Feeds:
Posts
Comments

Archive for the ‘Industry Insights’ Category

Recently I was asked if WiMAX base stations come with MPLS support. This might have sounded an innocuous question for someone from an IP background. If you are from a wireless background like I am, it might sound a little strange. A WiMAX base station provides wireless connectivity at the physical layer. In particular, WiMAX provides last mile connectivity to the end user. It can also be used to provide point-to-point (PTP) backhaul links.

From this perspective, anything above the physical layer can run transparently on WiMAX. While this is so, WiMAX has defined Convergence Sublayers (CS) at its interface which can then be mapped correctly to 802.16 MAC layer before the packets are sent on the wireless channel. The supported CS Specifications include ATM and Packet (IPv4, IPv6, Ethernet, 802.1Q-VLAN) CS. So where does MPLS fit in, if at all?

MPLS is a technology that sits between Layer 2 and Layer 3. It can be seen to be outside the scope of a WiMAX base station and certainly outside the scope of the WiMAX standards. This is where we, as engineers, have to look at the whole thing from a deployment and operational angle.

Firstly, operators want MPLS because of the many advantages it offers. It leverages on both IP and Ethernet, technologies which are cheap and ubiquitous. It offers QoS. It provides multipoint connectivity but in a simpler way than IP. Its faster to switch at Layer 2 using labels than perform routing decisions at Layer 3. The attractiveness about MPLS in the coming years is that it is set to enable the move towards all-IP transport networks. When IP replaces TDM and ATM architectures, MPLS is set to play a major role.

So operators are interested in MPLS. Before they install new devices into their network, they want to know if it supports MPLS. The problem is that there is a clear distinction between core networks and access networks. MPLS is usually limited to the core. However, there has been significant push towards bringing MPLS to the access networks. This enables end-to-end traffic engineering, right up to the WiMAX base station. 3ROAM offers such a base station with MPLS built-in. Likewise, New Edge Networks is another company that is taking MPLS beyond the core to edge networks.

What if the WiMAX base station did not support MPLS? In this case, an MPLS-enabled network would terminate at an MPLS edge router (ingress or egress). This router would then be co-located and connected to the WiMAX base station. The problem for the operator in this situation would be to have a router for every base station. This is simply not cost-effective.

In general, WiMAX base stations operate in bridge mode (Layer 2) or routing mode (Layer 3). If a base station has to be MPLS-enabled, it has to work in Layer 3 mode. In other words, the base station doubles as an ingress/egress router. It does more than simply provide wireless connectivity.

Sprint has in its long-term roadmap this architecture in mind for backhauling of its WiMAX network. Sprint’s WiMAX base stations would be  MPLS-enabled and the backhaul between such a base station and its ASN Gateway would be IP over MPLS. One of Sprint’s providers for its WiMAX backhaul is Ciena which uses PBB-TE. This may very well carry IP over MPLS right up to the base station. The backhaul itself is wireless with equipment supplied by DragonWave.

To answer the question with which we started, WiMAX base stations may very well support MPLS for cost-effectiveness from operator’s point of view. Practically, it makes a difficult case since the MPLS-enabled network is likely to be from a different provider than the base station itself. Integration becomes an issue. It is well-known that managing an MPLS network is a challenge and requires a steep learning curve. Nonetheless, MPLS may be that small factor to choose one base station over another when an operator is unable to decide otherwise.

Advertisements

Read Full Post »

While HTML has been the traditional markup language for the wired world, it was too complex and not strictly structured to suit the wireless world. To start with, mobile devices of the early days were power hungry and less on resources. Due to such limitations devices would end up implementing them in a partial way leading to a disconnect between content providers and mobile browser support. It is therefore no surprise that in the early days mobile devices did not support HTML. Rather, a few proprietary markup languages reared their independent heads (HDML from Openwave, ITTP from Ericsson, TTML from Nokia). From the point of adoption, they were never independent. Independence comes only by way of standardization.

Standardization is a beautiful thing. Like we use English universally as a language of choice, it enables content to run on any number of browsers that conform to the standard. It builds competence by enabling developers to learn one language and use it across many projects and companies. It is something that’s good for the industry, those who work in it and consumers of devices. It is that comfort and familiarity that in a fast changing and varied world, there are some things that help us (and our devices) to connect.

The currently recommended standard for the wireless world comes from Open Mobile Alliance (OMA). It is called XHTML-MP which was standardized way back in 2000. Almost a decade has gone and it is still going strong. It’s predecessor, WML, was in rage for many years but all new websites meant for the wireless world are using XHTML-MP. When WML came out, it was right for the mobile devices of the time. HTML was too complex for those devices with small screen, static display, monochrome rendering and little by way of scrolling. WML had this concept of deck/cards that made best use of precious air resources. It introduced compression in the form of WAP Binary XML (WBXML). It had programmable softkeys that was a great idea to ease user interaction. It enabled client-side scripting through its WML Scripting. So WML was a success, at least for a while.

Timeline of Markup Languages

Figure 1: Timeline of Markup Languages

The problem with WML was that it was too different from HTML. When WML came out in 1998, HTML had been around for a good number of years. This coupled with the steady growth of the Internet and the popularity of HTML, meant that it had it all – better browers, better and larger developer community, better tools. Websites written in HTML could not easily be viewed on mobile devices. Site developers had to re-write in WML.

In an effort to bring WML closer to HTML, a radical approach was adopted. Dump WML and create something new out of XHTML (eXtensible HyperText Markup Language), a new standard. This may be appalling to many on account of its backward incompatibility but this has been a sensible and logical decision on part of the standardization community. During the time WML has evolved, a new language had taken shape that had revolutionized every other language – XML. XML had become a popular language for data representation. It was being used in backend processing, data storage or transfer. It was being used on websites to represent data processed or rendered on client-side by Javascript or Flash. XHTML is in fact a combination of both XML and HTML – the former provided strictness of structure while the latter provided document semantics.

XHTML formed the basis of XHTML Basic, a stripped down version that was suitable for adoption by the mobile community. That’s exactly what they adopted it but they extended XHTML Basic into what we call XHTML-MP, XHTML Mobile Profile. This is the beauty of XHTML – it is extensible and modular without loss of strictness in its syntax. One of the extensions over XTHML Basic is the use of WAP CSS. XHTML-MP is also influenced by cHTML (Figure 2), which is a standard used by NTT DoCoMo in its iMode.

Evolution of XHTML-MP

Figure 2: Evolution of XHTML-MP

XHTML-MP is the official markup language for WAP 2.0. All sites for WAP 2.0 must use only XHTML-MP. Although WML 2.0 exists, it is only WML 1.x re-engineering with XHTML syntax for backwards compatibility. WML 2.0 is rarely used and is discouraged.

XHTML-MP has worked well so far. It’s future however is not so certain. With devices getting better all the time, with mobile phones getting almost as good as laptops, with better browsers such as Opera Mini that is able to display full websites in XHTML on devices with bigger colour screens, site developers may forget about XHTML-MP in the years to come.

Read Full Post »

Starting-up

I have not made a post to this blog for a long time. Needless to say, I have been busy with lots of things. I recently joined an Indian startup. I had previously thought of starting my own company. After considering such a proposition from all angles and recognizing my own strengths and weaknesses, I decided to abandon it. I don’t have that many contacts in India. I have never worked in India in all my career and I am new to how things are done here. Last of all, I kept questioning my motives for starting a company. The motives were not that obvious and certainly not healthy for the business.

What’s the next best thing, or perhaps even a better thing, to starting your own company? Join a start-up. That’s exactly what I have done. I started in my new job in the new year and I have been busy ever since. Today I finally decided to put some time to make this post. Choosing a start-up is not exactly an easy thing to do. You have to consider the pay packet which may not be up to market rates. You have to consider the working environment and the general lack of facitilies that is taken for granted in big corporations. You have to forgo medical benefits and insurance.

The real joy in a start-up is obvious to anyone who has worked in big corporations. There is a personal touch to everything. You know everyone in the company. The structure is flat. Rules are few and flexible. You take responsibility and make things happen. You generate ideas and take initiative. If the company has to grow, your actions matter. If the company grows, you grow along with it. Ultimately, you may not be the CEO or Founder, but you feel that you belong to the company and the company (part of it anyway) belongs to you.

Entrepreneurship

Starting a company is all about entrepreneurship. The common notion is that people don’t want to work for others. They want to do something on their own, be their own boss. On the contrary, I have a holistic take on this. The founder of a company works for and with everyone around him. His company works for the industry in which it operates. Market forces are always keeping his business vigilant. He may have some control over suppliers and customers but ultimately the market dictates his actions. The beauty is that as an entrepreneur you are in the driving seat. You decide how best to chart the progress of your company that aims to grow along with the market.

This appetite was long absent in India. People worked for rajas and maharajas. Then they worked for the British Raj. There was little innovation, if any at all. India is a country proud of its culture, customs and tradition. Anything new was seen as an invasion into age-old customs and tradition. Why change when there was no need to? Everyone was happy running their businesses on a small and medium scale, in the same way for many decades. Entrepreneurship is not about just running your own company. It’s about generating ideas, innovating and driving the industry to new heights.

There are lots of small Indian start-ups today. Some will succeed, many won’t. Not all are run by entrepreneurs in the true sense. Though all have some degree of innovation, in a competitive market only the best will survive. Some will grow to become big players while others will find their niche in the market. Many others will just dwindle and close. An example is the growing number of start-ups getting into social networking sites for the Indian market with very little competitive advantage [Business Week, November 30, 2007]. It is not an easy job. Technical innovation is one thing. It has to be backed by keen business acumen which involves a whole suite of decisions – how to keep costs low, is this the right time to release the product, what’s the best business model, is it better to import or make it indigenously, what’s the right price for the offered quality.

Today we are seeing more and more Indians breaking their long-held comfort zones and foraging into entrepreneurship. It’s part of the development of the Indian psyche which no longer sees itself as being repressed by British colonialism, princes and maharajas, or self-constraining customs. Independent India wallowed for half a century in dirty politics and ineffective governments. With the liberalization of the Indian economy, Indians may not yet be innovating for global impact but at least we are building and improving on ideas that are coming to us from rest of the world. Economy has firmly put India on the path of progress and for the first time governments, corrupt though they may remain, are forced to take note and follow.

Economy

Very few industries actually grow during a recession. The best period for starting a company is when the economy is growing or already in a boom. This perhaps is the most important factor why there are so many Indian companies doing so well. Even those that are not doing well, have the potential. In a growing market and a bullish economy, the potential is always high. In the current financial year Indian economy is set to grow at 8.7% [Business Week, February 7, 2008].

The potential for growth is enormous in many sectors. It is hard to see how, when we have come so far, the Indian economy can go into a recession. It is not likely to happen for another five straight years. A bolder prediction is that the economy will grow at 8% until 2020 [Financial Times, January 24, 2007]. The current growth has disproved previous predictions which put the long-term growth rate at 5%.

Global recession, if and when it happens, will affect India. BPOs, call-centres and software services industry will be affected. The appreciation of rupee is set to continue and will squeeze profit margins. Though India has sufficient resources for supply and potential for demand on its own, it is not self-sufficient. If India has to grow in the face of a global recession there must technological innovation and improved level of self-sufficiency.

Ecosystem

Ecosystem plays a key role towards self-sufficiency. Take the case of manufacturing a mobile phone. While Nokia has a high capacity plant near Chennai – into which it has just pumped $75 million investment [Nokia, December 5, 2007] – key components that go into the phone are not made in India. The phone may have chips from Texas Instruments or STMicroelectronics who prefer to have their fabs in China than in India. In fact, though India has been in the semiconductor for a good three decades most of India’s contribution has been towards software development and hardware design. Only in 2009 Hyderabad is slated to get India’s first fab.

If Indian companies have to compete against big foreign players they need to source indigenous components to keep costs low. They need to make the best of local knowledge for local needs. Their leverage against foreign competitors must come from their understanding of culture and consumption patterns.

In the ideal case, everything that goes into making a product is made in India. In other words, the entire value chain creation happens in India. All businesses along the value chain will stand to benefit. Creating such a value chain needs entrepreneurship at all levels. Some will focus on making the mobile phone. Others will focus on making RF tranceivers. Others will focus on baseband and modem part of the phone. Others will supply the protocol software. Others will supply test equipment. Others will play a vital role in representing India in world organizations so that when the time comes to certify the phone, there will be Indian companies certified to do so.

But making everything in India is not truly an ideal case for the simple reason that India will not have the economic advantage of making everything. India would have to specialize on what it does best and most efficiently. However, in the short-term the cost of imports and the hard affordability of foreign products make it worthwhile to look for substitutes within India. The main difficulty at this point is that Indians do not possess specialized technology. For example, no Indian company makes a mobile phone.

The future is promising. Indians returning from overseas are spawning ventures at all levels. While many may be looking at only services there are others who are taking to products. There are fabless semiconductor companies that do specialized design for silicon. There are companies starting to make RF components. There used to be a time when specialized products had to be imported directly from a foreign manufacturer. Today local distributors have taken shape. They stock various products, give faster quotes and shipments without businesses worrying too much about import duties and clearances.

Funding

An extension of the ecosystem is the availability of funds. Getting funds has never been easier. Getting funds has never been more difficult. Both statements are true. While opportunities are there, investors are choosy and demand is great. No two investors look at business potential in exactly the same way. The difficult task is to find the right investor who understands your industry and meets the needs of your business. Finding the right investor also means being able to retain control over your business. Investors want returns. They do not want to take over your business. So long as you can deliver, they are happy. If you can’t, they will find a way to sell your business for a profit.
Why do people want to invest in Indian start-ups? The potential is high. The market is huge. The ecosystem is growing. Everyone’s expectations are aligned and tend to reinforce a belief in growth. People’s spending power is increasing. Consumption patterns are changing and growing. With new ideas coming up all the time, there is that chance that a business will have global value as well.

I was at a recent event in Bangalore on 19th January 2008. The event was named HeadStart and took place over three days. It brought together venture capitalists and start-ups. The event consisted of demos and presentations. The VCs sat on a panel and talked about what they looked for in start-ups – a clear business case, competitive advantage, market research, solid financial projections, break-even analysis and a host of other things that will be familiar to anyone who has done a proper business plan. Investors are not interested in your technological breakthrough per se. They want to know why you are doing it, what is its value, who is going to buy it and why.

I also attend Mobile Monday Bangalore on a regular basis. Some of the sessions are attended by investors to get insights into start-ups and the technologies concerned.

Competition for funds is intense at the moment. Company valuations also tend to exhibit great variance. There is no standard set in stone. Only experience, insights and expectations of the future. If there is a standard, it cannot apply to all industries. Valuation of a company in the communications sector will be done differently from another company in the pharmaceuticals sector. The broad factors may be the same but the emphases are likely to be different.

Funding is not just about private investors. It is about making innovation possible which translates to upfront investment. NASSCOM has taken a step in this direction by creating an Innovation Fund. The process is in place since January this year and the Rs. 100 crore fund may be operational anytime soon. Key investors are ICICI Group, Tata Consultancy Services (TCS) and Bharti Airtel. Start-ups can hope that they will not make aggressive demands on returns like VCs.

The government is ahead of NASSCOM. Start-up companies are beginning to take advantage of a scheme called Support International Patent Protection in Electronics & IT (SIP-EIT) under the Ministry of Communications and Information Technology. Under this scheme, the government will bear a maximum of Rs. 15 lakhs for every international patent application. It is a highly useful support for companies wanting to protect their IP.

Community

While there is competition among start-ups they also form a community in which ideas are shared and nurtured. Such communities serve the additional role of promoting the company and its product or service. Meetings and seminars provide platforms to enable this. Partnerships may be formed not just between companies but between individuals. New talents may be recruited and industry contacts built. Some of these events are attended by well-established and large corportations who hate to be left in the dark.

Mobile Monday Bangalore is one I have often written about. Open Coffee Club Bangalore is another community that meets regularly. BarCamp Bangalore (BCB) is another forum for sharing ideas. DevCamp Bangalore is a new event that is happening today as I write this article. DevCamp focuses on technical issues of interest to developers. I have already mentioned HeadStart. Proto.in which concluded recently in Chennai was an event very much like HeadStart. The whole of last week was the Entrepreneurship Week at the International School of Business and Media in Bangalore. It was an effort at bringing industry and academia together to forge effective partnership. It acknowledges that innovation is key in the long run and academic institutions can fill this void.

Recently, NDTV aired a live debate that took place in IIT Delhi. The debate brought together students, Indian start-ups, British start-ups, Indian government officials and their British counterparts including Prime Minister Gordon Brown. The debate addressed a number of issues but at the heart of it, it sought to build a platform for greater cooperation between small and medium business in the two countries. There are some things that Britain does best but they are others that Indians are doing better as entrepreneurship in India continues to mature and grow. Events are this can be considered as part of the overall ecosystem that nurtures start-ups.

Conclusion

One of the greatest changes that happened in economic history is the Industrial Revolution, particularly in Britain. A number of things came together to make this revolution possible – availability of capital and risk-taking investors, a banking system, the Enclosure Act and availability of labour, the import of raw materials from the colonies, ready market, political stability, technological innovation, the power of steam and above all entrepreneurship. We may not see anything like a revolution in India but conditions are right for Indian start-ups to venture boldly.

Read Full Post »

Going by the number of mobile phone subscribers, India has become the world’s fastest growing region. Cellular mobile services were introduced in India in August 1995. The initial growth was lacklustre. Subscribers were added at the rate of 0.1 million per month at best for the first 5-6 years. In August 2007, 8.31 million subscribers were added. In May 2006, subscription crossed the 100 million mark. By September 2007, it had doubled. The accelerating pace of this industry in India is clear. This growth has outpaced all predictions. Some predicted 100 million by 2007 and 200 million by 2010. Now the estimate is 500 million by 2010.

Although cellular networks were introduced in India 7 years later than in China, India’s growth has overtaken China’s in the same time frame since inception. A chart (Figure 1) taken from India-cellular.com reflects the market share of the main players as of September 2007. Of the 204 million subscribers (TRAI quotes a figure of 209 million [1]), 75% were in GSM and the rest in CDMA. The four Metros accounted for 19% of the market.

Figure 1
Cellular Market Share Sept07

With an estimated population of 1.136 billion and about 72% living in rural areas, we can estimate that the urban population is 318 million. Given that only 2% of the rural population have access to mobile phones (16 million) [Gartner Research], the next growth segment is in the rural areas. This implies an urban penetration of 92%.

Table 1
Subscribers Sep07

What I found to my great surprise was wireline connections when compared against wireless. Table 1 released by TRAI on 22 Oct 07 tells us the impact of wireless [1] . Wireline compares feebly against it. We can infer many things from this table and associate some reasons for the growth of wireless.

  1. Since wireless has only marginal penetration, we can infer that wireline connections to rural areas are quite low.
  2. Capturing the rural market will never make business sense by laying down copper wires. Going wireless is the way.
  3. A typical urban household has one mobile phone per person (best case) whereas only one landline per household. This accounts for the much higher wireless subscriptions we see.
  4. Given the comparable pricing of wireline and wireless connections, and the added advantage of mobility that wireless brings, people are switching from wireline to wireless.
  5. Wireline has a fixed monthly rental charge. Wireless has this but more importantly the ability to offer prepaid service which works out cheaper for many income groups.

It’s worthwhile to look at some of these issues in some detail.

Urban areas are generally well connected by copper. Many people, especially among the retired and elderly, have been slow to change from their wired connections to wireless. This too is set to change as owning a mobile phone becomes cheaper than a landline. The competition among cellular operators and against landline providers has driven prices down across the industry. Phone calls from the mobile in India are among the lowest in the world. To take the example of ownership plans for Karnataka, I pay a monthly minimum of Rs. 375 for my Vodafone connection. Calls are as cheap as 30 paise per minute. For those who use their phones less often, plans as cheap as Rs. 199 are available from Vodafone. For prepaid connections, a person needs to spend only Rs. 99 to get connected.

While the market in urban areas appears to be saturating, there is yet room for growth. This growth is likely to come in the form of more and better value-added-services (VAS). Back in 2004 people were familiar with only a handful of VAS – roaming and voicemail [2]. For long, the best that users could get were ringtones, wallpapers, themes, icons and caller tunes. Today people are not only aware but starting to use MMS, mobile web browsing, call conferencing, call forwarding, call waiting, m-banking and access other data services. India now ranks as the highest in the world for mobile data services [Mobile Web Requests India]. It is hard to believe this when my own first-hand experience does not verify it. I know people who have high-end phones with GPRS but they haven’t used GPRS yet. On the other hand, I have heard of youths in Bangalore reading blogs while they are commuting (stuck in traffic, waiting for a bus). I have heard of skilled staff (IT, telecoms, …) browsing from their mobiles in their offices where employers restrict access to many sites. If it is happening in Bangalore, it is likely to be the case in the four Metros as well.

In order to provide the higher VAS, consumer needs and behaviour must evolve. There must be a clear demand before operators and content providers can supply. We are already in the midst of this evolution in which Indian mobile culture is changing. Operators are preparing for this. 3G licences are being discussed and we may be seeing the launch of 3G in India sometime next year. It is too early to comment on this. For the moment, operators are focusing on expanding their subscriber base by providing competitive plans with low call rates and monthly rentals. VAS is not yet their priority. Likewise, content providers so far have maintained a low profile in the Indian market mainly because operators take home most of the revenue. This is unlike the market in China. Content providers in India get only 15-25 % whereas their Chinese counterparts get 85% [3].

Despite the high penetration in urban areas, ARPU (Average Revenue Per User) is quite low, one of the lowest in the world [3]. Table 2 is a comparison of EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) and ARPU [4]. If anything, ARPU is falling. For operators, this is offset by increased subscription. However, profit margins are decreasing and to stay in good shape operators have to leverage on larger economies of scale. One trend in this aspect is the sharing of towers and base station location sites among operators.

Table 2

 

Q2 2007 EBITDA margin

Q2 2006 EBITDA margin

Q2 2007 ARPU (in rupees)

Q2 2006 ARPU (in rupees)

Reliance

42%

37%

375

375

Bharti

41.40%

38.90%

390

441

IDEA Cellular

34.70%

33.70%

320

362

Spice

28%

27%

333

400

Hutchison Essar

33%

433

Source: Company financials
Information is incomplete for Hutchison Essar, which is now part of Vodafone

There are many ways to interpret the low ARPU in India. This may have something to do with the willingness to spend from the Indian consumer. For many in the low income groups having a mobile phone is nothing more than a status symbol. They make calls only infrequently. As such, prepaid subscriptions are much more popular than postpaid. Cost for signing up is less. Incoming calls are free. BSNL has quoted that prepaid calls per day on its network is about 10 while postpaid is about 20 [5]. Data from 2004 shows that prepaid takes up two-thirds of all mobile subscriptions in the Indian market [2]. More recent data from IDC endorses the popularity of prepaid in emerging Asian markets (Bangladesh, Pakistan, Sri Lanka and Vietnam), where 95% of subscriptions are prepaid.

As an example, just two days ago I heard a first-hand account of an auto-rickshaw driver owning a prepaid mobile phone. He received an SMS in English which he didn’t understand. My friend, who was riding in his vehicle, read out the message. He needed to top-up his account. He wasn’t bothered because he could still receive calls. As another example, I had some relatives from the US who had come to Bangalore for a ten-day visit. For the duration of their stay, one of them took a prepaid subscription. Strictly speaking, she is no longer a subscriber now that she is back in the US. Likewise, it may be the case that many such prepaid connections are no longer in active use. It makes me wonder if the statistics that we see are entirely accurate. Do they reflect market penetration? Buying a subscription is one thing. Using it is another. May this be another reason for the falling ARPU?

Looking at growth potential in rural India, there is a clear case. Interest in WiMax is growing. The deployment of WiMax in India does not have a clear path yet. While ISPs are attempting to get into this space as a natural extension of their wireline broadband services, the government has left them out of initial discussions. Only cellular operators have been involved. We will need to wait and see.

While wireless to rural India will bring benefits, the nature of these benefits is not yet clear. The average rural Indian is financially a poor chap. Landowners and small-medium businesses may benefit from wireless connections but what about the landless labourer on the field? Will wireless on its own solve problems of poverty, education, water shortage and racial tensions? It is clear, in my opinion, that if wireless has to benefit rural India, a socialist model will be more appropriate than a capitalist one. A capitalist model will give wireless connectivity but will not help in attracting potential subscribers many of who are below the poverty line. Government must actively use wireless connectivity to provide remotely a host of services that would otherwise be available only in towns and cities – medical services, online education (for adults and children), e-governance (forms, birth/death certificates, marriage certificates, land registration & others), online banking and so on. An effective and viable partnership between the government and the private sector is the key to success.

The future is bright for India. Per capita income last year was about $800. Today it is around $1000. The Finance Minister has said that it will double every nine years. By 2025 it will be $4000 [6]. Urbanization of rural India is happening faster than ever before on the wave of steady economic growth. The Indian mobile market is growing and expanding in a competitive environment. It is now possible for subscribers to switch operators with the same number. The recent introduction of National Do Not Call Registry (NDNC) places consumers before intrusive marketing firms.

For long, India has been a great place for foreign companies to outsource work due to lower cost and skilled workforce. Even today, a lot of 3G and IMS specific work is done in India although their markets are elsewhere. The time has now come for the world to take notice, for the biggest market is India; and it’s growing.

References:

  1. Press Release No.91, TRAI, 2007.
  2. Vipul Chauhan, Mobile Value Chains in India, India Mobile Seminar, 2004.
  3. Mobile growth in India fastest, but realisations lowest, The Financial Express, Nov 21, 2005.
  4. Nicole Willing, Mobile Growth Blooms in India, Light Reading, Aug 03, 2007.
  5. Ravi Sharma, BSNL has an ambitious plan to expand customer base in State, The Hindu, Feb 17, 2007.
  6. India per capita income seen $1000 by ’07/08, Reuters India, Nov 5, 2007.

Read Full Post »

Those of us initiated into the design and workings of cellular systems will know the truth of the matter. Those of us who have tried browsing on a GPRS mobile will know that we rarely get the promised maximum data rate of 171 kbps. Engineers are not to be blamed for this. They know for sure what’s possible and under what conditions. Misrepresentation, as we may call it, comes from the marketing guys.

These days, with the growing affluence of the Indian middle class and their spending power, I find more and more TV adverts for cars – sleek, stylish and spacious. These cars are fitted with ultra-modern features and latest gadgets. In these adverts, the cars zip across a lush countryside. The ride is smooth and noiseless. The roads are wide, free of traffic and spotlessly clean. Overall, the cars promise a great driving experience. Exactly the same cars on Bangalore’s congested, pot-holed, water-logged and narrow roads struggle to live up to expectations.

Just as these adverts have failed to point out that enjoyment of cars is only as good as the roads, phones are only as good as the network and its capacity. Operators have failed to inform subscribers that there is a great deal of difference between average data rates and peak data rates. Most of the time users will not get the data rates that they have come to expect, be it for GPRS or for HSDPA. Let’s take the example of GPRS.

Cellular systems were first designed for GSM. GSM networks were deployed such that there is enough C/N (Channel to Noise ratio) for the required BER at the cell edge. This meant that users closer to the BTS often had better quality. However, GSM did not utilize this to provide higher capacity, higher data rates and better QoS for subscribers. This didn’t matter much because GSM offered CS voice calls and CS data at only 9.6 kbps. Then GSM 14.4 kbps data service was introduced. The difference with the 9.6 kbps was that this had less error protection by puncturing more bits [TS 45.003]. The end result was that GSM 14.4 kbps did not offer the same cell coverage as 9.6 kbps although it did deliver the promised bit rate because of the circuit switched nature of the connection.

Enter GPRS. Four coding schemes were introduced, the difference being the level of error protection: CS-1, CS-2, CS-3 and CS-4. Cell coverage decreases as we move from CS-1 to CS-4 and the coverage is worse without frequency hopping. So only users close to the base station will be able to use CS-4 at bit rates as high as 171 kbps. Even this is an ideal situation which can happen only if neighbouring cells are lightly loaded (lower interference), current cell has sufficient spare capacity so that all the slots in a frame can be allocated to the user requesting the high data rate.

The situation is similar with HSDPA. When there are multiple users in the same cell, it is unlikely that a single user will be allocated all the 15 codes. Even when there is only one user, he has to be close to the Node-B for ideal channel conditions. At the cell edge, it is has been shown that HSDPA can offer only 250 kbps with 15 codes and HSDPA using 80% power [1, Chapter 11]. In fact, at cell edge DCH/DSCH can achieve 384 kbps mainly because of soft handover gain. Soft handover is not possible with HSDPA.

It is certain that GPRS, E-GPRS, HSDPA and HSUPA all increase network capacity. This improvement is advertised to the user as higher data rates. This is true in terms of average bit rates which are significantly lower than peak rates. Peak data rates are possible only under good channel conditions that enable higher modulation and lower FEC coding. So although spectral efficiency has improved with newer access technologies, the difference between average and peak efficiency has also increased. The exceptions are AMPS and GSM for which cells were planned for what they were meant to deliver. Figure 1 summarizes the efficiency gap [2].

Figure 1: Average vs Peak Spectral Efficiency over Time

Average vs Peak Spectral Efficiency

This may be one way seeing why the cost of mobile/wireless data has always been not as competitive as fixed data. If it were cheap, lots of subscribers would try it for a start. This would increase the load, which would reduce the effective data rate per user. Reduction in data rate per user occurs because available capacity has to be shared and more users means more interference. The user would be disillusioned with the service when he had been promised a much higher rate. Thus, it is only natural that data is for premium users and not for the mass market. If all mobile users were to start using data at the moment and expect speeds possible with their ADSL modems, today’s cellular networks are not ready to deliver. We have the technology but not the delivery mechanism. Operators have to perform cell splitting and provide HSDPA at the level of microcells rather than at the macrocell level. This would result in more handovers. They would have to upgrade their backhauls (Iub, Iur and Iu). Naturally, link budgeting has to be revised along with other factors associated with cell planning.

Will it make business sense to make these upgrades? To answer this we need to look at the predicted growth of data when compared to voice so that a proper cost-benefit analysis can be made. Hopefully, this will be another post. But then, there are also competing technologies such as WiMAX/WiFi (microcell) and femtocells (picocell).

References:

  1. Harri Holma and Antti Toskala, WCDMA for UMTS, Second Edition, John Wiley & Sons, 2002.
  2. “What Next for Mobile Telephony?”, Agilent Measurement Journal, Issue 3, 2007.

Read Full Post »