State of Telecom Industry in Pakistan

Here’s the new world order in handsets for Q1 2008, based on an undisclosed research report.

Motorola drops to number three in volume terms and number five in value terms.

LG was the winner for the quarter with a YoY volume growth rate of 54% followed by Samsung with 33% growth. The market grew 14%. Motorola wasn’t the only loser. Sony Ericsson lost market share. And so did Apple. RIM and HTC are gaining smartphone share.

The handset market grew at YoY rate of 14% and again grew slightly less concentrated, with the top-five vendors taking 83.5% of global volume. This compares to 84.5% during the same period a year ago and 83.6% during Q4 2007. This is a reflection of both Motorola’s share loss and specialty vendors such as RIM, HTC and Apple taking higher-end share and smaller vendors taking some at the low-end (for example, the success of operator-branded handsets in Europe and some emerging markets).

The Korean vendors have been hedging their bets, using every form factor and platform known to man while working hand-in-hand with operators in key markets. In addition, Samsung and LG have been helped by the South Korean won’s weakness, which is at a two-year low against the U.S. dollar and even lower against the Euro.

Nokia’s market share for Q1, at around 41% according to Strategy Analytics, is up almost four points year-on-year and steady from the previous quarter. The combined share of Samsung, Motorola, LG, and Sony Ericsson was around 42.6%, meaning Nokia is close to matching the combined volumes of the two, three, four, and five vendors.

Recently I stumbled upon Mobile Marketing Association website. I found the information there to be quite useful. One of the report on their site was about consumer guideline and best practices for marketing to consumers. The context is US market but the principles mentioned in the report are applicable anywhere. I hope that the designers and implementers of mobile marketing programs in Pakistan and Asia pay attention to these. Otherwise mobile advertising may be looked upon as another form of annoyance.

The complete report in pdf: Mobile Marketing Consumer Best Practices

Some of the topics covered in the report include:

• Unsolicited Messages
• Opt-in Mechanisms
• Privacy
• Sweepstakes and Contests
• Free to End User Programs
• Billing (charges related to marketing)
• Customer Care
• Dispute Resolution

Hear what Big Blue has to say about the future of mobile phones. This discussion of a IBM mobile learning executive and a Motorola director touches upon some interesting directions such as text to speech and location based technologies. Technology companies realize that this is the time to define their territory and are eager to share their visionary thinking. One of the point worth mentioning from this conversation: phones have to fit well with people’s lives and not the other way around.

Over the coming years, mobile phones are expected to get “smarter”, adjusting to our usage patterns. Innovations such as larger projectable screens and other e-commerce and social networking features will enable the phone to provide much more value to our lives.

Future Of theMobile Phone - IBM

Taiwan-based High Tech Computer Corp. commonly known as HTC, has been doing some amazing things but without much fanfare. Now its getting well-deserved attention from the media and investors. Analysts are projecting HTC to be a major player in Asian handset markets. One of its star products is The Touch, which, like the iPhone, uses a touch-sensitive screen rather than dedicated buttons for many of its functions. Touch was a big profit-driver for the company last quarter. This week at CTIA, HTC Touch Dual was introduced with Windows Mobile 6.1. Later this year HTC is expected to launch Dream, an ultrathin version of Touch.

Thats not all though. HTC will be making android based phones as well. A recent WSJ article says that the buzz for Google phone may make HTC a smart stock for investors seeking growth in uncertain economic times.

HTC started in 2002 making Windows-based smart phones under contract for companies such as Palm Inc., Dell Inc, and Hewlett-Packard Co. Now, nearly 80% of its sales comes from handsets it makes in collaboration with telecom operators across the globe and under its own brand.

This month, HTC announced an alliance with Reliance Communications Ltd., India’s second-largest phone company by subscribers, to promote smart phones in that country. HTC’s CDMA handsets will be used on Reliance’s network, a move that will strengthen HTC’s foothold in one of the world’s fastest-growing phone markets.

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Here’s another sign that ICT industry in Pakistan is maturing. The first Mobile Commerce conference is being held in Karachi on April 2 2008. The event has a star-studded guest list which includes PTA Chief, mobile companies Mobilink, Warid and Telenor (CEOs will attend), mobile commerce companies such as Amaana, Inov8, senior management from banks (both commercial and State Bank) and a few foreign company executives. Full details are available in this pdf brochure. You can also take a quick look at the image to see participating companies.

The sessions are well planned and include topics such as environment for mobile commerce, role of telcos, micro-finance, security and risk management, new trends and challenges. I expect it to be a very interesting and useful event.

I am looking for feedback about this conference and would appreciate if anyone can share observations and thoughts.

It is inevitable that more and more kids (say ages 8-16) will own a mobile phone. The very qualities which make a mobile phone very useful (personal, connected and media capable) can also make it a cause for concern for parents. How can parents know if their kids are using the phones appropriately? Previously we have talked about some issues but there’s a lot more to discuss about the generation gap, content which ends up on the phone (whether it is live content or from removable media) and the vulnerabilities to which kids can be exposed to.

Results of a recent AT&T survey revealed that 84 percent of consumers believe parental controls and safety tools are extremely or very important in keeping children safe while they use today’s entertainment and communications technologies. Nearly one-third (31 percent) of those adults do not feel that they have adequate knowledge of how to use those tools to protect children from today’s threats.

There was a recent article in New York Times about the generation gap caused by mobile phones in US. It quotes a social psychologist Sherry Turkle (a professor at the Massachusetts Institute of Technology, who has studied the social impact of mobile communications) saying that these trends are likely to continue as cellphones morph into mini hand-held computers, social networking devices and pint-size movie screens. The point made by the story is that parents need to learn about how kids are using new technology. Obviously the situation varies from culture to culture but the trend is the same.

There have been attempts by a few companies to design services which allow parents control over how their kids use mobile phones and services. But there’s only so much that a parent can control and the personal nature of mobile phone makes it very difficult to monitor its usage. As many would argue, it is a social matter which should not be tried to solve using technology. However there is still a case to be made for putting controls over how the phone is used if you are the one paying the bill.

The NYT article adds: Marketers and cellphone makers are only too happy to fill the newest generation gap. Last fall, Firefly Mobile introduced the glowPhone for the preschool set; it has a small keypad with two speed-dial buttons depicting an image of a mother and a father.

Towards this AT&T has Smart Limits which allows parents to set account thresholds and to filter out content. See a flash demo here and keep in mind that it is not a complete solution by any means. Hit the link below to see details about this from AT&T website:

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Ufone is back with another interesting feature, Ur Name Ur Number. It is on Ufone website but without much details for now. This is a common feature used by businesses around the world. In Pakistan I think this will keep many people happily busy. Thanks to Tee Emm for pointing out this!

One of the premiere events of mobile and wireless industry, GSM annual meeting is a place to watch for trends. In the event hosted at Barcelona last month, Yahoo got the award for mobile portal, Grameenphone for social cause (note the familiar logo) and SonyEricsson got the award for mobile device. The full list of winners for 2008 can be viewed here.

Best Mobile Handset or Device
SonyEricsson: W910 Walkman Phone
3UK: 3 Skypephone - Highly Commended

Best Use of Mobile for Social & Economic Development

Grameenphone: CellBazaar

Best Mobile Game

Cellufun: Call of the Pharaoh
Glu Mobile: My Hangman

Best Broadcast Commercial
Safaricom: M-PESA ‘Send Money Home’ campaign

Best Mobile Advertising
Crossmedia Avenue: AMF Pension – the MMS campaign

Best Use of Mobile for Social & Economic Development
Grameenphone: CellBazaar

Best Network Quality Initiative
RAD Data Communications: LA-130 Cell Gateway - Cost-Effective HSPA Backhaul

Best Service Delivery Platform
Aepona: Aepona Telecom Web Services Platform

Best Billing and Customer Solution
Bharti Airtel: mChek on Airtel – Mobile Payments Service

Best Mobile Music Service
Omnifone: MusicStation

Best Mobile Video Service
mywaves

Best Mobile Social Networking Service
BuzzCity: myGamma.com

Best Mobile Infotainment Portal for News/entertainment
Yahoo! Connected Life: Yahoo! Go for Mobile 2.0

Best Mobile Enterprise Product or Service
Microsoft: Windows Mobile 6

Best Mobile Messaging Service
Seven: System Seven 7.0

The GSMA Chairman’s Award
Sunil Bharti Mittal, Founder, Chairman & Group CEO Bharti Enterprise

In January I covered the 7-to-8 digit mobile subscriber number migration. There were some questions from readers about the implementation of this change. Now PTA has issued a well written clarification. The detailed explanation is shown below. It mentions that the change in numbers will be limited to CMPak, Instaphone and SCO. All other mobile carriers will not be impacted. 

 

Location Based Services (LBS)  are one of the hottest new emerging growth area and battlefield in North America, Europe and parts of Asia (Japan, Korea, Taiwan, among others). With the sale of personal navigation devices at an all time high and with increasing number of mobile phones with GPS capability, it will be an interesting area to watch. Some of the recent events such as Consumer Electronics Show in Las Vegas provided ample evidence of this.

There are many pieces of technology which make up this: better/cheaper devices, new value added services based on connected navigation devices, alternatives to GPS for location determination on the phone, CDMA vs GSM technologies and advances in mapping technologies.

Maps have come a long way in the last few years and the need for real time location-based information whether it be traffic or product inventory is acting as a catalyst. For a view of the situation of maps technology in Pakistan see this recent entry at Green&White.

Here’s a bit more on the recent industry events related to maps and navigation from TheDeal.com.

U.S. software giant Microsoft Corp. built up its arsenal in the battle against Google Earth with the acquisition Wednesday, Dec. 12, of U.K. online mapping service Multimap Ltd. for an undisclosed sum.

Microsoft’s purchase is the latest in a series of deals in the digital mapping industry. In October Nokia acquired U.S. car navigation software provider Navteq Corp. for $8.1 billion. Last month Dutch navigation device maker TomTom NV snared Tele Atlas NV, the Netherlands-based digital map maker, for $4.3 billion.

Seattle-based Microsoft said the acquisition would enhance its existing offerings such as Virtual Earth and offer future integration potential for a range of other services and platforms.

As more and more cellular phone makers incorporate the technology into their handsets, demand for digital navigation devices is expected to explode. California research group iSuppli Corp. valued the market at about $4 billion in 2006 and projects $16.5 billion in revenue by 2013.

As the new year starts research and media companies present their views on what the future holds. Over the next few days I’ll share some selected articles about the future of communication technologies. Here’s one from TMC.

The evolution of mobile devices to an open platform and the movement of Internet video into the mainstream are this year’s two macro trends that will have the greatest impact in the future, according to a report released on Monday by MultiMedia Intelligence.

This year marked a new transition of mobile devices into open platforms. Although it’s known for being a closed platform when it comes to allowing third-party applications, Apple’s iPhone started a new dynamic, and Google’s Android platform and a possible Java-based operating system are the next phase, MultiMedia Intelligence said in the report.

Another important development rounding out the macro trends of 2007 is Motorola’s recent investment in UIQ, a software platform based on the Symbian OS. In October, Motorola bought 50% of Sony Ericsson’s stake in UIQ, which is also the platform behind Sony Ericsson’s touch-screen smartphones. This means touch screens are likely to become a major focus for the phone maker.

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BusinessWeek Story. In Pakistan Nokia has the number 1 spot and Samsung faces strong competition. Motorola does not have a chance against Samsung and other Asian handset makers!

With Motorola (MOT) struggling for more than a year, Samsung overtook its American rival in 2007 to become the world’s second-largest handset maker [BusinessWeek.com, 11/30/07] after Nokia. Its global market share is up about three percentage points from last year, at 14.5% in the third quarter, compared with Motorola’s 13.1%. And for every quarter this year, Samsung set a new sales record, with the 115 million phones sold in the January-September period exceeding the 114 million sold during all of last year.

Samsung believes its record-breaking run is just beginning. This year, its sales are expected to top 160 million phones, up 40% from last year, and executives are confident the pace of its growth will be about double that of the rest of the industry next year, when they expect sales of 200 million. “The growth momentum is accelerating, and there’s no reversal in the trend,” says Samsung’s Executive Vice-President Chu Woo Sik.

Building on Cheap Handsets

The big question is whether Motorola can rebound and stop Samsung. New Motorola chief Greg Brown, who was chief operating officer before being named CEO last month, has spent the past few months tackling the company’s problems to try and restore the glory it had just after the Razr’s sensational debut in 2004. “Samsung will face challenges,” says mobile communications analyst Tina Teng at market researcher iSuppli.

Samsung’s top brass believe the company’s recent run is sustainable. That’s because Choi Gee Sung, a marketing expert who took over as Samsung’s telecom chief in January, has targeted the fast-growing market for cheap handsets, which wasn’t a priority for his predecessor, Lee Ki Tae, a former engineer.

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