Ronnie05's Blog

A $100 billion brand

Posted in The Technology Ecosystem by Manas Ganguly on April 30, 2009

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One of my favourite one liners about internet, technology and Google is “There is Internet and there is Google!”. One of the most reverred tech companies Google became the first $100 billion brand in terms of Brand value (Millard Brown Brandz Top 100 most valuable 2009). A $100 billion tag is greater than most and many African, South American and Asian countries. Google finds itself to be a case study under Naseem Nicholas Taleb in his book Black Swan. Many analysts and thinkers are wary of the influence that Google holds over the internet often questioning “how much is our digital life is personal anyway (in the shadows of Omnipotent and Omnipresent Google)?”

In an year, where the overall value of the the top 100 brands had grown by 2% Google grew 16%. It’s worth is 25% more than the worth of its second competitor, Microsoft! Coke,McDonalds, IBM, Apple, China Mobile, General Electric, Vodafone and Marlboro complete the top 10 list. This is the third year in a year when Goolge has secured the Tops in Millard Brown’s Brandz 100!

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Technology companies make the bulk of the the top 10, with Google (no 1), Microsoft (no 2), IBM (no 4), Apple (no 6), China Mobile (no 7) and Vodafone (no 9)! Handset manufacturer Nokia slips out of the top 10 with Vodafone replacing it as the most valauble European brand. Blackberry has seen a fantastic 100% jump in its brand value over the year.

It has been a good year for fast-food, cigarette and alcohol brands, as consumers suffering from so-called “recession depression” appear to have sought quick pick-me-ups.
McDonald’s recorded a 34 per cent increase in brand value, year on year, followed by Marlboro (33%), Budweiser (23%) and Johnnie Walker (42%) The most valuable category was mobile telephone operators; its value grew 28 per cent year on year. This was followed by soft drinks and coffee.

Millward Brown chief executive Joanna Seddon said: “In the current environment, brand has become even more important because it can help to sustain companies in tough times. “Those who continue to invest in their brand will be better positioned for business growth as the economic situation starts to improve than those who have cut spend. The recession does not always harm individual brands as much as it does faceless corporations,” she added.

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Is India ready for MVNOs?

Posted in Industry updates, Value added services and applications by Manas Ganguly on April 30, 2009

 

This is the second post on the series: The advent of MVNOs and discusses the MVNO environs in India!

 

A few months back, Sunil Bharti Mittal (CMD, Bharti – Airtel) went on record saying that the MVNO model will not find many takers in India (read report). The idea was that with the kinds of tarriffs prevalent in India, MVNOs will not be able to sustain business and be profitable. The fact that Virgin Mobile’s foray into MVNO platform has not been as hugely successful bears this statement for the time-being. But in a long term basis, can MVNOs be ruled out of the country? Diamond, a global management consulting firm has some interesting pointers in terms of emergence of the MVNO business models in India.
1. The threshold mobile penetration levels (for the emergence of MVNOs) in these markets are around 40%! –> Markets typically display a level of mobile penetration above 40% at the time of launch of the first MVNO.
2. Higher levels of industry wide consolidations favor the launch of MVNOs.
3. Less competitive markets (high levels of dissatisfaction amongst consumers) favor MVNOs (because they cater to new customers and innovative solutions).

A study of 16 countries where MVNOs have been operating for a few years now, conducted by

India with its fastest growing telecom subscribers status is typically a mash of various degrees of penetration. On one end, the A category circles have 70 – 80% penetration ratios and on the other end, C category circles are at 15 – 20% penetration status. Thus India is to be seen a collection of 23 separate markets instead of a single homogenous market when assessing the opportunity for MVNOs. The Cat A and B circles are over ripe for MVNOs and there are states, where the MVNO business would not be as effective given low penetration levels. Also the tariffs are getting rapidly commoditized and if its were not for the consolidation, these tariff would be close to unprofitable! Number portability could rapidly increase churn in the eco-system, unsettling the top rug high ARPU consumer bases with the existing operators.

Within these set of circumstances, there may exist an opportunity to serve users better or serve a high profit niche segment. With the penetration levels at 32% nationally and tariffs touching lows, the MVNO route may be a key differentiator and an access to higher premiums. One needs to be define MVNO at this time. A re-selling, re-branded plain vanilla will not be attractive to users. In the case of Virgin, it has done some excellent work in associating itself with a category of customers. However, its proposition is based on cost which by itself is not the best way to differentiate especially if you are re-selling airtime.

Thus it is important, that the MVNA and MVNE route is taken to differentiate oneself in this market! Healthcare sector is one lucrative idea for MVNA/E, so is department of posts and telegraph, railways, banking etc. There is a need and necessity for including this diversity into the existing eco system. This would constitute differentiated service to consumers for which they would be ready to pay premiums. A focused attempt centered on the metros and high penetration areas can also keep costs under control and if the collaboration within the players in the eco system is good, can lead to high profit businesses.

Should we reconsider the model once more, Mr Mittal?

The third part of The advent of MVNOs will deal with the legal challenges of establishing this business in India.

 

 

 

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Study: The advent of MVNOs (Part I)

Posted in Industry updates, Value added services and applications by Manas Ganguly on April 28, 2009

A Mobile virtual network operator (MVNO) offers mobile voice and data services without owning any spectrum or infrastructure. Basically it leases network from a Mobile network Operator (MNO). It uses the leased capacity to sell retail services to consumers under its own brand name leveraging assets such as a strong brand, loyal customer base, exclusive content or an extensive distribution channel. At one extreme the MVNO can adopt as “pure reseller” position, where in it re-brands MNO’s service using its own brand name and sells it through its distributor channels. On the other hand, it could adopt a “pure MVNO” position, providing value added elements in its offering. The decision to adopt a given business model is governed by several factors including the targeted scale if business, level of in house telecom expertise, extent of initial investment the MVNO is willing to make and the level of risk the MVNO is willing to undertake.

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 The schematic given above is a representation of the US MVNO markets.

The earliest MVNO in the US market was Virgin Mobile and Qwest, who had their processes and platforms to complement the MNO network. They did this by either purchasing platforms or operating them in-house or through dedicated partnerships. At the next level with multiplication in MVNOs, the market started migrating to parties who could provide relevant BSS/OSS processes and platforms.These service providers whose core competence was the platform and they build the mobile services around this platform are referred to as the Mobile Virtual Network Enablers (MVNEs).

With increase in Market complexity, there emerged a class of Mobile Virtual Network Aggregators who acted as intermediaries between multiple MNOs, handset providers and back end platform providers with the MVNOs. Hence these were the experts in the field who served to reduce risk and time to market and lower the risk profile of launching an MVNO.mvno-business-models1

 

 

 

In saturated and high mobility markets, with excess capacity, MNOs have a choice of acquiring retaail consumers to fill up the network or filling up the network on whole-sale basis to a MVNO reseller, or a combination of both. The decision should/is influenced by the idea of maximizing Average Margin per Minute (AMPM). The AMPM is determined by factors such as
1. Price charged per minute
2.Subscriber cquisition costs
3. Costs of serving a customer (Cash Cost per user CCPU). The CCPU depends upon network related costs and other non network related costs.
As the markets mature, the AMPM shrinks due to increasing price competition, increasing acquisition costs, increasing costs of providing servicing and support and other factors such as change in mix of services, loss in share of high margin services etc. In such situations, the MNOs may find that AMPM asociated with wholesale minutes is higher than their averages. In addition to that, there could be niche, smaller markets, where the MNO may consider an investement to be unviable (given its operations). MVNOs could be used to address those specific niche markets and consumer segments.

Highly penetrated markets with limited competition between mobile network operators may lead to a situation where some customer segments are likely to be “underserved” in specific aspects of mbile experience. The dissatisfaction could come from either poorly tailored products and services or other brand intangibles. This is a classic case of short comings of the “One Size Fits all” strategy –> MNOs have scale benefits and lower operating costs but miss out on the Customer satisfaction bit.

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Calculating your social media initiative payback

Posted in Social context, media and advertising by Manas Ganguly on April 22, 2009

While Social media is a new kid in the block, the promises it holds are huge. It enables the marketeer to host a platform to hear what his consumers have to say about him, engage them and engineer products/services. In short it allows the marketeer to pro-create with the consumer.From a marketeers point of view, their is an abundance of media vehicles and the final choice of media is very often led by RoI or Cost/Benefit analysis. It is very interesting that calculating the RoI/ Payback of Social media is still based on the age old business perspectives and principles. So the tool and the procedure remains the same.It is just the metrics that have evolved.

Presenting the pointers to calculating the efficiency of marketing initiatives in social media:

1. Start from the objective. The more precise and focussed defination of the question, the better is the probability of a meaningful answer.

2. Identify ways to measure your objective/put metrics

3. A prior measurement of scores in the metrics sets the base

4. Identify gaps between your objective metric scores and the base scores.

5. Set time bound targets on the Gaps

6. Identify the investments you are willing to put in targets and gaps

7. Execution of the plan

8. Against the investments that have been put, the %age increase/decrease of your metrics against your targets will give you the efficacy of the programme.

Since we are talking social media initiatives, the metrics can be chosen from the list:
Views/hits; Followers/Subscribers; Comments/Blogs/Tweets/Board Posts; Tonality; Frequency; Sales; Inbound Links; Engagement Metrics; Visibility/Credibility; Inbound Links; Profile visibility @ SEO; Referrals and others.

There is another part that cannot be measured: Cross Referencing of the suite of products/services through Social Media (i.e influence of social media on perception of the brand when you seem to be only talking about the product/solution/platform.)

Is Social media/networking a marketing hyperbole?

Posted in Social context, media and advertising by Manas Ganguly on April 19, 2009

I believe in the power of social media and strenghts of networking. I use my blogs, my Linkedin, Facebook and Orkut profiles to stay in touch, share my life with my network of friends (Facebook and Orkut) as well as keeping myself updated on subjects of interest and learning from forums and other experts (Linkedin, Blogger, Twitter, Word Press). Deep down there is an effort to market myself to the world at large and social media and social networking are important tools to do them. I met my childhood schoolmates on Orkut (after being incoomunicado for over 10 years).The last person i interviewed was a contact from Linkedin (instead of the pay per use job portals). I am trying to actively position myself for my next job through the Social Networking media. I find it difficult to ccomprehend when someone doesnot have a profile/doesnot use Linkedin/Facebook and others. All this is an ode to the virtues of social media/networking: Life, Work, Learning and Friends have become interesting.

Yet, i sense a bubble of social media/networking all around. It is the next biggest thing in marketing. Someway, i have begun to think that from a marketing perspective, if you dont have social media in your portfolio you are “uncool”. Social media experts are mushrooming all over and there are more “social media” bloggers and experts than any other subject (i dont confirm this statement!!) With the rise in Facebook and Twitter and such others, these mediums have become the cynosure of marketing and brand experts. Now everyone wants to have an internet presence/ Facebook profile/ Social Media leg to their marketing campaigns. The efficacy of this idea/thought is questionable.

The central thought when a user is logged into a social networking site is to talk/ bond/ network with his kind of people or friends. A product advertisement/banner/ pop up is seen more as an intrusion into the users time. I may not have the statistics, but i have a hunch that these ads are mostly “skipped” or “closed” or “ignored” by the user. There is a moment of truth, when the user may eye the contents for a brief second, but that happens rarely. Especially in India, where the internet speeds are low, an ad frame that takes time to load and hence impedes the user from doing what he is doing is generally dismissed straightaway.

For a marketing campaign, its cool to have a Facebook user profile and a “fan” following. Except that a large percentage (again unratified) of such profiles are not refreshed for weeks and months and are only used as a platform to “advertise”, not “engage”. A leading marketeer in India has a Facebook profile of its most important gaming service with 46 fans for about 8/9 month now. This platform has a host, but there is no dialogue and no discussion except version release circulars. It doesnot cost a penny to put a Facebook profile up. However, all this without consistency of engagement is a waste.

Similarly, a particular product based company (i know of) believes in 15% allotment of its budget to digital media. Most often digital media is less understood by its marketing folks who judiciously use the money in the banner ads and in page ads, the success rate of which is about 5%! Thats 95% waste, which could have been used better elsewhere. In the company being spoken about, this 95% is seen as an investment (the fruits of which would be borne later).

A recent discussion on Linkedin, featured someone asking for “best ways in Social media/networking to market a consumer product to xyz profile…”. Well, for a start social media/ networking doesnot “Market”, it only generates “Awareness” and can be used to enagage customers in a “Dialogue”. The dialogue also is necessarily not required to be product led… instead it ought to be the platform that the product hopes to provide a solution to. It is a communication media and not an advertising media. Users differentiate between communication and advertising very sharply. An enagaging conversation is one thing, an advertisement is another. One has a lot of credibility and the other has none.

It is important that marketers need to now understand the virtues of marketing beyond advertising and sales is to listen, engage, hear and discuss with the consumers. Social Media has a role in marketing and organization strategy. It has to be treated more fairly than just another media and advertisement vehicle.

Nokia: Trending upwards

Posted in Mobile Devices and Company Updates by Manas Ganguly on April 17, 2009

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Over the last year and half, Nokia Scrip price has yo-yo’ed from $ 40 to $ 8 given the slump in the market and demand, its own performance in the smartphone market and its decision to change tacks from device orientedness to internet services focussed approach. Yesterday Nokia declared its 1Q, 2009 results and though a drop in numbers was in line of expectations, a 90% drop in profits was beyond expectations. This was Nokia’s worst quarterly profit in more than a decade. Profits declined to 122 million euros (US$160.7 million), from 1.2 billion euros (US$1.6 billion) a year earlier. Sales fell 27 percent. Nokia sold 93 million phones in the first quarter, 3 million more than analysts had anticipated, the ASP of the phones fell sharply to $85 from $93 in the fourth quarter. Nokia’s Devices & Services unit saw net sales decline 33 percent year-on-year to 6.2 billion euros (US$8.2 billion). Nokia remains the largest mobile-device maker in the world with a market share of 37 percent in this year’s first quarter. However, that’s down from 39 percent in the year-ago period. Nokia expects industry sales to continue to decline this year, estimating a 10 percent overall slide from 2008. Nokia’s sales were mostly based out of the Asia Pacific, followed by Europe and then Americas.

However, these bleak numbers seem to have come with silver lining as far as Nokia is concerned and while this is the worst quarter for Nokia on record, it does look like they have bottomed out and the only way from here is upwards.

While Nokia has taken a beating in Smartphone space in US and North America over the last year and half, it now looks like they are finally ready to take the Operator centric route to consumers. With AT&T putting their weights behind the E 71, May 2009 onwards, Nokia will finally be able to get the operator toehold, which is a critical success factor in North American markets. Read Report

Considering that in Q1, 2009, Nokia’s North American numbers actually grew by 30% and was the only Nokia region to register growth, the AT&T tie up on E 71 can be a big winner.

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There seems to be traction on the Economy Smartphone 5800 Xpress Music, with 2.6 million units already shipped. The phone is popular in China, India and other developing countries given its price and feature attractiveness.

Olli Pekka, CEO of Nokia Oyj has indicated that the fall in numbers could also be attributed to channel de-stocking. To be quoting OPK, “Regarding the health of the overall mobile-device market, the inventory already in the sales channels decreased substantially during Q1 due to extensive destocking by operators and distributors. This adversely impacted our sales volumes in the quarter,” Kallasvuo said. “However, it has also resulted in the demand picture becoming more predictable as we enter the second quarter.”
Amongst other strong signs of recovery is the fact that it has retained its 37% market share, and has in fact gained in strength in China and India, whereby Motorola and Sony Ericsson are flopping out. Nokia’s impressive offensive at the low end will make sure that market shares are stable and increasing for sometime.
With N97 Nokia looks to get back at the technology leaders platform, a mantle it has lost to Apple and RIM in the recent times.
Nokia expects industry mobile-device volumes in the second quarter to be at about the same level or up slightly. The company also expects its market share in the second quarter to increase.
The news that sparked a Wall Street rally on Nokia’s stock was the company’s prediction that the decline in the first two quarters this year would be worse than in the second half of the year. What’s more, the company is targeting an increase in market share for the year.
The two aspects, which are slight out of sync in Nokia at this time are its Netbooks foray and The flight @ Ovi, which will need to be accessed independently. The indicators at this point of time may not favour Nokia, but it certainly looks like Future Bright for Nokia.
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Twitter’s integration into mainstream broadcast media

Posted in Social context, media and advertising by Manas Ganguly on April 16, 2009

March U.S. comScore Media Metrix data shows that the number of visitors to Twitter.com jumped 131% in March to 9.3 million visitors! That’s 5 million more visitors than in February – a pretty astounding figure if you think about it. The chart below illustrates just how dramatic a jump it was:

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It appears that the recent growth in Twitter is partly fuelled by the attention it is getting from mainstream media. Twitter has now beome an active tool for news dissemination by the mainstream broadcasting mediums. A typical newscast is not “complete” without the integration of Twitter and mention of it. The latest and best example of Twitter usage as a primary media vehicle is Newst Gingrich’s criticism of Barrack Obama’s ressponse to the Somali pirate stand off. News broadcasters like CNN’s Rick Sanchez have actually incorporated Twitter into their live broadcasts, and it seems like just about every other journo these days has a presence on Twitter. Like it or not, Twitter is quickly revolutionizing the way our entire news ecosystem operates, from journalist to consumer, and blurring the lines in between.

That, the user profile is ideally suited for news cross connects is a boon for Twitter. A separate study shows a high incidence of new sites cross visits by Twitter users suggesting a strong relation between Twitter users and news consumption.

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The advent of Mobile point of sale transactions

Posted in Industry updates, The Technology Ecosystem by Manas Ganguly on April 14, 2009

I had in an earlier post covered the topic of mobile phone payments and phones that act as your wallet through the NFC (Near Field communications technology). http://technologyandtelecom.blogspot.com/2009/03/of-wallet-phones-and-mobile-payments.html

A significant development in this context was achioeved by the credit card major, VISA who have enabled the first mobile payment for a Point of Sale transaction, thus enabling the consumer to purchase an NFC enabled mobile device of the shelf and use that device to make the VISA pay wave enabled transaction at the point of sale instead of using their credit cards.This service waas launched in Malaysia early April 2009. Maxis Malaysia, Nokia, Maybank have collborated with VISA to offer its pay wave services on mobile devices. Initially this service is enabled in the Nokia 6212 handset and 1800 outlets in Malaysia.

The contactless chip embedded in the device will also power a number of additional functions, including a contactless transit application that enables Malaysian commuters to pay for charges while using metropolitan transit systems, bus terminals, highway toll gates and car park facilities at more than 3,000 contactless payment touch points throughout Malaysia. Maxis has branded these mobile payment services under the name Maxis FastTap.

Momentum for Visa Mobile Payments Continues to Grow

Visa is driving the convergence of two of the world’s most ubiquitous consumer products, 1.7 billion Visa cards and 4 billion mobile phones, by bringing its expertise in payments to the mobile industry. Over the last two years, Visa has worked closely with mobile network operators, handset manufacturers and financial institutions, merchants and technology provider to develop and commercialize mobile payments and related services. Recent Visa mobile payment activities include:

Visa announced last week that it is extending mobile payments to Singapore in partnership with Citibank Singapore Limited and MobileOne (M1). The Citi M1 Visa payWave payment trial on mobile devices marks the first program in Singapore where a mobile device will be used for payments at the point-of-sale. More than 750 merchant locations across Singapore are participating in the three-month pilot, which begins in May 2009. Up to 300 selected Citi M1 Visa Platinum account holders will be invited to join. Participating account holders will be provided a Nokia 6212 classic, the same NFC-enabled handset used in the commercial launch in Malaysia. Participating Citi M1 Visa Platinum account holders will be able to purchase an item at a Visa payWave merchant in Singapore simply by waving the mobile phone in front of a contactless reader at the point of sale.

In Canada, Visa, RBC, and Rogers Wireless have come together for the next phase of a mobile payment pilot, which will ultimately allow Canadians the flexibility to make purchases securely at the point of sale with a wave of their mobile phone. Designed to be a fast and convenient way for customers to pay for small purchases, pilot participants will be issued specially-equipped mobile phones that can simply be waved at Visa payWave-enabled checkout readers at select retail stores and quick-service restaurants in Toronto’s downtown core.

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Considerations on user interface design on Mobiles and Handhelds

Posted in Applications and User Interfaces by Manas Ganguly on April 14, 2009

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The “smart”ness of devices is a direct derivative of its functions, content and the multitude of uses it can be subjected to. Phones especially are now Cameras, PDAs, Gaming consoles, Browsing points, Navigation consoles, Social Networking devices, Music Juke boxes and more: all this rolled into one. However, the User Interface is the platform which integrates all these uses for the user in a neat package. UI was a lower order consideration element till not so long ago. However the UI today is increasingly becoming a differentiator in the Telecom space. Smart UIs take some smart thinking and have an elemnt of intutiveness built in to create the user “wow” effect. Here’s listing a few of my thoughts on UI designs:

1. Know your customer first: The first aspect of any UI is in terms of who is using it and for what purpose. This is critical in terms of adding the value add ons to the UI. Normally, a lot of back end research goes to zero down on users and usages. The UI then has to be customized for the particular user profile. For example: Gaming and Music can be supported on the same software versions (e.g S 60 for Nokia), but the UI has to be customized for a gaming freak versus a music listener.

2. Top Down in design: The UI design and development should begin from the fully loaded version instead of the base version. The functions and apps should be in a modular format, which can be removed from the fully loaded version to lighten it up for lower versions.
Examples of Modular formats: SMS + voice module, FM + MP3 Module, MP4 + Video Player module, Music Module(supports all music formats), Gaming Module, Navigation Module, Internet Browsing, RSS feeds module, Calendars and Organiser module, other apps.
This is also important from device memory and selection of relevant hardware and chipsets perspective.

3. The case for shortcuts–> Content/Context Specificity: If the device is for a particular use, then there should be hotkeys or shortcut keys on the panels or the UI to enable a one click access to the function. Normally phones have one key access to music, camera, internet etc. This establishes and supports the USP by customizing your UI around specific content/context.

4. Screen View: A judicious use of the small screen size is a high priority. Craming it up with too much information could reduce readability. (I have never managed to read those “X” line “how to” menus that keep popping up on the screen). In devices that need to support RSS feeds, it is important to balance the view in terms of visibility/readibility versus blocking out everything else in the background.

5.Scroll Conservation:It is essential that the main menu and the subsequent ones be customized so that the content viewing doesnot require a scroll down! Many users find the act of scrolling down on a menu view to be irritating. It also means that the menu is not sure what they are looking for in the first place and is not able to provide the required info in one screen.

6. Click Conservation: Similarly, the act of many clicks into menus, sub menus, prompts, functions and sub functions etc is avoidable. A few UIs require 6 or more (even 10 in exterem cases) clicks for the user to access a particular point in the system. You are clearly telling the user to sort your mess by navigation his way into your UI. There is no intutiveness and short route to the functions he so desires. It also shows that you dont know what your user is using your device for. A S 60 UI navigation path is 900 rows in lenght and some of these paths are 6 – 10 clicks long. The 900 statistic shows a diffuse focus in terms of device –> customer integration and the 6-10 click path shows UI inability to intuitively map its usage.

7. Intuitive Design: The intuitiveness of design is probably culture/ language/ region dependent. However there is a strong case of integrating user requirements with the UI and hardware of the device. (e.g: After a call to a new number, imagine one click “Save” option to “add to contacts”. On the other hand, imagine the path Options–> save as –> add to contacts. That is “one click” too many).

8. Energy Saving Options: Screens such as QVGA and TFT can be harsh on power. A UI should be able to switch off / stand by to save on power drainage when not in use for “x” minutes. Similarly, it should be able to close the apps which are open and are not being used in favour of conserving battery life.

9. Touch: A touch based UI needs to allow room for the “touch”. (That in fact necessitates 3 inch screens to accomodate for the fingers). The idea is not to cramp the screen with multitude of options and less space making the touch experience a very tedious one.

10. Use of smart animation: Smart animation to browse through the screens creates a pleasing effect. However, the animation if there is has to be easy and light on the device memory resources.
11. Customizable front screen: The option to customize the front screen (is already present in high end devices) is to be given to the consumer. The idea is to give him a direct access to the apps /functions he uses 80% of the times. The option to pick up the “Favoruites” can also be provided to the UI if the consumer so wishes it.

These are a few generic principles to be kept in mind in UI designing for Handheld devices and mobiles. The ultimate objective is to make the browsing and navigation experience on the device to be a “Wow”.

LTE,WiMAX: Co-Existance over Absolute Winning

Posted in Industry updates by Manas Ganguly on April 10, 2009

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Making its loyalties clear, for the first time in about 5 years, Nokia has averred LTE to be the future 4G technology standards over WiMAX. In an interview to Financial Times, Nokia EVP (New Markets) Anssi Vanjoki, fore-beared WiMAX to be Betamax of the 4G technology standards. His remarks were the most dismissive by Nokia of WiMax to date. Nokia has previously been perceived as taking care not to be too critical of WiMax, while Nokia still has a seat on the board of the WiMax Forum.

Sony Betamax and VHS were also involved in a war of video format technology standards in 1970s and 80s, which was eventually won by VHS setting the technology standard.

 

The Finnish company is betting the 4G wireless standard LTE – Long Term Evolution – will dominate the mobile world by 2015 and WiMax will be the big loser.Nokia’s claim is the first in an open forum and comes after the Finnish Phone maker has had stakes in both the technologies. Nokia went as far as developing the first prototype of WiMAX based internet tablets, which were subsequently never put to production. The telecommunication industry is increasingly getting fragmented into the LTE and the WiMAX camps.

 

While I have covered WiMAX and LTE in a few other blog posts as well, I fail to see why one technology must beat the other in the future technology perspective. Both technologies may be fulfilling the same objective of high speed data carriers, but the technologies per se are based on very different platforms. LTE with its greater carpet area will allow users to access high speed data from a bigger geography. It has an able back up in terms of the 3G/2G network. If there is a hole in the LTE, users will tend to fall back on the 3G/2G backbones, there by not breaking the connection. The ability to leverage on the 3G/UMTS infrastructure decreases the initial costs.

 

WiMAX on the other hand, depends on line of sight which limits the geographical spread. However, it’s enhanced features such as security and multi-bands make it a huge bet in the enterprise segment. It will essentially replace WiFi as the office standard. Being a high value segment, the profitability of WiMAX could be expected to be higher that LTE. From the consumer perspective, WiMAX has a low operating cost, reducing the per unit cost. However, unlike the LTE, WiMAX has a high initial cost of infrastructure installation.

 

On the whole, while 80% of the telecom footprint will be LTE, WiMAX’s 20% will be more profitable and versatile. LTE on the other hand will be mostly voice/data based services.

 

I guess, we will have to wait and watch how this space develops. It will be only good for the consumers if both technologies are allowed to take their own course to offer the best of 4G technologies to the consumer. The future ought to be decided by the consumer more than anyone else.

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