Regulatory authorities in the United States are taking a closer look at anti-competitive business practices. Mobile operators now find themselves being scrutinized for practices involving exclusivity arrangements signed with phone manufacturers. Also coming under examination are roaming and interconnection arrangements for data services. Operators like AT&T and Verizon own considerable segments of land-line networks and it is widely felt that this creates a conflict-of-interest, delaying the wider rollout of mobile Internet services.
From a NY Times editorial, a look at exclusive arrangements with phone manufacturers:
With the pattern of exclusive deals extending to new netbooks, smaller companies warn that mobile Web access could be tied up entirely. In the past 10 years, the big cellphone companies have gobbled up smaller ones while regulators looked on. The Big Four — Verizon, AT&T, Sprint and T-Mobile — account for 90 percent of cellphone subscribers. Verizon and AT&T alone have 60 percent. Dozens of areas have but one wireless provider.
Regulators intend to also focus on how data service arrangements between operators:
And they haven’t been shy about using that power. The F.C.C. mandates carriers, for example, to sign roaming contracts for voice services. But data, the fastest-growing and most innovative segment of telecommunications, isn’t covered. Small carriers complain that the big ones won’t enter into data roaming contracts.
Already, just the suggestion of a review by regulators has forced one operator to shorten the length of exclusivity arrangements with manufacturers. Again, this demonstrates the power regulatory authorities should be able to exercise. As mobile phones become an increasingly popular option for users to get online, authorities must take a closer look to ensure policies that foster competition are in place.
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October 21, 2009 at 1:57 am
Amitabh Kumar
The Mobile Web, TV and Roaming Charges
Questions are frequently asked as to whether there is really any need for special audio and video formats for mobile TV or infact any real justification for mobile specific websites? After all most mobile browsers such as Opera mini or Netfront can enable the viewing of any website? Can I not access Google, Yahoo or You Tube from my ordinary mobile phone browser? Or view a channel such as NBC? Similarly video players installed on mobile devices can enable viewing of any format of Video- Windows Media, Real, DivX or Flash. Then why create a new world of formats, browsers and players for mobile devices? Why have formats such as 3GPP video with low resolutions and frame rates? Or have low rate encoding using MPEG4 or have mobile enabled websites which support SVG-T or J2ME or Flash Lite? Is there not greater flexibility in being able to use the normal websites from airlines (for travel or holiday booking), weather, news or traffic information? Is it not better to listen to MP3 audio streams which is so popular and instead go for mobile audio services in AAC format?
The answer to this question is no and one of the causes lies primarily in the amounts of data you can consume when you use a mobile phone to stream video, browse a website or get navigation maps. If you are on a Wi-Fi network, the cost of data may be relatively low. But it can be very high on 3G mobile networks and more so if you happen to be roaming. This is well known to users of Blackberry or iPhone who happen to download web information or mails while travelling. Each mail can cost 20-50 cents while roaming, just a reminder of the expansive data you are using. The second reason lies in the capabilities of mobile devices in terms of processor power, memory and battery life. To put it straight rendering a full screen video on a mobile screen by doing format conversions and handling huge amounts of data which ordinary websites represent would reduce the battery life to under an hour.
An ordinary webpage has a size of 200 KB to 1.2 MB depending on how much text and pictures it carries. Most mobile browsers do not display images unless specifically requested, but even then a “normal webpage, not designed specifically for mobiles may have about 200 KB of data and involve 10-12 frames, many of which will be displayed on different screens breaking up a single webpage to 20 or more screens. On the other hand a mobile webpage is only 4kB or thereabouts of data.
While roaming such vast differences in webpage size can make all the difference. If while roaming, you need to search for some Hotel information, find its map or click through a few webpages to see its reviews, whether it has the facilities you need, and make reservations including payment, you might well use about 50 web pages before you are through. At 200 KB per page, this can mean 10MB of data. With an efficient browser which strictly avoids any popups or downloads any picture, the single use would have entailed the use of at least 5MB of data. Even after regional regulators such as the EU have sharply reduced the rates for data while roaming, the rates are prohibitively high. For example even within the EU the Orange and O2 charge £2.94 per MB, T-Mobile charges £1.50 per MB and Vodafone charges £5 for the first 15MB and £2 for every MB thereafter (prices based on a UK pay-monthly customer using data from France). If you are roaming between USA and EU, expect to pay no less than $3-4 per MB. This makes the simple transaction of a hotel booking using a conservative 5MB worth $50. The same transaction would cost only less than $5 if mobile enabled sites are used.
It is not that the carriers do not have data plans. With over 500 million smartphones in operation of all makes and types including Blackberry, iPhone,Nokia business phones and other devices, such a situation would have been unthinkable. However most data plans leave you with no less than $1 per MB. For example the AT&T offered data plans for travels to over 90 countries with rates as follows:
$24.99/month: 20 MB Data Global Add-On gives 20 MB of usage within over 90 countries
$59.99/month: 50 MB Data Global Add-On gives 50 MB of usage within over 90 countries
$119.99/month: 100 MB Data Global Add-On gives 100 MB of usage within over 90 countries
$199.99/month: 200 MB Data Global Add-On gives 200 MB of usage within over 90 countries
A similar situation prevailed for European carriers. The Vodafone World rates for roaming in USA, for example were £14.99($30) for 25 Mb of data( Plus charges for a message if sent via MMS).
Looks nice doesn’t it? 20 Mb is fine for applications using Blackberry mail?
However the main differences start to arise in other data intensive applications such as the YouTube, Google Video, watching Sports and Cartoons or looking at travel and weather channels. The mobile Video standards have been designed so that video (e.g. in 3GPP) can be streamed at as low data rates as 64 Kbps against a normal TV feed running at 1 Mbps. A mobile TV screen has only 80 K Pixels as against 300 K Pixels in a SDTV. With efficient coding protocols, the mobile TV runs at 1/20th data rates than what a streaming Standard definition TV takes. A 3 Minute Mobile Video at 64 Kbps is just 1MB. So for a user, even with mobile devices which have real or Windows media players, it makes a lot of sense to view video from mobile TV websites. Even so, such services can only be watched using only unlimited data plans which are hard to come by while roaming. This makes fallback to Wi-Fi a must and even here, mobile TV sites are a great help as full screen data rates cannot be sustained otherwise. There are horror stories of unsuspecting users ending up with $2000 bills just because they ventured out with their iPhones and used the device as they do at home without having subscribed to a data plan.
Within the US, FCC had already mandated roaming within the wireless ISP providers i.e.for services like Wi-Fi. It had also turned the heat on cellular wireless operators to mandate roaming agreements with smaller operators as just four operators i.e. AT&T, Sprint,T-Mobile and Verizon Wireless have 90% of subscribers on their networks. But the data roaming and the charges for it can make Shylock turn green with envy. Even as rates with the countries continue to fall, user continue to rise to 5 Billion and above and the use of smartphones and roaming is becoming commonplace the artificially high roaming data charges are creating a smaller world. In August 2009, the FCC voted in favour of an investigation on the state of affairs in the wireless phone market. However it would be wrong to think that the situation is any better in any other country. In India where the voice rates are 1 cent per minute within the country, these rise to $5 per minute while in the US( 500 times), even for in country calling. A global village? Hardly.
The problems are serious as everyone knows. But there is no global forum where such rates could be controlled so that the smartphones can remain smart even if you go out of the country. It hardly needs to be said that the use of search websites such as Google, Yahoo, MSN or BING; or the use of mail services such as Live, Gmail, yahoo Mail can be dispensed with just because you are travelling. Nor can most people give up social networking websites such as Facebook, Flickr!, Twitter or itsmy.com depending on the preference. Most people still like to watch stock updates, headline news or weather information and use internet radios or use navigation services. Despite the high roaming charges being under great pressure, these ordinary activities come within the realm of possibility with the use of websites designed specifically for mobiles like the Twitter, with message length limit of 140 characters.
Every major news, travel, mail or search website has its mobile version ( such as m.nbc.com) and it is just a matter of time before virtually every website gets web enabled. Mobile Video, both uploads and downloads will continue to rise as will streamed mobile TV from mobile specific websites such as MobiTV in the US. The roaming charges still remain a question mark. Perhaps the carriers which retain such charges are killing the golden goose as they underestimate the amount of traffic which can be built up if the roaming data charges come in the range of “matter of fact” usage. Else they might just lose all the traffic to Wi-Fi or similar technologies. The bell may be tolling for roaming data charges.