RunningWithBulls.com - The curse of Sanfermin

An article on GigaOm (which may be angled to give the quoted company “InterCasting” a plug and push-up MySpace) says that its expensive to build a mobile social network. Apparently MySpace “find it “difficult to start a mobile social networking business from scratch, AND it is cost-prohibitive for existing social networking sites to build their own mobile applications”.

As a number of commentors point out
the cash rich social networks would not find it difficult to build a mobile version of their site.

From the users point of view, its the cost of uploading a photo, sound clip, text etc.
A number of media outlets have recently used these figures to show the lack of take-up in mobile social networking:

“only 4% of U.K. mobile users and 6% of U.S. mobile users have uploaded content to social network sites (including sharing sites or blogs) from their phones, according to Telephia. That’s just uploading mobile content, and doesn’t include any of the other mobile social network features from the mobile web, or an application.”

The reason being? The cost of mobile data, at least in Europe (I can’t talk for USA).

A quick check of data plans for Ireland shows:

Vodafone (and this is monthly contract) - 15MB for €10 (Price Per MB Outside Bundle €2.50)

for “Pay As You Use”: 2c/KB up to 512 KBs and 0.5c/KB for any usage over 512KBs.

So lets see - for an average 250KB photo, you’d get 60 photos a month. Thats approx 2 per day.

For an MP3 (approx. 1MB per minute) you’d get 15 minutes of audio, and thats it.

For both, up and down transfers, it does not make sense.

From O2, you get (for a similar product to Vodafones):

For monthly contract subscribers: €9.99 for usage up to 10MB (thats a cost of €0.00098 per KB). While cost per MB extra is €1.00.

So, overall it works out the same price.

BUT interestingly, O2’s network is still at GPRS speeds.

With the GPRS coding schemes used with O2, and presumably Vodafone use similar coding schemes, (they have to be using at least CS1 and probably others to get high-ish data rates) they still charge the same cost for GPRS access as they do for 3G (this is Vodafone I speak about).

Surely one should be cheaper, as GPRS access is probably not as fast as Vodafone 3G (WCDMA which by spec, should give at least 115Kbps).

Anyway, leaving that aside, mobile operators have to wiseup to the new way of using Internet and communicating. A recent special in the Economist explained this in simple words:
(requires access to Economist subscription section unfortunately)

[when speaking about machine-to-machine communications via cellular networks]….a world in which devices can join the network, do as they please while they are connected and leave again at will (like PCs logged on to the internet) runs counter to the telecoms industry’s culture. It prefers to control customers’ activities, both to ensure quality of service and to keep rates high.”

“The same “walled garden” approach that prevents people from using Skype (a web-based telephone service) on their mobiles also ensures that they remain free of viruses.”

This “walled-garden” model was tried by Hutchinson 3G in UK previously and they almost died a death.

With the launch of their new X-Series (watch the webcast here) 3 are trying something new:

- Free phone calls to Skype users.
- Free instant messaging to your buddies.
- Unlimited search and internet surfing.
- Your TV on the move.
- Your PC on your mobile.
- Your life where you go.

all at HSPDA speeds.

The X-Series network has been built on Nokia Siemens Networks hardware, as well as other vendors of course.

Will 3 offer Wi-Max, or mobile network access over WiFi? Nokia Siemens are already working on the required infrastructure.

For the moment the vast majority of revenue comes from voice calls. As call rates drop, operators hope to make up their income by providing music and videos to the handsets.

And as this drops, as it is doing currently, the “traditional” operators will have to adapt or waste away.

Sprint Nextel’s chief technology officer, Barry West, imagines a world in which someone who buys a television or washing machine from any shop and plugs it in can connect it to Sprint’s network. The network itself will be open to the internet and users will be able to do what they like, rather than being funnelled to content providers with which the operator has a business relationship, as happens with most mobiles today.[…..]..he plans to change the way customers pay for his company’s service. Instead of charging for every bit of communication—a call over a particular distance for a particular duration—he will use flat-rate pricing, the way that people pay for internet service.

Sprint intends to charge a premium for special services, just as airlines charge more for a business-class seat, he says. Moreover, he plans to sell much of the information he has about his customers to advertisers. So, for example, interactive billboards at a bus stop may be tailored to young mothers at one moment and beer-guzzling sports fans the next.

I am not sure I like the sound of that…is that tiered Internet access?

Sprint is the first mobile operator to come up with a plan of action for a wireless internet world. Yet all operators are feeling the pressure of the internet. There is plenty of evidence that customers want to control their phones as they do their PCs, by adding new software, and pay for service at a flat rate as they do for the internet.

Not sure if Sprint are the first company, but at least they are one of them

Pricing is critical. In Europe the average monthly airtime per user is under 250 minutes; in America it is more than 1,000. The most likely reason for the difference is the charging structure. When Japan’s NTT DoCoMo introduced a flat fee for sending data such as photos from a phone, its network traffic was said to have risen many times over within days. Many people in America and Europe take pictures with their mobiles, but very few send them to other people because they are worried or uncertain about the cost. Sprint hopes to woo customers by simplifying the price and providing open internet access.

As we just saw above from the research quoted from Telephia on GigaOm.

Sprint’s business model echoes the internet approach in other ways too. For its new network the company chose WiMax, a technology that is supported by the computer industry, notably Intel, rather than by traditional telecoms vendors. WiMax uses the internet protocol to provide smooth online access, unlike mobile networks that carry the traffic over other protocols developed for phone calls. “If you try to use a phone or BlackBerry to access the web, it is a trying experience today at best,” grouses Paul Otellini, Intel’s boss.

And here we are back to the WiMax question again. Will Nokia Siemens Networks be able to persuade the operators that it makes sense to revise their data plans and access technologies?

Industry experts argue over whether WiMax works better than enhanced 3G cellular systems, but most reckon that their performance will end up much the same. The difference is in the way the equipment is made and sold…..

The computing industry likes open standards so that any device can be replaced by any other, whereas the telecoms sector has long benefited from locking customers in with proprietary standards.
And sometimes pieces of kit from different makers do not work smoothly together.

This I am not sure of. All of the technologies are based on International (if not just regional (European/American/Asian) standards.

WiMax does away with this problem by establishing a standard that puts everyone on an equal footing. The hope is that this will bring costs down to a commodity level for wireless gear, just as it did for computers. The royalties that firms will need to pay to license the intellectual property is expected to be lower than at present. ABI Research estimates that just four firms own almost 60% of the patents in 3G technology, pushing licensing rates as high as 28.5% of the cost of the equipment. WiMax’s patent pool is more evenly distributed among more firms, and rates are expected to be around 5%.
So WiMax not only lowers operators’ costs; it changes their approach to business. The problem is that it has barely got off the ground. Networks are still at the trial stage and mass-market devices are not expected until 2008.

So Nokia Siemens Networks will be pushing their WiMax solution well, and probably for a lower price, since, if the operators go for WiMax, they will be wanting lower prices!

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