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Innovation in Telecommunications Proceedings of the Research Seminar on Telecommunications Business

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Innovation in Telecommunications Proceedings of the Research Seminar on Telecommunications Business Helsinki University of Technology Publications in Telecommunications Software and Multimedia Teknillisen korkeakoulun tietoliikenneohjelmistojen ja multimedian julkaisuja Espoo 2006 TML-C20 Innovation in Telecommunications Proceedings of the Research Seminar on Telecommunications Business Editor Sakari Luukkainen Helsinki University of Technology Telecommunications Software and Multimedia Laboratory P.O. Box 5400 FIN-02015 HUT Tel. +358-9-451 2870 Fax. +358-9-451 5253 Helsinki University of Technology Telecommunications Software and Multimedia Laboratory Publications in Telecommunications Software and Multimedia Teknillisen korkeakoulun tietoliikenneohjelmistojen ja multimedian julkaisuja TML-C20 Espoo, 2006 Innovation in Telecommunications Proceedings of the Research Seminar on Telecommunications Business, spring 2006 Editor: Sakari Luukkainen (Lic.Tech.) Keywords: mobile services, mobile browsing, DRM, e-commerce, electronic payments, mobile television, triple play services, media centers, regulation, roaming, spectrum policy, UWB, wireless broadband, unlicensed mobile access, UMA, instant messaging, IPsec, business models The articles have been written by the students of the course T-109.7510 Research Seminar on Telecommunications Business in the spring 2006. The authors have full copyright to their articles. Layout and technical editing by Eino Kivisaari. http://www.tml.hut.fi/Opinnot/T-109.7510/2006/Proceedings_2006.pdf ISBN: 951-22-8253-4 ISSN: 1455-9749 3 WLANs can be relevant substitutes for 3G and have started Preface to disrupt the operators walled garden business models. It is natural for most people to speak while driving or walk- The success of Finnish telecommunications manufacturers in ing, but not to access Internet. Also the constraints of port- the 90's was influenced by the special characteristics of re- able mobile devices like display size influence to the user gional industrial structures and their internal dynamics. The experience. Similar service level cannot be provided in the domestic industry has especially benefited from Nordic GSM mobile environment in which users have been accustomed markets, which enabled those companies a forerunner position in fixed ADSL Internet access or using portable laptop in the export markets. The liberal telecommunications policy computers equipped with WLAN facility. WLANs are al- also fueled local market conditions that preceded global diffu- ready working in the areas where people actually need sion of GSM. The basic mobile voice call was an evolution of wireless access like in cafes, hotels and airports while wait- from fixed network as well as NMT and GSM provided this ing. For mobile networks then remains the role of wireless service reliably and by good coverage right from the begin- access of passengers in trains, cars and busses, where the ning. handover and thus mobility is naturally needed. Most recent development path in the mobile industry has been There future seems to be technologically fragmented again that the success of the GSM created excessive expectations of like in 1G. There are several USA originated alternatives the market demand for the third generation mobile technolo- emerging for wireless broadband access for rural areas also gies. The original target of UMTS was not to increase capacity in the market of Europe like Wimax and Flash-OFDM. The of basic voice services like in the GSM case, but rather to en- history has shown that the markets and applications of new able the convergence of Internet and mobile networks. 3G technologies develop in a very different way than engineers were then seen as a platform of fully integrated voice and data have originally thought. Also the success factors of the as well as fixed and mobile communications. new technology cycles are not similar to what they have been in the previous ones. During this decade domestic business environment in mobile communications is completely different. Instead of innovation This publication is a collection of research reports written driven growth constant deregulation of Finnish markets has during the course Research Seminar on Telecommuni- led to exceptional price competition and stagnated penetra- cations Business at Helsinki University of Technology. tions rates, which has commoditized GSM related mobile ser- The course is especially designed for students taking Tele- vices. Only the roaming service prices have maintained their communications Management for their major but is as well high levels. If so fast price decline and technological maturity suitable for all students that like to develop their techno- precedes again global development, the whole value chain economic analysing skills in the telecommunications area. would require ever increasing cost reductions if new innova- The aim of the Telecommunications Management major is tions and related business opportunities do not arise. to help the students to understand the structure and dynam- ics of economic life and industry with a special focus on Mobile multimedia has been widely thought to be the source the telecommunications by combining business and tech- of new service revenue by which the benefits of high-speed nology studies. mobile data network investments could be realized. Experi- ences related to WAP, MMS and mobile gaming applications The course provides an opportunity to rehearse scientific have however showed that mobile data service diffusion is a writing and presentation skills. The goal of the spring 2006 complex process that contains remarkable market uncertainty. seminar was to investigate the challenges service providers Currently mobile data services excluding the unxpectedly suc- face when updating their network infrastructure to offer cessfull SMS consist only a few per cents of operators' reve- emerging mobile and wireless data services taking into nues. From the mass market and end user point of view mobile consideration both business and fast developing technology data services are discontinuous. The subscribers of 3G ser- requirements and possibilities. vices have thus not grown on a level as it was expected and e.g. in initial pilots in Japan it was recognized that all services As a result of hard work we have now a collection of inter- that consumers were interested in 3G were already available in esting papers of several possible technological scenarios in their 2G network's I-mode concept. The introduction of video mobile and wireless data networks. I want to thank all the in mobile environment did not create enough value added. contributors for their excellent papers as well as for the There are also now attemts to integrate mobile and digital TV lively discussions during the seminar sessions. networks and to provide mobile television service in such a hybrid network. It is interesting to see what happens to this novel approach in coming years and what is the right business Sakari Luukkainen, editor model. July 3, 2006 Espoo, Finland In generally among 3G there remains the problem related to market and especially to the end user needs. Because it seems that GSM networks are able to serve cost efficiently still long time all the demand related to basic voice call service, the only way for 3G to differentiate are the mobile data services. It has been however questioned the need for full wide area mobility in broadband applications and e.g. much more cost efficient Contents Mobile Services Market in Finland ...................................Janne Janhunen .........................................5 Mobile Browsing................................................................Mika Lahti and Janne Hakola...................11 DRM in Mobile Environment............................................Yrjö Raivio and Sakari Luukkainen.........18 E-commerce, Electronic payments ....................................Ari Koponen ..........................................26 Mobile TV..........................................................................Visa Friström and Tapio Haantie ............31 Triple Play Services ...........................................................Aleksandr Poutanen ...............................39 Media Centers....................................................................Antti-Jussi Kangas .................................43 Regulation of Roaming Services........................................Kristian Dahlgren ..................................49 Radio Spectrum Policy in Europe .....................................Henrik Saksela and Timo Smura ...........55 Ultra-Wideband Communications ...................................Jing Jin ...................................................61 Mobile Broadband Wireless Access...................................Sami Aarnikoivu and Juha Winter ...........65 Unlicensed Mobile Access..................................................Ari Kuvaja and Olli Mäkinen ..................74 Advanced Telecom Computing Architecture....................Jussi Mäki ..............................................78 Operator Strategies for Mobile Instant Messaging...........Liia Sarjakoski.........................................84 IPsec Business ....................................................................Henri Ossi ..............................................89 Internet Business Models in Mobile ..................................Mika Mannermaa.....................................95 4 MOBILE SERVICES MARKET IN FINLAND Janne Janhunen Helsinki University of Technology Telecommunications Software And Multimedia Laboratory P.O.Box 5400,
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