How "Sideloading" Threatens the Wireless Carriers

Published on: 30th May 2007

Any content, at any time, at any location," is the new mantra for wireless communications operators. But as wireless operators strive to meet customer demand and to shore up their revenue by offering their customers music, video and games, they face a new challenge: Subscribers often are choosing to bypass such premium services sold by mobile communications providers and instead are loading their own content onto their mobile phones, a practice known as "sideloading."

For wireless operators, which are counting on sales of premium content to offset the impact of declining revenue in their core voice businesses, sideloading represents a significant challenge. However, the answer to this challenge - at least for one wireless carrier - may be found in the old adage: "If you can't beat 'em, join 'em."

Content on the side

"Sideloading is really coming into its own because of the proliferation of local interface choices in mobile handsets," said Frank Dickson, principal analyst for multimedia content services at iSuppli. "These interfaces easily allow subscribers to connect their phones to PCs or other devices in order to download content without even needing the wireless carriers."

By 2010, USB will still be included in 764 million wireless handsets shipped during the year and will be the most ubiquitous interface in the industry. However, the wireless alternative, Bluetooth, is gaining ground fast. By 2010, Bluetooth and USB will be available on nearly every handset, and WLAN and NFC will have established a significant market presence.

Market forces

The rise of premium multimedia content on mobile phones is being driven by three major factors.

First, mobile handsets have transformed from simple communications devices to full-fledged computing platforms, with sufficient processing power, memory and display quality to run video, high-quality audio and sophisticated games. Second, wireless carriers have established infrastructures capable of provisioning premium multimedia content to users. Third, and most importantly, there is consumer demand for such content.

The marching orders from consumers are clear: They want content on their handsets to entertain them and to personalize their mobile-communication experience. However, all too often, consumers are looking elsewhere besides their wireless carrier to attain this.

Going along to get along

While many mobile communications carriers view sideloading as a threat, Alltel Corp. recently took a different tack: Instead of fighting it, why not participate in the trend?

Alltel's approach to the issue was to launch a new service called Jump Music, a free software package that enables subscribers to find, manage and easily transfer music files.

Jump Music links to the eMusic Internet site, where subscribers can make purchases from a vast catalog of more than 2.5 million tracks that are delivered in the MP3 format, which is free from Digital Rights Management (DRM) restrictions. New Jump Music users get 35 free eMusic tracks.

Keeping the customers

Wireless carriers will continue to struggle to get subscribers to use their content and to find ways to keep customers from defecting to sideloading. Some, like Alltel, may look to approach the issue with a multi-platform strategy. iSuppli's view is that carrier- provided versus sideloaded content will not be an either/or scenario. In fact, many users will use both, depending on the opportunity or the need.|cn24037|30-05-2007|Pioneers Maintained Dominant Market Share for WiMAX Equipment|According to In-Stat, while better known equipment vendors like Samsung, Nokia Siemens, and Motorola received extensive press coverage in 2006 due to their high-profile WiMAX service provider wins, it was still the original market entrants - Alavarion, Aperto, Redline, and Airspan that held the dominant market positions. The market research firm does expect that will change as Sprint starts its network deployment. The company has not selected any of those early market pioneers as an infrastructure partner.

"While the early pioneers of WiMAX should lose their market share dominance over the next couple of years, they should continue to grow their revenues, benefiting from the overall growth of the market. These vendors continue to win larger contracts with higher profile service providers," says Daryl Schoolar, In-Stat analyst.

Recent research by In-Stat found the following:

• At the end of 2006, there were 213.3k WiMAX subscribers, worldwide.
• Almost all of those subscribers were found in Eastern Europe, North Africa/Middle East, and the Asia/Pacific Region.
• Due to delays in 802.16e certification, In-Stat now believes the life cycle for 802.16d equipment will be longer than originally forecasted.

|cn24038|30-05-2007|China Mobile Planning to buy 2 Million 3G Handsets|China Mobile is reported to be planning a TD-SCDMA handset tender later this year which could be worth between US$500 and US$780 million. China Mobile, which has already spent a similar sum to purchase 3G network equipment for 10 cities, will buy two million TD-SCDMA phones in October, according to Chen Haofei, the secretary general of TD-SCDMA Forum. The handsets are expected to retail for between US$260 and US$390 per unit.

About 18 phone makers will share the TD-SCDMA phone pie, including ZTE, Datang Mobile, Samsung, LG, Haier, Lenovo Mobile, TCL and Huawei Technologies.

A national TD-SCDMA network is expected to be completed by 2009, but about 20,000 TD-SCDMA cell phones are already being tested. China Mobile had expressed dissatisfaction with the test results and required handset makers to redesign phones, sources told the Xinhua official news agency.

"The first-tier suppliers, about six or seven vendors, will take 60 percent of the total phone procurement value," Haofei told Shanghai Daily during a phone interview yesterday, without naming the companies.|cn24039|29-05-2007|Deutsche Telekom Denies T-Mobile USA Sale|Deutsche Telekom's chief financial officer Karl-Gerhard Eick has denied speculation that the company is considering a sale of its US wireless arm, T-Mobile USA. There is periodic speculation that Telekom might sell its US division, typically to Vodafone who always denies any talks - but following last week's private equity buyout of Alltel Wireless - the speculation again reared up.

"A sale is absolutely not up for discussion at the moment," Eick told dpa-AFX in an interview. However, Eick said he doesn't rule out a sale of T-Mobile USA in the future, adding the "asset becomes more attractive every day".

Eick also said the process to sell unit Media & Broadcast has begun, with brochures having been sent to potential buyers.|cn24040|30-05-2007|Tech Savvy Consumers want Wireless Internet|Figures released by m-spatial reveal that UK consumers are becoming more technologically savvy when it comes to connecting to the Internet on the move. The m-spatial Winter/Spring Mobile Local Search Index charts local searches made on mobile phones in the first quarter of 2007, and highlights the increased convergence of fixed and mobile consumer services, and the growing appreciation from consumers of the breadth of information available.

With an abundance of Internet cafes and more and more businesses offering Wi-Fi access, from coffee shops to airport lounges, the Index shows ever greater numbers of consumers are relying on their mobiles to discover these locations. Consumers also demonstrated their increasing awareness of the value of mobile local search services not just when away from home, but for regular use in their local area for categories such as traffic information, live travel updates and even what's on at the local cinema. For example, the survey highlighted a 100% increase in consumers checking traffic cameras, enabling them to plan routes and miss traffic blackspots, even on familiar journeys.

Cinema searches still top the index, with Odeon and Cineworld swapping positions at the top of the brand charts, while Halfords has entered the top 10 brand searches; a sure sign that spring is here as people invest in bikes.

The Index again highlights that consumers are using their mobiles to look for more esoteric things. Lime kilns, toilet hire, diving services, marine engineers, genealogists and historians, model villages and animal transportation are just some of the more obscure searches amongst the hundreds of thousands carried out this quarter.

Commenting on the results, Andy Walker, CEO of m-spatial said: "The Index again highlights the breadth of local content that users are demanding while on the move. Perhaps more significantly, this quarter's search index highlights the growing trend of repeat usage of mobile local search services with consumers increasingly realising the value of search, not only when in an unfamiliar area, but on a regular basis near home, when making regular journeys and when planning a night out. This is a significant step in the development and mass market adoption of local search."

Top Ten Local Search Brands* January - April 2007

* based on the final chosen result of each individual mobile search by brand. Percentage figures based on breakdown of searches to top ten brands. Ranking changes relate to January - March Mobile Local Search Index figures.

Top Ten Local Search Categories* January - April 2007

*based on the final chosen result of each individual mobile search by category. Percentage figures based on breakdown of searches to top ten categories. Ranking changes relate to January - March Mobile Local Search Index figures.|cn24041|30-05-2007|Increasing Threat from Mobile Storage Devices|How many portable storage devices were the 12,000-plus security specialists who visited this year's Infosecurity Europe show carrying between them? This was what SmartLine, developer of network management and end-point security solutions, attempted to find out with a short survey conducted on its stand.

"Ninety per cent of our visitors were carrying USB sticks, MP3 players, mobile phones with a memory card, digital cameras or some other storage gadget," explains Sacha Chahrvin, managing director UK & Ireland, SmartLine. "If they are representative of Infosec's visitors as a whole then that means that nearly 11,000 had such a device on them. In fact, our stand attendees had an average of 1.8 devices each - some even had six or more. We calculate that there were just under 22,000 devices in total wandering around at Infosec."

However, the SmartLine survey also showed some more worrying results. An astonishing 80 per cent of visitors believed their company had lost valuable confidential data through the use of these devices. Of the 20 per cent who were confident that their data was safe from rogue USB sticks, only one did not use such devices at work.

Sacha continues, "The security experts who visited our stand were very honest, and most admitted to a security breach. My concern is that the remaining 20 per cent are just kidding themselves. Our survey shows that these devices are extremely popular. Only 10 per cent of people didn't have one on them - and everyone who took part in the survey owned at least one such product, even if they hadn't got it with them.

"Although these gadgets are designed to be perfectly harmless, unfortunately it doesn't take much for them to become a major security headache. It's all too easy to use them to siphon off valuable data. Even legitimate users can simply lose the device, or have it stolen. Organisations really do need to ensure that they have the right security measures in place to protect themselves from this type of data leakage."

 

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