to connect 2 standard corded or cordless phones. The router can either replace or supplement your existing wireless router and connects to the T-Mobile cellphone network. No other hardware is required from T-Mobile (e.g. you can use your own cordless or corded phones with it).Talk Forever customers must be on a T-Mobile individual plan costing at least $39.99/monthor a family plan costing at least $49.99/month.Talk Forever Home Phone has some significant downsides. It doesn’t support faxes, home-security systems and other devices that rely on dial-up modems. Also, unlike in POTS phones, your home address is not automatically transmitted to 911 emergency centers - the customer has to manually supply that address to T-Mobile during signup (and then change it whenever the address changes). This issue exists with any residential VoIP service. Cord-cutters can transfer their landline phone number to this new service, but it cannot be shared with the T-Mobile cellphone number. Also, the cell phones addressbook doesn’t transfer to the home phone (after all, addressbooks are generally local to the cellular handset).

This is similar to T-Mobile’s HotSpot AtHome program, which allows subscribers to place calls over their broadband connection using special Wi-Fi-equipped cell phones. The difference is that HotSpot AtHome uses the cell phone, while this Talk Forever Home Phone works with any standards corded or cordless phone. In both cases, T-Mobile is trying to get more people to give up their traditional landlines, but the new plan allows them to keep the familiar home phones as well as the home number.

Again the biggest losers out here will be pure-play VoIP providers such as Vonage! Not that there’s a complete overlap, but T-Mobile is positioning itself to carve out a chunk of Vonage’s customer base. This is waaaay cheaper than Vonage (doesn’t have all the features of Vonage, though) and will provide a better value proposition for those looking for cheap home service AND a mobile solution (users will have one bill for both at home and on-the-go voice service). Plus T-Mobile can market this cheaper than Vonage can because it already has a bigger customer base.

No doubt that this will be another nail in Vonage’s coffin - Vonage will now have to work even harder to survive

Verizon Wireless introduced an unlimited calling plan for $99.99 a month on last week. Verizon Wireless is the first major carrier to make an “unlimited” plan available nationwide with no domestic roaming or long-distance fees. At that time, it must have seemed like a good plan to upsell subscribers to “move up” to the unlimited level, including possibly getting new customers from the other cellular carriers, and to create some extra ‘buzz’.

However, not even a mere five hours had gone by when AT&T announced its own unlimited plan. Three hours later, T-Mobile announced its own unlimited $99.99 a month plan, which even included unlimited text and picture messaging, which otherwise costs an extra $14.99 per month when added to other T-Mobile plans. In the end, only Sprint Nextel hadn’t announced a matching plan, and the stock price of all U.S. mobile carriers had taken a dip.

This is far from a historic day in Wireless. This is merely putting a cap on the high end charge. Given that wireless carriers have a monthly ARPU (Average Revenue Per User) of around $50, it is clear that only a small percentage of customers subscribe to these high-end plans. Of course, one could expect more customers to move to the new unlimited plan, but even that would still be a small number. However, for those high end users, this will increase the rate at which they cut the cord and use cellular exclusively for their voice communication needs.

So why did the stock prices of dip so much?

Curiously missing from this picture is Sprint Nextel. Sprint has been trialling an unlimited plan for $119.99 a month (includes unlimited Web use, e-mail and messaging) in Philadelphia, Minneapolis, Tampa, and parts of Northern California and Western Nevada since May 2007. Sprint is looking at how well the offer is doing in the trial areas, and unfortunately for Sprint, this ‘looking’ has been mooted by the other 3 rivals. Given the recent customer losses and with no apparent advantage over AT&T and Verizon Wireless, Sprint will likely have to offer a cheaper plan, to stem the defection of customers. The dip in the stock price probably implies that Sprint will undercut very aggressively and that AT&T and Verizon will eventually be forced to respond. Rumors are that Sprint will undercut its rivals with a flat-rate calling plans that is as low as $60 a month. If AT&T or Verizon are forced to match a $60 to $80 plan, it can significantly cut industry-wide revenues and potentially sets a dangerous precedent towards downward spiraling price plans.

One way or the other, the actions by AT&T and T-Mobile show that nifty price plans no longer provide an advantage to any carrier. So why was this done in the first place?

Perhaps Verizon Wireless wanted to pre-empt a price cut by Sprint. Or perhaps it was a plan to kill-off Sprint Nextel. After all, Sprint is struggling and what better time to attack it than while its down!!! But now it may find itself in a downward spiraling pricing game that the industry is ill-designed to match. Nonetheless, if anyone is able to withstand price-cuts, it must be Verizon Wireless, because it has the higher margins that both Sprint Nextel and AT&T.

The cellular market in India is growing rapidly. In 2007 alone the Indian cellular added more than 80 million cellular subscriptions. By end of 2008, India will have more than 300 million cellular customers, according to estimates by Wireless Intelligence. In comparison, the USA is expected to have 270 million customers by the end of 2008. At this level, India will surpass USA to become the 2nd largest cellular market by subscribers after China. In the 1Q 2008, India is forecasted to have 250 million cellular subscribers, which will be on par with the total cellular connections in the USA. To meet this mark, the Indian cellular market with grow 57% year-on-year in Q1 2008, the same growth seen in Q4 2007. India’s cellular penetration will be more than 20% in early 2008. In comparison, China’s cellular base grew by approximately 18% over the same period, but will have 40% market penetration in early 2008.

This continued growth is facilitated mostly by providing cellular service in rural areas, where penetration rates are extremely low (6% in April 2007, according to TRAI). However, providing cellular to the rural masses will also mean charging less, because in rural areas affordability and willingness to pay are lower. This also means that cellular carriers must find ways to reduce their costs, in order to maintain profit levels. As a result, Indus Towers has been formed by Vodafone Essar, Bharti and Idea Cellular to share 70,000 cellular towers units in India, which will reduce OPEX and CAPEX and improve coverage in rural areas.

The figure below shows the number of cellular subscribers and penetration levels 2005-2010 ( courtesy of Wireless Intelligence)

India has ten GSM networks and six CDMA2000 1X networks. In 2007, GSM networks account for about 75% of total subscribers and grew more than 60% year on year. GSM subscribers are expected to pass 180 million in Q1 2008. In 2007, CDMA2000 1X connections grew by around 54% and is expected to have 65 million subscribers in Q1 2008. CDMA2000 networks are restrained by the limited availability of handsets, compared to a wide range of entry level GSM handsets.

AT&T Mobility says it will step up its 3G buildout, expanding its high-speed mobile service to more than 80 additional cities in 2008. The planned expansion will provide AT&T 3rd generation (3G) high-speed data services to nearly 350 leading U.S. markets by the end of 2008, including all of the top 100 U.S. cities. The initiative will entail rolling out 1,500+ additional cell sites in the U.S. The AT&T 3G network now delivers downlink (download) speeds between 600 and 1,400 Kilobits per second (Kbps) and uplink (upload) speeds between 500 and 800 Kbps.

AT&T also plans to complete the deployment of High Speed Uplink Packet Access (HSUPA) by the middle of 2008. HSUPA provides higher uplink speeds and is the next step in the evolution of AT&T’s 3G network that will the transition to High Speed Packet Access (HSPA) standards. With this change, AT&T will catch up to Verizon and Sprint in terms of high speed wireless coverage. In fact, AT&T may even have faster uploads with HSUPA than Verizon or Sprint has with their EV-DO Rev A network.

Currently, there are multiple 3G technologies used by different wireless carriers in the U.S. AT&T uses HSPA that is based on W-CDMA technology, while Verizon, Sprint, Alltel, and U.S. Cellular, use CDMA2000 1xEV-DO technology. Sprint is also building another high-speed wireless network based on WiMAX, which was recently classified as a 3G technology. For 4th generation (4G) services, AT&T will use a technology named Long Term Evolution (LTE), a 4th generation technology that is still in the ‘development’ stage. Verizon too has announced that it will use LTE as its 4G technology, which will align it closely with its half-parent Vodafone, which mainly operates in Europe and Asia.

JetBlue will introduce in early 2008 limited in-flight e-mail and Instant Messaging access, in partnership with Yahoo and RIM (the maker of BlackBerry phones). Passengers on JetBlue’s Wi-Fi equipped BetaBlue aircraft will be able to use their Wi-Fi-enabled laptops, smartphones, and BlackBerries to access customized version of Yahoo!® Mail and Yahoo!® Messenger named Yahoo! Mail in the Sky and Yahoo! Messenger in the Sky. BlackBerry users will also be able to check BlackBerry Email and BlackBerry® Messenger services. All this for Free (um..at no additional charge)! However, iPhones™ cannot be used on BetaBlue.

Yahoo!’s in-flight versions of Mail and Messenger are slightly different - they do not allow attachments to be opened via Yahoo! Mail in the Sky. Even Personal and corporate BlackBerry email on BetaBlue do not support attachments. So, if you are a laptop user, you cannot use your existing Yahoo! mail and Yahoo! messenger, but have to install the customized lightweight Yahoo! Mail in the Sky and Yahoo! Messenger in the Sky version. Those without a Yahoo! account can register for one on the fly (literally!).

JetBlue’s BetaBlue aircraft is an Airbus A320 equipped for email and Instant Messaging services above 10,000 feet. Once the BetaBlue aircraft has reached 10,000 feet, customers can begin using the Wi-Fi service. JetBlue is in a unique position among airlines because it has licensed spectrum in the United States that allows it to transmit from planes to the ground. This also positions JetBlue to offer similar service to other carriers.

All this good stuff is coming in early 2008, with additional features and functionally coming later. These services are free to customers and provided exclusively by JetBlue and LiveTV™, Yahoo!®, and BlackBerry®.

I think this is a great step forward. I travel quite a bit, so I know that being on a plane is one of the most boring and harrowing experiences. Being able to connect with friends and family on mother earth will go a long way towards making the on-board experience more useful.

I didn’t know how many business travelers fly JetBlue, but the last time I flew JetBlue about 4 weeks back, I noticed multiple people with Blackberries, so the partnership with Research in Motion makes sense, although I don’t think there are many Wi-Fi capable BBs out there now. I don’t travel JetBlue that often, but this is one more thing that will tip the scale in favor of JetBlue for my future travel.

India’s cellular market has more than 217 million customers and is adding eight million subscribers a month, making it the world’s fastest growing. With just 13% penetration of mobile subscribers, there’s still a lot more opportunity for wireless carriers and a lot of areas in India still don’t have cellular coverage. So far India’s mobile revolution is mainly confined to the cities, but the real opportunity lies in providing telephone service in the vast rural hinterland that have more than 770 million people, only 2 percent of who have telephone service. Even the teledensity, the percentage of people owning ANY phone, in India is just 21 percent (compared to the saturated markets in the west). However, building out a wireless network infrastructure is no mean feat - it is very very expensive - and a feat that only highly capitalized mobile operators can do.

In order to make a nationwide roll out cheaper and to grow faster, three leading Indian private mobile operators, namely Bharti Airtel, Vodafone and Idea Cellular, are launching a new company to share communications infrastructure to cut costs and help speed the roll out of a nationwide phone network. This new company will be an independently managed communications tower operator by the name Indus Towers. The companies will pool their existing communications towers so Indus Towers will start out with 70,000 tower sites. Bharti (India’s biggest private mobile phone operator) and Vodafone will hold 42 percent stakes each, and Idea Cellular, controlled by the Aditya Birla conglomerate, will hold 16 percent. The new company will also share infrastructure with other service providers like broadcasters and broadband service providers

This is the first such venture to be launched in India and it is a great strategy. Sharing network infrastructure will help reduce mobile phone service costs even more, despite India already having one of the world’s cheapest wireless services at less than two cents (U.S) a minute. No doubt that this is the best strategy to reach a new layer of untapped clientele, and one espoused in the book “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits” by well-known strategist C.K. Prahalad.

The Indian telecom sector has undergone a major transformation since key policy reforms were initiated in the late 1980s when telecom equipment manufacturing was opened to the private sector, followed by the National Telecom Policies in 1994 and 1999. Historically, the telecom network in India was owned and managed by the government. It was considered a strategic service, best under state control. However, when the telecom revolution in other countries in the 1990s resulted in a better quality of service along with lower tariffs, Indian policy makers opened up the telecom services sector. India is divided into 18 telecom circles and four metropolitan jurisdictions.

Today, India is the fourth largest telecom market in Asia, after China, Japan and South Korea. It is also the eighth largest telecom network in the world and the second largest among developing countries. In wireless telecom, India is one of the world’s fast - growing mobile markets, adding 6.4 million subscribers a month on average.

Although wireless penetration is just 13% among a population of 1.1 billion (compared to 40% in China and close to 100% in Western Europe), India is forecasted to have 525 million mobile subscribers by 2010, but wireless service providers may have to be consolidated to make services more affordable through higher economies of scale. For its part, the Telecom Regulatory Authority of India (TRAI) has developed a set of M&A norms that have limited the market share of a merged entity to 40% in the particular market, against the earlier 67%, based on the number of subscribers and revenues.

Given the continued growth opportunity, Foreign investors are lining up to enter the Indian Market. In Late 2006, AT&T became the first foreign telecom operator, in partnership with Mahindra Telecom, to obtain a telecom license under the foreign direct investment policy that allows up to 74% foreign ownership. Vodafone, the wireless operator based in the UK and the half-parent of Verizon Wireles, recently acquired a 52% stake in Hutchison Essar, which was renamed Vodafone Essar. Russian telecom major, Sistema, has acquired a 10 per cent stake in Shyam Telelink for fixed - line, cellular and internet services in the North Indian state of Rajasthan.

Major telecom operators in India include Bharti Airtel, Reliance Communications, the government-owned Bharat Sanchar Nigam, and Vodafone Essar.