Real Time Updates from #RusTechDel
Where Is Komarov?
Readers of my blog at the previous version of eyeline’s site may wonder “Where did Komarov go and why don’t we see him contributing posts anymore?”
I am well and am busy with one (of many) new spun-off project at http://mobileheroes.com/blog/
It’s a project which aims at a much broader audience than just corporate blog readers.
Please stop by at a new location and help me grow it to something that we will all enjoy.
LinkedIn USSD Question Still Gathers Answers!
Was it a surprise to get an answer to my old USSD question on LinkedIn about USSD!
Here is the answer from Tom Gleason
Ivan,
Sorry I took so long to reply. I have been very busy.
I have developed both a distributed messaging platform (GSM/SMSC, IS41/SMSC, SMPP, SMTP, HTTP/SOAP, SNPP, USSD, WAP-Push etc) and also a CAMEL SCP that houses a USSDgateway. If I understand your question correctly, the addition of new USSD services is straightforward and highly extensible. Basically the PLMN operator must provision USSD services (by service number *nnn#xxxxx) in HLR which routes mobile originated requests to my USSDgateway which in-turn relays these requests (in XML) to an application. This allows the services application to be written most languages (Java, Python, C#, Perl, C/C++, …) In addition to mobile-originated requests, USSD allows your application to “push” notifications and requests to the phone (like pushing an alert message or sending a menu and reading the user response). USSD can also be used to push a web link – the user clicks, it starts up the browser. Or a WAP push can be performed to launch the browser. Whats great about USSD is it supports roaming and it’s free (if so provisioned in HLR). USSD can also be used to trigger voicecalls from the switch (MSC) to the mobile (call-backs). Basically you can instrument applications/services that generate revenue for the operator of the network.
Hope this helps.
Tom
This Reading World
A bit unusual post today. I know I have not been plentiful lately… Anyway, this one is big. This one is about books. I hope those who read my posts like books in any form, and I found this author’s article very well written and covering well the direction of development for books.
Enjoy!
Source in Russian: http://www.computerra.ru/vision/423520/
This Incredible Reading World
Author: Anton Nekhaenko
Published 30 April 2009
Regular online readers of Computerra have a skeptical attitude towards distribution of legal content via the Internet. Indeed, why pay for something that can (on a count of one-two-three) be taken via a torrent? Similar attitude is characteristic of a much larger group of people – practically of everyone who has figured out how to use torrents. Giants of the content industry understand this very well and bypass the Russian market, but for some timid steps just for experimental purposes.
Despite existence of such “islands of liberty”, global trends point directly towards iTunes-like models which are targeting mostly mobile platforms. If it itches to listen, you take the device out, press the button, buy, download, and, viola! – you listen. The same is true for films, videos, and TV series. I have to admit all these media are consumed most intensely, whereas books, the subject of today’s post, hold a rather unimpressive position at the first sight. Simply speaking, it is assumed that in developed markets people do not read books. I will never forget Steve Job’s remark from about a year and a half ago directed at Amazon Reader, which was introduced back then: “It’s not important whether this product is good or bad. The fact is that people do not read anymore. 40 percent of Americans read less than one book a year.”
Steve Jobs: “Do you still think that people read???”
Well, Apple has always targeted the needs of American market so arguments about the armies of highly educated, reading Europeans, Russians and Asians are not valid here. Does it mean that the market for electronic books will not be “iTunes-ed” (I mean not the dominance of one company with an attitude but the concept as a whole) as it happened to music, video and programs? Absolutely not. But it will be done by completely different companies which, not without difficulties, are finding their key to the market. In order to understand how this will happen, let’s study the market and check whether Jobs is right in his contemptuous disdain.
Let me note, for a start, that the 40% number was taken by the master of “mirror marketing” almost from the air. The real report, prepared half a year before the famous quote, by Associated Press, gives the number of 27%. Overall, the downward trend is characteristic for the market of paper books which in small steps moves in the direction of “elite” goods – following vinyl discs (love them!) and other physical storage. The new generation in developed countries is not used to physical storage – this fact is well seen by comparing the readership of paper and electronic newspapers by various age groups (there was a curious report on this by Comscore). According to researchers from British Library, electronic books obviously lead to a more superficial, “diagonal” reading but the fact is the fact – this year the market for electronic books in “non-reading” USA will be more than 5 billion dollars, Europe will add another 2.76. By 2010 the global market, by a forecast of Global Industry Analysts, will grow to 9.5 billion.
Developed markets attract all classical “paper publishers” – Barnes & Noble, Penguin, Random House… At the moment they all launch incompatible projects, but this will change soon. What about developing markets? China is interesting in this respect. It seems like China will pirate everything and big publishers have nothing to do there. But this is not true – if legal sales comprise 1-2% of the total volume, in absolute numbers it can be a very significant market. At the moment, book majors just try the waters there. One of the most brave is Penguin Group, which debuts a pilot project in May to electronically distribute English language books in Chinese market.
The project has been developed in cooperation with a local monopolist – Founder Apabi – which controls almost 80% of the local market for e-books, offering half a million titles in Chinese. Of course, there were concerns about illegal copying but expertise of Founder Apabi shows that with the right pricing, stealing is very small – too much work makes too little sense. Taking into account the fact that last year the market has grown to 50 million pieces and 33 million dollars (up 15 and 34 percent respectively), the game is interesting – an average price is growing but stays affordable. 79 million readers (last year data) won’t be left without food for their brains.
Russian market is not that interesting yet – it is still very small. Recently there was an article, in which CEO of OZON, Bernard Luke, complained that the share of electronic books in total sales is less than one percent, which is not surprising given the total number of titles is 3,000. But the director of our “е-book Gazprom” – LitRes – Alexey Kuzmin is very happy – half a year ago he sold 1,500 books a day, now he sells 6,000. An average price of 32 rubles per title may seem high for someone, but if you compare this to the explosion of prices of paper books (non-lengthy books like novels by Erlend Loe at 200-300 rubles apiece), it seems like a good deal.
If it is more or less clear with the market, but how will the books be read? I think that reading from a desktop monitor and notebook has been and will remain an entertainment of a selected few. There are two obvious competitors: on the one hand specialized electronic books like Kindle 2, Sony Reader and others, and on the other – leading smartphone platforms. The former, for their advantage, have a large screen, long battery life, and lesser load on the eyes. The latter do not require any additional spending, are compact and have permanent Internet access through a cellular network thus a powerful channel for spontaneous buying – for situations when you decide you need this book right now.
A unique position is taken by Amazon which fiercely disagrees with Steve Jobs and tries not to give him any chance to catch up. The company has a pretty good Kindle 2 reader, which, by the way, has the problem of permanent Internet access solved – at least for the US. Moreover, the company does not reject smartphone support – there is a client for iPhone, there are plans to support other platforms as well. Moreover, the supply of titles is more than abundant – there are about 300 thousand titles, price for which is moderate – 10 dollars for hot items, 4-5 dollars for the rest.
Last week the company stirred a little turmoil among those who like to read on iPhone with a purchase of Lexcycle company which is known by its Stanza reader. The main worry of regular free-riders readers was that Amazon acquired the company with a secret idea to sink the competitor and to stop people from downloading free books from the computer. Personally, I am doubtful about it – the reader Amazon Kindle 2 allows loading of “guerrilla’s” TXT files, as well as conversion of PDF files into the native AZW format. If free Stanza features will be taken off, I am sure there will be plenty handy men who will code the same in a new program, moreover, Stanza is not the only software reader for iPhone. But the idea to impose control on a competitor through acquisition is quite apparent – Stanza had direct access to catalogs with 50 thousand books for sale and the same number of free books.
Of course, Amazon is not alone in thinking about capturing the reading public – Google has similar plans. But the Corporation, as always, has chosen an unusual distribution model, and it seems like they have erred with it. The company has created a search module, Google Book Search, through which the books can be searched, bought and even rented. Moreover, book authors can choose one of the two: either include their books in the search index for free, and then catch viewers when they go to their site, or join the “Library” – a database which contains a brief book annotation. Moreover, for a fixed fee readers can get full access to the scanned books from the browser. From the collection of such fees, Google is going to pay copyright holders.
Theoretically, all of the above makes Google a full blown competitor of Amazon, but I personally have difficulties with three moments: first, it is inconvenient to read on mobile devices! There is no normal reader even for the native Android (except for FBreader). Second, copyright holders under such model will not sleep well – theoretically, it is possible to make a browser plug-in which creates an offline version of the online book. Third, last Tuesday by a decision of American judge Denny Chin effective date of the Google contract with copyright holders has been put off for 4 months because many of the interested parties had received 334-page contract not long ago and demand more time to get acquainted with it. In a 4 month time Amazon will introduce an Android client and Google will have no right not to let it in the Marketplace.
Voting Using USSD
What if we implement e-voting machines and empower them through USSD? It is one of the possibilities discussed in Nigeria, in African IT. It could be an interesting idea, all in all. For every country.
Source: http://allafrica.com/stories/200904070454.html
MTS in 2008 (Part II)
$ or minutes per month… Churn must be per year.
| Uzbekistan | ||||
| 2007 | 2008 | Abs chg | Prct chg | |
| ARPU | 9.7 | 7.7 | -2 | -25.97% |
| MOU | 516 | 536 | 20 | 3.73% |
| Subscriber Acquisition Cost | 4.3 | 7.7 | 3.4 | 44.16% |
| Churn | 58% | 21% | -36.90% | -173.24% |
| Turkmenistan | ||||
| 2007 | 2008 | Abs chg | Prct chg | |
| ARPU | 51.9 | 17.1 | -34.8 | -203.51% |
| MOU | 250 | 258 | 8 | 3.10% |
| Subscriber Acquisition Cost | 24.7 | 8 | -16.7 | -208.75% |
| Churn | 24.40% | 14.30% | -10.10% | -70.63% |
| Armenia | ||||
| 2007 (since 09.2007) | 2008 | Abs chg | Prct chg | |
| ARPU | 15.5 | 12.6 | -2.9 | -23.02% |
| MOU | na | 178 | na | na |
| Subscriber Acquisition Cost | 9.7 | 19.3 | 9.6 | 49.74% |
| Churn | na | 28.00% | na | na |
| Belarus | ||||
| 2007 | 2008 | Abs chg | Prct chg | |
| ARPU | 9.4 | 9.7 | 0.3 | 3.09% |
| MOU | 464 | 483 | 19 | 3.93% |
| Subscriber Acquisition Cost | 16.3 | 18.3 | 2 | 10.93% |
| Churn | 24% | 20% | -3.40% | -16.75% |
And some measures of VAS…
| VAS Russia 2008 | mln $ | |
| Messaging Revenue | 521 | 44% |
| Data Revenue | 260 | 22% |
| Content Services Revenue | 359 | 30% |
| Other | 54 | 4% |
| Total | 1193 | |
| VAS Ukraine (incl. CDMA network) | ||
| Messaging Revenue | 70 | 31% |
| Data Revenue | 35 | 16% |
| Content Services Revenue | 42 | 19% |
| Other | 76 | 34% |
| Total | 223 |
The data for the last two tables was given by quarters so I thought that may be there are some interesting trends like the growth of data revenues over the course of the year. Data revenue have, indeed, grown faster than any other segment, and almost 4 times faster than VAS in general:
| 1Q09 to 4Q08 | 2Q09 to 1Q09 | 3Q09 to 2Q09 | 4Q09 to 3Q09 | 4Q09 to 4Q08 | |
| Messaging Revenue | 12.54% | -0.48% | 9.31% | -12.71% | 8.67% |
| Data Revenue | 62.42% | 7.94% | 17.69% | -5.68% | 82.37% |
| Content Services Revenue | 6.63% | -1.54% | 14.42% | 0.66% | 20.16% |
| Total | 17.06% | 0.46% | 11.90% | -6.72% | 22.70% |
–
MTS in 2008
I have downloaded the latest presentation from MTS prepared for press (mind this). I want to put some numbers here in the blog because these numbers always change and it is hard to keep up with them when citing. But! Some numbers are really telling. I will tell you what at the end.
So… FYI, those are the end of 2008 numbers.
# of subs in mln.
| 2007 | 2008 | abs chg | prct chg | |
| Russia | 57.4 | 64.6 | 7.2 | 11.15% |
| Ukraine | 20 | 18.1 | -1.9 | -10.50% |
| Uzbekistan | 2.8 | 5.6 | 2.8 | 50.00% |
| Turkmenistan | 0.36 | 0.93 | 0.57 | 61.60% |
| Armenia | 1.4 | 2 | 0.6 | 30.00% |
95.7 mln total (if Belarus is included with its 4.32 mln.)
CAPEX
Forecast for 2009 – $1500, of which $350 million are planned for network support ($700 is a rollover from 2008, and $450 is planned for EDGE/3G upgrades). In millions of dollars.
| 2007 | 2008 | abs chg | prct chg | |
| Russia | 918.8 | 1399.3 | 480.5 | 34.34% |
| Ukraine | 544.8 | 595.6 | 50.8 | 8.53% |
| Uzbekistan | 30.1 | 139.7 | 109.6 | 78.45% |
| Turkmenistan | 31.8 | 58.2 | 26.4 | 45.36% |
| Armenia | 14 | 34.6 | 20.6 | 59.54% |
| Total | 1539.5 | 2227.3 | 687.8 | 30.88% |
| % of revenue | 18.70% | 21.70% | 3.00% |
OIBDA (unofficial terminology, Operating Income Before Depreciation and Amortization, which in official GAAP reports by MTS is reported as EBIDTA, though the two are different by definition) in mln. $
| 2007 | 2008 | abschg | prctchg | |
| Russia | 3152.7 | 3924.3 | 771.6 | 19.66% |
| Ukraine | 781.8 | 759.3 | -22.5 | -2.96% |
| Uzbekistan | 157.8 | 242.9 | 85.1 | 35.03% |
| Turkmenistan | 93.5 | 77.6 | -15.9 | -20.49% |
| Armenia | 37.7 | 136.3 | 98.6 | 72.34% |
| Total | 4223.4 | 5140.3 | 916.9 | 17.84% |
Operational Indicators (in $)
Russia
| 2007 | 2008 | abs chg | prct chg | |
| ARPU | 9.2 | 10.5 | 1.3 | 12.38% |
| ARPU excl. Guest Roaming | 9.0 | 10.4 | 1.4 | 13.46% |
| ARPU from VAS | 1.3 | 1.6 | .3 | 18.75% |
| VAS as % of ARPU | 12% | 15% | 3.00% | 20.00% |
| MOU | 157 | 208 | 51 | 24.52% |
| Subscriber Acquisition Cost | 26.3 | 27.3 | 1.0 | 3.66% |
| Dealer Commission | 12.6 | 14.3 | 1.7 | 11.89% |
| Advertising & Marketing | 13.7 | 13.0 | -.7 | -5.38% |
| Churn | 23% | 27% | 3.90% | 14.44% |
Ukraine
| 2007 | 2008 | abschg | prctchg | |
| ARPU | 6.6 | 7.2 | 0.6 | 8.33% |
| ARPU excl. Guest Roaming | 6.5 | 7 | 0.5 | 7.14% |
| ARPU from VAS | 0.7 | 1 | 0.3 | 30.00% |
| VAS as % of ARPU | 11% | 14% | 3.00% | 21.43% |
| MOU | 154 | 279 | 125 | 44.80% |
| Subscriber Acquisition Cost | 12.1 | 11.1 | -1 | -9.01% |
| Dealer Commission | 4.1 | 2 | -2.1 | -105.00% |
| Advertising & Marketing | 5.8 | 7.4 | 1.6 | 21.62% |
| Phone Subsidies | 0.6 | 0.4 | -0.2 | -50.00% |
| Cost of SIM and Payment Cards | 1.6 | 1.4 | -0.2 | -14.29% |
| Churn | 49% | 47% | -1.70% | -3.59% |
More to come… (ARPU from other countries, VAS break-down, analysis)
Is Everything So Bleak?
It was a nice way to end my week here, in Russia, so I thought it would be good to share it with you!
As a side note it was nice to connect with people from TruTeq (South Africa) (on our USSD Expert Group) and Myriad Mobile Software (former Esmertec/Purple Labs) -- a French Company, all in one day!
Crowdsourcing and USSD
Do you know of crowdsourcing? Did you follow the link? Now you know. In simple words: it’s when you outsource some tedious task which requires a lot of manual labor to countries which have a lot of it.
And what a great idea to use this concept with USSD! Nathan Eagle from MIT wants to make it happen.
His idea is to employ USSD to have people in East Africa do manual tasks like translations for Nokia into local languages and medical transcriptions. See a list of possible tasks.
It would be such a noble thing to help Africa which clearly needs help:
and to apply the easiest and the cheapest mobile technology! I simply love that initiative. Hope it takes off.
3G or not 3G: that is the question
I am still perplexed about 3G. I was thrown off by this statistics on which I have elaborated in my previous post.
Is 3G really adding or is it nothing? This time I would like to argue PRO. Because…
1) The statistics showing that 70% of mobile Internet is used at home may just be showing the ease of Internet use from mobile devices as well as that users usually… are at home. The first observation speaks favorably for 3G adoption whereas the second really casts doubt as to whether 3G is unnecessary.
2) I just came back from Altai where Internet isn’t that great. There I have all possible Internet connections (though I go there, as my superior correctly suggested, to “meditate” (also without quotes)) — Satellite+GPRS and DSL (+WiFi). This time I had guests — RAs for my wife’s project — and they all invested in HSDPA modems. That made sense, I thought — the aforementioned alternatives are marginally better in speed, too cumbersome to implement, and unreliable at best.
3) The person behind first largest Russian Internet massmedia (Anton Nossik) has recently visited our modest town for a talk show. His idea was that WiFi will be taken over by WiMAX and WiMAX will be taken over by 3G (I think WiMAX is a good alternative to 3G, especially if there will be mobile Internet phones). For him and others 3G would have been a benefit because breaking GPRS made it nearly impossible for them to toy with their iPhones.
The other news is that if we have mobile Internet, a lot more people can start using it, apart from the big cities’ 33 million users — people in rural areas have good phones as a rule, but they all lack good Internet.
3G obviously will be first build-out in large areas where its usefulness is indeed limited. Although I am not the target audience, as marketing people like myself would say, but I don’t really need it — I use it at work and home at good speeds and in-between I prefer to transit on the real and not information highway (well, except for audio books which I get beforehand — speaking of which I recommend The New New Thing — what a story, also very relevant for our — post-bubble — economic times).
