It first became possible to access the Internet on a mobile phone in the early 2000s, using the Wireless Applications Protocol (WAP) standard. Ever since then Mobile Network Operators (MNOs) have been seeking ways to add value to their core data service and thus avoid becoming a commodity bit-pipe provider. Early attempts to control the revenue stream involved creation of a portal (or walled garden) that would, in theory, provide all the revenue-generating services a customer might need. But digital services provision was never a core competence for MNOs – upstarts such as Google and Facebook, were much better placed. In any case, the open architecture of the Internet was always going to ensure that WAP portals went the same way as dial-up walled gardens like CompuServe (eventually bought by AOL).
But the creation, analysis and application of location data is a core competence for MNOs. Mobile networks depend critically on location information to provide the coverage and capacity needed to serve customers with data, messaging and voice services. And as 5G gets closer, faster and more sophisticated location analytics will be required to monitor network performance and assure service levels. So, there is a clear logic to Telefonica’s acquisition of location data start-up Statiq. Telefonica has the data, Statiq has the analysis capabilities, together a powerful combination.
Moves such as this give MNOs the a very real opportunity to deliver added value and counter the recent trend towards commoditisation.
Yesterday’s Institution of Engineering and Technology (IET) 5G conference gave us an excellent status update in relation to 5G, the next generation mobile phone technology. Every new generation of technology is known for something and typically becomes described in reference to the previous generation of technology. The first, analogue, mobile phone networks (later known as 1G) were all about mobility – a phone that you can carry with you. Having met the mobility requirements, 2G networks were all about being digital, which in practice meant text messaging, a network feature that had originally been intended for engineers performing tests, but consumers made into a cool new messaging channel. When 3G arrived it was all about multimedia, Hutchison 3 launching on the back of videos of premier league football, although for many 3G really meant mobile email. With the arrival of 4G the mobile phone experience started to get close to the broadband Internet experience we had become used to on a fixed connection - it became about mobile broadband.
So what will 5G be all about? The conference revealed a wide range of views: The Internet of Skills, more capacity, low latency, an enabler of applications and ubiquity were just a few. The difference with 5G is that is the first cellular telecoms technology to be designed from the ground up to meet a broad range of (currently) identified user needs. Use cases such as telemedicine, connected cars, media services, public safety and wireless replacement of the fixed network have been defined - to mention just a few. 5G will be the way people access the connected services they need in their daily lives for business or pleasure.
All of which means that 5G will be whatever you want it to be.
Ofwat has published its assessment of the costs and benefits of retail competition for household water customers.
Quantitative benefits are easier to evaluate than qualitative ones, so it’s no surprise that the analysis focuses on cost savings and efficiency gains, with limited analysis of the non-financial benefits.
Experience from the energy and telecom markets tells us that when price becomes the primary driver of competition, the market can be viewed as consisting of two main segments:
Ofwat’s analysis shows that in the best scenario, household competition will deliver savings of around £8 per household per year and in the worst scenario it will increase costs by nearly £3 per year per customer. Even if the market passed all the financial savings through to customers in the form of lower prices, the case for competition based on cost savings alone is marginal.
Which brings us back to the non- financial benefits. Other markets, telecoms especially, have competed on a number of other fronts: brand values, additional features and value-added services, for example. Whilst bottled water brands have successfully been able to differentiate, it remains to be seen whether that is possible in water supply. Incumbents and new entrants are going to require some very innovative marketing if they are to make a success of a competitive household water market.
A new eBook from Esri looks at the role of location information in the IoT. The eBook predicts the emergence of an IoT data economy, a market in which data providers and aggregators participate, creating value-added data products that will power the industrial transformation that we are living through now. From innovative ways of monitoring air quality to targeted mobile advertising, a diverse range of real world applications are showing that IoT is now much more than hype. A common foundation for them all is location information, rapidly becoming a critical building block.
During the 1980s, Britain’s monopoly gas, water, electricity and telecommunications industries were privatised and regulated. Since then, the utility industries have been on a 30-year journey, which in many ways has been a risky experiment with the critical infrastructure of the nation. The different sectors have been liberalised to a greater or lesser extent, with telecommunications the one market to have embraced competition throughout the supply chain. A lot has been learnt:
Let us hope that the collective memory of UK plc is good. As the water sector journey moves on there are many areas in which we can learn from the experiences of the telecommunications industry.
Andrew Keevil assists technology companies with strategy and marketing, specialising in new proposition development.