Disruptive Tendencies

AT&T Wi-Fi: How long to a billion?

In October 2007, AT&T acquired Wayport for $275m, and its national footprint of 20,000 Hot Spots in such high-profile locations as Starbucks and McDonalds. For many of us in the industry, this was a seminal event, as it was the first time that a major licensed spectrum holder embraced Wi-Fi (and unlicensed spectrum) as a major piece of its service offering.

Since then, AT&T has continued to be the poster child for its use of Wi-Fi for 3G data offload in areas of cellular congestion. Generally speaking, these locations can be described as areas where people eat, shop and congregate, and includes not only traditional Hot Spot locations, but also high capacity venues, college campuses, special events, and high-foot traffic urban centres.

Today’s announcement of 106.9m connections shows impressive, historic year-over-year growth, but it’s interesting to project forward.

• With over 90m subscribers, this number translates into 1.2 connections/subscriber/quarter.
• With around 30m smartphone users, this number translates into ~1.1 connection/smartphone user/month.

And keep in mind that, with free Wi-Fi at venues like Starbucks, some of these connections are from non-AT&T subscribers, so the number of connections/subscriber is going to be lower.

The following chart shows the number of AT&T Wi-Fi connections, as reported over the past 11 quarters. It’s interesting to note that AT&T has been able to materially impact the slope of the curve. When AT&T and Apple enabled seamless, transparent auto log-on for the iPhone in July 2008, the slope clearly changed. In July 2010, AT&T opened up its Starbucks locations to free Wi-Fi, the slope changed once again.

So how big can it get?

Clearly, one can imagine an AT&T quarterly report touting 1 billion connections (PREDICTION: Q3/2011), a 9X increase from today.

IMO, the biggest obstacle is subscriber mindshare and user intervention. People walk into a Starbucks today, and they know there’s Wi-Fi, so they’ll turn it on. But unless they know there’s Wi-Fi in the football stadium, rocking out at the concert, or walking around Times Square, users are far less likely to have their Wi-Fi radios turned on.

Maybe iOS v5 will be able to sense (or know via GPS) that there is an AT&T SSID nearby, and automatically turn on Wi-Fi, removing user intervention from the Wi-Fi equation totally. Now that would be cool, and welcomed by service providers the world over.

Wi-Fi for service providers? Onwards, and upwards!

One billion connections? Here we come!

 

That’s my .02!

Martin Suter

 

Mobile Internet: Fundy-esque!

(Original published at http://www.von.com/blogs/guest/2009/06/mobile-internet-fundy-esque.aspx )

In 1963, JFK is credited with having observed that, “A rising tide raises all ships.” The evidence is overwhelming that the mobile Internet tide is unprecedented in scale and that it’s coming in fast. Anyone, or any company trying to resist, inevitably will be washed away.

The launch of the Palm Pre this past week has given the industry an opportunity to debate whether the Pre is an iPhone killer. David Pogue, of the New York Times, has described the Sprint-Nextel/Palm pairing as “a pair of sad sack losers team up to defeat the smug athletic golden boy,” going on the suggest that it’s the “Palm Pre vs. iPhone.”

To its credit, Time presents a much more balanced view, pointing out that “Palm doesn't need to steal any of its competitors' customers to thrive.” This seems to be the view being (wisely) espoused by Jon Rubinstein, executive chairman of Palm Inc. as well, who rightly notes, in the same article, that the smartphone market is “large and expanding.”

Rubinstein is right in suggesting that the smartphone market is not zero-sum. Yes, there is a heightened need for device manufacturers to deliver a compelling user experience. Apple has set the bar extremely high, but the fact remains that there are “4 billion mobile phones in the world today, after all, and Palm says only about 10% of them are smart phones. During the next few years, that number may reach 50%. Morgan Stanley Research even described the migration to Internet-connected mobile devices as ‘one of the biggest opportunities in the history of the technology industry.’"

I would argue that Apple will continue to maintain its market share on the platform and device sides even as this market grows for one simple reason: iTunes. None of the other vendors has delivered a seamless content and application management platform from the desktop to the device, coupled with an accepted micro-transaction platform. Microsoft had an opportunity to do so with Windows Media Player, but was so tied up in antitrust litigation, it missed the window of opportunity and was left in the dust.

Apple’s the poster child; the launch of iPhone 3G S makes it even more so. Palm’s the underdog. But what of the other 800 pound gorillas?

“Google: Expect 18 Android Phones by Year’s End,” “BlackBerry Storm 2 could hit as early as June,” “HTC: Touch Pro 2 coming to North America,” “Samsung Unveils World's First 12 Megapixel Camera Phone,” etc.

Throw in Netbooks, gaming devices, cameras and you’ve got a rising tide of mobile data that is unprecedented. Dare I say, it is even Fundy-esque*!

That’s my .02!

Martin Suter

(*Canada’s Bay of Fundy purportedly has the highest tides in the world.)

Martin Suter is vice president of business development at BelAir Networks, the global market share leader in service provider Wi-Fi, enabling 3G data offload for wireless carriers, quad-play for cable operators, and managed WLAN business services. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.

 

Mobile Internet Genie is Out of the Bottle

(Originally posted at http://www.von.com/blogs/guest/2009/04/mobile-internet-genie-is-out-of-bottle.aspx)

And it’s not going back...

What a week it’s been!

After blogging last month about the market disruption being caused by the combination of Wi-Fi and unlicensed spectrum, the industry reeled as it grappled with the implications of the release of Skype on the iPhone and iPod.

The buzz at CTIA was polarized around two ends of the spectrum — the incumbent wireless carriers, especially Verizon and its LTE plans, and the disruptors, led by Skype.

One of the characteristics of the climb to the “Peak of Inflated Expectations,” as articulated by Gartner, is that the only enterprises making money are conference organizers and magazine publishers. The ascent of LTE and the noise floor created by the buzz at CTIA certainly bears this out!

But LTE is just another technology. It has the potential to expand the adoption of the mobile Internet, but unlike Wi-Fi, spectrum owners that have a history of tightly controlled walled gardens will roll it out. The question is whether companies will continue to propagate a closed, walled garden approach or recognize this as the mobile Internet. There are interesting analogs in the fixed Internet that bear considering. AOL tried, for far too long, to contain its subscribers within the AOL controlled portion of the Web, and look at what’s happened to them. Does anybody remember CompuServe? Could the same thing happen to Verizon or Deutsche Telekom? Only time will tell.

The Internet has proven itself to be fertile ground for disruption. Look at how it has changed the music industry, newspapers, advertising, retailing, travel, residential voice and long distance service, and even the OS and office suite. ... Companies that “got it” on the fixed side have thrived, while those that resisted it have withered and died. Why should we expect the mobile Internet to be any different?

The availability of Skype on iPhones and iPods has, once again, brought the opposing forces into sharp contrast. Now faced with the potential loss of voice minutes, the wireless carriers are reacting in the only way they know how, by locking it out. AT&T is at least to be commended for allowing Skype traffic on its Wi-Fi network, while Deutsche Telekom companies are saying they will even restrict its use across the company’s Wi-Fi hot spots.

The battle is moving to the FCC in the U.S. where lobby groups are saying that blocking applications such as Skype is in violation of net neutrality regulations. While this argument may take years to resolve in this forum, I would bet that the consumer will decide which approach they favor, long before the courts do, and thus which companies they will continue to support as subscribers.

The Internet is kryptonite to a walled garden. Those incumbent carriers that don’t understand this and continue to try and force a controlled, mobile walled garden experience on their subscribers will ultimately lose.

That’s my .02!

Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.

Unlicensed Spectrum + Wi-Fi = Opportunity or Threat

(Originally posted at http://www.von.com/blogs/guest/2009/03/unlicensed-spectrum-wi-fi-opportunity-or-threat.aspx )

Having been on the bleeding edge of wireless for the past nine years, it is gratifying to finally see a major market disruption move from the theory to reality.

I have noticed that the industry is largely clustered around two ends of the spectrum (no pun intended). There are the “cellular” guys, who maintain that licensed spectrum, cell towers, and complex cell planning are all required to deliver robust, wireless service to their subscribers. And there are the “enterprise” guys, who have embraced unlicensed spectrum, low-cost APs, and ad-hoc deployments to deliver wireless service to their clients.

But finally, the line is blurring.

It is now impossible to deny that one can deliver superior customer performance at a fraction of the cost using Wi-Fi. There are very interesting upload, download and latency figures based on millions of worldwide SpeedTests. Their conclusion: “Overall, we found that Worldwide 3G average download speeds to be 956 Kbit/s versus upload speeds of 153 Kbit/s and a 484 ms latency. This compares to average free Wi-Fi network speeds of 2,502 Kbit/s download, 774 Kbit/s upload, and 205 ms latency clearly demonstrating the superiority of Wi-Fi network performance. See our summary chart for additional details...”

Leaders in the cable industry are now moving rapidly into delivering a quad play for their subscribers. Cablevision, a leading MSO, is rolling out a reported 18,000 outdoor access points across its footprint in New York, New Jersey and Connecticut. Why? Verizon, the nation’s largest wireless carrier is moving into Cablevision territory with its own home Internet and content delivery called FiOS. So, unencumbered by the need to purchase expensive spectrum, or the burden that handset subsidies place on carriers, Cablevision has changed the rules of the game. And how are they doing head-to-head? According to a report from market research firm Dell'Oro Group, “Optimum Wi-Fi contributed to “more than 70 percent sequential growth” in Cablevision's net subscriber additions in the fourth quarter of 2008, “a rate higher than any other cable operator in North America.”

And others, like Comcast, have begun rolling out their own trials.

Embracing disruption, just as they did with VoIP only a few short years ago.

In the United States, AT&T is a great example of a traditional wireless carrier that “gets it.” Faced with the challenges brought on by the success of the iPhone and the stresses the mobile Internet were placing on its 3G network, AT&T went out and added wireless data capacity nationally by spending $275 million to acquire Wayport. This gave AT&T an instant data network capacity upgrade at 20,000 locations where people congregate across the country. And are they done? Not if you listen to Greg Williams: “You can think of Wi-Fi as a giant offload point for wireless data traffic. Look at the growth in smartphones and data traffic, and it’s pretty clear that Wi-Fi can be a real plus to AT&T.”

An interesting contrast is Verizon, where the old school cellular perspective has meant clinging to the status quo. Recently, this manifested itself in their signing an exclusive deal with RIM for the Blackberry Storm that shipped without Wi-Fi. The blogosphere lit up over this, as people revolted over not being able to leverage Wi-Fi, even at home or the office.

In the face of competition, leading cable companies see Wi-Fi as an opportunity to deliver a true Quad Play for their subscribers. (In fact, my colleague, Dave Park, will be discussing that topic at a few upcoming events including The Cable Show, NAB and a webcast).

AT&T sees Wi-Fi as an opportunity to add low-cost data capacity at better than 3G data rates.

Verizon sees Wi-Fi as a threat and doesn’t even allow it on a cool, new Blackberry.

Which are the disruptors and which will be the disrupted?

That’s my .02!

Martin Suter

Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.

 

Apple’s Wi-Fi Strategy: Hiding in Plain Sight?

(Originally posted at http://www.von.com/blogs/guest/2009/03/apple-s-wi-fi-strategy-hiding-in-plain-sight.aspx )

A year ago, during an earnings call, Peter Oppenheimer, Apple CFO, laid out Apple’s view of the iPod: “We view the iPod market as bigger than the market for simple music players. We believe one of the iPod’s future directions is to become the first mainstream Wi-Fi mobile platform.”

Certainly the iPhone’s impact on the mobile Web has received the lion’s share of attention and deservedly so. But what of Apple’s ambitions vis a vis evolving the iPod Touch?

There’s been a flurry of very interesting data lately about the impact that Apple is having on the Mobile Web. According to AdMob’s January Mobile Metrics Report, Apple devices accounted for 29.1 percent of U.S. Wi-Fi Internet access requests, split roughly 60/40 between the iPhone and the iPod. But what is very interesting is the rate at which the iPod Touch is growing as an Internet device. Over the Christmas holiday, the iPod grew 3.4X over the November numbers and sustained these levels into January.

So what does this mean for service providers?

It opens the door to a wide range of companies to provide Mobile Web services without having to buy (or consume) spectrum or pay any handset subsidies. Leading companies, like Cablevision, are building out wide areas of Wi-Fi coverage to do just that – delivering mobile broadband services, at data rates that are faster than 3G, and system capacities far greater than any of the cellular carriers.

It’s safe to say that Apple is executing on its ambition to make the iPod the first mainstream Wi-Fi mobile platform. We live in exciting times, indeed!

That’s my .02!

Martin Suter

Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.

 

Wireless Bull

(Originally posted at http://www.von.com/blogs/guest/2009/01/wireless-bull.aspx )

First off, I should clarify that’s “bull” as in bullish, not the other kind! With doom and gloom at every turn, I think it’s worth noting that the glass really is half-full in segments of wireless right now, especially Wi-Fi.

Chris Silva from Forrester Research recently posted a blog from CES called, “Wi-Fi: The Only Network You Need?”, in which he describes how Wi-Fi is becoming the de facto wireless technology of choice for personal area networks. Even though my focus is at the other end of the Wi-Fi spectrum (no pun intended), this is great news, as it will lead to even broader proliferation of devices and form factors. Already, companies like Eye-Fi are Wi-Fi-enabling cameras, turning them into mobile broadband devices. Furthermore, they have a deal with Wayport (now part of AT&T Inc.) that automatically uploads your pictures to any social networking site wherever there’s a Wayport access point in range.

More device types mean more demand for cheap, ubiquitous bandwidth.

Then the Wi-Fi Alliance came out this week to report “in 2008, Wi-Fi chipsets were up 26 percent year-on-year to 387 million.” Highest growth areas are mobile devices — smartphones, netbooks and media devices. Of particular interest is that In-Stat “expects the most resilient Wi-Fi products to be dual-mode handsets. ...” This is simply further proof that there is industry-wide momentum behind Wi-Fi. I don’t think it’s too contentious to say that in 2009, Wi-Fi finally will become “need-to-have” in all devices, much as it previously has in laptops.

More devices, particularly mobile devices, mean more demand for cheap, ubiquitous bandwidth.

Over the holidays, TechWorld in the U.K. ran a story that headlined “Wi-Fi beats iPod in geek survey”, in which they published the results of a survey in a British magazine. “A clear majority (35.5 percent) opted for wireless Internet with the iPod ranked at No. 5 with only 5.6 percent of the respondents favoring it.” And while I love my Wi-Fi, I love my iPod and iPhone because they have Wi-Fi! Apple has created a device, a platform and an ecosystem that exposes the mobile Internet in a way that it never had been experienced before. However, as many have noted, iPhone performance over cellular can be hit or miss. I have likened it to driving a Ferrari down a dirt road, while I am able to crank it up with my iPod over Wi-Fi.

There are many other data points that confirm that Wi-Fi’s time has come. It’s seldom that you find the planets aligning as they have in 2009: a mature, low-cost, proven technology ... broad consumer acceptance and experience ... widely deployed ... low barriers to entry for service providers ... and innovative ecosystems. Even in good times, it doesn’t get any better!

That’s my .02!

Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.

 

Mobilizing Web 2.0

(Originally posted at http://www.von.com/blogs/guest/2008/11/mobilizing-web-2-0.aspx )

The launch of the iPhone by Apple and AT&T in June 2007 was a seminal event in the evolution of the mobile Internet. For the first time, a handheld device delivered much of the usability and functionality that is available to laptop and PC users, in a form factor and interface that people wanted to use. The iPhone allows users to stream YouTube, purchase from the iStore, upload pictures to Facebook, and of course, make plain old phone calls.

Entire ecosystems are being enabled, as we speak, by companies like Apple, Google and RIM Blackberry releasing software development kits (SDKs), and creating a revenue-sharing business model that gives these developers a route to market (Apple App Store). Marquee VCs, like Kleiner Perkins, are committing hundreds of millions of dollars to fund startups focused narrowly on Mobile Web 2.0 application development.

The Mobile Internet is happening. Now.

But all is not idyllic. Many iPhone users report being frustrated by the limitations of current cellular networks. In many respects, it’s analogous to driving your Ferrari over a dirt road. Much of the functionality described above is only available over a Wi-Fi network, when available.

A short-term answer for the Mobile Internet is more ubiquitous Wi-Fi. We’re not advocating blanket, citywide coverage, but rather strategic deployments in areas where it makes sense to do so. This may be as simple as re-thinking the hotspot coverage area — perhaps placing a high-powered, highly sensitive access point on the outside of a location, rather than placing a low-power, enterprise AP inside. Conceivably, this simple step would provide coverage inside the establishment and its patio, just as the indoor AP, but it also could create a “virtual patio” covering about 10 times the area of the indoor AP alone. If you think about it, the location’s SSID could be used as an advertising beacon, pulling in more customers from the surrounding area, not simply serving those customers already inside the establishment.

Other locations where it might make sense to deploy Wi-Fi access include convention centers, hotels and resorts, sporting venues, commuter rail stations and lines, shopping malls, urban cores, multi-tenant dwelling units, etc.

The long-term bet carriers are making is LTE, 4G. In April 2008, the FCC raised $19.6 billion from 4G spectrum auctions and the major LTE equipment providers have agreed on an intellectual property model to accelerate adoption. 4G trials are expected to begin in 2010, with wide-scale rollouts beginning in the 2012 timeframe.

Whether Wi-Fi, WiMAX or LTE, or most likely some combination of all three, the challenge of deploying a network with the capacity capable of delivering applications and content to many of these devices simultaneously, at rates approaching 100mbps, is not trivial. Wireless networks are constrained by the laws of physics, notwithstanding the unfortunate hype that inflates expectations with every new generation of technologies. The infamous WiMAX promise of “70mbps over 70 kilometers” sounded good to the marketing department, but the reality is that this is an either/or proposition. Distance and power dictate data rate. Handheld devices are, by definition, low-powered, range-limited devices. For 4G to deliver on anything approaching its promise, much smaller cells (micro and picocells) will need to be used outdoors, with even smaller femtocells expected to provide an answer indoors, in the home and office.

That’s my .02!

Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.