Google and Intel Boost Mobile Internet
When Intel puts its weight behind an initiative, it automatically gets a boost. But when Google and Intel together join forces, no one in their right mind can bet against such a combined force. Mobile Internet with broadband access has achieved that inevitability with Google backing a Wimax joint venture between wireless veteran Craig McCaw's Clearwire and Sprint-Nextel. In addition to Intel and Google, this venture is also supported by Comcast and Time-Warner.
As the world goes mobile, Intel's objective is to extend its leadership position in platforms used to access the Internet. Google is aiming at capturing the huge market for mobile advertising that is likely to grab a increasingly larger share of online advertising revenue.
The wireless carriers such as Verizon and AT&T have long been busy building walled gardens and controlling the distribution and content of mobile platforms. On the other hand, Intel and Google have long been arguing for an open model similar to the Internet access by PCs where the consumer is in charge. Such a model would obviously benefit both Intel and Google to extend their current dominance in the desktop/laptop user market into the mobile Internet space. Now the two giants appear to be succeeding with the roll-out of the Wimax network and Sprint-Nextel's willingness to work with them to beat Verizon and ATT Wireless as the incumbent carriers.
According to Wall Street Journal, the WiMax venture will create a network that potentially covers 120 million to 140 million people in the U.S. by 2010, the companies said. The venture, valued at more than $12 billion, will have a two-year head-start on rivals Verizon Wireless and AT&T Inc., which are just beginning to sketch out plans for their next-generation wireless networks.
While the potential for Wimax in the US market looks very good, I believe the really big opportunity is in the emerging markets, such as India and Pakistan, where the mobile phone has achieved greater than 50% penetration and the PC/Internet penetration remains in single digits. South Asia is witnessing some of biggest deployments of Wimax with a lot of consumer interest in both fixed and mobile broadband.
According to Juniper Research, South Asia will be the driving force behind the growth of Mobile WiMax, or the 802.16e standard. The Asia and Australia regions are expected to account for more than 50% of the total WiMax deployments by 2013.
Pakistan, being among the first countries in the world to roll-out a functional WiMax service, is experiencing tremendous growth in demand after Wateen Telecom’s launch of its WiMax service and roll-out plans announced by Mobilink.
India's state-owned Bharat Sanchar Nigam Limited is rolling out a Wimax network for broadband access in response to government requirement that 20 million broadband lines be in service by 2010.
Given the pent-up demand for the Internet access and the ubiquity of mobile phones, Wimax roll-out will likely spur the largest adoption of mobile Internet in South Asia first.
As the world goes mobile, Intel's objective is to extend its leadership position in platforms used to access the Internet. Google is aiming at capturing the huge market for mobile advertising that is likely to grab a increasingly larger share of online advertising revenue.
The wireless carriers such as Verizon and AT&T have long been busy building walled gardens and controlling the distribution and content of mobile platforms. On the other hand, Intel and Google have long been arguing for an open model similar to the Internet access by PCs where the consumer is in charge. Such a model would obviously benefit both Intel and Google to extend their current dominance in the desktop/laptop user market into the mobile Internet space. Now the two giants appear to be succeeding with the roll-out of the Wimax network and Sprint-Nextel's willingness to work with them to beat Verizon and ATT Wireless as the incumbent carriers.
According to Wall Street Journal, the WiMax venture will create a network that potentially covers 120 million to 140 million people in the U.S. by 2010, the companies said. The venture, valued at more than $12 billion, will have a two-year head-start on rivals Verizon Wireless and AT&T Inc., which are just beginning to sketch out plans for their next-generation wireless networks.
While the potential for Wimax in the US market looks very good, I believe the really big opportunity is in the emerging markets, such as India and Pakistan, where the mobile phone has achieved greater than 50% penetration and the PC/Internet penetration remains in single digits. South Asia is witnessing some of biggest deployments of Wimax with a lot of consumer interest in both fixed and mobile broadband.
According to Juniper Research, South Asia will be the driving force behind the growth of Mobile WiMax, or the 802.16e standard. The Asia and Australia regions are expected to account for more than 50% of the total WiMax deployments by 2013.
Pakistan, being among the first countries in the world to roll-out a functional WiMax service, is experiencing tremendous growth in demand after Wateen Telecom’s launch of its WiMax service and roll-out plans announced by Mobilink.
India's state-owned Bharat Sanchar Nigam Limited is rolling out a Wimax network for broadband access in response to government requirement that 20 million broadband lines be in service by 2010.
Given the pent-up demand for the Internet access and the ubiquity of mobile phones, Wimax roll-out will likely spur the largest adoption of mobile Internet in South Asia first.
Comments
Over the 2002-2009 period, the number of mobile subscribers rocketed from less than 2 million to more than 94 million (58% penetration). The 2006-2007 period in particular had been remarkable for the country’s mobile operators as the total subscriber base moved from 22 million at the beginning of 2006 to 77 million at end-2007. By early 2008, the 50% penetration milestone had been reached, probably much faster than most people expected. Despite a tightening national economy, coming into 2009 the mobile market continued to expand at an annual rate in excess of 10%.
By 2009, however, Internet penetration remained low and broadband growth had also been negligible. There was some good news on this front when the year 2008 saw an upsurge in broadband subscriptions; importantly, this looked to be continuing in 2009, boosted by the spread of competition throughout the market. DSL subscriptions were dominating the broadband market, quite overshadowing the cable modem broadband services provided using HFC infrastructure.
In the meantime, early signs of wireless-based broadband Internet technologies had begun to appear and by 2008 there were a number of WiMAX networks being rolled out in the larger urban centres. For the time being, however, the number of wireless broadband subscribers remains relatively small.
The big challenge in the short term for Pakistan’s telecom market will be to manage the impact of a pronounced downturn in the national economy. The 2008/09 fiscal year saw a huge dip in FDI as foreign investment in the country suffered a significant overall reduction. In the longer term the ongoing task of regulatory reform will be the major challenge.
Key highlights
• Despite a faltering economy and speculation that the mobile market was saturating, Pakistan still managed to grow its mobile subscriber numbers in 2009, reaching 94 million subscribers (almost 60% penetration) by June 2009.
• Growth in mobile subscribers was continuing at an annual rate of about 12% in 2009, modest compared with previous years, yet still representing healthy growth in the circumstances.
• Pakistan’s mobile sector has been boosted by increased competition, with newcomers Warid Telecom and Telenor (both launched in 2005) having quickly claimed big stakes in the market. By mid-2009, their combined market share had reached just over 41%.
• Broadband Internet penetration remains low in Pakistan (around 0.2% in early 2009) but 2008/09 had witnessed a strong surge in demand for broadband services that looked set to continue.
• Growth in the country’s fixed-line market remained sluggish; fixed teledensity stood at less than 4% by end-2008 with the numbers expected to only edge up slightly in the short term.
• One positive factor in the emerging fixed market has been the success of WLL technology which was supporting around 35% of all fixed subscribers by early 2009.
Pakistan – Key telecom parameters – 2008 - 2009
Category 2008 2009 (e)
Fixed-line services:
• Total subscribers (million) 6.2 6.5
• Annual growth -7% 5%
• Fixed-line penetration (population) 3.8% 4.0%
• Fixed-line penetration (household) 23% 23%
Internet:
• Total subscribers (million) 3.7 4.0
• Annual growth 6% 8%
• Internet subscriber penetration (population) 2% 2%
Mobile services:
• Total subscribers (million) 90.0 99.0
• Annual growth 17% 10%
• Mobile penetration (population) 56% 60%
(Source: BuddeComm)
In Pakistan, the widespread infrastructure of mobile operators provides them strong advantages to serve as an important link in the financial services value chain. As we have seen in Pakistan, banks and mobile operators have partnered up to start MFS. This generated a wave of marketing activity (see these commercials) which also extended to social networks such as Twitter and Facebook, highlighting the competition among mobile network operators.
One may ask why did it take so long for MFS to start in Pakistan? Well, unlike entrainment or information services, financial and commerce related services require coordination of multiple institutes and approval of government regulatory agencies. Security, accuracy and establishment of trust of users is also very important.
Easypaisa. An example of this is ‘easypaisa’ from Telenor Pakistan and Tameer Microfinance Bank. Interesting thing about this service is that money can be sent and received without a mobile phone. However, using a mobile phone provides convenience as confirmations are sent as sms. Any person with a valid Nadra CNIC can send money or receive money. Sending/Receiving can be done from more than 4,000 easypaisa shops all over Pakistan. The transaction is encrypted and the process has been approved by the State Bank of Pakistan. Details on how this works are available at easypaisa website and on YouTube.
Regardless of one’s opinion on the convenience and the fees, one must admit that introduction of MFS such as easypaisa changes the status quo for payments which has been around till now in Pakistan.
Telenor is not the only company with plans for mobile financial services. Ufone started premium banking service for customers of Ufone who have account with one its partner banks. This is a different approach where an application on the handset allows eligible customers to carry out financial and non-financial transactions. Mobilink, the largest cellular company by subscribers, is also gearing up for MFS. In July, Orascom announced its plans for MFS:
Mobilink and Citibank will utilize Mobilink’s extensive retail infrastructure to extend the reach of financial services to the previously un-served masses. Using Mobilink’s cutting edge technology, Mobilink users will be able to open branchless bank accounts through a simple and convenient registration process via authorized agents across the country. The service will allow users to maintain their accounts through their phones and make secure peer to peer money transfers to any Mobilink number simply via SMS.
At telecompk.net we have extensively covered the potential, opportunities and market size of MFS.
Wi-tribe, a wireless internet provider backed by Qatar’s Qtel Group, has launched a wireless broadband service in Pakistan. The deployment, which uses WiMAX technology from Motorola, covers major cities of Karachi, Islamabad, Lahore, and Rawalpindi.
Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, chairman of Qtel Group, said the launch, which is Wi-tribe’s biggest project to date, marks an important stage in the company’s aim to become a top 20 telecom player by 2020.
“Following our launch in Jordan, Pakistan marks a major stepping stone towards our expansion strategy and our intention to leverage the scale and strengths of the Qtel Group in order to deliver the latest technologies to our customers,” he said.
Dr Nasser Marafih, CEO Qtel, added that broadband represents a “major pillar of growth” for the company, particularly in markets which have low broadband penetration rates, such as Jordan and Pakistan.
“Broadband penetration levels in new emerging markets are currently very low compared to markets in the region. However, consumer demand for wireless services is growing at a fast pace. So we will continue to focus on this area in the future as we see good business opportunity and significant growth potential,” he said.
While Pakistan already has about 50 ISPs, services are limited outside metropolitan areas. Access to high speed broadband and mobile broadband is also limited.
As of February 2008, Pakistan had about 100,000 broadband users, although the government has set itself a target to increase this number to 1.6 million by 2010.
Qtel entered Pakistan in April 2007 when it acquired a 75% stake in wireless telecoms operator Burraq Telecom, in a joint deal with and Saudi Arabia's A.A. Turki for Trading and Contracting.
When compared with cellular phone growth, Broadband has been slow to take off in Pakistan. However the last two years show some progress in terms of growth (a little over 20K subscribers per month), more choices of services in more places and most importantly a significant drop in cost for broadband access (~Rs.1200 per month on average). Another welcome trend is to move towards unlimited broadband.
PTCL has taken the lead with its DSL and EVO offerings while WorldCall, Mobilink Infinity, Wateen / WiMAX, Qubee, NayaTel and Wi-Tribe have also offered their services.
According to PTA, “broadband subscriber base grew by 146% adding 245,727 subscribers during July 2008 – June 2009, while broadband connection charges for 1Mbps connection dropped below Rs. 1000. There were 413,809 Broadband subscribers in June 2009 as compared to 168,082 in June of 2008.”
At the current rate of broadband growth we can cross the half-million mark by December 2009. We need to get to 1 million much faster.
Last month, Chinese handset makers Huawei and ZTE unveiled Android phones powered by Qualcomm chips for about $100. That’s not yet low enough for Indian operators, though. “The big threshold will happen at $50 to $60,” says Sanjay Kapoor, CEO for South Asia at Bharti Airtel. “At that price, then an explosion of the market can happen.”
To get there, Jacobs has made changes at Qualcomm. In the late 2000s the company lost a step to Taiwanese rival MediaTek, which made a splash in 2G phones by working closely with cheap, no-name producers in China that had little experience making handsets. MediaTek didn’t just sell them its chips; it taught its customers how to produce handsets. Jacobs says Qualcomm tried to keep its distance from what he calls this “swarm of ants” strategy, but MediaTek’s success made Qualcomm realize it had to adapt. Now the American company has started offering reference designs of its own to companies that work on 3G phones. “We learned you need to give the complete design, soup to nuts,” says Jacobs.
That new approach is helping companies such as Micromax, one of India’s leading local brands, take aim at the $100 smartphone barrier. Micromax once needed up to 12 months to come out with a phone, says Vikas Jain, business director and co-founder of the company. Now it needs only four, he says. Qualcomm’s expertise is also helping Micromax reduce its use of components from other companies, Jain adds, thus cutting by 30 percent its bill of materials for new devices. The company’s cheapest smartphone now costs $175, but Jain expects a $100 handset within six months. “Once we are able to reach these price points,” he says, “we are very sure about the mass adoption of smartphones in India.”
For most Indians right now, though, the smartphone “is not a device that you must have,” says Lennard Hoornik, president of South Asia for Taiwan-based smartphone maker HTC. The $100 challenge, he says, misses the point. For Indians to buy smartphones en masse, they need to have lots of apps in Hindi, Tamil, Bengali, and other Indian languages. “There aren’t enough local apps that make people feel, ‘I have to have this.’ ”
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Meanwhile, Qualcomm is looking further ahead. Although 3G is only getting off the ground in India, the government last year auctioned off spectrum for the next generation of high-speed mobile service. To ensure operators go with the Qualcomm-backed standard, called Long Term Evolution, rather than the alternative WiMAX technology backed by Intel (INTC), Qualcomm spent $1 billion to buy spectrum. The plan is to sell it to operators and help them launch LTE networks. The move, which Jacobs calls “a surgical strike,” not only outflanked Intel, it also helped drive operators in other countries to the LTE camp, says Shiv Putcha, an India telecom analyst with London-based research firm Ovum. He points to moves by Clearwire (CLWR) in the U.S. and Yota in Russia to adopt LTE as signs that Jacobs’s strategy has paid off. “Qualcomm coming in and pushing LTE really shut the door” on Intel, he says. “All of these technologies are going to coexist,” says Aicha Evans, general manager of Intel’s Mobile Wireless Group. “The users don’t really care what is below the hood.”
For the next few years, though, the real action in India will be in 3G networks. Back in the Palika Bazaar, salesman Khan is waiting for a cheap smartphone that might interest some of his customers. A $40 made-in-China clone won’t provide the sort of online experience you can get from real smartphones, but there’s no beating the price. “For a common man,” says Khan, “I’m not sure there’s a better deal.”
http://www.businessweek.com/magazine/qualcomm-rewires-for-india-09082011.html
RIM has opened the doors of App World to the sixth largest mobile market, three years after its launch in US, Canada and UK – indicating a shift of focus to the emerging economies. With the inclusion of Pakistan, App World is now available in over 130 countries.
Pakistani BlackBerry users can access apps that include the newly introduced BBM connected apps, which make it easier for users to stay in touch with their contacts, share content and play multiplayer games, and discover new things from their BBM community; Saihgal said.
There are already several applications available in App World that were developed with Pakistani users in mind, the MD said, including the Pakistan Cricket News app for sports fans; the Abida Parveen Collection for music aficionados; the Karachi Love application for tourists visiting the port city and even a Pakistan Animated Theme to liven up the smartphone.
Limited access to apps
BB users welcomed the much-awaited launch of App World, however, they still don’t have access to all the apps available on the store. RIM may have to put in more to win over rivals iPhone and Android whose users enjoy unlimited access to the App Store and Android Marketplace, respectively, according to experts.
Pakistani users, according to Saihgal, will have access to the Middle East catalogue that provides access to only 40,000 apps.
Though appreciated, RIM’s recent move was not a surprise for industry analysts who believe it was always on the cards – especially due to increasing popularity of iPhone and Android-powered phones.
“BlackBerry certainly dominated Pakistani market until 2010. However, its market share fell recently after iPhone gained more popularity among masses,” said a telecom official who requested not to be named. Introduction of android-powered phones to the market was another blow to the Canadian smartphone maker, official added.
Responding to a question, the official said companies usually give BlackBerry to their executives and managers as part of their job package, which is why it dominates the corporate sector. He, however, added iPhones and Android-powered phones have recently gained much popularity among masses in the country, it is, therefore, hard to say whether BlackBerry still dominates the country’s smartphone market or not.
The exact figures for BlackBerry’s market share in Pakistan could not be obtained – mainly due to the information being confidential – however, three telecom sources estimated that there are about 1 million BB users in Pakistan.
http://tribune.com.pk/story/374851/smartphone-wars-pakistan-part-of-blackberrys-shift-to-emerging-markets/