More than half of this is taking place in Asia. Over the last two years close to 300 mobile operators in 120 countries have launched mobile broadband networks (using the 3G HSPA technology) and some 70 of these are already planning the next upgrade of their networks using the LTE technology—the first $5 billion of investment money has been committed to that technology.

The two countries that are ahead of the pack in this are—where else but in Scandinavia?—Sweden and Norway.

Japan and Korea are also moving in this direction but they are using different technologies.

Within that same short time period over 200 million subscribers have embraced mobile broadband and, as reported previously, this has caught many mobile operators unprepared. They were still peddling their mobile portals while the apps available on smart phones almost instantly overtook a market that the mobile operators had been trying to build up for ten years.

Because of the success of this market mobile operators are now scrambling to keep up with an enormous demand for mobile broadband access. They are eager to get at least their share of the access market and competition is driving them to charge ever less for simple broadband access. As a result of this the margins available for mobile operators are being squeezed more and more.

Does that mean that mobile operators will be relegated to becoming pipe suppliers? Not necessarily. They have a number of very powerful tools that they can use. They know mobile customers better than anybody else and they are able to provide a very reliable and secure service—so much so that banks are using their networks to deliver financial services. This has built a powerful trust relationship between operators and some very key service providers. The mobile operators are the only ones who have a very secure identity management service on their networks that can be used by these financial institutions, and (if the mobile operators permit) by others also.

Furthermore, mobile networks are excellent for mobility applications such as GIS, location-based navigation, etc. Again, the mobile operators are currently the only ones who have access to this user information.

It then comes down to whether the mobile operators will be able this time around to also develop business plans that are going to make it attractive for other providers to utilise the network. This will require open networks, wholesale, MVNOs, etc. The question is will they indeed this time around do change their business models, or will they again wait for others to eat their lunch.

Mobile operators and their supporters all talk about a range of essential services such healthcare, education, public safety and so on. Lessons learned from the past will hopefully encourage operators to open up their networks to these public sectors. It is not too difficult to predict that, if this does not happen and consumers want to make more use of mobile broadband infrastructure for such services, regulation will be used to force the operators to open up to these new social and economic opportunities.

What might change their attitude this time is the fact that they now nearly all operate in saturated markets. There are very few new users that can be connected—certainly in the developed markets. So today there is certainly more urgency among the mobile operators to change their business models to cater for the new opportunities. Also, it will only be a matter of time before OTT providers such as Google, Facebook, Twitter, Amazon, eBay, Skype and others will have more sophisticated applications in competition with the mobile operators.

One of the main problems still being experienced by operators at the moment is a lack of sophisticated middleware that would allow them to deliver these new applications more efficiently and effectively. For instance, the many BSS/OSS systems within the mobile operators' organisations are making it very difficult to deliver real-time and on-demand services.

Who will win?

The judges are still out on this. There are the smart device operators like Apple, with their proprietary applications; companies like Google and Microsoft, with devices based on Operating System (OS) innovations; and the mobile operators, who recently formed an alliance to also develop their own apps stores. This broad level of competition will drive innovation and those who are able to deliver the best customer experience are going to be in the lead here.

Over the next few years the mobile market will pass the $1 trillion revenue mark. The stakes are high, the rewards are great, and the future looks very bright indeed. So may the best one win.

Written by Paul Budde, Managing Director of Paul Budde Communication

LTE was envisioned as an all IP system, but the RF allocations follow the voice-centric approach of earlier generations. While LTE standards allow for either Frequency Division Duplexing (FDD) or Time Division Duplexing (TDD), all initial LTE equipment uses FDD. FDD requires two separate blocks of spectrum—one for each direction. FDD makes perfect sense for bi-directional voice traffic. It makes no sense for data. With the exception of peer-to-peer file sharing (which most mobile operators block), data traffic is very asymmetric. Sending data via FDD means one block of spectrum is fully utilized and the other, equal sized block, is dramatically under utilized. Result: the operator pays for almost twice the spectrum they actually use.

Verizon is deploying LTE in the 700 MHz C block which means they are using 746 MHz to 756 MHz (a 10 MHz channel) for their downlink (to the mobile device) and wasting most of 777 MHz to 787 MHz (another 10 MHz channel) for the uplink. If Verizon could deploy TDD (as used by WiMAX and as defined for LTE but not implemented), they could fully utilize both 10 MHz blocks for data transfers, almost doubling their data capacity.

I don't know the actual capacity Verizon will realize on average with their first generation LTE infrastructure. But suppose Peter Rysavy is correct (as implied by Gigaom) that Verizon will initially average 15 Mbps per 10 MHz channel. That's 15/15 Mbps, symmetric, even though average traffic is likely to be 15/2 Mbps. No single user is likely to see 15 Mbps; rather that 15 Mbps is shared among all users in that sector. With TDD (the default for WiMAX and an unimplemented option for LTE), the Verizon spectrum could support two channels of perhaps 13/2 Mbps each in that same sector. Again, no single user will see 13 Mbps, but all the users in the cell will be sharing 30 Mbps of capacity that can be dynamically divided between up and down—mostly like averaging 26/4 Mbps but able to allocate 15/15 or 28/2 as the traffic mix changes.

It's ironic the LTE implementors got this wrong when you consider their decision to use only IP in the rest of the LTE design, thereby dropping support for traditional voice or SMS services. That's right, initial LTE deployments won't support voice telephony or SMS messages, only data services, and yet LTE spectrum assignments were made as if voice comes first.

That's ironic.

Written by Brough Turner, Founder & CTO at Ashtonbrooke; Chief Strategy Officer at Dialogic

As Global Insight speculates, we are indeed likely to see the smart phone war starting to get more acrimonious in 2010 as software platforms and manufactures slug it out, hopefully to the benefit of the consumer. Mobile web browsing for the masses should not be that far away as smart phone prices start dropping seriously. On the network side we are likely to witness a titanic battle amongst mobile network operators trying to walk the fine line between the cost of G4 licenses and network upgrades, affordable end-user pricing, growth in market share and EBITDA. The only certainty is a decoupling between the growth in traffic volumes and the growth in revenue.

As markets and technologies evolved so fast it was rather interesting to see the sudden scramble on how to do voice and SMS over LTE. The most basic, and let us admit, most lucrative, services seemed forgotten in the data deluge. Would it be Volga (Voice over LTE with generic access) using existing circuit switched networks or would it be One Voice which is IMS based with real VoIP calls. One Voice now seems to be gaining the upper hand.

IMS implies addressable IP addresses, lots of them, no need to say more.

Time has come for an IPv6 address population clock to complement the IPv4 address exhaustion clock.

Written by Yves Poppe, Director, Business Development IP Strategy

Although I didn't attend, this week's Mobile World Congress seemed like a fitting stage for news of this nature. Until only recently, has it been remotely plausible to consider such different companies joining forces. I've written about Skype often, and for the most part, they've been a threat for incumbents of all stripes. To hear about this from Verizon during such a public event makes it very clear that the sands are shifting once more, and yet again, VoIP is the culprit.

Skype has upset another apple cart, but I'm more inclined to put a positive spin on things, and say the opposite. No doubt the golden egg of wireless is poised to go the way of the RBOCs in the wireline world, and that's not good for the major mobile operators. On the other hand, this trend is inevitable, and in time, all mobile voice calls will be IP, running over a data network. Service providers are well aware of the risks of waiting too long, where either an established asset becomes a liability, or they miss the boat the first time around.

Think about the wireline incumbents, who of course, were the last to embrace VoIP. They've hung on too long, and that market is going away either to cablecos or wireless. We all know that today's youth will never have landlines, so there really is no future in this market. Think about how Verizon Wireless turned down the iPhone, and what a winner it's been for AT&T. Verizon Wireless has a pretty healthy business, but they've never had an answer for Apple.

Skype, on the other hand, has its own challenges. Having gone to Silver Lake, they have debt to manage now. Their growth story is still intact, but the business model has inherent limitations, and this has led them to seek closer ties with service providers. The business market could be a great opportunity for them, but they need carrier partners to really make this work. They absolutely need to grow beyond the desktop, and their efforts to date have been moderately successful, but a far cry from being a real growth driver.

I am sure you can see where this is going. Verizon and Skype both have needs, and face some common enemies. They are hardly complementary and have no warmth in their history. However, when long term survival is at stake, you can rationalize anything, and at face value, its news on Tuesday makes good business sense. Verizon gets access to Skype's huge global community, which they expect will be a great driver of data traffic over their 3G network.

Also, with Skype being mostly a voice service, you don't need an iPhone to use it. Any smartphone will do, so in lieu of offering the iPhone, Verizon can now create a distinct value proposition built around the smartphones they want to offer. This may not totally neutralize AT&T's handset advantage, but it gives Verizon a different advantage that comes by not being an Apple partner.

With Skype, Verizon has more levers to control the overall value proposition, and not be held hostage to the demands of Apple, who have radically shifted the traditional balance of power between operators and handset vendors. I would argue that this matters to Verizon, especially when all evidence points to the superiority of their network over AT&T. An example of this control is the fact that Verizon's deal with Skype precludes the use of WiFi. This ensures that Skype calls are routed over their network and not someone else's. It's not clear how long they'll be able to uphold this, but for now, it helps make their data plan more attractive, hopefully to the point where people will think twice about going to AT&T just for the iPhone.

Interestingly, Skype's deal is not exclusive to Verizon, as they do have an iPhone app with AT&T, so they actually get the best of both worlds. However, with Verizon, they get an instant bolt-on to a huge subscriber base and integration with every top smartphone not made by Apple. We don't know the revenue sharing details, but I have no doubt the financial upside is attractive for Skype. It's also not clear how using Skype for IM will impact Verizon's SMS revenues - which could be substantial—but I'm sure they'll figure this one out.

Thinking more strategically, Apple may be the coolest tech brand ever, but Skype has cachet too, and Verizon knows this is a great way to gain overnight credibility with the youth market, as well as business users (and their addictive BlackBerrys), both of which are heavy Skype users.

I'm keeping this analysis high level, mainly because the details would make this a very long piece, and they've been dissected extensively by bloggers who followed this minute-by-minute. There are many items I haven't touched on here, but from my view, I'd say both companies come out as winners.

Skype brings more to Verizon than to AT&T and the iPhone, and the longer mobile operators ignore VoIP, the more they stand to lose. Sure, those long distance and roaming charges will be hard to give up, but they won't disappear entirely any time soon. More importantly, anyone using mobile broadband knows there are cheaper ways to make phone calls, and customer goodwill will turn into goodbye if carriers stand still.

With IP, the economics of voice change big time, and there's no turning back. What happened to wireline will be repeated with wireless, and this news with Skype and Verizon is a major inflection point in the evolution of mobile. The iPhone was a big one for sure, but I think this will be bigger as it will cause every mobile carrier to rethink their core business plans. It will be very interesting to see who makes the next move, and how they will respond, and you can be sure I'll have something to say about it soon after.

Written by Jon Arnold, Principal, J Arnold & Associates

Like many, I have bought the view that voice communications has become a software application that rides on top of any wireline or wireless link. As such, the downward trend line for telephony approaches zero, right? Yes, if subscribers abandon their voice minutes of use plans that start at about $45 for 450 minutes a month. But no if subscribers keep the voice plan and add the $30 or higher data plan.

There was a time when wireless carriers mandated the bundling of a voice plan for the privilege of adding a data plan. Absent such compulsory bundling, Verizon must have confidence that consumers will opt to keep the user friendly voice option. This assumption makes sense particularly if wireless carriers expect to replace unmetered, "all you can eat" data plans with several tiers of monthly throughput baskets.

Cable television operators did not have such confidence that their subscribers would add service tiers rather than cherry pick. By law cable operators must provide subscribers with some "buy through" opportunities.

With a future data dominant, but tiered service environment, users may consider it prudent to keep their voice minutes on a voice plan to conserve their available megabytes for nonvoice services. Under this scenario, efficient pricing plans trump visions of convergence and zero cost voice.

Written by Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law

In her recent book entitled Summer Players Carol Velthuis uses the four seasons of the year to plot where the various companies are in relation to their ongoing performance in the market. When comparing successful companies with those that are lagging behind it becomes clear that the differentiating variable is the ability and willingness to adapt to the new environment that has been developed over the last decade.

While Google and Apple are 'Summer Players', Microsoft is an 'Autumn Player'. Nevertheless there is no reason for the software giant not to leap back into the race and position itself alongside those other leaders in the emerging digital economy market.

I have always found it difficult to understand why Microsoft has left it so late to fully embrace the new environment—in relation to both the Internet in general and mobile broadband. The Windows Phone7 should be able to provide that seamless transition between the many Microsoft applications that more than a billion people already use and the mobile world. For too long it has left it to handset manufacturers to take the lead, but in the process it began to lose traction, with Blackberries and iPhones offering far more appealing products.

This will be one of those decisive moments for Microsoft. If it fails here it will become increasingly difficult to keep pace with this rapidly changing market. It should try to quickly manoeuvre itself back into 'summertime', a place it was occupying a decade or so ago.

The PC version of Windows 7 has been given the thumbs-up by our very critical BuddeComm office team, so, together with the new phone, the company certainly could have a winning formula to compete with Apple and Google.

Looking at it from the telecoms side, I see this development as another nail in the coffin of the mobile operators' business models. These new smart phones are generating an enormous demand for access to mobile broadband and this is rapidly becoming a commodity. With their totally flawed mobile portal business models the telcos have lost the lead in this market and they are now being forced the follow the market led by the device vendors. They need to adjust their business models quickly and start looking for wholesale services they can offer as value-added services to content and application providers.

M-billing could be a possibility—but never, ever, at the current rate of approximately 35% of revenues generated by these apps. I think 10% would be the upper limit of such a charge.

So the new Microsoft phone will not only change the situation for Microsoft; it will also put further pressure on the mobile telecoms operators to make significant changes to their industry.

Written by Paul Budde, Managing Director of Paul Budde Communication

Off the record, two of the best engineers in the world have confirmed to me that's perfectly plausible. It corresponds to my research, an FCC conclusion, and what John Stankey of AT&T is telling investors.

Campbell calculates it costs less than $3/month for a gigabyte of added capacity, falling. If the average "unlimited" (really 5 gig) customer uses about 1 ½ gig (a likely average), that means a carrier collecting $20-50/month needs to spend about $5 of that for the bandwidth.

It should fit in a capex budget similar to todays and will drop with Moore's Law.

An important point is that the carriers can essentially control the bandwidth demand by plans and pricing. If they stay with today's 5 gigabyte cap or even double it, the numbers work. Behind the higher estimates for 2012-2015 is an implicit assumption that carriers will raise double their caps every two years and be at 20-40 gigabytes for the almost all customers. That's unlikely.

Those caps will limit the use of wireless for folks who want to watch all their TV over the net. It is therefore only a partial substitute for landlines, so I believe most families will maintain both. With a landline in most homes, 30-50% of wireless traffic can be diverted to femtos and WiFi. Vodafone and AT&T are well along making that happen, especially as femto prices drop to $50 and eventually $20. They pay for themselves just with the spectrum savings. Vodafone is already giving them out for free as part of the bundle and 2Wire has promised gateways with femtos inside.

While some of his conclusions are U.S. centric, most of his data applies across the world. Glen is Merrill's world lead on telecom and he has some conclusions about both the emerging and developed world. He has long been acknowledged as one of the dozen best in the world. This report is the most interesting I've seen in a while. It should be available through the standard investor databases but unfortunately is not public.

There are predictable technology shifts like double or triple capacity in 3G/4G, huge IP voice efficiencies that will free up spectrum used for voice today, mass deployment of WiFi phones and/or femtocells.

My guess is we probably can go a decade without a serious problem based on some almost certain FCC moves. Improved spectrum use is the most important part of the broadband plan, as I wrote more than a year ago.

Written by Dave Burstein, Editor, DSL Prime

For those of you who are unfamiliar with Afilias, it's a leading and well-established registry company that's been providing registry operation services for the .mobi domain since it launched in 2006. Afilias is also the registry for .info and .aero, and provides technical services in support of 15 top-level domains, including .org (under contract to Public Interest Registry), .asia, and ccTLDs. In all, Afilias supports about 15 million registrations across these TLDs. In short, Afilias is an expert at supporting and growing new TLDs. For them, this acquisition is an opportunity to capitalize on a high growth area of the internet—mobile usage.

The ownership change will be invisible from an operations perspective. The change you will likely see, though, is an increased emphasis on the .mobi domain itself, along with dotMobi's award-winning services like Instant Mobilizer and DeviceAtlas.

While we have an extensive FAQ, there is one question many of you probably have, "How does this impact dotMobi's relationship with its 14 founders?"

The founders of dotMobi remain committed to the mobile Web and support dotMobi's central role in helping consumers find made-for-mobile content. They will continue to provide their expertise, background and support via a revitalized .mobi Advisory Group (MAG), along with individual working relationships that are in place. dotMobi's founders have contributed greatly to the success of the .mobi domain so far. Their oversight and input has been helpful in achieving .mobi's status as the 6th largest gTLD.

Early on, the value proposition of .mobi domains needed the vision—and voice—of key players in the mobile industry to ensure that the domain was embraced in a way that would advance the mobile Web. In 2010, the mobile Web has become a part of our daily lives, and an organization with proven expertise in the domain industry is needed to take the domain to the next level of growth.

Since Afilias already has the industry experience and currently serves as the technical operator for the .mobi domain, the synergy between the companies for this acquisition was a perfect fit. And since Afilias is already providing registry and DNS services for .mobi, Afilias' acquisition of dotMobi will be smooth and uneventful—likely invisible—for .mobi registrants, registrars and site visitors.

"Afilias has long been a leader in launching new TLDs and now supports over 50 percent of the entire universe of registrations in TLDs launched since 2001," said Hal Lubsen, CEO of Afilias. "Our acquisition of dotMobi reflects our long term commitment to the success of the TLDs we support and the communities they serve. We are particularly proud of the global success of the .mobi domain, and look forward to working with the dotMobi team and the mobile community to build on this solid base."

Afilias and dotMobi have worked closely together since the Mobi JV (predecessor to dotMobi) was started by Nokia, Vodafone and Microsoft to apply to ICANN for the .mobi TLD in 2004. Upon approval, Afilias provided registry services in support of the successful launch in 2006, and today there are nearly one million .mobi registrations. Now more established, dotMobi will benefit from the increased focus that a seasoned registry expert like Afilias will provide.

"The mobile Web continues to evolve and expand, and Afilias' strategic domain expertise combined with mobile industry support will be a powerful accelerant for .mobi growth," said Trey Harvin, CEO of dotMobi. "Afilias' strategies for growing top-level domains have directly resulted in several of the world's largest domains, and we are excited to work closely with Afilias' management to achieve dotMobi's full potential."

"With its excellent registry and DNS support, Afilias has been a close partner since the beginning," said Jerry Easom, Chairman of the Board of dotMobi. "This partnership, coupled with the success of dotMobi in furthering acceptance of the mobile web, makes moving the ownership of dotMobi to Afilias a natural progression. dotMobi founders, who include some of the largest companies in the mobile space, are looking forward to supporting dotMobi and the .mobi domain with involvement in both the MAG (.mobi Advisory Group) and the PAB (dotMobi Policy Advisory Board)."

Afilias provides registry and DNS services for more than 15 million domains, including more than 950,000 .mobi domains registered worldwide. In addition, Afilias supports .INFO, .ORG, .aero, .ASIA, .AG (Antigua and Barbuda), .BZ (Belize), .GI (Gibraltar), .HN (Honduras), .IN (India), .LC (St. Lucia), .ME (Montenegro), .MN (Mongolia), .SC (the Seychelles), .VC (St. Vincent and the Grenadines).

For more information on the details of this agreement please visit www.afilias.info/mobi.

About mTLD Top-Level Domain Ltd. (dotMobi)

Headquartered in Dublin, dotMobi is a worldwide leader in enabling the development & discovery of quality mobile content through innovative services, helping businesses and individuals reach the world's billions of mobile phone users. dotMobi spurs mobile industry innovation by giving content providers the tools they need to ensure the Web will work on mobile phones with speed, accuracy and relevant content.

dotMobi, a wholly owned subsidiary of Afilias Limited, was founded by 14 visionary mobile operators, network & device manufacturers, and Internet content providers, including Ericsson, Google, GSM Association, Hutchison 3, Microsoft, Nokia, Orascom Telecom, Samsung Electronics, Syniverse, T-Mobile, Telefónica Móviles, Telecom Italia, Visa and Vodafone.

For information on .mobi domains and all dotMobi services, visit http://mobiDomain.com, and on mobile devices, visit http://mobiDomain.mobi.

Here's how it works. Emails which offer a free one-year warranty extension for a popular smartphone, link to a company-branded web page. That web page asks for an email address and then smartphone serial number, IMEI number, type of phone, and capacity of phone. See below for examples of the phishing web page.

Cybercriminals use the information requested on the web page to clone the smartphone for various uses, including stealing long-distance service from the subscriber or simply using a deniable, disposable smartphone for other criminal activities. In effect, the cybercriminals used phishing techniques to clone smartphones.

This recent attack also stands out because it utilizes some advanced technologies and suggests possible directions of future cybercriminal activity. First, the attack uses server-side logic that hides the phishing site unless it is accessed through the browser produced by the smartphone company. Second, the attack uses additional protective technology in the form of a fast-flux network, which hides the phishing site behind a dynamic network of ever-changing proxies. These two smart technologies demonstrate how cybercriminals continue to focus their efforts on making their attacks targeted, stealthy, and resilient.

Written by Frederick Felman, Chief Marketing Officer at MarkMonitor

(At least) two solutions are on the table, Femtocells and Wi-Fi offload. Both approaches solve the backhaul issue by using customer or 3rd party links (DSL, DOCSIS, T1/E1, WISP or otherwise).

Femtocells are tiny mobile cellsites using the mobile operators' licensed spectrum, supporting all handsets and all services. Thus femtocells are a great way to extend coverage. If you want mobile voice service in a place where macrocell coverage is poor, a femtocell could be ideal. However, that's the only place where femtocell's have the advantage.

As a solution for mobile data capacity, Wi-Fi wins, for many reasons.

First, most mobile data is destined for the open Internet, not for someplace on the mobile operator's network. Multiple actual measurements of live traffic in different countries show 96%-99% of all bytes passed over the mobile data channel are destined for the Internet.

The mobile operator's NGN mobile core network is a complex network designed to support differential services, fine-grained billing and so forth. This makes it significantly more expensive than a best efforts network like the Internet and yet, no operator has found a way to charge for this extra capability—people just want to get to the Internet.

Femtocells are part of this complexity, and cost.

Second, the primary sources of mobile data demand are laptops, notebooks and smart phones. Laptops and notebooks have Wi-Fi connectivity. Half of smart phones have Wi-Fi already and the percentage is rising rapidly. So the major demand comes from devices that can connect to either femtocells or Wi-Fi hotspots. Thus the only potential disadvantage of Wi-Fi hotspots is gone or rapidly vanishing.

Third, Wi-Fi access points cost less than femtocells. Besides being somewhat simpler, they are being produced in very high volumes, far higher than the mobile operators are likely to achieve with femtocells. Femtocells might have made sense when they were first conceived, but today Wi-Fi has changed the landscape which leads us to…

Fourth, Wi-Fi access points are showing up everywhere. People are installing them in their homes but we also see Wi-Fi coverage in enterprises, in retail establishments and in public places.

Individuals spend most of their online time in just two locations: home and the office. Enterprises will not install Femtocells as the IT department can't control them. Consumers, retail and public locations have already done or are doing Wi-Fi. They won't install femtocells unless there is some form of subsidy from the operator—another cost with no net benefit.

Summary:

Femtocells will flop. They do provide a way to extend voice coverage into homes that macro cells don't reach, but they are not efficient for data offload. Since Wi-Fi is efficient for data offload, and it costs less to buy and less to operate, Wi-Fi will trump Femtocells.

What should an operator do?

Mobile operators need to focus on providing bundles of connectivity, not on whether its 3G/4G or Wi-Fi. They should be encouraging Wi-Fi offload by bundling "free" public Wi-Fi access with their mobile data plans.

In the long term, it's likely most mobile data bytes will go over Wi-Fi. The 3G/4G network is still necessary to provide a backup path when no Wi-Fi is available. Mobile operators who recognizes this can still come out on top, if they focus on facilitating connectivity for their customers regardless of the technology involved.

Written by Brough Turner, Founder & CTO at Ashtonbrooke; Chief Strategy Officer at Dialogic

At the same time the mobile subscriber markets are becoming saturated and competition is driving margins down. It is highly unlikely that consumers are going to double their mobile spend simply to get mobile broadband, because in the end consumers have a budget and, with or without broadband, that budget is suddenly not going to double in size.

Driven by these financial realities, while mobile operators are becoming increasingly interested in sharing, they are also very aware of the risks they are taking. As we have seen in Europe (see below) such activities could be seen as anti-competitive and the mobile operators, eager to keep their lucrative vertically integrated businesses going, are very much aware of the regulatory dangers involved in doing this.

It will be interesting to see how this will develop further. As we have seen with the iPhone, this device has singlehandedly changed the dynamics within the mobile industry. The market is no longer driven by what the operators dictate, but by the devices which the manufacturers and the Apps provide. The mobile content portals of the carriers failed to achieve in a decade what Apps, based on an open network environment, will achieve with leadership of the mobile content market this year. Apps revenue will overtake mobile carriers' portal revenue during the next 12 to 18 months.

This trend will result in more power being taken away from the mobile operators. It will only be a matter of time before other providers will be able to negotiate better wholesale deals with the operators and this will mean that they are then only one step away from structural separation. At the point in time when companies such as Apple, Google and leading Apps providers have gained sufficient market power, it would no longer make any financial or business sense to keep overbuilding mobile networks, so better sharing arrangements will be required to underpin the 4G mobile network investments in the future.

Australia and New Zealand

With massive investments and more competitive processes ahead of them, mobile operators in New Zealand are beginning to look at opportunities to share. Mobile operators have been at loggerheads with each other for over a decade regarding sharing facilities but recently, in the wake of heavy investment, they have been forced together to address this issue moving forward to 4G.

Australia was possibly the first country where infrastructure sharing arrangements were made between the four mobile operators. However this did not happen in the way it was envisaged, and ultimately only two providers continued to work together in a contractual arrangement where Telstra shared ownership and control of the Hutchison Radio Access Network (RAN) through 3GIS. There is a similar development in Europe.

Asia

In Asia some governments have introduced policies that require mobile operators to share passive network infrastructure. China, India, Indonesia, Sri Lanka and Bangladesh are supporting passive infrastructure sharing in order to prevent large-scale network duplication and the enormous costs involved in network build-outs.

In China, for example, operators will be required to share towers and the fibre pipes that connect the towers to base stations. The policies apply mainly to new 3G network construction, rather than existing 2G infrastructure.

In January 2010 China Telecom and China Unicom agreed to build 500 3G base stations together in Shanghai in 2010. The deal will save an estimated RMB300 million (US$43.9 million).

However, so far there have not been any announcements regarding shared 4G rollouts. Operators in Japan, the most advanced country in this market, are building them separately with the first launches expected at end-2010.

Europe

In March 2009 Tele2 and Telenor announced plans to build a joint 4G network in Sweden through Net4Mobility, a joint venture for network construction and spectrum sharing. Telenor also holds a 4G licence in Norway, where it has started testing LTE technology. The roll-out of what would be Sweden's most extensive 4G network was started in December 2009 with equipment supplied by Huawei. Mobile Internet services based on LTE should be launched at the end of 2010.

By 2013 the operators expected to cover 99% of the population, providing speeds of up to 80Mb/s in rural areas and up to 150Mb/s in urban areas. The joint network would use part of the 2×20MHz of FDD spectrum which they bought separately in 2008. The partnership would also see the two operators share existing 900MHz GSM spectrum and extend their GSM network by up to 50% to support voice services on the new network.

The trademark of the joint venture is Mobile Norway, which is the mobile network operator 50% owned by Network Norway and 50% by Tele2. Mobile Norway planned to deploy the third network in Norway with nationwide coverage on the GSM 900MHz band. It also has a 3G licence. The company signed a roaming deal with Telenor in mid-2008 (having previously been hosted by TeliaSonera), providing it with network access in areas of the country where it did not have a network.

In February 2009 Network Norway contracted Cisco to deploy a mobile Internet platform based on Cisco's IP NGN architecture, and in the following December it contracted Ericsson to build its 3G mobile broadband infrastructure with the aim of covering 75% of the population.

In September 2009 Deutsche Telekom and France entered into negotiations to combine T-Mobile UK and Orange UK in a new 50:50 joint venture company, having a combined mobile customer base of around 28.4 million, representing about 37% of the UK's mobile subscribers. The merger and integration of the two units were estimated to generate €4 billion (£3.5 billion), with annual operating cost savings of £445 million from 2014. The deal came under the scrutiny of the regulator and the EC, while the other MNOs also voiced their concern, particularly the implications for Virgin Mobile (the country's largest MVNO) which runs on T-Mobile's network and accounts for about 25% of its UK customers.

In addition, there are implications for both Vodafone and 3UK. In May 2009 O2 signed a deal with Vodafone to share infrastructure costs for passive network components across Europe. Vodafone and O2 operate in the 900MHz spectrum, meaning that sharing antennae is less problematic. Vodafone's brief network-sharing arrangement with Orange was complicated by the fact that Orange operates at 1800MHz. In 2008 T-Mobile and 3UK set up a network sharing agreement which they expected would generate cost savings of £2 billion over the following ten years. Although masts and the 3G access networks are being combined, each company's core network and T-Mobile's 2G network will not be shared.

Both parties will retain responsibility for delivering services to their customers and use their own frequency spectrum. A 50:50 joint venture company, Mobile Broadband Network (MBN), was set up to operate the joint network on behalf of both companies. Over 5,000 duplicate sites from both carriers (about 30% of the total) will be decommissioned. In August 2008 Mobile Broadband Network selected Nokia Siemens Networks (NSN) as its 3G network infrastructure supplier. NSN's radio access solution will replace most of the two operators' communications stations across the UK, while equipment at the remaining sites will be upgraded and reconfigured for higher quality and capacity.

Telecom Italia and Vodafone signed a six-year agreement in November 2007 to share their existing and future mobile network access sites. The deal renews an earlier agreement which enabled the two operators to share infrastructure such as poles, cables, electrical and air-conditioning equipment. The operators will use each other's infrastructure to help improve their network footprint without paying out for new equipment.

In July 2009 Telecom Italia and 3 Italia signed a three year network sharing agreement, affecting some 2,000 sites nationwide. Each operator will retain ownership of its network infrastructure but is required to open sites to house its partner's equipment. The agreement conforms to the 2003 Electronic Communications Code (ECC) which calls for the more efficient use of network infrastructure in urban and rural areas. The operators expect cost savings of around 30%.

Middle East

In the Middle East the only case in point I'm aware of is very minor sharing in 3G. The UAE regulator has established a committee to preside over base station arrangements between the two operators, Etisalat and du. Etisalat and du are meant to share transmitter sites but retain individual antennas.

Written by Paul Budde, Managing Director of Paul Budde Communication

The telluric shift albeit the user will not care or should not notice is that when he or she will power on that smartphone or whatever the communicating Swiss Knife will be called, it will request an IP address to complete an IP based call. A device without an IP address will be rather difficult to reach and the ungodly NATword should not even be whispered. The comfort of the good old circuit switched network core will be gone in the LTE era.

It is rather timely, if not a bit last minute, that the GCF, the Global Certification Forum, announced a LTE device certification scheme to be ready by the end of 2010.

Verizon, as far as I know, is the only mobile network Operator so far who officially announced IPv6 support in their devices and stated that " the device shall be assigned an IPv6 address whenever it attaches to the LTE network".

Verizon's commitment to IPv6 seems to be further underscored as ICSA, their independent conformity testing lab became the first one approved by NIST for USGv6 conformance testing. Congratulations, Verizon.

In the meantime, Telia Sonera claimed the world's first commercial LTE deployment in Stockholm and Oslo in December. Has anyone confirmed what kind of IP addresses they are using, IPv4 and/or IPv6? They just announced the suppliers for their LTE network extension to 29 cities in Sweden and Norway. Let us hope the Nordic countries will continue to surprise us as they have done for a long time in telecommunications.

With all the LTE plans announced lately, it should not come as a surprise to see LTE as a prime discussion topic during the Mobile World Congress in Barcelona this month. And while it will not have the starring role, IPv6 will be best supporting actor.

With the first LTE networks coming on-line later this year it will be interesting to track compliance and interoperability.

LTE should not be fragmented in too many Short Term Evolutions. The end-user community expects seamless high quality service, to them it is ancillary if is called LTE and works in IPv4 or IPv6.

Written by Yves Poppe, Director, Business Development IP Strategy

Just when you thought Nexus One was the biggest thing coming out of Google this week, we now get word about Google Energy. Well, Nexus One is a big deal, but I say that wearing my telecom analyst hat. Switching to my smart grid hat, Google Energy is something else altogether. It's easy to see where Google is going with mobile devices—no surprise there—and for once, someone managed to steal Apple's thunder at CES.

As big as that is—and will be—Google Energy has all kinds of implications for smart grid. For starters, I should say that Google has not issued any public announcements, and you can see for yourself by scanning their website. No doubt that will change in time, and for now, most of the reporting has come from news sites like CNET.

I'm sure this is by design, and in keeping with their "do no evil" mantra, Google would rather keep our attention focused on Android, where we want to find them. Pushing into energy is a much bigger leap, and when Google makes a move like this, everyone in that space takes cautious notice. Companies like Google are very good at managing entries into new markets, and the cynic in me would say that doing this just after Nexus One is a calculated way to keep a low profile for a sector we don't normally associate them with.

There are many facets to this move, and I'm just going to touch on two of them here. First, a lot of attention has focused on Google's publicly-stated goal of reducing their carbon footprint. In this regard, Google Energy puts them in a good light, especially following the Copenhagen conference last month. This can only be positive, and while their intentions are to be applauded, I think there are bigger forces at play.

Not only is it desirable for them to become a carbon-neutral energy user, but this is a business opportunity in its own right for Google. I'm thinking here about PowerMeter, which gives Google a legitimate entry point for the Smart Home market. No doubt, PowerMeter has the potential to help reduce the carbon footprints in our homes, but surely you can see how this sets the stage for Google to provide all kinds of other services and applications that have nothing to do with making the world green.

We've explored PowerMeter before, and will continue in 2010 as we think it has a large role to play in smart home. For now, though, I want to move on to the second aspect of Google Energy. At first glance, Google's move into energy seems like an abrupt right turn. What does energy have to do with search? Or mobility? Or maps? Or browsers? Don't they make enough money already? How can they make money in the energy business? These are all valid questions, and the answer to me is simple—vertical integration. Google may well be the ultimate Web 2.0 company, but even they have hard assets that drive their business.

Just about everything Google does is software and web-based, but the real leverage comes from their massive server farms that power everything else. As the web continues to permeate every aspect of modern life, there is an exponential need for Google to expand its server capacity. I may be oversimplifying things, but energy is a hugely important cost factor that impacts Google's operations. Data centers are major energy users, and there are two critical variables that Google would like more control over—cheap power and reliable sources of energy.

Like any other business, Google wants as much vertical integration as possible. It's the best way to control costs, ensure quality, and keep barriers to entry high. In this regard, Google Energy makes perfect sense. It's too early to tell whether they will enter the retail market and try to compete head on with utilities - I don't think that's the plan here. Rather, this entry is a strategy to ensure Google gets access to power on their terms to optimize the performance of all those servers. This may sound rather self-serving, but I'd probably do the same thing if I had their resources and ambitions.

Putting my telecom analyst hat back on again, I can't help but notice what this is really saying about the state of the energy business. Cheap, reliable power may be more important to Google than any other company in America, and their move into energy speaks to the very essence of what smart grid is about. Simply put, Google cannot rely on existing power sources to sustain their growth - the costs are too variable, and the supply is too unreliable. That's exactly what smart grid is trying to address. Fortunately, for those of us in this space, most energy users don't have the luxury of starting their own operation like Google has. Google will get what it needs, and the rest of us will figure it out on our own.

That said, back to telecom, Google Energy is yet another example of an outsider disrupting the status quo—much the way Apple has changed the balance of power in the mobile market—practically overnight. It's actually less surprising to see this happening with Google Energy in that the utility market remains highly regulated and is not really a hotbed of innovation. How utilities will respond is a different question, and we'll address that in due time.

I must add there's an important sidebar to this story—renewable energy. For all my cautionary comments, this is the virtuous side to Google Energy. They have long supported and invested in renewable energy—especially solar—and I believe the end game goes beyond vertical integration. For both selfless and selfish reasons, Google embraces renewable energy, and I think it will become an important aspect of this new venture. Again, we'll explore that when the dust settles a bit.

Finally, I have to circle back to the Android reference at the top of the article. I mentioned that Nexus One was a big story this week, but there was another notable Android item from CES that brings us back to our portal. Let me explain. On Tuesday, MIPS Technologies announced a demonstration of the first Android-based set top box. This may have nothing to do with Smart Grid, but everything to do with Smart Home. Think about the possibilities of communicating with your home media system via a mobile device, both of which run on Android. As Google deepens its reach into the home via the Android platform, it's not hard to see how this could easily extend to energy management applications. Interesting, no?

Here's what's even more interesting. One of the partners in this announcement is Home Jinni, a startup run by my ICP partner, Shidan Gouran. On a personal note, this news is great to hear, and for all of us, we can look forward to hearing more about how Android will impact the Smart Home first hand from Shidan as these demos become commercialized down the line.

Written by Jon Arnold, Principal, J Arnold & Associates