4G to 5G Buzzword Compliant Passage

This report in The Guardian reports how NIC of UK is distressed about lack of 4G reach in UK.

It will be interesting to see how follow up is done and depth is improved.

Perhaps something country like India can observe and emulate.

The most amusing part of the Guardian report is the use of the phrase, "buzzword compliant".

Any new technology comes with its own set of buzzwords and adjectives and their combinations.

Facebook's Missed Call ads and my post from stone-age

The race to capture the value at bottom of the pyramid brings to us a unique offering from Facebook. For the low-end phones (read as not smartphones), which are still carried by almost two-thirds of Indian subscribers, Facebook is bringing in missed-call ads.

This has the potential to be a game changer. While this article does not speak whether they plan to use internet / data here, I believe the real potential will be tapped if the program is run irrespective of data availability. Despite impressive mobile network reach, countries like India have some time before data is pervasively available.

So there is nothing to boast about here, yet let me point to one of my posts from few years ago where I had discussed on the missed-call innovation. You can read it here - The very interesting "Missed Call".

I had described a few use cases there. The whole concept of missed call is on the basis of what I called "inter personal communication protocol (IPCP)". That is the knowledge of what is to be done is known only to the 2 parties exchanging the missed call - The idea of IPCP is the users decide the meaning of the missed call.

Facebook (and I am sure others will follow soon) are tapping this IPCP with some enhancements. Lets see where this innovation goes.

On 5G Mobile Communication

One of the best articles I have read on the evolution here on. Especially the info graphic is excellent,

http://thenextweb.com/mobile/2014/06/25/5g-uk-beyond-know-far/5/

Telecom update and challenges thrown by internet

Check this article on GSMA MBB on developing world's nos. in terms of telecom lines.

Of about 6 billion people, 2 billion are yet to be connected. And overall 40% growth is still waiting to happen.
No wonder these countries are seeing phenomenal investments.

And now to something funny and scary at the same time. The power of free speech and the power that internet gives to thus emancipated speakers.

NY Times article on how internet is influencing tourists. Though for individuals it may be distressing, unmoderated comments on incidents that are best classified as "outliers" can wreak havoc on businesses.

How to control and manage? No argument here, businesses have to find way out and ensure correct image is portrayed. It is an additional load on their PR and corporate communications managers.

Mobile Mania and Music Quality - Net Gain!

The New York Times is running an article that discusses how the spread of mobiles as music devices has brought down the quality of the music being reproduced. What the article misses is the service that these devices are doing to artists across the world. 

Consider the dynamics of the previous era of music:

1. Gramophone Disc and Player

2. Audio Cassette and Player - Smallest Size - walkman

3. Compact Disc and Player - Smallest Size does not fit in a pocket.

All the 3 above are oversized, they have limited song carrying capacity but each had reached good sound reproduction quality. Now, consider the mobile phone that fits in your pocket and can carry theoretically hundreds of songs in a small chip. 

Mobile phone is a device that is almost omnipresent. So the number of music fans who can access music has increased manifold. Earlier it was restricted and mobile phone has brought about this change.

It is like that classical question of recent times - who sold most cameras in India? Not a camera manufacturer but a mobile phone manufacturer.

So yes, I am sad for the loss of quality but am happy for the music lovers and for the artists. Especially the artists, who otherwise had a much smaller audience. 

From Do-Not-Call to Do-Call

Moving from Do-Not-Call to Do-Call will suddenly create tectonic shift in this important market.

What it does is it empowers the phone users to prevent the marketing companies from calling them. Interestingly, the do-not-call was supposed to help the mobile users but it has been read that it is not as effective as it was hoped to be.

Would be interesting to learn if the do-call registry model has been used in any country other than India.

Mobile Cash, Field Hockey and others

Interesting article and blog post on NewYork Times:
http://bits.blogs.nytimes.com/2010/04/29/no-cash-no-problem-mobile-phones-instead-of-cash/?ref=technology


http://www.nytimes.com/2010/04/29/technology/29cashless.html?ref=technology


And a very interesting article in WSJ on Field Hockey! Well honestly, I am not such a great hockey follower though I would love to see and follow more:
http://online.wsj.com/article/SB126327472700025905.html?mod=WSJINDIA_mgmt_LeftTopNews

Telecom dynamics - Misc Links

Lightreading speaks about European market.

In the meanwhile, India starts its walk towards 4G.

Shyam Ponappa's thoughts on Alternative Scenarios in Indian telecom

The very interesting "Missed Call"

This article in WSJ shows the power of technology through this innovative use of mobiles by the fishermen  in Tamil Nadu. This article points finger to the miserable weather forecasts of traditional agencies that makes fishermen feel the need of above SMSes. In developed countries the forecast is quite accurate and there is no need for such services.

But then, India is a market full of innovative uses, especially in the mobile space. The earliest innovation being the missed call. For readers from outside India, a Missed Call is where a caller calls and disconnects before the call is picked up. With mobile users, the caller's number is displayed on the mobile of the called party. It is quite widely used in India.

Now what is the use of a missed call? I will list few scenarios, but I am sure there are many more depending on the inter personal communication protocol (IPCP). I will come to IPCP a little later.

Scenarios:

1. Caller does not have money to spend on a call and wants the other person to call. He/she makes a missed call. The other person calls and speaks. This is probably the most basic of the uses.

2. Both parties have agreed to meet at some place. Whoever reaches first will give the other person a missed call.

3. A missed call is made to economically convey nice emotions like, "I miss you" or "I love you".  The thoughts reach the destination without costing anything to the entrenched parties.

So what is IPCP - Consider scenario 2 above. Now the 2 people have decided that a missed call means "I have reached". IPCP is established and will expire with the missed call.

Similarly, say A and B are going to a wedding. They are reaching the venue directly and they need to buy a gift on the way. Whoever buys a gift first gives a missed call. Similar to above, yet different.

One can think of hundreds of such examples. The idea of IPCP is the users decide the meaning of the missed call. And who framed the concept of IPCP....well that would be none other than yours truly :)

And, IPCP also leads to some really amusing and sometimes embarassing situations. More on that in some other post.

How 2009 Went By? Part 1

As is the ritual, year endings are mandated with the lists of 10 somethings...top news, best, worst....

So here are the 2 telecom updates:
1) MBB on top 10 telecom news. 
2) Telecom M&A details from Unstrung - Check the AdMobile story in there. Interesting.

As I gather more such lists, I will either update this post or post next part.

Also posting these / some of these individually on twitter under #How2009Went. If you got any interesting ones, post in comments here or tweet them.

Telecom Market Evolution & Part 3 of Nortel's Story

Nortel has sold its GSM business. This article from LightReading summarizes the sales so far and the expected asset sales.

Telecom Market Discussion

Now check this article from Economist on forecasted mobile subscriber base. 2 things of note:

1. Check the forecast by 2011 when the mobile broadband subscriber base passes fixed broadband subscribers.

2.  The costing of the netbooks and other low cost computing devices meant to improve internet penetration.

Another point is that as 3G is made available across the world, the mobile eliminates the need of a separate computing device. This matters a lot to 2 types of subscribers - convenience oriented and cost oriented. The convenience oriented market has been more or less addressed.

The cost oriented ones are the ones that are forming a very large part of the mobile broadband forecast in the Economist article.

Finally, fixed broadband has a role to play in rural and other emerging areas. That is described in the intern-kiosk model that is there in Economist. And of course the folks who are already onto it in established markets.

Mobile banking for shareholders

Here is a very interesting application of m-banking. This article in Business Line reports mobile share transfer: Transfer your shares through mobile phone

Such VAS services are forming important part of the ever expanding telecom offerings. Offerings that go much beyond voice and SMS. For example, check this earlier post where I spoke about location based services being used to encourage use of public transport in the Bay Area.

Security is very important in these cases. At the least, the interface should take multiple confirmation since the network should be sure that the subscriber is indeed requesting this service.

Check one of my earlier articles if you want to read more on that:
Mobile Money Transfers - Opportunities and Issues

Valuing Nortel's LTE Patents - Part 3

Nortel has come out with ~3400 patents. All About Nortel reports that these will be assessed for its value and the strategy for sale will be decided after their consultant provides inputs on the portfolio's potential.

As I had discussed in my earlier blogs, there are 2-3 methods to assess the value of the patents. Most probably it will be a mix of direct market potential and value of real option.

The older posts - Patent related post 1 and Patent related post 2.

Going Green with Mobile Technologies (Location Based Services)

It is a no-brainer on how much greener the earth will get if folks start using public transport where possible. Interesting ways to encourage people to board that bus or railway train will help reduce emissions.  It also helps improve health since you need to walk at least a few steps farther than the garage to the bus or train stop. Location based services uses location of a mobile to deliver value added services.

I am impressed by this game that Bay Area public transport authorities have started to encourage usage of public transport systems. Reached this location from NewYork Times BITS page.

Countries like the US, where urban dependence on public transport is pretty low, do need such initiatives. Particularly impressive is the use of the location based technology. What makes you play this game are incentives such as "being a Mayor gets you some freebies".

Awesome!

Mobile Charging - Case for alternative energy

Hmmm. Interesting. This report from GSM World says that emerging markets that can provide for alternative means of power off grid for mobile charging may lead to an eventual increase of revenues by about 10% or so for the mobile industry.

I remember when I was a kid, some of my cousins from US used to have Solar powered calculators. They used to work fine. Rarely did I see these devices need battery replacement. That was 20 years ago and I am sure that technology has evolved over the years.

So why exactly are solar powered mobile phones still seen as a thing of future? Really, I understand the limitation for equipments like A/Cs or heaters which consume more power. But small mobile phones can come with solar power charging at least.

Consider this case, from this report, 485 M cellphones use chargers of about 1-2 W rating ...so 485MW. If 1/5th of that is charged through solar (or other alternative means), then the net saving is about 100MW, imagine how many houses can be added to the grid. (OK, this calculation is way too simplistic and you can see 2445 logical problems in that...but I hope I made my point.)

While some handset manufacturers are bringing out such devices, it helps to have an agreement on such things. There can be a coordinated effort so that there is some level-playing field in terms of effort and cost. The output in terms of technology should lead to modifications that may be mandatory.

In general, network connectivity and electrical connectivity have a lot to do with improvement in standard of living. The sooner the divide is bridged, the better it is for all of us. The greener the way to bridge the divide, the better it is for our next generation.

Telecom stocks hammered - Why the haste?

Indian telecom stocks have been heavily hammered in the last few days. I was surprised.

Further to the pay-per-call, there was the 50 paise call and the discussion about possibility of mandate for per-call pulse that caused almost panic selling in the markets. It seems a hasty conclusion that all telecom is going to lose overall...

Following points need to be thought of in the context of Indian telecom scenario:
1. The ARPUs are falling but they still seem to be a function of the demand-supply equilibrium. Consider this, which markets are still untapped in India? Rural markets. The teledensity of rural ndia is far behind the urban. So the rural market is probably stimulated at a lower price and the industry is probably responding to that.

2. Commoditization is natural but this rural market would still allow the business to be a good business because of the volumes.

3. Now, in the recent times, operators have adopted several measures that are cutting costs like Infrastructure sharing, outsourcing their network operations etc.

If the operators are willing to pass this cost savings to customers, then that is actually good news for customers. Perhaps the demand generated by this will more than compensate the reduction in revenues.

4. The 3G scenario has still not even started. I am sure every operator definitely would have a strategy for 3G. They will find new ways to generate interest in 3G apps in the urban market. Particularly, business customers and the youth segment.

5. Operators are also trying to unlock value by spinning off businesses like tower business etc.

Considering this, I thought it was a little premature to assume that telecom story is over. I would rather wait and watch.

New Tech - Wirelessly Charging Mobile Phones

Wireless power charging is being worked on. Just read on Techtree and Ubergizmo websites that Nokia has joined the consortium that is bringing together work in this direction.

What this promises is that you no longer have to plug the charger wire in the phone.

I was wondering if this means higher power needs, since the charging will be in wireless mode. The following analysis on the Wireless Power Consortium says that the efficiency is comparable. Efficiency of wireless power.

I suspect the handsets with this technology will remain expensive till the time the technology is new and the demand low. Although, in cases of such technology the adoption is pretty quick. Especially if people think that this is really useful.

The good part is that the above consortium is already trying to ensure interoperability.

I had blogged some time ago about standardization of the normal (wired) chargers Good News for Mobile Customers. I think most of us, at least once, have been through the experience of forgetting the charger and then trying to find from people around if their charger can charge our mobile.

Then there are the technology questions -
1. Is this safe?
2. How long will it take to charge a phone?
3. Is this used in some other field / technology?

Another thing to see is the business promise of the technology. I agree that this will be adopted. But the current costs and its comparison to wired chargers will be useful to assess how soon and to what extent.

Miscellanous and Interesting

1)
An interesting discussion in NYTimes on Wireless On-board.
http://roomfordebate.blogs.nytimes.com/2009/09/28/the-in-flight-menace-wireless-chatter/

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2)
Mumbai municipal corporation has just earned Rs. 26 Crore for scientific handling of garbage dumpyard. http://timesofindia.indiatimes.com/news/india/Mumbai-dump-gets-Rs-26cr-in-carbon/articleshow/5048215.cms

I am witness to this change because I lived in that suburb. We used to hate going near the creek because of the smelly garbage pile that could be seen and smelt from a kilometer away. This summer I went to Gorai Island and actually did not smell the stink. When I checked ( that is turned my head in the direction of dumpyard), the pile was transformed into a smooth surfaced hillock. It was obvious something was done about the thing but I did not know at the time that this was the work that was going on. Something to be proud about.

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3)
Swapan Dasgupta's article "Bust the myth of Good over Evil" in this Sunday's Times of India left me baffled.
What exactly is the point of this article? That we stop believing in the values we built? Or stop believing that, ideally, there should be law and order...and that if it breaks down there is a judicial process?

Mr. Dasgupta, who is generally articulate and logical, is all over the place with this article. Speaks about 80's movie endings, then about Ravan's virtue, then Kumbhakarna's moral dilemma. But what is the whole thing about?

After a certain age we all understand the reality and flaws of a system that prevent the world from becoming perfect. But does that mean that we abandon praying for the victory of good?

More than anything else, the social value of occasions such as Ramleela / Durga Puja is reason enough to keep the tradition going.

Valuing LTE Patents of Nortel - An approach - Part 2

I received a few comments on part 1 of this article. Thanks to Paddy and Fehrzard for their comments. This article is an attempt to make the first one more complete.

1. First, the disclaimer - Black Scholes assumes efficient markets as well as liquidity of the asset. Both may be challenged and rightly so.

2. Now, one very interesting thought on how to view patent is how to define it? It may be as a product or a service that can be developed as a result of the patent - this was the primary assumption in the earlier article.

However, the patent is also something that gives exclusivity to the innovation, not the innovation itself. Hence more pertinent is the value of 'exclusivity', or even the benefit from suing the competitor who infringes the patent.

3. The time to expiry is minimum of patent expiry or time for technology obsolescence.

4. A big assumption in my first article is the knowledge of investments needed in developing marketable products from the patents. Obviously, this is a difficult thing to predict. One can go by historical stats but that too is no guarantee to future. Only thing we can do is scenario analysis.

5. Finally, the opportunity cost of delaying the project also needs to be adjusted in the calculations.

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Tailpiece - Nortel has now put on block the Carrier Division - Software minus the patents. More info on All About Nortel.

Valuing LTE Patents of Nortel - An approach

Now that Nortel's Wireless and Enterprise businesses have been auctioned, Nortel still has LTE Patents with it. LTE is a considered to be a successful technology for the 4G wireless business and is expected to take the world to seamless broadband wireless paradigm. Nortel is said to have 600 patents in this area. Now let’s try to assess how this asset can be valued.

Following is with the assumption that the potential buyer is going to know everything about the patents.

1. A Patent is an asset that will be used directly or indirectly through applications based on the patent.

2. First step would be to find the directly assessable market based on history. That market is of those products this patent and its extensions can directly substitute.
That is the possible market potential.

The subjective part here is how much one can be sure on this market potential.

3. Next is finding the potential of those products that are not conceivable as of now. This is the tricky one.

(i) One way to approach this is on the basis of historical statistics of patents from the same industry. For example, in this case of 4G, we can take a random sample of 600 patents (or possibly more) from the period when 3G (or any other technology) was a new area of research.

(ii) Now analyze how many of these samples proved to be huge successes, moderate successes and damp squibs. With this as the basis, we can use the same probability on this set of LTE patents (this is a huge assumption). Obviously this is not something that will always work yet if we are going to use history as any indicator then this is one way to follow.

(iii) The next 2 things we can draw from the above sample would be the standard deviation and volatility.

4. Now if we look at this set of patents as an asset, then the value of buying an asset with unknown potential is nothing but buying an option on the asset.

5. So now the value can be assessed as the value of a real option with a possible market value that was calculated in points 2 AND 3.
a. We have - Possible Value of the asset and the volatility.
b. We also have the risk free interest rate.

c. Now the tricky ones, the strike price of this option and the expiry time.
(i) The PV of the investment in productizing these products is the strike price. Why? Compare this to a stock call option - What you earn in a call is the difference between the stock price and the strike. Similarly, here the gain of the patent owner is the difference between the revenues and capital cost.

(ii) Now the expiry time is how long these patents are useful. We cannot sit on 4G patents when the market is already preparing for 5G technology. Beyond a certain time, any technology simply loses relevance.

6. At this point we can insert the values in any Black Scholes Calculator.

Alternative
An alternative to this step is to break the 600 patents in several sets of like patents and then assess each set individually. The next step can be to sum them all and use these steps for overall value or consider each set as a separate option and value them one set at a time.

Major assumptions of the above approach -
1. This set of LTE patents will have a market performance similar to historical set of randomly chosen 3G patents from a similar period in 3G's lifecycle.
2. Cost of productizing and other capital costs.

I have applied theory of real options in this case and will try to find out of there are other better methods already used elsewhere. That would form some other post

- Siddharth Garud

Reference:
http://www.cbc.ca/technology/story/2009/07/29/f-lte-long-term-evolution-wireless.html