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Ovum at Barcelona: no more femtocells? Commerce/philanthropy duo for emerging markets?

As the mobile industry gathers in Barcelona to set out its roadmap, Ovum analysts provide their opinion of the most interesting announcements made in the frst 48 hours. 
Vodafone has announced a trial of 3G signal repeaters in several markets, after the successful completion of initial trials in Egypt. As a result, Steven Hartley, Ovum's Senior Analyst, is querying the role of femtocells. The technology used by Vodafone provides a boost to in-building wireless coverage, much like femtocells. In fact, however, this doesn't look like the end of femtocells, even though there haven't been many announcements in this field this week. Vodafone has, in fact, stressed to us that this is not a sign that it is giving up on femtocells.

It sees a different usage case for the repeaters. It has not yet revealed further details, but, for example, they could be used in emerging markets where poor fixed infrastructure prevents femtocell backhaul. However, repeaters also offer a fixed mobile substitution opportunity in more mature markets and could serve customers happy to cut their fixed line. Even if Vodafone doesn't eventually use them in this way, there is certainly potential for other mobile operators to take this approach. For example, 3 Ireland recently announced that repeaters would be part of its winning bid for the Irish government's National Broadband Scheme for rural areas.

Acording to Eden Zoller, principal Analyst at Ovum, it's proving a busy week for the GSMA, which today announced a project with the Bill and Melinda Gates Foundation that aims to bring low cost mobile financial services to people in emerging markets. The Mobile Money for the Unbanked (MMU) programme will put US$12.5 million on the table and work closely with operators, governments, banks and other stakeholders to accelerate the roll-out of services.

The MMU has what should be an effective agenda, combining commercial opportunity with services that are of genuine benefit to unbanked people. Ovum forecasts that mobile money transfers in the Middle East and Africa will grow from US$1billion in 2008 to $20billion in 2012. And there is already strong evidence that mobile payments in emerging markets can be successful for all parties concerned. The best known is probably the Vodafone Safaricom M-Pesa service in Kenya, where there were 4.2 million M-Pesa users at the end of September 2008 transferring around US$100million of funds every month, mostly in small sums of between US$5-20.

There are of course other initiatives of this kind, and service provider Zain today announced a new mobile banking called Zap that it hopes will bring services to over 100 million people in East Africa. Hopefully the MMU programme will result in many more of these services launching in the near future.

Tony Cripps, another Principal Analyst at Ovum, has been casting his eye over the latest iteration of Microsoft's Windows Mobile experience. Version 6.5 offers a more attractive, consumer-friendly face than previously but lacks any real "wow" factor, following as it does in the wake of others that were there earlier. Version 6.5 of the OS itself offers a new home screen, featuring hexagonally-organised application shortcuts as well as live notifications of message and content updates. The OS is further enhanced through integration with cloud services, including personal information sync (My Phone) and the now obligatory application store (Windows Marketplace for Mobile).

These are essentially clones of similar services from Apple (App Store and MobileMe) and Nokia (Ovi Store and Sync) and further indicative of a move by device software vendors and manufacturers towards better integrated device/online service offerings. Where Microsoft could score additional points, longer term, is in its potential to integrate across and extend such services between other types of internet-connected device. Its popular Xbox 360 games console is an obvious target here (any takers for Xbox integration with Windows Mobile?) as are any future Zune media players. Evidence of such thinking would help Microsoft regain its Mojo and fulfill CEO Steven Ballmer's joined up vision.

The GSMA is making a strong case for more spectrum for mobile broadband, observes Emeka Obiodu, Senior Analyst at Ovum, arguing that it could help the global economy to overcome the credit crunch. In what Emeka Obiodu describes as a high profile stunt, the organisation, together with CEOs of some of the leading mobile companies, called for 100MHz out of the 400MHz digital dividend spectrum, to be set aside for mobile broadband. Importantly too, the GSMA is urging governments to adopt a harmonised approach to the spectrum that will ‘allow the same devices to be used in many different countries and enable vendors to achieve economies of scale'.

Although much of what the GSMA had to say is already known to governments and regulators, it is important that the GSMA continues to lobby hard. The benefits of spectrum for mobile broadband, especially in the low frequency range, can not be overstated. If there is any hope of extending broadband services to rural areas cheaply, then governments and regulators must heed the GSMA's call to set aside the spectrum. As Alexander Izosimov, VimpelCom's CEO and the current GSMA chairman said, "additional spectrum is not a luxury but an absolute necessity for future growth".

Emeka Obiodu also comments on a 4G issue, noting that Alcatel-Lucent "has cranked up the debate about 4G and the services it will enable." Alcatel-Lucent states that it has founded the ng (Next Generation) Connect Program, a group aimed at promoting future mobile and fixed broadband services, devices, applications and content. Since its conception, the ng Connect Program has attracted several members including HP and Samsung.

While the idea of an industry-wide initiative to promote future services is laudable, a lot more needs to be done to craft a coherent framework for future mobile services. Ovum notices that the ng Connect Program has yet to sign up any of the big players that lead the industry. Inded, as Emeka Obiodu predcits: "Unfortunately, if the likes of Nokia, Microsoft, Vodafone and Google are not brought onboard, the ng Connect Program has little chance of achieving its objectives.

A final observation by Ovum comes from Senior Analyst Steven Hartley. Under the headline "Sony Ericsson announces new strategy: same as old one" he notes Sony Ericsson launch of its "Entertainment Unlimited" strategy. It will increase its focus on high-end, multimedia devices and broaden the user experience across devices. It's just that for Steven Hartley "It's not too cruel to describe the "new" strategy as staggering in its blandness. It is little different to the joint venture's founding principle that should have been guiding the company anyway. Instead of having music-centric Walkman devices and camera-oriented Cybershot phones, the new approach calls for something of a ‘Cyber-man' approach. Full multimedia functionality is to be concentrated in a single device, as envisaged by the forthcoming W995 and idou.

"Will it work? The elements of the announcement expanding the user experience to other devices are crucial. Otherwise Sony Ericsson will struggle to differentiate in an increasingly crowded high-end."

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